Monday, April 30, 2007

20070430 Reading the news, investment adviser's newsletters, other traders and research boffins' opinions on the state of Bursamalaysia market, I get the feeling there are two camps.... In the blue camp are those subscribing to the 'blue sky theory.... the KLCI will make higher new highs... In the red camp are those like and others, who see a "severe correction" coming.... What can we discern from these two opposing viewpoints. Basically these are just 'predictions' or attempts to crystal ball forecast the future direction of the KLCI and are ....hogwash. If you look at the 60 minute chart of the FTSE Bursa 100 index, the market is trapped between these two strong bear and bull forces and is 'coiling the spring'.(my favourite expression) Watch and wait for the breakout and go with it....might be a prudent approach.

20070430 1715. FKI May went on to make high of 1310.50.

20070430 1620. Longs at 1297.5 triggered. It would be prudent to scale out of the position in 34ds based on one's own risk tolerance and parameters.

20070430 1145. Setup comes with levels to long at 1297.5 and to short at 1291.5 on May FKLI futures.

20070430 1002. Back from a break, to look for setups again.

Thursday, April 19, 2007

20070419 1715. On a volatile day like today, taking the setup short trade at 1271.50 needs a wider stop. Standard 5 point stops would be hit before the afternoon sell off to 1257.

20070419 1548. Blogger has been down today. Been itching to post this 60 min FKLI chart, showing break of support.

Wednesday, April 18, 2007

20070418 Came across this article today. From Nov 2006, the PAM front end and the Bursatrade engine was implemented by Bursamalaysia. This, along with the surge in equity market activity was the contributor to the futures market on Bursa marking record after record volumes, to today's critical mass. Bursamalaysia, its management and technology team should get commendations on a job well done. In the words of a veteran Local Participant of 8 years, "The PAM workstation is a wonderful tool for the active trader in FKLI futures."

20070418 1715. FKLI longs stopped for 5, shorts taken 1313, but again, limited follow through. The discount to cash market, which closed around 1328, is something that points to a showdown ahead between the bulls and bears in the FKLI market. In trading, one learns from experience that not every trade is a winner, and not every day is a winning day. What matters is whether quarterly, 1/2 yearly or annually one is positive in returns. Learning to lose (small) is an essentially part in successful futures trading.

20070418 1245. FKLI not much follow through from the 1320 long. If stopped out, might consider the 1313 short, at least that is the plan anyway.

20070418 1123. The consolidation range pegs the levels as 1313 and 1320. Long at 1320 with 5 pt stop. Let's see what happens.

Tuesday, April 17, 2007

20070417 1715. FKLI pushes to 1325.5, but settles at 1323. The position squaring at the end of the day limited the potential of this breakout.

20070417 At 16:42, the FKLI is showing something interesting: The Coiling of the Spring.

20070417 1524. Another dodgy setup. The lows of the consolidation pattern were >1 tick below the lows of the 'thrust candle', otherwise might have triggered long after lunch. So, no trade for today.... Patience to wait is an important part of disciplined trading.

20070417 1117. The consolidation pattern would have been the 4 candles 9:30 to 10:30, with the short on break of 1330. However since it did not meet the criteria strictly, we missed this one.

Monday, April 16, 2007

20070416 1715. FKLI closes at 1323. It is time to take stock: the KLCI closed 2006 at 1096.24, with today's closing at the year high of 1322.91, giving a YTD return of 20.67%. With the right approach and mindset, one can get equal if not better returns from FKLI trading.

20070416 1511. OK, just back after being stuck in torrential downpour.(customary Malaysian weather) So the long trade made up for the stop out on the original short. The reverse trade, from a trader psychology point of view, can provide more momentum and follow through.

20070416 1222. Took 4 point stop on the short at 1309.5. Now long at 1314, the reverse trade..... Let's see if can make back the loss and turn in profits.

20070416 1102. fkli HAS CONSOLIDATED, SETTING UP BREAKOUT LEVELS 1309.5 AND 1314. Narrow range, if trade triggers, have to put in 4 pt stop.

20070416 1039. FKLi is on the 3rd 15 min bar of consolidation. Need another bar, so nothing to do but to relax until 11:00 am candle completes to see any setup, which may or may not come.

Sunday, April 15, 2007

AIGB revisited

20070413 On January 23, 2007, I looked at this stock AIGB as potentially the trade of the year. Earnings at 19 sen per share, fundamentally sound and potential to benefit from stock market volume robustness, increased M&A fees. The plan was to buy on break of the trendline, so just above RM1.80. Well, it is now (albeit after a wild wooly ride) around RM2.50. A lesson in having a game plan and sticking to it. And you don't need to 'trade on a tip' from a friend, the broker, or the runner spreading rumours.

Friday, April 13, 2007


20070413 1434. Nice follow through after break of 1295.5.

20070413 1434. Nice follow through after break of 1295.5.

20070413 1131. After some undue volatility, now we have our setup levels. Long at 1299.5 short 1295.5. Let's see what happens.

Thursday, April 12, 2007

20070412 1715. Could have been a setup consolidation range 1295-1302, which would have triggered short at 1294.5, but we did not force this interpretation. One of those that we missed. 60 min cash chart however shows some divergence with the RSI 14. Expecting some weakness in the market going forward.

20070412 1245. FKLI no worthy setups yet, unless one caught the morning 'morning star' reversal off the lows.

20070412 0902. FKLI gaps down to low of 1282. Higher rewards in terms of this bonus rewards high risk taking. (overnight)

Wednesday, April 11, 2007

20070411 1715. For the shorts at 1305, a bit of patience sees FKLI close 1294.5, 3 ticks off the low. In this situation it could be worth it to hold some contracts overnight, as the 15 min charts are in clear downtrend. But that depends on one's risk tolerance, whether to hold ovrnight or not. The rewards can be good, but the risk is higher. Traders have to know themselves.

20070411 1245. The reverse short trade on FKLI was more responsive.

20070411 1136. Longs at 1310 stopped for 4 points. Now the questin is whether to go short at 1305.

20070411 1018. FKLI levels are 1302 and 1310 today. Came early today, let's see what happens on breach.

Tuesday, April 10, 2007

20070410 1715. FKLI makes high 1312, but has a wild ride in the afternoon trade. The volatile fashion of trade indicates a possible change occuring.

20070410 1245. Nice followthrough buying on this one to high 1307, which would give 8 pts vs 4 pt stop loss, a 2:1 ratio in the classical textbook style.

20070410 Aseambankers are referred in thestar article with the words: " The integration of all these units was smoothly done which “enables us to go out and tell our clients we have a full range of services,” Surachet said in a recent meeting with StarBiz. Recent announcements showed the parent company is aptly also one of the clients that benefited from the corporate finance advice of Aseambankers. "" But when the customers ask about hedging with futures or options on the KLCI, they don't have. Of course, setting up futures broking business is a commercial decision on the part of any 'for profit' organisation, but I think they need to set an example for the Investment Banks and offer futures and options broking services to provide the FULL SERVICE to their clients.

20070410 11:44. 1299 long took 2 point heat, but now needs some more follow through.

20070410 10;30. FKLI sets up buy at 1299 and sell at 1295 with stop. Let's see how the plan works out.

20070410 09:15. Triangle breakout on 10 min FKLI is worth noting.

Monday, April 09, 2007

20070409 17:15. FKLI settles at 1308, off high of 1310.50.

20070409 14:59. Longs triggered 1304. FKLI delineated by uptrend line.

20070409 12:00. FKLI sets up longs above 1304 and shorts at 1300, if triggered. Going to use 4 point stops, if trades triggered....

20070409 11:02. With the futures breaching 1300, we'd expect a move towards 1306. Stock players perception is of 'bull run'. But we will continue to l9ok for the setup regardless of sentiment. Patience should pay off.

Friday, April 06, 2007

20070406 17:15. FKLI breaks out through the upper resistance 1283, pulls back and makes high of 1283.

20070406 12:02. We have the setup that will see longs at 1283 or shorts at 1278 as the plan. However today being Good Friday may torpedo the plan.

"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