Another demonstration of the newly created Indicator that provides excellent shorting opportunity

Previous blog post, I demonstrated how the new indicator "Looking for no demand for shorting" from the below post, if you miss it, click here >> http://volume-price-spread-for-metastock.blogspot.com/2011/02/new-developed-indicator-that-inform-you.html

Above is another stock that triggered the expert indicator sometimes back, the black diamond is

specifically used for this alert. You will see this often in the future. As you can see, after the black

diamond triggered,I had to wait for potential weakness on the next few bars to warrant a short sell. Immediately after the black diamond, we could see that the next alert was "Lack of Demand" and this confirmed the  weakness. But shorting should be done only the next bar if it closed was below the

pivot level of the "Lack of Demand" bar. Indeed, as shown above, the next bar closed much lower

than the"Lack of Demand" bar and warrant a short sell. This is no coincidence, with a trading system

that  alerts me on possible future event to look for, make trading fun and interesting to be.



How to confirm a stock background weakness for Short Sell?

Temple Bar Investment Trust (LSE: TMPL) is a large British investment trust dedicated to investments in UK securities. Established in 1995, the company is a constituent of the FTSE 250 Index

 

1st check on Monthly Chart to have a bigger picture.



2nd Look at the Weekly Chart for sign of strength or weakness



lastly, look out for bearish indicators, confirm that Monthly, Weekly and Daily charts are telling

the same story that the stock is weak in the background. Look out for further weakness by observing possible expert indicators trigger sign of weakness alerts.

In the chart below, newly created expert indicator " Go Short if No Demand over next

2 bars" triggered, therefore look out for any sign of weak bar over the next 2 days. Indeed the next day,

"lack of demand indicator" was triggered and if the next bar(04/03/11) traded below the previous day's close then it could be a good short sell. Yes, it did and we can see that 04/03/11 closed below

the previous day's closed, it is a genuine short sell stock.

Diamond Trading System applies in all Financial Markets

Sometime back last July 2010, after I had programmed the first edition of Diamond Trading System, I decided to further finetune the indicators by looking for trial accounts in the net to test the system.
I spotted a few free trading platforms but many are too little in the credits offered. But I found http://www.updown.com/ where the site offers 1million dollar of credit to trade. So I decided to create
an account and use the trading platform to test my trading system.

I would subscribe to a data provider inorder to obtain USA EOD data and would run my Diamond
Scanner to pick stocks for analysis. Once a basket of 3-5 stocks were selected, I would enter the
orders for queue without waiting for the US Market to open for trade, and headed to bed.

The basket of stocks would have cut loss levels defined and when any of the stocks triggered the
cutloss, I would execute sell order to exit the stock before the US Market open.
This went on for months while I continued to finetune the trading system with more improvement
such as more indicators to reveal the activities of the professionals, and many more stock scanners
to pick Blue or Orange Diamond Stocks for the next trade.

I would constantly reviewed the portfolio and replaced weaker stocks with newly picked stocks.
Knowing that my Diamond trading system can work well not only in local SGX context but also
US Market, commodities, forex and foreign stock exchanges such as Hang Seng, ASX, Nikkei,
really thrilled me to continue to develop better technique to chart any stocks with clear definition
such as colored price bar, trend cluster just below volume and colored volume as well.

I used pivot point level as trigger to buy or cut loss stock on daily basis, drawing channel lines to
determine the major trend ahead. By segmenting the channel range into quarters, I can quickly
determine the near term resistance or support for the stock.

With bar by bar analysis, I am able to interpret the current underlying activities of the professionals to a certain degree of accuracy in very short term.

New Developed Indicator that inform you to look out for Weakness after 2 bars for possible Short Sell

When everybody is chasing higher price, who is selling then?

Years of trading have taught me not to chase stock which is heavily transacted with or without wide
price range. If the volume is extremely high says 2 - 5 times above the average volume. I would not
trade on that day, but I would choose to stay aside and watch the stock unfolds in the next few sessions.
If the stock continues to be bullish, i would expect price continues to go higher with substantial
volume but if price starts to fall below the pivot level, I would walk away and wait for the Blue
Diamond to trigger long trade.

Even though, we cannot forsee the possible run-up in the stock price in the near term.
A way to take advantage is to trade along with my propietarty indicator, "Go Long1" is able to
trigger long trade near the baseline where the price starts to move higher
from there. Usually the previous price bar is used as cutloss reference, and most of the time,
cutloss is seldom triggered even it could be just 2-5 cents away from the buy price.
The reason is simple, most of the indicators are coded taking future price into consideration
which means tomorrow conditions must be met so that the indicator will trigger today.

Most of the time when I trade, I never scan for home-run stock as we are not GOD to know.
Faithfully follow my Personal Diamond Trading System, I encounter many non eye-catching
stocks later turn into monster trades...So just work hard to make a good trade each time and
let the market decide where the stock price will be later and care less. The most important
thing I do after enter a trade is to watch the cutloss level like a hawk each day.
As long as the cutloss is not triggered, I am a winner to survive another day.

Cheers!

Why Majority of Traders tend to lose Money Chasing Explosive Price & Volume Day

Ok, I have some dollars to trade today and I am waiting for any stock that gives me bullish signal to
buy so that I can plug some money for coffee.

Oh, this stock has never been in the top 20 high volume list but today it has appeared with volume
exceeds 2 - 3 times normal daily volume.

Hmm, yesterday night, news reported that this company has bagged some new contracts worth xyz
million of dollars and today price starts to move up quickly with substantial volume after market open.
This stock looks so bullish, it must be my lucky day. I have been waiting for days and the time has
come for me to make some money.

Woo, the price has never traded with such a enormous gain of 25% price gain and extremely high
volume by late afternoon.

Ok, I have entered to queue to buy but it is still in the queue. Oh, market is going to close in an
 hour's time and I need to run errand and may not have time to monitor the stock.

Ok, since the stock is moving higher with enormous volume, I think that it is ok to go along with
the tide. I am going to make some money this week, woo...I love this stock, hopefully it will run up
another 25% or more tomorrow and I can celebrate victory.

Ok, I cancel the previous queue and immediately buy at the ASK price.. Woo, I feel great after
transaction. I am going to make some money tomorrow for sure.. Ok, better inform my  friend,
Alex, and let him know that this stock is a top performing today in Daily Top Volume and number
one spot.

Hmm, I am feeling like a champion. Can't wait to watch the market tomorrow again. What an
exciting day.

---------------------------------------------------

Above is the typical trader that trades stock on hunches and witness for yourself what happens
after the highly transaction day from the chart. I won't give you the answer, as the chart is clear.

Trading is never a simple game. It's the toughest game I ever play but I enjoy every single
moment.

Cheers

Another Powerful Display of Blue Diamond Indicator detecting each turning point.

This is another demonstration on the Diamond Scanner which picks up stocks for further analysis every single day.

Inorder to trade well, I believe that we should not worry about not having stock to trade each day.

If a stock which we are holding is losing its upward momentum, it is best to protect the profits and

use the scanner to pick another potential stock to trade. No point holding on to a stock which is

exhibiting weakness and hoping that it will turn up in the future.

That is one of the reasons why I do not hang on to stock which shows weakness. Protecting profit or

know where to sell is as important as where to buy.

By taking profits on weakening stock and moving quickly to another stock picks up by the scanner proves

to be a nice way to compound earning again and again.

So in order to trade well, you need to have a Personal Trading System that includes the following:

1) A good Charting Software which allows personal coding of indicators and scanners

2) Stock Scanners that can pick up potential stocks for serious picking for income.

3) A strategy to cut loss and take profits base on what the market tell us.

4) Strong discipline to follow the system.

5) Nothing is free, when tips are from any sources, brokers or friends. Justify the claim from the chart

     instead.

6) Believe the chart, the professionals cannot lie to you as their footprints are caught in the transacted volume.

    If you can decode the volume, you know how to master the market.

Inorder to track all activities of the professionals, I have created a trading system that alerts me as price moves forward each day. Most indicators today available in standard charting package are lagging in nature or are derivatives of price and volume.

Kelvin's Trading System is created purely by understanding the demand and supply of the market, using of

trend channel, trendlines to determine the probable trading range and seek to buy from the base of the channel and sell at the top of the channel. Many indicators require the Day + 1 (future day) to meet certain

criteria before an indicator alert will appear. This system seeks to decode the activity of the professionals

within a short time frame and ride the journey with the professionals.

Below is a nice chart on Streettrackers Gold, looking where the blue diamond (Go Long1) appeared

at the base of the channel  each time, provides a very lucative trading position without fail.

With the help of the Diamond Scanner, I am able to study with great detail on the stock for trading

opportunity.