Trading Observations

2012 - Looking Forward to a New Year Full of Success

2012-01-30T16:54:00.001-08:00

It was one week after CNY and I expected the market to open on Monday in full force & excitement but Malaysia always had a mind of its own...Mkt was a slight downward motion from 1523 to 1519. Just over the weekend, the World Economic Forum took place in Davos and Bloomberg has issued a brief on the happenings in Davos. There was this 'Debt - Swap' between Greece and some private creditors..dunno what kind of scheme they're gonna pull off next :( isn't it enuff with the CDO & mortgage shit and all? Oil was reported at the highest level in a week (I think oil is inversely related to the index - to check) And the financial firms may be forced to accept 75% haircut on greek sovereign bonds...I like what Joseph Stiglitz said...

Lessons from KC

2010-12-09T07:14:00.001-08:00

-Look for companies that have appreciating earnings growth over time;
-After the ex-date, the price of the share will adjust downwards to pay for dividend;
-Go travel

Solely technical...Well, almost...

2009-10-26T06:57:00.000-07:00

Went to Menara The Star over the weekend to get some memory refreshments on technicals..Went back home motivated and started scanning through the online portals..The stock below were noted as top volume players on 23 Oct 09.

i) AXIATA (6888) - Noted some selling supported by volume on 23 Oct 09. It was trading at the lower BB band, at the time I wrote on paper, the price ws RM2.98, it closed on 26 Oct 09 at RM2.92. Noted negative breakout from lower band.
Immediate term outlook = Negative

ii) SERNKOU (7180) - Unusual Mkt. activity noted. Announcement revealed it was by Mr. Quek Gim Hoy.Last trade on 23 Oct 09 was RM0.405. MACD -ve, RSI shows oversold.
Am not interested in this counter. Checks revealed that there was net loss of RM2.809mil in FYE 08.SERNKOU manufactures wooden furniture and metal furniture and parts.

iii) KNM (7164) - The stock is walking the upper band since 16 Sept 09 to-date. If want to go in, advise to wait for price to go down to RM0.805. Last on 26 Oct 09 was RM0.835, MACD +ve but volume low.

iv) TA (4898) - Has been walking the upper band, but today after so many weeks, closed slightly below the middle band. This confirms as a don't buy signal.

v) 3A (0012) - Company involved in manufacturing and supply of F&B ingredients. New product line includes producing malto-dextrin, a glucose based powder used for 3 in 1products (Ie: Milo, 3 in 1, Nescafe 3 in 1 etc) and also ice cream production. Used to be stagnant at RM0.34, went to up fast and furious to RM1.53. FYE 08 was RM12.13mil, NTA/share RM0.25, now trading at 6.12X cost.

vi) GPACKET (0082) - I must say that the advertistment really paid off. The 'Cut Already' advert seems to have a positive reaction. Today(26 Oct 09)closed at RM0.99. Chart shows that it had surpassed its 200MA at RM0.763 and set for an upward move.

Cuti cuti Malaysia means trading time!!

2009-08-29T20:54:00.000-07:00

14th July 09, 9:22 a.m;
Woke up late!..It's already 8.00 am. Have another 30 mins to mkt open. A look at US overnight performance data and was greeted by such a pleasing sight of +2% across the Board (By this I meant Dow, Nasdaq & S&P500). This is due to the positive corporate earnings posted by Goldman Sachs. Due to the run triggered by the financial sectors, all 10 major sectors have closed with gains if at least 1%. Staving off advances are buyers who wants to close their position.

14th July 09, 11:06 am;
My thnking is that there are some very observant ppl who are monitoring the market. Accumulated sell shot to 394 at 11:07am Vs 60 buys due to FKLI breaking 1069. Tough cookie. Looking toppish at 1069?

Reminder:-
Mkts. going UP -due to Short Sellers taking profit/closing their positions
-New contracts due to bullish mkt sentiment

Mkts. do DOWN- due to Buyers taking profit/Closing their position
-New contracts due to bearish sentiment

2008-09-30T06:38:00.000-07:00

A little workout does a lot of good!!

2008-08-06T01:02:00.000-07:00

A lovely get together...it's been ages since I played ping pong, had a refresher last month with these good samaritans...

Functions are a help!

2008-08-04T20:51:00.000-07:00

As I slumped tiredly at my notebook, I went through the excel 'Functions'..the last two weeks, I found a command which can sort data according to an 'up' day or a 'down' day ..I had to think of a way since the Dow was being naughty and I wudn't want to be trapped again..So i took the difference between the Close and Previous and keyed in the IF function.

=IF(Cell No>=0,"P","N"), which simply means if the end result is positive or equal to zero, it'll log a 'P' otherwise it'll be an 'N'.
I think the above can somewhat help us to gage how long a movement can be expected to last besides using other obvious indicators such as the 3 SMA, (7, 20 & 65 days).

The next function which I discovered today was the MAX function.I really hate being stopped out, so now I have plotted the EURUSD on a daily basis from 23/11/08 till 5/8/08 and find the daily ranges.After that, I key in the MAX function which goes something like MAX(J4:J186) and it gives out the answer, 279 pips max fluctuation.So for those who wud like to set a stop for daily EURUSD trade 279 pips is quite safe.

Signs Are Everywhere??

2008-07-27T19:08:00.000-07:00

I walked past the unkempt corridor of terminal 3 which is "Under Progress"....I was walking by and heard my very young cousin quoting in a Cheshire Cat - like voice " We Can't Become What We Need by Remaining What We Are"...She kept repeating it over and over again...like a reminder of sorts... How true...How True Indeed...

Volatility Kicks In

2008-07-10T02:13:00.000-07:00

Sometimes the market has a way of turning its table on you even if you have your guns ready .I expected the FKLI to move in tandem with Wall Street's overnight performance of -2%.That is to me, quite a reasonable ground to go short, especially after the previous day's low of 1084.5.I missed that boat and didn't want to miss this one too.Instead, at the time of closing, it erased my earlier gains...perhaps I shud have stopped trading when I got what I wanted..but nooo, I had to get some more...Well...in trading, losses happen, it's all in the name of the game ;)

Patience is Key

2008-07-08T01:03:00.000-07:00

It has been quite an unseemly beginning to the week...I was expecting the mkt to head south fast on Monday, 7 July 08 due to the oil price hike rally but due to the way things were being dished out
it just didn't materialize, until today that is....and I was out too soon (again)...but of course it was with a very valid reason of being very sick that I called my broker to close all short positions.I was not up to seeing my gains being slashed because of not being able to stand by and monitor the market. I believe it will go to a low of 1045, which is another 39 points down..the thing is, we don't know when the market will take a breather.....or retrace...in times like this being calm and focused is of essence..I remind myself of GM Teoh's remark that the mother of all bear market is here, the Hang Seng index indeed at the time of writing (4.18pm, 8 July 08) plunged 3.29%, a day's record.

Trading on Riot

2008-06-26T07:22:00.000-07:00

The Spot month July 08 FKLI blinking quotes at my terminal were signalling a very tight trading band, between 1117.5 and 1119.I am tired.Yesterday was my duel.I finished it good :) However, today itself brought with it a fresh trading opportunity.The market Open gapped down some 23 pts or 2% for the KLCI but for the FKLI this was already factored in.I am anticipating further downward slide due to the fact that tomorrow there is going to be a rally at KLCC for the protest on oil price hike.If we let past emotions toil in our guts after our previous trade, it is certainly not going to help.

Caution on Warrants Exercise

2008-05-29T01:52:00.000-07:00

What happens when there are warrants to be exercised?Expect the company's share price to go down by a fair bit...This happened to YTL Power when it was announced on 9 May 08 that they are going to exercise 3,025,805 warrants which took effect on 13 May 08...the share price was fine even after the announcement but plunged on the day the exercise took place, from 2.60 to 2.30 around 13% drop.Do take this for a warning sign for the future.

Why Out So Soon???

2008-05-26T00:55:00.000-07:00

Important Note:

26 May 08, 4:35pm FKLI is 1262.If I were to stick to my guns I wud have made some handsome gains right now.....but my mom said...sometimes you must accept the fact that it is fated that some things (money/profit/whatever else) are not meant to be yours...I accord my current loss to my lack of determination and fear of losing ...

On Futures - When you have discovered a trend or a trend reversal and have gone into position it will usually last MORE THAN ONE DAY.Do not make the same mistake of closing your position the very next day!!!The channel usually takes time to complete in a few candles/period.

On FX- Wed, 21 May 05-EURUSD made a significant reversal on its retracement, going up 107 pips in one day.The daily chart shows that the ascend started on 15 May 08 with a low of 1.5435 and high of 1.5601. Next candle was red but subsequent two candles were green all the way to 1.5794 on 20 May 08. Noted that the Long Term trend line was not breached - therefor, long term strategy is in place now.

Trading a Loss

2008-05-16T09:37:00.000-07:00

It has been an emotionally challenging month for my mental health.The psychology of trading in terms of resisting fear, submitting to greed and acting on hope is a war between your gut feel and your brain.I was sorely reminded that Hope is not an action plan and it cannot be your basis for an entry or an exit.

For the FKLI-Spot May 08 , I had identified the support (low) at 1263 and also identified 1284.5 as the extended support level.My resistance was marked around 1303 level and I noticed that this had been breached up to 1306 today.However, Fear got into the way.I think part of the cause for my recent failures was that I heeded the volume on 'Buy' & 'Sell' side..once I started seeing the volumes it just disrupt my forgone conclusion.It gave me second thoughts as to whether I'm entering on the right or wrong side...My disastrous trades made are as follows:

1) Long FKLI May 08 on 8 May 08 @ 1284.5 with target 1300. Chickened out the very next day @ 1273 after withstanding the low on the previous day at 1268.Noted that the same day it went down again to 1268.Today, 16 May 08, eight days later it went up as high as 1306.Que Sera Sera...So I loss 11.5 pts (equivalent to RM 575) excluding commission...

2) My FX Trade which had peaked to USD 1000 previously is now USD 433.61. What happened? Truly some disastrous game plan that didn't bore well with market sentiment..first, I long the EURUSD when it was in its early stages of retracement....What was I thinking? I thought giving the moves 'room enough' to breathe at 150 pips stop is a good idea since I don't think it would actually breach that...But it seemed that I was wrong and it was trading below the 200 MA anyway.....I was advised in a book I read that 200MA is WAY a GOOD ENOUGH reason to kowtow your ego and save it for another day..But alas, I wasn't in any mood to be proven wrong that day.Lesson well paid for!

After pondering my next move, decided to short the pair on the night of 16 May 08.Short at 1.5465 with the target of 1.5420, a profit of 45 pips ($45).I've put the stop loss at 20 pips above, so my risk reward ratio was 1: 2.25, quite fair.Other supporting indicators are -ve MACD, -ve crossover, supporting opinions by traders expecting North American Mkt to take sell position, and comments by options traders who agreed that T1 should be 1.5420 with extended downside to 1.5400. After 2 hrs at Istana Budaya and a cup of heavenly bubbly Milk Tea I returned home to see that I was stopped out.Haha..hmm this time I do not blame myself as it did touch 1.5420 but that is after going high up above 1.5485.It actually formed a double bottom and extended upside by a whopping 126 pips.Wow...who would have thought of that...A few minutes later these comments came in:

17:17 EUR/USD: Traders Perplexed By Persistent Bid Tone, Ponder Trend New York, May 16th. After the rumours of a revision to the payrolls data from -20k to -150k was denied, the pull back has been miniscule at best, and inter-bank traders are perplexed by the Euro's strength given the fact that with the exception of the Eurozone GDP data that was skewed upward by heady German GDP growth (1.5%) everything else out of the Eurozone for the past 3-wks has disappointed. The persistent 1.5400/50 sovereign bids were understandable and the soft US data pressuring 1.5510 stops and following range extension also understandable, but the Euro's latest surge and new found strength has traders worried that the Euro is back and badder than ever. Spot last at 1.5575. Peter.Wadkins@thomson.com /rs

3) So now, I've come to the conclusion that good trades can be made and planned for the longer term..and you have to have the stomach for it.Four years ago, someone told me, if you cannot watch 50% of your money off the plate, don't even think of going into the stock market.More so for FX & Futures, its jet setting cousins..

4) At ATIC 08, we were advised by a trader that if it was a bad day yesterday, FORGET IT and if it was a good day yesterday, FORGET IT.You cannot trade when you are emotionally attached to what recently happened to you as it would affect your decision making on your entry.

5) Stop Losses are your safety net but make sure you don't get entangled by them.Stops should be wide for longer term trades.20 pips stops for short term trading will usually be triggered if you are in the wrong direction.

6) So how do you explain all these bad things that happen?Trading losses happens and it is part of the game.It is part of the understanding that if you want to make high returns you are only obliged to assume the risks that comes with it.People make mistakes and you are not an exception.If you made mistakes, study carefully where you had gone wrong or perhaps, it's just unfortunate that the market turned against you even when you had everything in place.It's just what markets do, fluctuate & take you by surprise. Therefor, be at peace with yourself and only enter when you are up to taking blows.