Saturday, November 11, 2006

The Bull Is Charging Up?

Malaysia Stock Market has perform very well recently and did manage to break 1000pts, 1006pts and 1022pts. I am very excited to see this breakout and I has posted my view base on monthly KLCI trend.

Let me make a brief, from 1990 to 1992 it take the bull to charge up before a mighty super bull run start on 1993. It take 3 years to do that. Refer to current trend, from 2004 to 2006, you can see as well the bull is charging up and it also take 3 years to do that. In term of Elliot Wave theory (I have point out in the chart) both mighty super bull will ride on wave 3! Well, can I said 2007 will be a mighty super bull make a come back? Nobody knows, I will let the time to tell.

Enjoy your trade ! :-D

Saturday, August 19, 2006

A Lessons By Jesse Livermore

  1. Don't make a trade until all the odds are in your favor.
  2. Did not generally use the terms 'bull' or 'bear'.
  3. Determining the line of least resistance and buy at the correct point.
  4. Don't try and anticipate what the market will do next, go with evidence of what the market is telling you.
  5. Don't concern with why things are happening, only observe what is happening.
  6. You can beat a horse race, but you can't beat the races.
  7. There are no good stocks! There are only stocks that make money.
  8. Never become an involuntary investor by holding a declining stock.
  9. Don't buy your entire position all at one time, use probing technique (average upward - buying more as the stock goes up).
  10. Before buying a stock establish a profit target.
  11. Always establish a stop before making a trade.
  12. Put half the profit from a windfall trade in the bank.
  13. Keep the number of stocks you follow limited in order to focus.
  14. As long as a stock is acting right, and the market is right, do not be in a hurry to take profit.
  15. Stocks are never too high to begin buying or too low to begin selling short.
  16. All tips are dangerous - take no tips, see what you are believing.

Saturday, July 29, 2006

Investor vs Trader: How Do They See The World

Investors are different from traders. They put their money into a market, like stocks or real estate under assumption that the value of the entity they invest will increase over time. Investors typically do not have a plan for when their investment value decreases. They hold on to their investment, hoping that the value will reverse itself and go back up.

Investors typically succeed in bull markets and lose in bear markets. This is because investors anticipate bear market with fear and therefore are unable to plan how to respond when they're losing. They chose to 'hang tight', so they continue to lose.

A trader has a defined plan or strategy to put capital into a market in order to achieve a single goal: profit. Traders don't care what they own or what they sell as long as they end up with more money than they started out with. They are not investing in anything. They are trading.

What Type Of Trade You Would Do In Bursa Malaysia?

Day Trade (Intra day 1min - 3hrs)

- Prefer pattern or sign of follow-through.
- Tight risk control (mentally strong, take profit fast & cut-loss
even faster).
- No overnight position (no long and short position).
- Trade in heavy size, eg: 1,000 - 10,000 shares.
- Timing the market entry and exit is very important.

Swing/Trend Trade (1-10days)
- Prefer to watch for clues on how stock are open and close.
- Follow trend and business news closely.
- Doing research on fundamentals and technical analysis.
- Holding long and short position.
- Prefer to identify sweet spot and let the profit run.
- Execute cut-loss at specific percentage of price level.

No matter what trade you make, a pure discipline (mental preparation and risk tolerance) is required through a written plan which will help you set reasonable expectations to offset manic highs when success is found and depressive lows when inevitable losses occur. Your trading plan would then be require to review from time to time to reflect the changes in market sentiments and directions.