Friday, March 30, 2007

20070330 12:45. Pre lunch session trade sets up breakout levels 1234.5 and 1230.5 for the FKLI April contract.

Thursday, March 29, 2007

20070329 April FKLI ends as a 'trend day' up.

20070329 15:16. Long on the bounce of the cah KLCI off the 15 min 200 ma proves rewarding.

Wednesday, March 28, 2007

20070328 12:45. A short signal indicated on break down of support at 1235, but alas we were not in the market at that time. However with the ma crossover on the FTSE Bursa 100 index 60 min chart, may be opportunity to take positions for the move down.

Tuesday, March 27, 2007

20070327 17:15. FKLI went on to reach high 1246.50.

20070327 10;58. Moves to 1242, prudent to take off half the position.

20070327 10:30. A signal to long FKLI at 1239 with 3 pt stop.

Monday, March 26, 2007

20070326 17:15. Today is the day no setups occured. Daily KLCI is on the 8th consecutive day of higher closes today.

20070326 11:10. No signals, even though there were some nice moves.

Saturday, March 24, 2007

20070323 17:15. A clean break of 1233 resistance today.

Friday, March 23, 2007

20070323 15:00. Breakout levels form at 1233 and 1227.50 on the March FKLI.

Thursday, March 22, 2007

20070322 Long or short triggers show no follow through.

20070322 11:48. Indications are to buy above resistance at 1131 and sell below 1127 support for the FKLI today.

Wednesday, March 21, 2007

20070321 17:15. After a head fake upwards (hits the stop), FKLI ends at 1202 low.

20070321 10:54. FKLI breaks down the lower support zone. Indications for us to consider short with stop just above 1214.

20070321 Being aware of gaps and potential for gap fills, can be useful, not only for profiting, but avoiding being on the wrong side.

Tuesday, March 20, 2007

20070320 17:15. FKI breaks out of upside resistance,...but there is not enough time left for followthrough, near the end of the trading session.

Monday, March 19, 2007

The Numbers Game in Trading

20070319 17;15. FKLI trend day up, mirroring the strength of the regional indices. "Bad" news supposedly broke in the morning on the China interest rate hike. However the market made a "news reversal" to end as a classic trend day up.

Many who dwelve into the financial markets, searching for "instant gratification", do so without understanding the numbers behind the game. Read and enjoy this written by K Lien & B Schlossberg, a couple of Forex traders:

In his seminal book on trading Market
Wizards, Jack Schwager interviews one
mysterious currency trader with penchant for
meditation and Sanskirt who is uncannily
successful in making profits for his
employer. The start of the chapter contains
the following exchange:


How do you recognize when (your trading
power) goes away?


When I am wrong three times in a row. I call
time out. Then I paper trade for while.


For how long do you paper trade?


Until I think I?m in sync with the market
again. Every market has a rhythm, and our job
as traders is to get in sync with that rhythm.

The trader?s identity has never been revealed
for certain, but I believe that it was Andy
Krieger who said those words. He was so
phenomenally successful in the heyday of
interbank currency dealing that he managed
to earn 300 Million dollars for Manufactures
Hanover ( which has since merged with
Chemical, which in turn became Chase, which
is now JP Morgan Chase) in just one year.

This small snippet from 300+ page book is
almost a throw away paragraph. Few people
ever recall it. But ever since I've read it
many years ago I've always thought those
words held special meaning. Now, I am even
more convinced that this little exchange is
perhaps the wisest advice ever given to traders.

Losing streaks are universal in trading.
Anyone who has day traded for longer than six
months will recognize that fact. George Soros
lost $1 Billion dollars in the Russian ruble
fiasco, but everyone remembers him as the man
who broke the bank of England. Michael
Steinhardt was decimated in the emerging debt
market meltdown of 1994, but he is revered as
the one the greatest hedge fund managers of
all time. The reason most novice investors
and traders never appreciate the true risk of
the game is because they rarely see it.
Typically, most traders simply look at their
end of the year statements and only see the
end result. Rarely do they realize that their
money may have suffered a 20% loss sometime
during that year.

20070319 15:14. The FKLI is undergoing a strong uptrend day..... In the morning the psychology was to "Sell! Sell! China raises interest rates, Malaysia Bank Negara sure to follow. Bad for the stock market" A local equities research house wrote ""We will probably see share prices on our Malaysian stock exchange face renewed selling pressures today, which in turn
will likely lead to a marginal downward bias in the key Kuala Lumpur Composite Index (KLCI) performance. This comes as China’s central bank has raised interest rates (by 0.27%) over the weekend in an effort to cool investment amidst a robust economy. Whilst the rate hike was not entirely surprising, nervous investors might be concerned about possible future tightening measures. Recall that a plunge in the Chinese stocks in end-Feb has then triggered a global
equity sell-off." This is logical, but logic or fundamentals have less importance in today's markets. An example of how trader psychology is screwed up by hype on "fundamental" news.

Malaysian Capital Markets need DMA to get out of stone age

20070319 I put in a stock order today, using the so called 'online trading' systems that one of the stockbrokers provide (who are also stagnating), and the order has to go to a human, who then pushes a button to pass the order to Bursamalaysia Securities, whose's 20 year old system gives the confirmation. The whole process takes 20 to 30 seconds for the order to be confirmed. Alamak! The rest of the world are doing online trading and talking milliseconds to put in orders. We definitely need the upgrade to the Bursatrade for the securities, and for DMA (Direct Market Access) system to get up and running ASAP for the derivatives, and later for the securities side. Comeon Bursa, access the CMDF (Capital Market Development Fund) to make DMA a reality, and move the Malaysian Capital markets from the stone age into the digital age.(remember? we are in the MSC here)

20070319 09:27. FKLI trade into last Friday's close shows some consolidation in the afternoon. Looking ahead, the cash KLCI looks to close the gap. Trade this morning shows this may be the case panning out.

Friday, March 16, 2007

20070316 The Chairman Mr Teh, at the Public Bank Berhad AGM yesterday alluded to something that is food for thought for those who deride the stock market. This is something that is worth noting in the blog.
  • "After 40 years of uninterrupted profit growth, a shareholder of 1,000 Public Bank shares in 1967 would now be owner of 129,720 Public Bank shares worth a whopping RM1.16mil. Together with RM391,000 paid out in gross dividends, Teh said the net worth of the 1,000 shares would be RM1.55mil, which represented a compounded annual return of 20% for each of the 39 yers."
  • "One owning Public Bank shares since the start of 2002 when the shares were worth RM5 each would have reaped a return of 122% over the five-year period to date, compared with a 58% rise in the KL Composite Index. "

20070316 12:45. 1144 break potential was 7 points. 1149 was the stronger worth 15 points. Another topsy turvy day for the FKLI.

20070316 10:03. Breakout range 1144 and 1149.

Thursday, March 15, 2007

20070315 17;15. Whipsaw price action on FKLI today.

20070315 10:39. FKLI sets the 1147-1154 range. Buy on breakout of 1154 and short on breakout of 1147 would be the strategy we look for.

Wednesday, March 14, 2007

20070314 FKLI 4 candle consolidation on 15 min chart provides reward for buy on strength strategy.

Tuesday, March 13, 2007

20070313 17:15. FKLI gave advanced warning in morning trade of afternoon downdraft in the KLCI. In addition, we were aware of and watching the 61.8% retracement level, which is now proven resistance.

20070313 We'll be watching the 61.8% retracement Fib level.

20070312 FKLI trend day into the close.

Monday, March 12, 2007

20070312 Intels tells Malaysia "to reinvent itself as a Digital Nation..." The molith organisations like the SC (Securities Commission) should make sure Malaysia goes into the digital age of direct access online trading, by facilitating the expediation of the Bursamalaysia DMA.(Direct Market Access) Impediments to speedy implementation should be removed. The state of the current stock online system, given the large volumes transacted this year is in a word, LOUSY. It still needs humans to push buttons when the light turns on, to transmit the orders to the Exchange. Come on, SC move Malaysia into the Digital Age of direct access online trading.

20070312 12:45. Only meaningful signal would have been to buy the breakout of the 4 candle consolidation range (circled). But we missed that trade.

Sunday, March 11, 2007

200070309 Some weekly S/R levels to be aware of.

Friday, March 09, 2007

20070309 17:15. Shorting on break of 1157, required some patience, until the close where 1153 was the settlement price.

20070309 The world stock indices have a correlation to the Japanese Yen cross rates, the USDJPY and EURJPY. This is because of the theory of the Yen carry trade unwinding. They sell assets such as foreign stocks and commodities and buy Yen to repay the 'almost zero' Yen loans back in Japan. If the EURJPY or USDJPY resume the downside move from the retracement (similar to the stock indices), there could be more carnage ahead for financial markets. But this is only a 'what if' scenario, and by no means will turn out to expectations.

20070309 15:15. FKLI consolidating , goes into "coiling the spring" mode, indicating long above 1165 and short below 1157.

Thursday, March 08, 2007

20070308 Technical picture on KLCI improves, as KLCI crosses 50 ema. However, the momentum indicators have yet to cross up.

20070308 This organisation is one of the Investment Banks classified by Bank Negara Malaysia. It is one among others which offer so called investment banking services.(as seen from their 'services;' offerings) But futures/options broking is not one of these services. With the recent crash of world's stock markets, I wonder how the employees of this question answer customer enquiries such as: "We think the markets might correct, can you short some futures contracts to hedge our portfolio?". Without a futures broking arm the answer might come back as, "Er, sorry we don't offer futures broking services." These are the flagship financial institutions of Malaysia, who can hold themselves out as investment bankers, yet do not provide risk management services such as futures. Bursamalaysia should revamp the trading memberships structure, pay back the RM1.5million to be a trading member, start afresh and rope in the remaining Universal brokers, small brokers and the investment banks to be members of Bursamalaysia Derivatives Exchange. Undo the mistake of leaving out the derivatives industry from the demutualisation of the then KLSE, start afresh and make hedging/risk management an integral part of the Malaysian capital market landscape.

20070308 17:15. 15 min KLCI punches through 200 ema, sparking a trend day rally in the FKLI. Classic break through resistance.

20070308 10:07. KLCI 60 min chart shows the CI reaching 100 ema level.

"There is the plain fool who does the wrong thing at all times anywhere, but there is the Wall Street fool who thinks he must trade all the time."J Livermore Manchester City FCl Crude Palm Oil


From Dragons and Bulls by Stanley Kroll
Intro and Foreword
The Importance of an Investment Strategy
5 The Art of War, by Sun Tau (circa 506 BC) and The Art of Trading Success (circa AD 1994)
That's the way you want to bet/a>
Long-term v Short term trading
Technicals v Fundamentals
Perception v Reality
Part 1: Winners and Losers
Part 2: Winners and Losers
Sun Tzu: The Art of War
Those who tell don't know, those who know don't tell
Why there is no such thing as a "bad market"
The Secret to Trading Success
The Experts, do they know better?
Risk control and money management
Good advice
The 'good bets' business by Larry Hite
Don't lose your shirt
Ed Sykota's secret trend trading system