Warning: This is a long posting (what's new??). For those who just want to know where to find a good coach who doesn't burn a hole in your pocket, please scroll right to the end of this posting.
This coming Wednesday will be lesson 19 of M's class. One more class to go and it completes the syllabus.
As I was going through his presentation slides for lesson 19 on Inside Bars, I was amazed by its clarity. One almost doesn't have to attend the class to make sense of the chapter. The slides are mostly charts that identify the inside bars. Then there are charts that show you WHERE exactly to enter and WHERE exactly to place a stop loss.
Although the presentation includes another broader topic - Fibonacci - it does not confuse. Because of the way the syllabus is structured, M's students would have already become familiar with Fibonacci by now. Support and Resistance was thrown in, along with oscillator indicators.
And what you have is a blueprint of where to enter a trade WITH CONFIDENCE, provided that you FOLLOW THE RULES.
M stands out from his counterparts in the region. He REALLY teaches the fundamentals of trading. His syllabus is truly designed for novices. The simplicity of the setups he shares and the step-by-step guidance are a godsend for people who are so new to trading it's not unreasonable or insulting to label them as "idiots".
I started off as an idiot. The course I took prior to M's was designed for those who have been trading for a while, but for some reasons (usually a result of having learnt from self-proclaimed gurus who are more idiotic than the average idiots), were totally slaughtered by the market and had sought the help of my previous trainer. It was not the right course for me although it teaches the basics of trading. For someone who has never entered the market, I needed something even more basic.
6 months after graduating from my first trading course and after having done a lot of reading on topics that even some professional traders can't be bothered with eg. Elliot Waves, and I became quite an expert in indicators after having done extensive research and backtesting on them. Yet I had little experience on TRADING itself. I was kinda "forced" into the real battlefield by D, who was getting quite fed-up with my very academic approach towards trading.
And it was around the time that I was also beginning to wonder why I am so afraid to trade. Yes, I know that I hate to lose and that's probably one of the reasons. But there's something else. I knew I was missing out something.
It was then that a friend who was attending M's class, even though he was already helping to coach my previous trainer's class, recommended that I check out M's class.
I did. And I have to say that M was truly refreshing. He speaks melodiously. Calm and confident, he was not my idea of the typical daytrader. My idea of a serious daytrader has to be unkempt, edgy, and shows a reluctance to teach coz he would rather be trading than teaching. But M showed me enough during his preview to convince me he was who I was looking for to teach me THE fundamentals of trading.
I needed to know how exactly to ENTER A TRADE. WHERE, WHEN, HOW. I would have looked like a complete idiot had I asked in my previous class coz EVERYONE seemed to know where to enter a trade. I might know all the setups, the indicators, what moves the market, recognize patterns that signal a reversal or continuation of a trend. Hell, I can even laugh at authors who write about how useless oscillator indicators are coz I recognize the periods they were making reference to were trending periods, where oscillator indicators, being oscillator indicators, will just stay in oversold or overbought region.
But I don't know where in the world to place my entry.
And I was beyond grateful on the day that M taught the class exactly where to enter a trade. I couldn't believe my eyes when I saw the 2 huge candles on the slide with the lines indicating where you enter and where you put your stop.
Breathtakingly amazing.
Truly for both newbies and traders without actual trading experience, like me.
I know that over time, trading does become more arts than science. But for a bona fide trading novice, M's step-by-step guidance at least gives him/her the confidence to GET STARTED.
I'm not one of those who love living on the edge (Yes I drive fast, but I am at my most alert when I drive and I know every intended move of the drivers around me). In many aspects of my life, I need a blueprint for everything. I tread carefully and I strive for precision in executing my plans . Same goes for trading. I need to know precisely where to enter before I will step into the war zone (I am not delusional though. I don't think that a good entry will guarantee a winning trade. In fact, I've stopped looking at trading from the perspective of winning or losing a trade. But more on that in a separate blog entry.).
Back to M's class.
M's class is designed to get you started on where the real action is: in the market. Without stepping out of the academic/theoretical mode into the market, you will never get the experience you need to practise and sharpen your skills, and you'll never become a successful trader.
Before looking at M's presentation notes for lesson 19, I thought I knew Inside Bars. After going through his presentation, I realized I knew only the definition but not the application of inside bars in real-life trading.
I began to go back to look for his notes on topics that I've become very familiar with eg. Fibonacci, divergences, etc. I hadn't even taken a look at them after I missed those classes (I must have missed half of his course because of conflicts in schedule...long story...)
I am SO going to go back for his make-up classes (once his student, forever his student. You can go back for his lessons as many times as you want and you have Wednesday, Thursdays and Fridays to choose from) on these topics that I thought I had mastered. I have mastered the theory but I'm impressed by how much M knows how to USE them in his trades, through his near 20 years of trading experience.
And Michael loves to teach. I asked him how he does it - to have to be at a certain place (in class) for all his Wedesdays, Thursdays and Fridays. He laughed and said he actually looked forward to his classes. It's not a chore for him. It's his PASSION to teach.
For those who have been trading for a while and still struggling coz you haven't a clue as to what you are doing, M is possibly THE person who can help you.
Although the PIONEER in the field, M charges a fee that is not just reasonable, but amazingly affordable. I don't want to use the word "cheap", because that is the last word I would use to describe his course, which is packed with value.
Let's just say his course is really VALUE FOR MONEY.
And this is the part that M is probably not going to like very much but I'm going to do it anyways:
Go google on "Trading For a Living" and check out M's course.
:-D
Monday, July 21, 2008
Sunday, July 20, 2008
Saturday, July 19, 2008
D
I'm a typical INTJ; D, a typical ISTJ.
One of the traits that INTJs and ISTJs share is this: they think they are always right.
Under normal circumstances, it would have been impossible for D and me to live under the same roof for 15 days, let alone 15 years.
There's something about D that makes it agonizingly hard for me to tear myself away from him.
He's wise.
In the 15 years that I've been with D, he has taught me many things. Had it not been for him, my life would have been a mess. I would not have gotten my degree, and I would most probably have turned out to be just like my mother.
Something that he's told me recently got me thinking about what kind of a person I really want to be.
Do I want to continue to insist on getting my way - at the expense of others - and be eternally unhappy despite getting what I want?
Or is it time to step out of my shoes into those of others so that I can appreciate what they want and find happiness by giving instead of taking?
When I chose the latter, I had no idea how easy it is to just live and let live and how therapeutic it is to not have to keep tabs on whether things around me are working out as I wanted them to.
When the going gets tough these days ie. when I don't get my way, I look within myself - not so much for reasons, logics and answers anymore - but for peace.
And I'm gradually seeing the benefit of not looking for something or someone to blame when I'm upset: I haven't the reason to continue to be upset anymore.
D has this innate ability of constantly finding a way to keep moving forward in the face of adversity. He doesn't give his adversaries - human or inorganic - any power to control his state.
And this is the kind of person I want to be, someday.
One of the traits that INTJs and ISTJs share is this: they think they are always right.
Under normal circumstances, it would have been impossible for D and me to live under the same roof for 15 days, let alone 15 years.
There's something about D that makes it agonizingly hard for me to tear myself away from him.
He's wise.
In the 15 years that I've been with D, he has taught me many things. Had it not been for him, my life would have been a mess. I would not have gotten my degree, and I would most probably have turned out to be just like my mother.
Something that he's told me recently got me thinking about what kind of a person I really want to be.
Do I want to continue to insist on getting my way - at the expense of others - and be eternally unhappy despite getting what I want?
Or is it time to step out of my shoes into those of others so that I can appreciate what they want and find happiness by giving instead of taking?
When I chose the latter, I had no idea how easy it is to just live and let live and how therapeutic it is to not have to keep tabs on whether things around me are working out as I wanted them to.
When the going gets tough these days ie. when I don't get my way, I look within myself - not so much for reasons, logics and answers anymore - but for peace.
And I'm gradually seeing the benefit of not looking for something or someone to blame when I'm upset: I haven't the reason to continue to be upset anymore.
D has this innate ability of constantly finding a way to keep moving forward in the face of adversity. He doesn't give his adversaries - human or inorganic - any power to control his state.
And this is the kind of person I want to be, someday.
Friday, July 18, 2008
Pre-Market Analysis - RUT 7/18
RUT's WEEKLY CHART
What I see: Bearish Hidden Divergence
My interpretation of what I see: Downtrend from early Oct 2007 continues.
Unlike classic divergences, hidden divergences suggest CONTINUATION of trend. Any deviation is often a correction (in an uptrend) or a corrective rally (in a downtrend), or a re-test of price lows and highs.
In the case of the RUT, the rally from Mar this year up to early Jun looks like a re-test of price high (prior to that we were seeing lower highs that confirm the downtrend), and that RUT is still heading south
That said, I see also a Bullish Hidden Divergence suggesting that the corrective rally from Mar is resuming after price slides from its high in Jun. See channel I've drawn showing that upward trend.
To make some sense of what's going on (ie so what trend is RUT in??), I look at my moving averages. They are pointing down, with the slowest on top and fastest below. Candles are beneath MA50. Bearish setup.
Hence this is how I would see the counter rally in the past 2 days - its upward move is greatly restrained. Prices are hemmed about by the main downtrend and the ceiling of the up channel ie price is unlikely to test late Dec 07's high.
Looking at technicals, the stochastic momentum index is showing a very oversold market, which can continue to stay oversold, suggesting that a breakdown in price is possible after a consolidation period (prices nearing moving averages, tells me any movement up or down is going to be held back).
RUT's DAILY CHART
To give me a sense of how much further price is moving up for the week, I zoom into the daily chart. It's showing me an overbought situation. It's not likely to stay overbought, based on pure technicals, since price is going up towards the moving averages, MACD line is in bearish region in spite of the bullish crossover (price moving up in a downtrend - talk about swimming against the current...).
So, seems to me that we are going either sideways or down.
Putting the weekly and daily chart together - now this is purely from my point of view, very personal, and I could very well be wrong so please do your own analysis (what kind of society do we live in where we constantly have to make disclaimers...jeez...):
On weekly chart, we are going to see an oversold market that's here to stay. SMI could stay below -25 in the weeks to come.
Having said that, if the market today is anything like that of late 98's, we could see an end to the correction soon. And we are actually not doing that bad now considering that we've only retraced to Fib 61.8, as compared to the retracement to 50% in Oct 98.
Now this is really just a combination of gut feel and what I'm seeing these past few days: the market is going to resume its upward path. If you look at the DOW chart, you'll notice that the Great Depression is but a blip on the chart, (ok, you won't notice. ZOOM right into the 1920 to 1940 area). A retracement is actually good, necessary in fact. Afterall, what goes up must come down. If we go up too fast (parabolic), we'll fall even harder.
Ok, will stop before I get philosophical.
So what am i doing all this for? Besides the thrill I'm getting out of killing my eyes and my neck, I need it to trade my ER2. Yes, I do intraday trade, mostly scalps in fact, but I need my big picture. Even if it's wrong, what I have is the confidence a trader needs on the battlefield. Not arrogance (coz I do KNOW that there's a 50% chance that I'll be wrong), just merely the assurance that I have gone in prepared and equipped.
In a nutshell, I hate to move in the dark.
What I see: Bearish Hidden Divergence
My interpretation of what I see: Downtrend from early Oct 2007 continues.
Unlike classic divergences, hidden divergences suggest CONTINUATION of trend. Any deviation is often a correction (in an uptrend) or a corrective rally (in a downtrend), or a re-test of price lows and highs.
In the case of the RUT, the rally from Mar this year up to early Jun looks like a re-test of price high (prior to that we were seeing lower highs that confirm the downtrend), and that RUT is still heading south
That said, I see also a Bullish Hidden Divergence suggesting that the corrective rally from Mar is resuming after price slides from its high in Jun. See channel I've drawn showing that upward trend.
To make some sense of what's going on (ie so what trend is RUT in??), I look at my moving averages. They are pointing down, with the slowest on top and fastest below. Candles are beneath MA50. Bearish setup.
Hence this is how I would see the counter rally in the past 2 days - its upward move is greatly restrained. Prices are hemmed about by the main downtrend and the ceiling of the up channel ie price is unlikely to test late Dec 07's high.
Looking at technicals, the stochastic momentum index is showing a very oversold market, which can continue to stay oversold, suggesting that a breakdown in price is possible after a consolidation period (prices nearing moving averages, tells me any movement up or down is going to be held back).
RUT's DAILY CHART
To give me a sense of how much further price is moving up for the week, I zoom into the daily chart. It's showing me an overbought situation. It's not likely to stay overbought, based on pure technicals, since price is going up towards the moving averages, MACD line is in bearish region in spite of the bullish crossover (price moving up in a downtrend - talk about swimming against the current...).
So, seems to me that we are going either sideways or down.
Putting the weekly and daily chart together - now this is purely from my point of view, very personal, and I could very well be wrong so please do your own analysis (what kind of society do we live in where we constantly have to make disclaimers...jeez...):
On weekly chart, we are going to see an oversold market that's here to stay. SMI could stay below -25 in the weeks to come.
Having said that, if the market today is anything like that of late 98's, we could see an end to the correction soon. And we are actually not doing that bad now considering that we've only retraced to Fib 61.8, as compared to the retracement to 50% in Oct 98.
Now this is really just a combination of gut feel and what I'm seeing these past few days: the market is going to resume its upward path. If you look at the DOW chart, you'll notice that the Great Depression is but a blip on the chart, (ok, you won't notice. ZOOM right into the 1920 to 1940 area). A retracement is actually good, necessary in fact. Afterall, what goes up must come down. If we go up too fast (parabolic), we'll fall even harder.
Ok, will stop before I get philosophical.
So what am i doing all this for? Besides the thrill I'm getting out of killing my eyes and my neck, I need it to trade my ER2. Yes, I do intraday trade, mostly scalps in fact, but I need my big picture. Even if it's wrong, what I have is the confidence a trader needs on the battlefield. Not arrogance (coz I do KNOW that there's a 50% chance that I'll be wrong), just merely the assurance that I have gone in prepared and equipped.
In a nutshell, I hate to move in the dark.
Thursday, July 17, 2008
My Life...& Forex...& The Iron Man
Ok, I didn't go back into the market after my last blog entry. It had been a long day with multiple migraine attacks (which miraculously went away slightly before market opened last night and came back this morning...)...
Most of all, I didn't want to over-trade. It was a mistake I made once before and it nearly destroyed my state and I don't want to repeat it. I hate making the same mistake twice, which is why I do "after action reviews" after major screw-ups. I conduct a postmortem and then generate from the result a list of "to do's" and "not-to-do's" and put them somewhere where I can see them often enough (Back at my old home, I had 10 mistakes I vow never to make again as a relationship manager printed out and plastered on the walls of my study, my bedroom, where the TV was, right by my dressing mirror, and yes, in my restroom too. Drove D nuts.).
Ok, back to last night.
So I took an hour to document what I did right and wrong for my trades. It took me an hour, coz, like I've mentioned, I had put in bracket orders for all my trades, for the first time. Which means I had my stop loss and profit target figured out for each. Which means I have REASONS to enter each of these trades (or more precisely, no reasons NOT to enter...boy, I've got to learn to be more laconic with my description...), and hence, more to write.
Then I did a little reading and turned in at probably a quarter past 5 in the morning. Struggled out of bed 2 hours later to have breakfast with D (while stealing glances at the charts on my computer screen).
When D was done getting dressed, I was already on my forex trading platform.
D couldn't believe his eyes.
I promised him I would get some rest.
But of course after PATIENTLY waiting for him to get out of the house, I dashed back into my study's to see how US market has fared last night, how the world has fared, what the central banks and the policy makers are cooking now and brewing for the days, weeks and months to come, how commodities are doing, did someone who can move the yen say something, etc.
And this "morning tour" is the part that I love best about trading forex. When it comes to forex trading, I have become less fixated on technicals coz as much as I love my charts, I started to see consistently good results only when I began to drop them, albeit not totally. As far as charts go, I will take a look at where the pair is trading within a 10-year, 1-year and 1-month period and that's it.
Many would disagree with my approach, and it's ok. Trading is really a personal thing. So, to each his own.
I used to trade a few currency pairs at one go, especially during periods when a certain prevalent trend or "theme" seemed to be there to stay. For instance, when there were signs that carry trades were unwinding coz the global market was really letting the Japanese down or freaking them out, I bought Yen and sold US and all those affected by US (EUR, GBP, CAD). Other than CAD, I didn't touch the other commodity currencies coz commodities were (and still are today) doing well then. When there's no clear winner and loser in a pair, I just don't trade the pair.
What I usually do is to buy just one lot to reduce my exposure to too high a gearing that's very generously offered by most brokers. Because there's no precise entry, I am ready to give room for the trade to go in my direction, as long as I have confidence in my short and intermediate view of where the pair is going.
Unlike stocks, currencies trade around a median, and as long as you are somewhere around there and going IN the direction that it's going, you will eventually get there (where the pot of gold is). But if your view is wrong, it'll be like taking a wrong bus. In which case, once you realize the bus is not heading towards your destination, get off and wait for the RIGHT bus to come along and hop on.
How do I know I'm on the wrong bus, since I allow my bus to take detours? Well, I keep tabs on news almost the entire day.
The only news I don't keep up with is my own country's.
The reason that I have no problem walking out to get a smoke by myself at 3, 4 and 5 am is because I feel safe in this peaceful little island. Nothing much happens here. Uneventful is how most living here will report their typical days to be.
Anyways, if anything MAJOR does happen, I would hear it from Seabloke (e.g. the first time in the country's history that someone broke out of prison...Actually, he's not the first. The first man who successfully got out, but was caught again, is now a esteemed pastor who recounted his very interesting life in his book "Iron Man"...check out Neville Tan..the bit that sent me rolling on the floor laughing was when he related how, while being incarcerated for manslaughter, he had randomly torn out from a bible a page to use as cigarette paper to roll his smoke..and - if I didn't get this mixed up with another similar story - it turned out that the page he tore out had John3:16 on it...hmmmm....).
Now, where was I?
Oh, Forex.
But enough of Forex.
I'm such a junkie.
When Ken wrote me to ask how my day was and that he's was boring, I replied,"Too many books to read. Too many charts to see. Too many forums to follow,. Too many things I wanna write on my blog. Too GREEDY!!"
"A small lady with a big stomach...tzk tzk tzk...."
Spot on, Ken.
But I'm getting smaller only coz I'm forgetting my meals! :-D
Most of all, I didn't want to over-trade. It was a mistake I made once before and it nearly destroyed my state and I don't want to repeat it. I hate making the same mistake twice, which is why I do "after action reviews" after major screw-ups. I conduct a postmortem and then generate from the result a list of "to do's" and "not-to-do's" and put them somewhere where I can see them often enough (Back at my old home, I had 10 mistakes I vow never to make again as a relationship manager printed out and plastered on the walls of my study, my bedroom, where the TV was, right by my dressing mirror, and yes, in my restroom too. Drove D nuts.).
Ok, back to last night.
So I took an hour to document what I did right and wrong for my trades. It took me an hour, coz, like I've mentioned, I had put in bracket orders for all my trades, for the first time. Which means I had my stop loss and profit target figured out for each. Which means I have REASONS to enter each of these trades (or more precisely, no reasons NOT to enter...boy, I've got to learn to be more laconic with my description...), and hence, more to write.
Then I did a little reading and turned in at probably a quarter past 5 in the morning. Struggled out of bed 2 hours later to have breakfast with D (while stealing glances at the charts on my computer screen).
When D was done getting dressed, I was already on my forex trading platform.
D couldn't believe his eyes.
I promised him I would get some rest.
But of course after PATIENTLY waiting for him to get out of the house, I dashed back into my study's to see how US market has fared last night, how the world has fared, what the central banks and the policy makers are cooking now and brewing for the days, weeks and months to come, how commodities are doing, did someone who can move the yen say something, etc.
And this "morning tour" is the part that I love best about trading forex. When it comes to forex trading, I have become less fixated on technicals coz as much as I love my charts, I started to see consistently good results only when I began to drop them, albeit not totally. As far as charts go, I will take a look at where the pair is trading within a 10-year, 1-year and 1-month period and that's it.
Many would disagree with my approach, and it's ok. Trading is really a personal thing. So, to each his own.
I used to trade a few currency pairs at one go, especially during periods when a certain prevalent trend or "theme" seemed to be there to stay. For instance, when there were signs that carry trades were unwinding coz the global market was really letting the Japanese down or freaking them out, I bought Yen and sold US and all those affected by US (EUR, GBP, CAD). Other than CAD, I didn't touch the other commodity currencies coz commodities were (and still are today) doing well then. When there's no clear winner and loser in a pair, I just don't trade the pair.
What I usually do is to buy just one lot to reduce my exposure to too high a gearing that's very generously offered by most brokers. Because there's no precise entry, I am ready to give room for the trade to go in my direction, as long as I have confidence in my short and intermediate view of where the pair is going.
Unlike stocks, currencies trade around a median, and as long as you are somewhere around there and going IN the direction that it's going, you will eventually get there (where the pot of gold is). But if your view is wrong, it'll be like taking a wrong bus. In which case, once you realize the bus is not heading towards your destination, get off and wait for the RIGHT bus to come along and hop on.
How do I know I'm on the wrong bus, since I allow my bus to take detours? Well, I keep tabs on news almost the entire day.
The only news I don't keep up with is my own country's.
The reason that I have no problem walking out to get a smoke by myself at 3, 4 and 5 am is because I feel safe in this peaceful little island. Nothing much happens here. Uneventful is how most living here will report their typical days to be.
Anyways, if anything MAJOR does happen, I would hear it from Seabloke (e.g. the first time in the country's history that someone broke out of prison...Actually, he's not the first. The first man who successfully got out, but was caught again, is now a esteemed pastor who recounted his very interesting life in his book "Iron Man"...check out Neville Tan..the bit that sent me rolling on the floor laughing was when he related how, while being incarcerated for manslaughter, he had randomly torn out from a bible a page to use as cigarette paper to roll his smoke..and - if I didn't get this mixed up with another similar story - it turned out that the page he tore out had John3:16 on it...hmmmm....).
Now, where was I?
Oh, Forex.
But enough of Forex.
I'm such a junkie.
When Ken wrote me to ask how my day was and that he's was boring, I replied,"Too many books to read. Too many charts to see. Too many forums to follow,. Too many things I wanna write on my blog. Too GREEDY!!"
"A small lady with a big stomach...tzk tzk tzk...."
Spot on, Ken.
But I'm getting smaller only coz I'm forgetting my meals! :-D
Wednesday, July 16, 2008
Moving On
Was at my old home for the last time today to let the movers from the town council clear out 3 huge items.
Notice I said moverS.
Imagine my surprise when a dark and refined looking chap less than an inch taller than me (I wasn't in heels) and probably less than 10 kg heavier, showed up at my door.
"Are we waiting for your men?"
"No, just me."
Faint...
The Jude Law lookalike dragged my sofa out in less than 3 minutes, came back for the refrigerator which was out in under 5 minutes (he struggled with the cord for about a minute...). After that he stood silently by my study table, the grandest item in my home, looked under it, and then picked up his phone to call for reinforcement.
While waiting, he yanked out a ply of wood from one part of my table, using pure brute force.
Impressive.
A few minutes later, another ply from the other end came off.
The plies started piling on the floor.
The middle part of the table was as sturdy as it was when it came in 10 years ago, and posed a real challenge to the mover.
The course he eventually took to separate it from the table's frame bordered on a small-scale demolition...all I can say now is that I was glad that as of today, 99% of my neighbors have vacated the building.
I resisted the urge to capture the kodak moment...
But my desire to share with Seabloke anything out of this world got the better of me, and I took a few shots of JL...and my very badly battered table.
I stayed a while after the mover left. What used to be my home had been completely emptied of its contents. It was in a sorry state. But mine was not any better. It's 10 years of memories with D that I was leaving behind.
And those were the better days.
The day I moved into my new home was the day I knew that D and I would no longer be who we used to be.
Little wonder that I have always resisted growing up. I've never asked my parents what lied ahead when I grew up coz I KNEW what it would be like and I prayed it would not come true.
Much as I've always hated que sera sera, I've come to terms with the fact that I have no control over life's circumstances from this point on. The best I can do is choose the best way to react to them.
And I can think of no better way than to simply move on.
Notice I said moverS.
Imagine my surprise when a dark and refined looking chap less than an inch taller than me (I wasn't in heels) and probably less than 10 kg heavier, showed up at my door.
"Are we waiting for your men?"
"No, just me."
Faint...
The Jude Law lookalike dragged my sofa out in less than 3 minutes, came back for the refrigerator which was out in under 5 minutes (he struggled with the cord for about a minute...). After that he stood silently by my study table, the grandest item in my home, looked under it, and then picked up his phone to call for reinforcement.
While waiting, he yanked out a ply of wood from one part of my table, using pure brute force.
Impressive.
A few minutes later, another ply from the other end came off.
The plies started piling on the floor.
The middle part of the table was as sturdy as it was when it came in 10 years ago, and posed a real challenge to the mover.
The course he eventually took to separate it from the table's frame bordered on a small-scale demolition...all I can say now is that I was glad that as of today, 99% of my neighbors have vacated the building.
I resisted the urge to capture the kodak moment...
But my desire to share with Seabloke anything out of this world got the better of me, and I took a few shots of JL...and my very badly battered table.
I stayed a while after the mover left. What used to be my home had been completely emptied of its contents. It was in a sorry state. But mine was not any better. It's 10 years of memories with D that I was leaving behind.
And those were the better days.
The day I moved into my new home was the day I knew that D and I would no longer be who we used to be.
Little wonder that I have always resisted growing up. I've never asked my parents what lied ahead when I grew up coz I KNEW what it would be like and I prayed it would not come true.
Much as I've always hated que sera sera, I've come to terms with the fact that I have no control over life's circumstances from this point on. The best I can do is choose the best way to react to them.
And I can think of no better way than to simply move on.
Tuesday, July 15, 2008
Empty Your Cup
Paper traded the ER2 last night using a different approach from that which I've become accustomed to, and my performance was unimpressive at best. I was stopped out at least 6 times, and I stop counting after that. It was after I resumed to using my scalping method that I recovered some of the losses. But I was hardly consoled. I knew it's time I take a pause to figure out what exactly I have been doing and whether I'm sabotaging myself in the long run.
What transpired last night reminded me of 3 scenes from " The Forbidden Kingdom starring Jackie Chan and Jet Li.
In the first scene, the impressionable, kungfu obssesed protagonist was seen furiously cutting away wild grass as part of the training program devised by the drunken beggar played by Jackie Chan. Jason, the protagonist, needed to master martial arts in a very short period of time in preparation for his mission: to take on the Jade Army and use the "magic staff" to free the Monkey King that has been imprisoned for 500 years by the evil Jade Lord.
"When are you going to teach me kungfu?" Jason, who was hardly hot on the heels of the powerful opponent he was to take on, was getting frustrated with Lu Yang, the drunken beggar, for the latter's indifference to his lack of progress.
"You want to learn kungfu? I'll teach you kungfu" Lu Yang responded with a spoonful of sarcasm, before hitting Jason apathetically in his arm with a stick.
"That's called STRIKE; tomorrow teach you BLOCK".
Lu Yang's message clearly didn't get through to Jason. In the scene that followed immediately, Jason was seen reciting enthusiastically names of kungfu techniques like Buddha's Palm, Iron Elbow, One finger Death Touch, probably hinting to Lu to teach him these techniques.
Lu was pouring tea into Jason's cup as he was yakking away, and overfilled his cup.
When Jason told him to stop coz his cup was full, this was what Lu said,"Exactly, how can you fill your cup when it's already full? How can you learn kungfu when you already know so much?...no Buddha Palm. Empty your cup."
In the 3rd scene, Jason was totally nonplussed by Jet Li's character, the Silent Monk, and Lu Yang, who were competing to get Jason to learn their respective techniques. One was traditional; the other, unorthodox at best. Both equally potent, but were clearly overwhelming for Jason, who hasn't any FOUNDATION in kungfu to begin with.
The 2 kungfu gurus' attempt to enlighten Jason on the way of the martial arts culminated with them taking turns to utter what seemed at first to be a heap of kungfu mumbo jumbo :
Kungfu, hard work overtime to accomplish skills...
Learn the form, but seek the formless.
Hear the soundless.
Learn it all, and FORGET it all.
Learn the way, but FIND YOUR OWN WAY.
So much for counting on gurus to really teach you something. :-D
I have to say that I'd never have expected to take away so much from a Jackie Chan movie.
All the above martial arts gobbledygook have offered much insights that I find applicable to trading.
What I was reminded of is this: if you find yourself lost and losing precious capital, it's worth taking a step back. Go back to basics, start from taking a good look at how you manage your finances and the risks you're taking with your trades, learn to read pure price movements without the help of indicators (Jesse Livermore could do it, so can you), learn to identify key supports and resistances, etc. Drop your software, your systems, your Elliot waves, your Fibonacci fans and arcs, the 50 indicators you use for entry signals etc, etc.
Just go back to learning how to block and strike properly before you venture back into the market with your Iron Elbows and Buddha's Palm, only to get clobbered by gurus who have put in years of hard work to fortify their foundation.
Do something about those itchy fingers that are ever so tempted to hit the "transmit" button (Now, that's what I'd call the "One Finger Death Touch").
I've saved the best for last - the single most important trading skill that you have to learn, one that's probably the most difficult to master is this:
If the trade has gotten awry, before the situation gets dire, like what M said, "RUN!"
What transpired last night reminded me of 3 scenes from " The Forbidden Kingdom starring Jackie Chan and Jet Li.
In the first scene, the impressionable, kungfu obssesed protagonist was seen furiously cutting away wild grass as part of the training program devised by the drunken beggar played by Jackie Chan. Jason, the protagonist, needed to master martial arts in a very short period of time in preparation for his mission: to take on the Jade Army and use the "magic staff" to free the Monkey King that has been imprisoned for 500 years by the evil Jade Lord.
"When are you going to teach me kungfu?" Jason, who was hardly hot on the heels of the powerful opponent he was to take on, was getting frustrated with Lu Yang, the drunken beggar, for the latter's indifference to his lack of progress.
"You want to learn kungfu? I'll teach you kungfu" Lu Yang responded with a spoonful of sarcasm, before hitting Jason apathetically in his arm with a stick.
"That's called STRIKE; tomorrow teach you BLOCK".
Lu Yang's message clearly didn't get through to Jason. In the scene that followed immediately, Jason was seen reciting enthusiastically names of kungfu techniques like Buddha's Palm, Iron Elbow, One finger Death Touch, probably hinting to Lu to teach him these techniques.
Lu was pouring tea into Jason's cup as he was yakking away, and overfilled his cup.
When Jason told him to stop coz his cup was full, this was what Lu said,"Exactly, how can you fill your cup when it's already full? How can you learn kungfu when you already know so much?...no Buddha Palm. Empty your cup."
In the 3rd scene, Jason was totally nonplussed by Jet Li's character, the Silent Monk, and Lu Yang, who were competing to get Jason to learn their respective techniques. One was traditional; the other, unorthodox at best. Both equally potent, but were clearly overwhelming for Jason, who hasn't any FOUNDATION in kungfu to begin with.
The 2 kungfu gurus' attempt to enlighten Jason on the way of the martial arts culminated with them taking turns to utter what seemed at first to be a heap of kungfu mumbo jumbo :
Kungfu, hard work overtime to accomplish skills...
Learn the form, but seek the formless.
Hear the soundless.
Learn it all, and FORGET it all.
Learn the way, but FIND YOUR OWN WAY.
So much for counting on gurus to really teach you something. :-D
I have to say that I'd never have expected to take away so much from a Jackie Chan movie.
All the above martial arts gobbledygook have offered much insights that I find applicable to trading.
What I was reminded of is this: if you find yourself lost and losing precious capital, it's worth taking a step back. Go back to basics, start from taking a good look at how you manage your finances and the risks you're taking with your trades, learn to read pure price movements without the help of indicators (Jesse Livermore could do it, so can you), learn to identify key supports and resistances, etc. Drop your software, your systems, your Elliot waves, your Fibonacci fans and arcs, the 50 indicators you use for entry signals etc, etc.
Just go back to learning how to block and strike properly before you venture back into the market with your Iron Elbows and Buddha's Palm, only to get clobbered by gurus who have put in years of hard work to fortify their foundation.
Do something about those itchy fingers that are ever so tempted to hit the "transmit" button (Now, that's what I'd call the "One Finger Death Touch").
I've saved the best for last - the single most important trading skill that you have to learn, one that's probably the most difficult to master is this:
If the trade has gotten awry, before the situation gets dire, like what M said, "RUN!"
A Friend for a Husband; Compassion vs Passion
A friend whose wife has left him for some time now said that he was a better friend than a husband to her.
This friend is one of the calmest persons I've met. I haven't known him a long time, but from what I observed, he's the kind that tends to be able to take things in stride. And by that I don't mean that he's a doormat. He's the type that deals with people accordingly - he has rather strong opinions about issues that are beyond the mundane matters of life, and is guided by a distinctive set of principles that I've yet to make out, but he is gentle and accommodating in his treatment of people.
Based on what he's related to me, I think he would have still been happily married today had he met someone who's able to appreciate a soulmate who's a better friend than lover.
I speak from personal experience.
While I've been taught from young by my Dad and my granny that a kind and gentle man who devotes his time to work and contributing to society is the marrying kind, my mother has taught me that if I'm ever going to be happy, I'll have to look for someone who puts me on a pedestal.
Maybe it's genes, maybe I just don't take to my mother's teachings very well, I grew up shunning men who dropped everything else to attend to me. On the one rare occasion that I chose sheer fervor over benevolence, the relationship ended in disaster and left a really bad taste in my mouth.
Looking back, the person was callous and hostile whenever he was crossed or felt let down. And in misery, he made sure that he dragged me down with him. This was the same man who treated me like a princess whenever life was hunky dory - the wildly passionate and poetic kind who was willing to drop almost everything for the object of his infatuation.
There have been times that I ponder on whether I've been unfair to him - I walked out because I felt it was the right thing to do. I cannot imagine living with someone whose temperament is as unpredictable as the choppy market these days, and who doesn't seem to have an identifiable set of rules and principles that guide him in his dealing with people and life in general. He seems moved entirely by his emotions and that petrified me.
I admire a man who has integrity, a big heart and stable temperament, who stands by his rules and principles, has his views about people and everyday affairs but keep them to himself until such time that he's asked for them. This is the kind of man you can trust to never hurt you - unless you CHOOSE to feel hurt , because while you were looking for full-blooded romance, all you got was heartwarming companionship.
A partner who's more a friend than a lover is someone who cares about you in ways that will make you a better person even if one day you have to part. Unlike the wildly passionate and romantic kind, who do things for you to satisfy an intense need to be appreciated, the "friendly" sort thinks and acts with your interest and well-being in mind. They are gentle with your feelings and will not impose on you. If they have to keep their opinions to themselves to not upset you unnecessarily, they will do so without hesitation, and without having to make an issue out of it.
Because of their meekness, their acts of benevolence usually escape the eyes of those looking for out-and-out declaration of utter devotion and adoration.
Blessed are those who are able to appreciate this type of love, and reciprocate with the same tenderness that will keep a marriage ever so warm and the bonding so robust that it can weather any trying times and circumstances.
I believe that my friend, who has been single since, is truly as happy as he claims he is. And although he claims that he was a better friend than a husband, I think he has loved his ex-wife the way a woman should be loved.
A person who can find happiness within himself is the kind who is able to give love without expecting anything back. Unfortunately, i reckon, this lack of "aggression" in demanding for affection is often what drives a woman who's looking for excitement and fireworks away. In which case, there is no loss to the man and he can now wait for someone who knows the true meaning of love to come along to walk the rest of his life with him.
Meanwhile, he's much better off spending his leisure time playing poker with friends.
This friend is one of the calmest persons I've met. I haven't known him a long time, but from what I observed, he's the kind that tends to be able to take things in stride. And by that I don't mean that he's a doormat. He's the type that deals with people accordingly - he has rather strong opinions about issues that are beyond the mundane matters of life, and is guided by a distinctive set of principles that I've yet to make out, but he is gentle and accommodating in his treatment of people.
Based on what he's related to me, I think he would have still been happily married today had he met someone who's able to appreciate a soulmate who's a better friend than lover.
I speak from personal experience.
While I've been taught from young by my Dad and my granny that a kind and gentle man who devotes his time to work and contributing to society is the marrying kind, my mother has taught me that if I'm ever going to be happy, I'll have to look for someone who puts me on a pedestal.
Maybe it's genes, maybe I just don't take to my mother's teachings very well, I grew up shunning men who dropped everything else to attend to me. On the one rare occasion that I chose sheer fervor over benevolence, the relationship ended in disaster and left a really bad taste in my mouth.
Looking back, the person was callous and hostile whenever he was crossed or felt let down. And in misery, he made sure that he dragged me down with him. This was the same man who treated me like a princess whenever life was hunky dory - the wildly passionate and poetic kind who was willing to drop almost everything for the object of his infatuation.
There have been times that I ponder on whether I've been unfair to him - I walked out because I felt it was the right thing to do. I cannot imagine living with someone whose temperament is as unpredictable as the choppy market these days, and who doesn't seem to have an identifiable set of rules and principles that guide him in his dealing with people and life in general. He seems moved entirely by his emotions and that petrified me.
I admire a man who has integrity, a big heart and stable temperament, who stands by his rules and principles, has his views about people and everyday affairs but keep them to himself until such time that he's asked for them. This is the kind of man you can trust to never hurt you - unless you CHOOSE to feel hurt , because while you were looking for full-blooded romance, all you got was heartwarming companionship.
A partner who's more a friend than a lover is someone who cares about you in ways that will make you a better person even if one day you have to part. Unlike the wildly passionate and romantic kind, who do things for you to satisfy an intense need to be appreciated, the "friendly" sort thinks and acts with your interest and well-being in mind. They are gentle with your feelings and will not impose on you. If they have to keep their opinions to themselves to not upset you unnecessarily, they will do so without hesitation, and without having to make an issue out of it.
Because of their meekness, their acts of benevolence usually escape the eyes of those looking for out-and-out declaration of utter devotion and adoration.
Blessed are those who are able to appreciate this type of love, and reciprocate with the same tenderness that will keep a marriage ever so warm and the bonding so robust that it can weather any trying times and circumstances.
I believe that my friend, who has been single since, is truly as happy as he claims he is. And although he claims that he was a better friend than a husband, I think he has loved his ex-wife the way a woman should be loved.
A person who can find happiness within himself is the kind who is able to give love without expecting anything back. Unfortunately, i reckon, this lack of "aggression" in demanding for affection is often what drives a woman who's looking for excitement and fireworks away. In which case, there is no loss to the man and he can now wait for someone who knows the true meaning of love to come along to walk the rest of his life with him.
Meanwhile, he's much better off spending his leisure time playing poker with friends.
Saturday, July 12, 2008
Trader's Instinct
A few days ago, I sent out an SOS via email to my trading instructor after having been nonplussed by the market, my trades, and everything I’ve been doing so far in my scalping activities.
M was very kind and responded by calling (well, ok, the truth is, M's not really big on writing). In the course of our conversation, the words "instinct" and "intuition" came up a few times. I've been mulling over them since. It doesn't bother me a bit that my trading coach believes that "instinct" plays a part in trading, probably coz I tend to see trading as an art. I believe that to master it, our “sixth sense” SHOULD be included in our depository of trading arsenals.
For me to make a claim like this seems a tad out of character, since I'm supposed to be among those whose left-brain is somewhat more developed than the right – a typical INTJ. Logical and pragmatic – that’s what we are. I reckon that it's precisely the pragmatic side of me that makes me see the folly of hanging on to the limiting belief that the only way to figure out the market is via logical and scientific analysis. In fact, it's senseless to even want to figure out what the market is going to do in the next few minutes as if it will let you, if only you'll TRY.
Truth be told, the market is essentially organic. It's alive and is constantly growing and evolving. That's because the market, at its very core, is merely a hodgepodge of institutional players (hedge fund companies, members of exchanges, the specialists, the market makers etc) and retailers (the general public) transacting with one another. Whenever we talk about moving the market, we are talking about moving "people" – living things with cognitive abilities, emotions, agendas, and what have you – in certain directions. While in time, people do see the development of patterns and figure out the course the majority is taking and catch up with what they are doing, in the here and now, your guess is as good as mine when it comes to predicting the result of the collective actions of hundreds of millions of market participants (bearing in mind that just because you don’t buy or sell stocks or invest in anyway, it doesn't make you a passive observer of the market. You are, even if you don’t step out of your house, a participant in the market. Here's a simple example: when you use your handphone, you’re contributing to your mobile service providers’ revenue. Don't wish to get long-winded, guess we get the drift here) in the minutes, hours, or days, or even weeks to come.
For players using very short trading timeframes, any attempts to make sense of where the market is heading exactly in the next candle will more often than not prove to be futile. As short-term traders, in particular, daytraders and scalpers, all we can do is to make the best of what we have at our disposal: the knowledge we’ve acquired so far, the lessons we learn from on the field experiences, the skills we’ve sharpened through tireless practice, and the market signals that we pick up with all our senses throughout the day and over days and weeks (I’m not talking about the ‘tips’ you HEAR from your fish mongre..monger…I mean, although if I hear the same from the vegetable sellers too, and other fishmongers and vegetable sellers in other wet markets, and if the cab drivers are echoing a similar opinion, I would probably start digging deeper in case the ‘tips’ is indeed supported by legitimate basis).
Now that’s really a mouthful. Many, like M, would simply call the above “intuition”, or “instinct”.
If I’ve started losing everyone since paragraph 2, Brett Steenbarger, who wrote “The Psychology of Trading”, might help to clear the air on the difference between longer-term trading / investment and short-term trading and the distinctive skills required to excel in them:
"The expertise of the diagnosing physician is akin to that of the long-term investor. Other forms of expertise, such as those of the short-term trader, do not allow for the luxury of extended decision making. The fighter pilot, hockey goalie, or SWAT team member must integrate information on the fly, making critical decisions by "instinct" alone. Such instinct, however, is actually highly automatized skill. The expert scalper integrates a huge amount of information from price, volume, time of day, and shifts in the depth of market. This integration, however, is not a deliberative process. It is built into the scalper's perception."
The above is extracted from his blog entry here.
Here's the sequel where Steenbarger talks about how traders who apply the wrong skills for the timeframe they are trading or using the wrong timeframe for the skills they’ve developed are doing so at their own peril.
M was very kind and responded by calling (well, ok, the truth is, M's not really big on writing). In the course of our conversation, the words "instinct" and "intuition" came up a few times. I've been mulling over them since. It doesn't bother me a bit that my trading coach believes that "instinct" plays a part in trading, probably coz I tend to see trading as an art. I believe that to master it, our “sixth sense” SHOULD be included in our depository of trading arsenals.
For me to make a claim like this seems a tad out of character, since I'm supposed to be among those whose left-brain is somewhat more developed than the right – a typical INTJ. Logical and pragmatic – that’s what we are. I reckon that it's precisely the pragmatic side of me that makes me see the folly of hanging on to the limiting belief that the only way to figure out the market is via logical and scientific analysis. In fact, it's senseless to even want to figure out what the market is going to do in the next few minutes as if it will let you, if only you'll TRY.
Truth be told, the market is essentially organic. It's alive and is constantly growing and evolving. That's because the market, at its very core, is merely a hodgepodge of institutional players (hedge fund companies, members of exchanges, the specialists, the market makers etc) and retailers (the general public) transacting with one another. Whenever we talk about moving the market, we are talking about moving "people" – living things with cognitive abilities, emotions, agendas, and what have you – in certain directions. While in time, people do see the development of patterns and figure out the course the majority is taking and catch up with what they are doing, in the here and now, your guess is as good as mine when it comes to predicting the result of the collective actions of hundreds of millions of market participants (bearing in mind that just because you don’t buy or sell stocks or invest in anyway, it doesn't make you a passive observer of the market. You are, even if you don’t step out of your house, a participant in the market. Here's a simple example: when you use your handphone, you’re contributing to your mobile service providers’ revenue. Don't wish to get long-winded, guess we get the drift here) in the minutes, hours, or days, or even weeks to come.
For players using very short trading timeframes, any attempts to make sense of where the market is heading exactly in the next candle will more often than not prove to be futile. As short-term traders, in particular, daytraders and scalpers, all we can do is to make the best of what we have at our disposal: the knowledge we’ve acquired so far, the lessons we learn from on the field experiences, the skills we’ve sharpened through tireless practice, and the market signals that we pick up with all our senses throughout the day and over days and weeks (I’m not talking about the ‘tips’ you HEAR from your fish mongre..monger…I mean, although if I hear the same from the vegetable sellers too, and other fishmongers and vegetable sellers in other wet markets, and if the cab drivers are echoing a similar opinion, I would probably start digging deeper in case the ‘tips’ is indeed supported by legitimate basis).
Now that’s really a mouthful. Many, like M, would simply call the above “intuition”, or “instinct”.
If I’ve started losing everyone since paragraph 2, Brett Steenbarger, who wrote “The Psychology of Trading”, might help to clear the air on the difference between longer-term trading / investment and short-term trading and the distinctive skills required to excel in them:
"The expertise of the diagnosing physician is akin to that of the long-term investor. Other forms of expertise, such as those of the short-term trader, do not allow for the luxury of extended decision making. The fighter pilot, hockey goalie, or SWAT team member must integrate information on the fly, making critical decisions by "instinct" alone. Such instinct, however, is actually highly automatized skill. The expert scalper integrates a huge amount of information from price, volume, time of day, and shifts in the depth of market. This integration, however, is not a deliberative process. It is built into the scalper's perception."
The above is extracted from his blog entry here.
Here's the sequel where Steenbarger talks about how traders who apply the wrong skills for the timeframe they are trading or using the wrong timeframe for the skills they’ve developed are doing so at their own peril.
Thoughts on Trading for a Living
Someone once told me that women don't make good traders. Many others told me that if one hasn't developed a penchant for trading and investing in the very early years of their life, or for making money, it's highly unlikely they will make it in the field of trading.
And I fall under both categories.
First, I have never been big on matters related to investment. Given a choice, I didn't even want to know my own financial status. I hated filling up my income and expense sheets and I hadn't an inkling what my networth was. The only thing I was very mindful about was not to pay the credit company a single cent in interest, and I use credit cards only to accumulate points (Maybe I have something against the notion of profiting from people who are either not matured, or simply not sensible enough, to not use money they haven't had.)
Secondly - and I'm serious about this - I used to think that people who aspire to accumulate great wealth are self-serving individuals who are not worthy of my respect. I'm not blaming my Dad for inculcating that sort of mindset in me though - he was just concerned that I could grow up materialistic given that things had always come easy for me since I was born.
To cut a long story short, sometime in 2007, something happened and I decided to take a good look at all my assumptions and rules regarding how one is to live his/her life, and question many mental models I had which were limiting my potentials and stifling me. One thing leads to another, and I found myself taking an interest in trading and exploring what seems like a really disastrous career path for someone with my disposition.
"How I trade for a living" by Gary Smith was the first book I read on trading. I had stumbled upon it while browsing at a bookstore. It was sitting on one of those shelves that are hard to reach - says a great deal about how nonconforming it must be. My kind of book. My suspicion was somewhat proven when I flipped to the author's profile page. Without any disrespect to the author, his picture convinced me that this trader (I avoid books on trading that are written by people who don't trade themselves, or have no concrete results to show that I can learn anything from them) probably cares about nothing else but trading. I bought it, because I believe in learning only from people who are obsessed with what they do. Most call that "passion". I prefer to use "obsession", just to make sure I get my point across.
I've since gone on to read many books written by great traders and people who interviewed them. "Reminiscence of a Stock Operator" is one of my favorite. But Gary Smith's is my companion. I've asked a number of traders and none of them have heard of him. Totally explains why he was chucked in an inconspicuous corner of the bookstore.
I suck at doing book review, and I am so glad to find a quality review done by this guy who's helped (not directly, but in his capacity as a software programmer or something along that line...) Smith (who's mathematically challenged...yup, I totally love a trader with a damaged left brain...) to find a way to figure out how much tax he had to pay on the annualized returns the latter was making within a 5-year period.
Check out what he has to say about Gary and his book here
And interestingly, Smith is among those who believed that if you have a passion for something, you probably started showing signs of it as a child. I agree with him whole-heartedly. My brother loved airplanes as a child and he joined the youth flying club when he was in elementary school, and traded his engineering degree (he was 3 months from graduation) for a once-in-a-life time opportunity he couldn't miss to join the SIA. He's now a First Officer. Seabloke loves anything that has a high probability of killing her, and she now helps to run a diving centre after retiring from rescue diving (she especially loves those deep dark caves that are 3000 feet down). Me, I used to want to be a brain surgeon coz I thought it's noble to want to save lives. Then I wanted to be a singer coz...well, i love to sing. Then I just wanted to do something that wouldn't bore me after 3 days of doing it and something that will make me feel like getting out of bed for EVERY morning.
I can't wait to get up to get to my charts and all my trading books now - EVERY morning. So I guess I found my passion. And I want to make a living out of it. Smith and the others might/ would have seen that as an unwise decision on my part. But I've proven time and again to be able to do anything that people say I can't pull off, as long as I'm obsessed in proving them wrong.
But in all honesty, I do love trading. And I don't care about people's opinion and beliefs surrounding the topic in question.
And I fall under both categories.
First, I have never been big on matters related to investment. Given a choice, I didn't even want to know my own financial status. I hated filling up my income and expense sheets and I hadn't an inkling what my networth was. The only thing I was very mindful about was not to pay the credit company a single cent in interest, and I use credit cards only to accumulate points (Maybe I have something against the notion of profiting from people who are either not matured, or simply not sensible enough, to not use money they haven't had.)
Secondly - and I'm serious about this - I used to think that people who aspire to accumulate great wealth are self-serving individuals who are not worthy of my respect. I'm not blaming my Dad for inculcating that sort of mindset in me though - he was just concerned that I could grow up materialistic given that things had always come easy for me since I was born.
To cut a long story short, sometime in 2007, something happened and I decided to take a good look at all my assumptions and rules regarding how one is to live his/her life, and question many mental models I had which were limiting my potentials and stifling me. One thing leads to another, and I found myself taking an interest in trading and exploring what seems like a really disastrous career path for someone with my disposition.
"How I trade for a living" by Gary Smith was the first book I read on trading. I had stumbled upon it while browsing at a bookstore. It was sitting on one of those shelves that are hard to reach - says a great deal about how nonconforming it must be. My kind of book. My suspicion was somewhat proven when I flipped to the author's profile page. Without any disrespect to the author, his picture convinced me that this trader (I avoid books on trading that are written by people who don't trade themselves, or have no concrete results to show that I can learn anything from them) probably cares about nothing else but trading. I bought it, because I believe in learning only from people who are obsessed with what they do. Most call that "passion". I prefer to use "obsession", just to make sure I get my point across.
I've since gone on to read many books written by great traders and people who interviewed them. "Reminiscence of a Stock Operator" is one of my favorite. But Gary Smith's is my companion. I've asked a number of traders and none of them have heard of him. Totally explains why he was chucked in an inconspicuous corner of the bookstore.
I suck at doing book review, and I am so glad to find a quality review done by this guy who's helped (not directly, but in his capacity as a software programmer or something along that line...) Smith (who's mathematically challenged...yup, I totally love a trader with a damaged left brain...) to find a way to figure out how much tax he had to pay on the annualized returns the latter was making within a 5-year period.
Check out what he has to say about Gary and his book here
And interestingly, Smith is among those who believed that if you have a passion for something, you probably started showing signs of it as a child. I agree with him whole-heartedly. My brother loved airplanes as a child and he joined the youth flying club when he was in elementary school, and traded his engineering degree (he was 3 months from graduation) for a once-in-a-life time opportunity he couldn't miss to join the SIA. He's now a First Officer. Seabloke loves anything that has a high probability of killing her, and she now helps to run a diving centre after retiring from rescue diving (she especially loves those deep dark caves that are 3000 feet down). Me, I used to want to be a brain surgeon coz I thought it's noble to want to save lives. Then I wanted to be a singer coz...well, i love to sing. Then I just wanted to do something that wouldn't bore me after 3 days of doing it and something that will make me feel like getting out of bed for EVERY morning.
I can't wait to get up to get to my charts and all my trading books now - EVERY morning. So I guess I found my passion. And I want to make a living out of it. Smith and the others might/ would have seen that as an unwise decision on my part. But I've proven time and again to be able to do anything that people say I can't pull off, as long as I'm obsessed in proving them wrong.
But in all honesty, I do love trading. And I don't care about people's opinion and beliefs surrounding the topic in question.
Thursday, July 10, 2008
Pre-Market Analysis - GS 7/10
GS Daily Chart
GS closed yesterday at the support of my blue channel.
I see a Bullish Hidden Divergence, which tells me that assuming that there are no news that will have bearing on the sector, GS is likely to continue to trade within the channel and very likely to trade within yesterday's range.
With the tug of war going on between buyers and sellers, it looks like GS is going to trade in a range again for most part of today's session.
Had a nice long chat last night with someone I have a lot of respect for, and he shared so much about trading that I went away realizing how little I know about the business. I took a break and didn't trade last night.
In fact, I'm taking a break from scalping and will be doing something different. Holding my position for more than one candle has always been a challenge to me. But I really want to overcome this psychological barrier.
I am grateful to M, who's taught me many things about trading last night, And I'm most grateful that he made me laugh on a day like yesterday.
GS closed yesterday at the support of my blue channel.
I see a Bullish Hidden Divergence, which tells me that assuming that there are no news that will have bearing on the sector, GS is likely to continue to trade within the channel and very likely to trade within yesterday's range.
With the tug of war going on between buyers and sellers, it looks like GS is going to trade in a range again for most part of today's session.
Had a nice long chat last night with someone I have a lot of respect for, and he shared so much about trading that I went away realizing how little I know about the business. I took a break and didn't trade last night.
In fact, I'm taking a break from scalping and will be doing something different. Holding my position for more than one candle has always been a challenge to me. But I really want to overcome this psychological barrier.
I am grateful to M, who's taught me many things about trading last night, And I'm most grateful that he made me laugh on a day like yesterday.
Wednesday, July 9, 2008
Pre-Market Analysis - GS 7/9
I'm making some notes on yesterday's trading session.
GS 7/8 (5-min Chart)
Apparently there was more than short-covering that went on yesterday. The bulls and bears REALLY fought.
Dow fluctuated wildly - it was a choppy market from session open to around 2:30am EST.
As far as GS was concerned, sellers continued to have an upper hand at the open,and found support at the base of the "box range" in my weekly chart (refer to my weekly analysis from Jul 8) - at around 167. A bullish morning star then sent GS up.
GS' climb didn't see it reversing the trend set by the evening star (formed 5 mins after session's open). It did however, succeed in moving price up to Fib level 50%, before it was stopped by a bearish harami/ inside bar, a doji and a hanging man.
From there, GS dipped below the support from previous day's hammer, rallied (2nd rally) back up again to resistance set by previous day's 2 spinning tops.
The 2 shooting stars that formed at this top served to reinforce the resistance (which should become a strong SUPPORT in the session/s that follow, as and when GS pulls back) set by the 2 spinning tops . The validity of this resistance was proven when the 1st rally stopped below it, and again when the 3rd rally stopped at around the level of the first.
Basically, GS traded sideways / in a range until a break out of that box range happened after a series of positive news in the market, including oil's pulling back to hover near 135.9, stabilizing home sales, favorable news from various companies, etc. Finance sector really performed and GS went up steeply for 20 mins after 2:20am EST, and then steadily til session closed.
My trades yesterday were 2 puts bought on GS' decline at the open. As market was erratic, and my indicators were showing mixed signals, I merely sat to watch the very interesting attacks and counter attacks (yes, I'm intrigued by candlestick patterns) that went on when GS was ranging.
Truth is, I had really wanted GS to fall through support, so I can buy a put (because despite what I said about it going up for the week, I just can't get the image of that grisly bear out of my mind! So there's no way I'll be confident holding a call position), only to remember what I said in my pre-market analysis about it showing signs of bullishness (bullish hidden divergence suggesting continuation of upward move that began on Jun 12), and that it should trend with the market. But market was sending mixed signals well into lunch, and oil was going up. Didn't expect the market to go into positive zone, and with GS gradually showing signs of reversing to an uptrend, what I saw was a lack of good reason to continue to trade for the day.
__________________________________________________________________
Pre-Market Analysis for Jul 9's session
GS Daily Chart
Yesterday's price low was lower than that of the previous day's, while MACD's histogram has become less negative.
What this is telling me is that I can still depend on my blue channel for support and resistance. Profit taking will likely continue, and more buying is possible should the positive market sentiments prevail.
GS 7/8 (5-min Chart)
Apparently there was more than short-covering that went on yesterday. The bulls and bears REALLY fought.
Dow fluctuated wildly - it was a choppy market from session open to around 2:30am EST.
As far as GS was concerned, sellers continued to have an upper hand at the open,and found support at the base of the "box range" in my weekly chart (refer to my weekly analysis from Jul 8) - at around 167. A bullish morning star then sent GS up.
GS' climb didn't see it reversing the trend set by the evening star (formed 5 mins after session's open). It did however, succeed in moving price up to Fib level 50%, before it was stopped by a bearish harami/ inside bar, a doji and a hanging man.
From there, GS dipped below the support from previous day's hammer, rallied (2nd rally) back up again to resistance set by previous day's 2 spinning tops.
The 2 shooting stars that formed at this top served to reinforce the resistance (which should become a strong SUPPORT in the session/s that follow, as and when GS pulls back) set by the 2 spinning tops . The validity of this resistance was proven when the 1st rally stopped below it, and again when the 3rd rally stopped at around the level of the first.
Basically, GS traded sideways / in a range until a break out of that box range happened after a series of positive news in the market, including oil's pulling back to hover near 135.9, stabilizing home sales, favorable news from various companies, etc. Finance sector really performed and GS went up steeply for 20 mins after 2:20am EST, and then steadily til session closed.
My trades yesterday were 2 puts bought on GS' decline at the open. As market was erratic, and my indicators were showing mixed signals, I merely sat to watch the very interesting attacks and counter attacks (yes, I'm intrigued by candlestick patterns) that went on when GS was ranging.
Truth is, I had really wanted GS to fall through support, so I can buy a put (because despite what I said about it going up for the week, I just can't get the image of that grisly bear out of my mind! So there's no way I'll be confident holding a call position), only to remember what I said in my pre-market analysis about it showing signs of bullishness (bullish hidden divergence suggesting continuation of upward move that began on Jun 12), and that it should trend with the market. But market was sending mixed signals well into lunch, and oil was going up. Didn't expect the market to go into positive zone, and with GS gradually showing signs of reversing to an uptrend, what I saw was a lack of good reason to continue to trade for the day.
__________________________________________________________________
Pre-Market Analysis for Jul 9's session
GS Daily Chart
Yesterday's price low was lower than that of the previous day's, while MACD's histogram has become less negative.
What this is telling me is that I can still depend on my blue channel for support and resistance. Profit taking will likely continue, and more buying is possible should the positive market sentiments prevail.
Tuesday, July 8, 2008
Pre-Market Analysis - GS 7/8
GS Daily Chart
I see a Bullish Hidden Divergence for period Jun 11 - Jul 7, and that tells me that GS is Not likely to close below my blue channel (refer to chart above). In fact, after the sell-off yesterday (which continued after-hours), I'm expecting some short covering in the first part of the trading session.
Charts aside, outlook remains grim for GS. Bloomberg reported that the company has "lost money on 20 trading days during the quarter, including 9 days with losses of $100 million or more..."
Light sweet crude fell further (65cents down) but not enough to boost investors confidence. Dow, Nasdaq and S &P futures are all down for now. Will see what happens after Bernanke's speech later today.
My view on where GS is going today: the first move is probably up, (GS is currently trading below yesterday's close and is likely going to open lower than this closing price), followed by a dip or a plunge, depending on how bearish market sentiments are.
Truth is, I can't see a definite trend. Gut feel tells me that GS is going to be trading sideways for the week.
GS 7/7 (AAR)
In my pre-market analysis yesterday, I said that as far as the week goes, GS is going to be trading within a confined range of 167 - 184. And if it breaks out of 184, it might just have enough momentum to hit 203.5.
I also said that it's possible GS could trade up at yesterday's session, as the market seemed rather upbeat over the drop in the price of oil.
At the time of my journaling, Brent Crude futures was down just $1.75, and as I mentioned, I expected it to continue to drop further because of the bearish patterns (bearish engulfing pattern at top of uptrend; bearish MACD divergence) I noticed on its chart:
I was not expecting GS to follow the general trend of the market (ever so often, it displays its own trend), but I was willing to be flexible given the very bullish mood in the market then.
And that was all before I caught the news about the regulations that Fed announced it was going to impose...which hit the finance industry, in particular, GS, really hard. This was how much worse GS did compared to her counterparts:
In any case, when yesterday's session began, DOW was going up, up and up, and GS looked set for on a free fall (it did pause now and then on its way down - by consolidating - and only rallied during the last half hour of the entire session).
By then, of course I had gotten wind of the bad news that hit the financials. Actually 2 hours before market opened I did. I told D that I might have to buy against the direction of where I said GS would go for the day, effectively breaking a promise to myself that I wouldn't do that.
But then again, as I said in my earlier entry, whatever analysis I've done, I'm ready to change my views whenever new information surfaces that warrants my reassessing what I've thought and said prior to that.
On top of that, I always keep the big picture in mind.
At the back of my mind is always a huge grisly bear engulfing GS, drooling all over her and waiting for the right time to consume her.
Hence, I bought puts throughout. 3 scalps that I showed in my previous entry.
The 5-min chart that I look at for scalping & daytrading:
At the appearance of a hammer (look for candle in a red box in the chart above) at 1pm EST , whose low incidentally sat on my fib 161.8, I waited for GS to rally coz I wanted to take the ride down if it ever rallied up to 172.3 (where the tip of the upper shadow of a shooting star was touching - more on shooting star later).
But the market had turned so bearish (thanks to financials) by then that even a hammer (2 in fact, side by side) couldn't do much for GS, and it found resistance at Fib 138.2 %.
2 spinning tops sent GS back down but I was not ready to enter a put.
Hammers have an effect on me. I respect supports that come from a hammer at the bottom of a strong down move.
I wanted GS to break down below the support at 161.8 (where the hammer sat), come back up again in the form of a healthy rally, hit what I saw as a key resistance from the shooting star I mentioned above (refer to GS' 5min chart and look for the candle in a blue box), and then I would take the ride down from this top.
"You've exceeded your target for the day, let's turn in early", said D, after I told him my plan.
D probably didn't think a rally is going to happen.
But I expected it to, coz there had been only one very meagerly profit taking before 1pm EST - after the completion of each bullish pattern, which would otherwise have encouraged buying, GS merely went sideways - and I found it hard to believe that there would not be a real rally at least once for the session.
But I went to bed anyway.
And this morning, it was D who went to check the charts the first thing after he got up.
"It happened! At 3:35pm EST! You would have had to wait til then!" He reported excitedly from our study's as I was struggling out of bed.
"Dear, I used to trade in that window, whenever you were sound asleep".
*&$%#@%&*@#(*!
It would have been a nice ride down, as I would have stayed in the trade longer, letting my profits run. Why the confidence?
Coz what halted the rally was an engulfing pattern. Most importantly, the engulfing pattern validated the resistance produced by THE shooting star from 1240pm - the one I had counted on to put a robust ceiling over the bulls. It was a resistance level that I would have trusted.
I accept that trading involves risks, and that losses are inevitable and are part of the cost of doing this business. What I don't, and will never accept, is the taking of unnecessary risks. To go short on a stock that has tested an unconfirmed resistance just once, is, to me, not too different from betting on a horse that has just won its first race.
But in the event that I have taken all the necessary steps to defend my trades, and still make a loss, I would accept that particular loss and take whatever learning lessons it has to offer (sometimes, there's just nothing to learn coz the reason behind a losing trade might not surface immediately, or ever, and I also accept that).
Well, I'm happy with my 3 winning trades, and, 4 hours of beauty sleep.
I also said that it's possible GS could trade up at yesterday's session, as the market seemed rather upbeat over the drop in the price of oil.
At the time of my journaling, Brent Crude futures was down just $1.75, and as I mentioned, I expected it to continue to drop further because of the bearish patterns (bearish engulfing pattern at top of uptrend; bearish MACD divergence) I noticed on its chart:
I was not expecting GS to follow the general trend of the market (ever so often, it displays its own trend), but I was willing to be flexible given the very bullish mood in the market then.
And that was all before I caught the news about the regulations that Fed announced it was going to impose...which hit the finance industry, in particular, GS, really hard. This was how much worse GS did compared to her counterparts:
In any case, when yesterday's session began, DOW was going up, up and up, and GS looked set for on a free fall (it did pause now and then on its way down - by consolidating - and only rallied during the last half hour of the entire session).
By then, of course I had gotten wind of the bad news that hit the financials. Actually 2 hours before market opened I did. I told D that I might have to buy against the direction of where I said GS would go for the day, effectively breaking a promise to myself that I wouldn't do that.
But then again, as I said in my earlier entry, whatever analysis I've done, I'm ready to change my views whenever new information surfaces that warrants my reassessing what I've thought and said prior to that.
On top of that, I always keep the big picture in mind.
At the back of my mind is always a huge grisly bear engulfing GS, drooling all over her and waiting for the right time to consume her.
Hence, I bought puts throughout. 3 scalps that I showed in my previous entry.
The 5-min chart that I look at for scalping & daytrading:
At the appearance of a hammer (look for candle in a red box in the chart above) at 1pm EST , whose low incidentally sat on my fib 161.8, I waited for GS to rally coz I wanted to take the ride down if it ever rallied up to 172.3 (where the tip of the upper shadow of a shooting star was touching - more on shooting star later).
But the market had turned so bearish (thanks to financials) by then that even a hammer (2 in fact, side by side) couldn't do much for GS, and it found resistance at Fib 138.2 %.
2 spinning tops sent GS back down but I was not ready to enter a put.
Hammers have an effect on me. I respect supports that come from a hammer at the bottom of a strong down move.
I wanted GS to break down below the support at 161.8 (where the hammer sat), come back up again in the form of a healthy rally, hit what I saw as a key resistance from the shooting star I mentioned above (refer to GS' 5min chart and look for the candle in a blue box), and then I would take the ride down from this top.
"You've exceeded your target for the day, let's turn in early", said D, after I told him my plan.
D probably didn't think a rally is going to happen.
But I expected it to, coz there had been only one very meagerly profit taking before 1pm EST - after the completion of each bullish pattern, which would otherwise have encouraged buying, GS merely went sideways - and I found it hard to believe that there would not be a real rally at least once for the session.
But I went to bed anyway.
And this morning, it was D who went to check the charts the first thing after he got up.
"It happened! At 3:35pm EST! You would have had to wait til then!" He reported excitedly from our study's as I was struggling out of bed.
"Dear, I used to trade in that window, whenever you were sound asleep".
*&$%#@%&*@#(*!
It would have been a nice ride down, as I would have stayed in the trade longer, letting my profits run. Why the confidence?
Coz what halted the rally was an engulfing pattern. Most importantly, the engulfing pattern validated the resistance produced by THE shooting star from 1240pm - the one I had counted on to put a robust ceiling over the bulls. It was a resistance level that I would have trusted.
I accept that trading involves risks, and that losses are inevitable and are part of the cost of doing this business. What I don't, and will never accept, is the taking of unnecessary risks. To go short on a stock that has tested an unconfirmed resistance just once, is, to me, not too different from betting on a horse that has just won its first race.
But in the event that I have taken all the necessary steps to defend my trades, and still make a loss, I would accept that particular loss and take whatever learning lessons it has to offer (sometimes, there's just nothing to learn coz the reason behind a losing trade might not surface immediately, or ever, and I also accept that).
Well, I'm happy with my 3 winning trades, and, 4 hours of beauty sleep.
Over and Done With
Seabloke, thanks for having stood by me throughout these 4 really lousy months.
There must have been a dozen times that I was so close to throwing myself out my 27th storey unit that I have made it a point to steer clear of my windows.
There were times that we discussed - over kaya toast and nicotine breakfast - what would be the most comfortable way to die and even took into consideration what effect the method with which we use to kill ourselves would have on our fresh corpse.
You've been a gem. Coz you know me so well :-) Never once did you make an attempt to talk me out of thinking morbid.You joined me instead and made fun of death. Never once did you deliver any motherhood statements. You *bleep* more than me, and seemed even more pissed than me over things that bugged me.
I'm done being mad. Am taking down the angry entries and putting things behind me. Life is so short. For everybody.
By now, I've lost track of who started it first.
I just know I want to let live. And I want to make peace - with myself.
Say bye bye to the *bleep* *bleep* entry :-)
Love ya!!
There must have been a dozen times that I was so close to throwing myself out my 27th storey unit that I have made it a point to steer clear of my windows.
There were times that we discussed - over kaya toast and nicotine breakfast - what would be the most comfortable way to die and even took into consideration what effect the method with which we use to kill ourselves would have on our fresh corpse.
You've been a gem. Coz you know me so well :-) Never once did you make an attempt to talk me out of thinking morbid.You joined me instead and made fun of death. Never once did you deliver any motherhood statements. You *bleep* more than me, and seemed even more pissed than me over things that bugged me.
I'm done being mad. Am taking down the angry entries and putting things behind me. Life is so short. For everybody.
By now, I've lost track of who started it first.
I just know I want to let live. And I want to make peace - with myself.
Say bye bye to the *bleep* *bleep* entry :-)
Love ya!!
Monday, July 7, 2008
Pre-Market Analysis - GS 7/7 (Weekly Analysis)
5-Year Monthly Chart
At a glance:
Primary Trend is Up
Secondary Trend: Consolidation after Correction
On closer look, these are what I see:
Although bulls have been in a steady climb since 2005 with only 3 relatively mild bearish months in 2005 and 2 in 2006, the picture changed drastically in 2007, where bears took control half the time.
Granted that the beginning of the 4th quarter saw bulls taking just 2 months to accomplish what the bears took more than 3 months to pull off, bears had succeeded - month after month for 5 consecutive months - in recovering all that they've lost, and price was back to around where it opened in Sept 07, from where the bulls began their 2-month rally.
The length of Feb 2008's candle is an indication of increasingly bearish sentiments.
The following month, however,saw the bears taking a break.
One would think that the hammer that formed would have given buyers some confidence to come in since a hammer after a strong downward move typically spells trouble for the bears, especially when the low of the hammer is reinforcing a support from 2006.
But that didn't happen.
It didn't seem that the bulls were ready to take the helm. Although we did see some buying interest in the month that followed, the rally was short-lived. The month after saw bears taking from the bulls as much as 75% of what the latter had gained.
What I'm seeing is that although the bears have gone on another holiday, the bulls are hardly a threat. In what is primarily an uptrend since 2003, the bears are making increasing bigger corrections and for longer periods each time.
Nobody can predict what's to come, but it's logical to infer that the prevailing sentiments (well, charts' all about sentiments, isn't it?) towards the ailing financial sector, rising oil prices, and a sluggish US economy will definitely continue to put downward pressure on GS' prices (overlay a dow and S & P chart on GS' and you'll see them dancing together, with GS sometimes taking the lead!).
I'm not optimistic about GS's rebound (at least not within this year) from the 50% Fib level it's sitting at now to its high in Oct 07.
Again, simply put, I can't see any indication of a major reversal to the upside for GS in the next few months to come. At least not according to what I see on my monthly chart.
Zooming in to my weekly chart, For the Week of Jul 7
I'm seeing patterns that counter one another:
- A hammer in late Aug sending GS up, only to have
- A shooting star in late Oct took it all the way down
- A bullish engulfment disrupted the plunge but didn't send prices back up immediately despite the long bullish candle
- A short rally ensued after 4 weeks of consolidation and found resistance at April's support, which was also resistance from Dec 2006
- GS corrected to support level shown in red dotted line (reinforcing late Aug's hammer's support)
- A bullish outside bar in the week of Jun 9 was formed and GS rallied for a week
- A bearish engulfing pattern is formed in the week of Jun 23, but whether it will halt the rally will depend on how determined the bulls are and on this week's general market sentiments.
If oil prices indeed continues to slide (Brent crude oil chart showing bearish divergence and also a bearish harami), market's going to move up accordingly. When that happens, and if GS' going to trend with the market, we should see a spike in GS's prices. Why? Because for GS to move up against its longer-term downtrend, there will have to be a heap of optimism and/hence momentum!
So this is what I see:
- Oil has come down by $1.75 from thurs, sending Dow up
- GS has a reinforced support at around 167
- On its intraday chart, GS has closed higher than it's previous day's high on an uptrend (on 5 min chart)
Putting everything together, it seems unlikely that GS will drop today.
For the week, it looks like GS will trade within the box range defined by the the support at 167 and resistance at 184. If it breaks through the ceiling of the box, it's likely to aim for 203.5
It looks possible to me that GS could be trading up today.
At a glance:
Primary Trend is Up
Secondary Trend: Consolidation after Correction
On closer look, these are what I see:
Although bulls have been in a steady climb since 2005 with only 3 relatively mild bearish months in 2005 and 2 in 2006, the picture changed drastically in 2007, where bears took control half the time.
Granted that the beginning of the 4th quarter saw bulls taking just 2 months to accomplish what the bears took more than 3 months to pull off, bears had succeeded - month after month for 5 consecutive months - in recovering all that they've lost, and price was back to around where it opened in Sept 07, from where the bulls began their 2-month rally.
The length of Feb 2008's candle is an indication of increasingly bearish sentiments.
The following month, however,saw the bears taking a break.
One would think that the hammer that formed would have given buyers some confidence to come in since a hammer after a strong downward move typically spells trouble for the bears, especially when the low of the hammer is reinforcing a support from 2006.
But that didn't happen.
It didn't seem that the bulls were ready to take the helm. Although we did see some buying interest in the month that followed, the rally was short-lived. The month after saw bears taking from the bulls as much as 75% of what the latter had gained.
What I'm seeing is that although the bears have gone on another holiday, the bulls are hardly a threat. In what is primarily an uptrend since 2003, the bears are making increasing bigger corrections and for longer periods each time.
Nobody can predict what's to come, but it's logical to infer that the prevailing sentiments (well, charts' all about sentiments, isn't it?) towards the ailing financial sector, rising oil prices, and a sluggish US economy will definitely continue to put downward pressure on GS' prices (overlay a dow and S & P chart on GS' and you'll see them dancing together, with GS sometimes taking the lead!).
I'm not optimistic about GS's rebound (at least not within this year) from the 50% Fib level it's sitting at now to its high in Oct 07.
Again, simply put, I can't see any indication of a major reversal to the upside for GS in the next few months to come. At least not according to what I see on my monthly chart.
Zooming in to my weekly chart, For the Week of Jul 7
I'm seeing patterns that counter one another:
- A hammer in late Aug sending GS up, only to have
- A shooting star in late Oct took it all the way down
- A bullish engulfment disrupted the plunge but didn't send prices back up immediately despite the long bullish candle
- A short rally ensued after 4 weeks of consolidation and found resistance at April's support, which was also resistance from Dec 2006
- GS corrected to support level shown in red dotted line (reinforcing late Aug's hammer's support)
- A bullish outside bar in the week of Jun 9 was formed and GS rallied for a week
- A bearish engulfing pattern is formed in the week of Jun 23, but whether it will halt the rally will depend on how determined the bulls are and on this week's general market sentiments.
If oil prices indeed continues to slide (Brent crude oil chart showing bearish divergence and also a bearish harami), market's going to move up accordingly. When that happens, and if GS' going to trend with the market, we should see a spike in GS's prices. Why? Because for GS to move up against its longer-term downtrend, there will have to be a heap of optimism and/hence momentum!
So this is what I see:
- Oil has come down by $1.75 from thurs, sending Dow up
- GS has a reinforced support at around 167
- On its intraday chart, GS has closed higher than it's previous day's high on an uptrend (on 5 min chart)
Putting everything together, it seems unlikely that GS will drop today.
For the week, it looks like GS will trade within the box range defined by the the support at 167 and resistance at 184. If it breaks through the ceiling of the box, it's likely to aim for 203.5
It looks possible to me that GS could be trading up today.
A New Approach to Using the RSI (Part 1)
Check out this link and see how the RSI - a widely used indicator - is being used with a twist: http://www.tradingacademy.com/news/TradersJournal_BrandonWendell.pdf
If you don't at least take a quick glance at the above before reading on, it's likely I'll lose you...right about...NOW.
This is the journaling of my backtesing of Connie Brown's method (please refer to link above for detailed description of the said method). I'm doing this for the friend who sent me the link and also for my own learning purposes. I've not used the method to trade at all and I strongly advise those who intend to apply it in their trading to first do their own backtesting, then paper trade first before using it in real-money trades.
As Connie Brown's method requires trend confirmation before it can be used effectively, I've added these moving averages for trend determination: EMA 7 & EMA 21. I've decided on these numbers after testing out various other combinations of periods. Backtesting is done on the stock that I'm actively trading: GS.
If you're trading a different equity or instrument, you will have to play around with the number of periods, and also see if the EMA or SMA, or a combination, fits more with the price data of what you are trading. Which MA you use, and the number of periods used, will be based on such factors as the volatility of what you're trading, its trending characteristic, and your personal trading style.
The number of periods most commonly used are: 21, 50, 89, 150 and 200 days. Certain equities use periods of 70 and 100.
I've chosen EMAs and the periods 7 & 21 because I am a very short-term trader, and this setup's degree of sensitivity to signals suits my risk appetite.
I've also adjusted the oversold line for bearish trend to 20 from the 25 that Connie Brown uses, because when tested on GS, 25 sends premature exit signals too frequently. Based on my observation, divergences above the adjusted 20 line make better exits.
The following chart shows an example of how I MIGHT use Connie Brown's method:
In the RSI panel, you'll see various overbought and oversold lines. Ignore the 2 white lines representing 70 and 30. The ones we are looking at are:
For bullish trend - Blue solid line that represent the OVERBOUGHT line ; Red solid line for OVERSOLD
For Bearish trend - Blue DOTTED line that represents the OVERBOUGHT line; Red DOTTED line for OVERSOLD
Briefly on GS' movement prior to May 7: GS was trending down for 2 days on May 2 and May 5. On May 6, it climbed up to a high that's slightly higher than May 2's open, then took a slight dip but still closed above its open and near its high.
On May 7, the session opened with GS gapping up just a little from its previous day's close. As seen in the 5-minute chart above, GS's first move was a dip. The 2nd candle that I've labeled S1 seems like a good place to short the stock because:
1) RSI has crossed over the 50 overbought line (represented by the blue solid line in the RSI panel) from above
2) MA is seeing a bearish cross-over
3) MACD is also showing bearish cross-over and going into bearish region
However, I wouldn't enter a trade here for the follow reasons:
1) S1 sits on May 6's support - given GS' tendency to vacillate markedly in the first hour of the trading session, I'm not sure "down" is the direction it'll continue to take. The length of the bearish candle before S1 would have made me really uncomfortable as i would expect some profit taking following that.
2) To enter at S1, my stop loss would have to be at the high of the 1st candle of the session - the risk I would have to take is far too big for an unknown profit potential. Putting it in another way, the cost of this trade would be too high for me personally.
So much for today. Examples of 2 trades that I would enter will be shown in Part 2 of this topic.
If you don't at least take a quick glance at the above before reading on, it's likely I'll lose you...right about...NOW.
This is the journaling of my backtesing of Connie Brown's method (please refer to link above for detailed description of the said method). I'm doing this for the friend who sent me the link and also for my own learning purposes. I've not used the method to trade at all and I strongly advise those who intend to apply it in their trading to first do their own backtesting, then paper trade first before using it in real-money trades.
As Connie Brown's method requires trend confirmation before it can be used effectively, I've added these moving averages for trend determination: EMA 7 & EMA 21. I've decided on these numbers after testing out various other combinations of periods. Backtesting is done on the stock that I'm actively trading: GS.
If you're trading a different equity or instrument, you will have to play around with the number of periods, and also see if the EMA or SMA, or a combination, fits more with the price data of what you are trading. Which MA you use, and the number of periods used, will be based on such factors as the volatility of what you're trading, its trending characteristic, and your personal trading style.
The number of periods most commonly used are: 21, 50, 89, 150 and 200 days. Certain equities use periods of 70 and 100.
I've chosen EMAs and the periods 7 & 21 because I am a very short-term trader, and this setup's degree of sensitivity to signals suits my risk appetite.
I've also adjusted the oversold line for bearish trend to 20 from the 25 that Connie Brown uses, because when tested on GS, 25 sends premature exit signals too frequently. Based on my observation, divergences above the adjusted 20 line make better exits.
The following chart shows an example of how I MIGHT use Connie Brown's method:
In the RSI panel, you'll see various overbought and oversold lines. Ignore the 2 white lines representing 70 and 30. The ones we are looking at are:
For bullish trend - Blue solid line that represent the OVERBOUGHT line ; Red solid line for OVERSOLD
For Bearish trend - Blue DOTTED line that represents the OVERBOUGHT line; Red DOTTED line for OVERSOLD
Briefly on GS' movement prior to May 7: GS was trending down for 2 days on May 2 and May 5. On May 6, it climbed up to a high that's slightly higher than May 2's open, then took a slight dip but still closed above its open and near its high.
On May 7, the session opened with GS gapping up just a little from its previous day's close. As seen in the 5-minute chart above, GS's first move was a dip. The 2nd candle that I've labeled S1 seems like a good place to short the stock because:
1) RSI has crossed over the 50 overbought line (represented by the blue solid line in the RSI panel) from above
2) MA is seeing a bearish cross-over
3) MACD is also showing bearish cross-over and going into bearish region
However, I wouldn't enter a trade here for the follow reasons:
1) S1 sits on May 6's support - given GS' tendency to vacillate markedly in the first hour of the trading session, I'm not sure "down" is the direction it'll continue to take. The length of the bearish candle before S1 would have made me really uncomfortable as i would expect some profit taking following that.
2) To enter at S1, my stop loss would have to be at the high of the 1st candle of the session - the risk I would have to take is far too big for an unknown profit potential. Putting it in another way, the cost of this trade would be too high for me personally.
So much for today. Examples of 2 trades that I would enter will be shown in Part 2 of this topic.
Sunday, July 6, 2008
Shell
This is NOT an entry about SHELL the oil company.
Shell is what my home is to me.
This blog entry is about my new home (I have to give Seabloke some incentives to check in here now and then...she's complaining that my blog's getting very BORING)
I love my new home.
Ok, that's an understatement.
I LOVE, LOVE, LOVE my new home!
This 100 square meters living area totally confused the curtain guys (all of whom I like to call the "blind men" coz I have more blinds than curtains...haha...yup, EVIL's moi's middle name....) when they first came in. They couldn't identify the rooms; they couldn't find any, in the first place.
That's because all the walls within the unit, with the exception of the one that forms the building's pillar, have been hacked. In their place I've put in 1) a glass door & panel, 2)a dark wooden sliding door (which is actually the door of my mammoth study cabinet and 3) NOTHING.
The men were looking for my bedroom, which was concealed behind the studies.
My study room - my favorite hangout - is separated from the main living space by a glass panel and door that are usually wiped so clean by my cleaning lady that you probably won't be able to make them out, visually, until you knock your nose (or your forehead, whichever is the one that's jutting out) against it.
On most days, I would "unhide" my bedroom and open all my blinds and curtains. The unit becomes a bright and spacious studio.
Did I mention that my home has only 2 colors?
Black and pale lilac. My favorite colors.
In black are: the flooring, the cabinets and wardrobes, the sofas, the settees, D's lazy day-bed, the piano, the platform bed (from where I can see the entire night sky with its twinkling stars when i lie down to sleep - I live high enough to not have any buildings block my view), etc.
In pale lilac: my walls
Everything else that's not black or lilac is glass. Well, except for Al and Keisha. Al is bluish gray, and Keisha is beige.
I know Seabloke thinks my home is COLD. But that's the way I like it, and COLD is so ME.
I've never liked the warm and earthy colors that Seabloke loves - the brown, the orange, the red, the yellow-beige - and I don't really fancy bright colors (the only bright-colored thing in my home is a bright green stool which serves one key purpose: for my little nieces to sit on when they take off and put on their shoes during their visits).
And I utterly hate clutters. The fewer things to get in my way as I move around the house, the better. Hence there's absolutely no loose, dangling decoratives or displays - everything is mounted on the wall and all things that are not fixtures are hidden from view. The place is designed to allow lots of space for Al and Keisha to dash around wildly without having to make an e-brake every 2 meters.
My home is a model of what I want my life to be - clean, cool and bright, with lots of space, no messy clutters, no standing ornaments to trip me nor delicate displays to maintain. My curtains and blinds are made of pure synthetic material (D likes to call it "non-organic") - I made sure they are, coz I don't want anything eating and growing on them.
Yes, I have to agree whole-heartedly with Seabloke (ok, honey, I know you've never said it, but I can see it written all over your face :-) ) that my home is cold. But like I said before, and I cannot emphasize this enough: I LOVE it COLD.
I've gone through enough to appreciate a colorless life. Everything I'm looking at now gives me the visual comfort that I cannot find any place else.
Besides, I do get my healthy and regular dose of color and warmth - from Seabloke, my darling nieces, Pilot, and Ken.
And occasionally, I get more warmth than I ask for from D. But those are more aptly called "fires" - the kind that you FIGHT.
:-D
Shell is what my home is to me.
This blog entry is about my new home (I have to give Seabloke some incentives to check in here now and then...she's complaining that my blog's getting very BORING)
I love my new home.
Ok, that's an understatement.
I LOVE, LOVE, LOVE my new home!
This 100 square meters living area totally confused the curtain guys (all of whom I like to call the "blind men" coz I have more blinds than curtains...haha...yup, EVIL's moi's middle name....) when they first came in. They couldn't identify the rooms; they couldn't find any, in the first place.
That's because all the walls within the unit, with the exception of the one that forms the building's pillar, have been hacked. In their place I've put in 1) a glass door & panel, 2)a dark wooden sliding door (which is actually the door of my mammoth study cabinet and 3) NOTHING.
The men were looking for my bedroom, which was concealed behind the studies.
My study room - my favorite hangout - is separated from the main living space by a glass panel and door that are usually wiped so clean by my cleaning lady that you probably won't be able to make them out, visually, until you knock your nose (or your forehead, whichever is the one that's jutting out) against it.
On most days, I would "unhide" my bedroom and open all my blinds and curtains. The unit becomes a bright and spacious studio.
Did I mention that my home has only 2 colors?
Black and pale lilac. My favorite colors.
In black are: the flooring, the cabinets and wardrobes, the sofas, the settees, D's lazy day-bed, the piano, the platform bed (from where I can see the entire night sky with its twinkling stars when i lie down to sleep - I live high enough to not have any buildings block my view), etc.
In pale lilac: my walls
Everything else that's not black or lilac is glass. Well, except for Al and Keisha. Al is bluish gray, and Keisha is beige.
I know Seabloke thinks my home is COLD. But that's the way I like it, and COLD is so ME.
I've never liked the warm and earthy colors that Seabloke loves - the brown, the orange, the red, the yellow-beige - and I don't really fancy bright colors (the only bright-colored thing in my home is a bright green stool which serves one key purpose: for my little nieces to sit on when they take off and put on their shoes during their visits).
And I utterly hate clutters. The fewer things to get in my way as I move around the house, the better. Hence there's absolutely no loose, dangling decoratives or displays - everything is mounted on the wall and all things that are not fixtures are hidden from view. The place is designed to allow lots of space for Al and Keisha to dash around wildly without having to make an e-brake every 2 meters.
My home is a model of what I want my life to be - clean, cool and bright, with lots of space, no messy clutters, no standing ornaments to trip me nor delicate displays to maintain. My curtains and blinds are made of pure synthetic material (D likes to call it "non-organic") - I made sure they are, coz I don't want anything eating and growing on them.
Yes, I have to agree whole-heartedly with Seabloke (ok, honey, I know you've never said it, but I can see it written all over your face :-) ) that my home is cold. But like I said before, and I cannot emphasize this enough: I LOVE it COLD.
I've gone through enough to appreciate a colorless life. Everything I'm looking at now gives me the visual comfort that I cannot find any place else.
Besides, I do get my healthy and regular dose of color and warmth - from Seabloke, my darling nieces, Pilot, and Ken.
And occasionally, I get more warmth than I ask for from D. But those are more aptly called "fires" - the kind that you FIGHT.
:-D
Saturday, July 5, 2008
Pre-Market Analysis - GS 7/3 (Correction: No Belt Hold)
Pulled up GS' daily chart today and noticed that the candle for Jul 3 is different from that which was initially captured.
This is the updated chart showing a candle with a smaller body and a longer upper shadow (hence effectively disqualifying it as a belt hold):
This is what I see when I look at the daily chart: granted that GS gapped up for 2 consecutive days, the body of the bullish candles were getting smaller and the upper shadows are getting longer (upper shadow represents sellers). The high of Jul 3 has also hit what is by now a 5-month resistance.
Volume has dipped significantly from above average on Jul 2 to way below average on Jul 3 - but given that Jul 3 was the eve of a major holiday, the dip is hardly a surprise. Of course I could choose to look at the unimpressive trading volume as a sign that a reversal of the primary trend (ie. DOWN) is at least NOT around the corner.
Simply put, when I look at GS' daily chart, I just don't see it going up from where it is now in the next few trading days.
Zooming into the intraday (hourly) chart, this is what I see: in an uptrend (more precisely, a 3-day rally in what seems to me to be a general downtrend), GS has gapped up moderately, then dipped gradually and continually to its close. In a full-session trading day, if GS' uptrend has any strength, it ought to have rallied from its first dip back up to at least its open price. Since Jul 3 was a half-day session, it's difficult to tell if its closing without having ever rallied from its dip (after gapping up in an uptrend) actually means anything.
For now, based on the daily chart, it seems that GS' upward move from Jul 1 has lost momentum.
Personally, I like to do a thorough analysis on my weekly and monthly charts for the bigger picture once a week or whenever the prevailing trend seems to be losing strength or when I am totally confused by what I'm looking at on the daily chart.
But that's not going to happen tonight...In any case, charts can tell whatever stories they want to tell, what's fact is real-time price movement.
In a nutshell, before the market opens on Monday, it's rumors, news (on GS, on the other sector leaders, etc), the things that Fed says and does, general market sentiments (movement in the indices) , movement in oil prices (which should be reflected in overall general market sentiments anyways, so I'm going to forget my crude oil chart - I'm going nuts looking at charts!) that will have a more immediate effect on the movement of GS.
This is the updated chart showing a candle with a smaller body and a longer upper shadow (hence effectively disqualifying it as a belt hold):
This is what I see when I look at the daily chart: granted that GS gapped up for 2 consecutive days, the body of the bullish candles were getting smaller and the upper shadows are getting longer (upper shadow represents sellers). The high of Jul 3 has also hit what is by now a 5-month resistance.
Volume has dipped significantly from above average on Jul 2 to way below average on Jul 3 - but given that Jul 3 was the eve of a major holiday, the dip is hardly a surprise. Of course I could choose to look at the unimpressive trading volume as a sign that a reversal of the primary trend (ie. DOWN) is at least NOT around the corner.
Simply put, when I look at GS' daily chart, I just don't see it going up from where it is now in the next few trading days.
Zooming into the intraday (hourly) chart, this is what I see: in an uptrend (more precisely, a 3-day rally in what seems to me to be a general downtrend), GS has gapped up moderately, then dipped gradually and continually to its close. In a full-session trading day, if GS' uptrend has any strength, it ought to have rallied from its first dip back up to at least its open price. Since Jul 3 was a half-day session, it's difficult to tell if its closing without having ever rallied from its dip (after gapping up in an uptrend) actually means anything.
For now, based on the daily chart, it seems that GS' upward move from Jul 1 has lost momentum.
Personally, I like to do a thorough analysis on my weekly and monthly charts for the bigger picture once a week or whenever the prevailing trend seems to be losing strength or when I am totally confused by what I'm looking at on the daily chart.
But that's not going to happen tonight...In any case, charts can tell whatever stories they want to tell, what's fact is real-time price movement.
In a nutshell, before the market opens on Monday, it's rumors, news (on GS, on the other sector leaders, etc), the things that Fed says and does, general market sentiments (movement in the indices) , movement in oil prices (which should be reflected in overall general market sentiments anyways, so I'm going to forget my crude oil chart - I'm going nuts looking at charts!) that will have a more immediate effect on the movement of GS.
Friday, July 4, 2008
Pre-Market Analysis - GS 7/3 (Belt Hold)
I was looking at GS' daily chart and noticed that yesterday (Jul 3)'s candle is a Bearish Belt Hold(circled in green on chart). The high of the candle touches a 4-month resistance that I've drawn by using the low of the hammer that was formed on Jan 9.
The resistance was broken only on Apr 24 with the closing of a long bullish candle above the line. GS subsequently came back down, broke through the line and went further down before going back up to test the resistance again in mid June.
The appearance of a bearish Belt Hold candle suggests either a reversal of the upward move from Jul 1, or a consolidation. The belt hold line is significant when it confirms a resistance - in this case, the 4month resistance mentioned above.
Should GS close above this line in the coming week, it will be a signal that it will continue its uptrend along my green channel (refer to chart).
I will be looking at the weekly and monthly charts to get a bigger picture.
Meanwhile, the daily chart's telling me that 182.3 to 183 is GS' very short-term resistance.
GS 7/3 ( AAR)
So today turns out to be a really bad day to trade. Session ended early at 1am. Might as well...
Was having a breather with D and talking about my trade when he told me that several times during the session, he had wanted to buy a put after I exited from my trade. I asked him for his basis for wanting to enter.
To which he replied,"coz you said it's a down day. And you went and bought a call. hahaha..."
**&%#(*#$*&%%##!
Ok, I did tell him that. I have this habit of telling him just prior to market open, after he knocks off from work, how I think GS is going to move for the day. Most time, I tell him whether it's going to be a bearish or bullish candle on the daily chart, what the range is and how long the body is going to be. For today, I told him GS' going down.
But of course GS gapped up from its close of 178.79 yesterday and opened at 181.95 today.
D stared at his screen and gasped,"GS's going up!".
I was looking at something else on my screen (probably reading my mails, surfing some unrelated sites, etc)."It will come down" I commented casually.
I usually ignore the first half hour of the action coz GS behaves erratically at the start of the session frequent enough for me to not want to waste my time and energy staring at the screen.
When asked how much it will go down, I told him about my green channel and said it should stay within.
So when GS was around $181.2 (shortly after I close my losing position),where price was not too far down from the day's high, D was tempted to buy puts - he figured the only way it's going from there is DOWN. Coz I said so, according to him at "confession time" (see, I always ask D for reasons he wants to enter a trade, just to ensure that he actually has a strategy, and not just using his "gut feel").
And so after market closed at 1am, when we were having a smoke outside our home (the common walkway with a scenic view 27 storeys below shared by us and our only neighbour), D started counting the number of winning trades he would have made had I not stopped him from executing them. I was amused and teased him about his "gambling" style of trading.
He quickly countered that I was worse, and that in future, I should print out what I wrote on my blog and have my "prediction" highlighted so I'll not trade against it.
He got me :-)
Was having a breather with D and talking about my trade when he told me that several times during the session, he had wanted to buy a put after I exited from my trade. I asked him for his basis for wanting to enter.
To which he replied,"coz you said it's a down day. And you went and bought a call. hahaha..."
**&%#(*#$*&%%##!
Ok, I did tell him that. I have this habit of telling him just prior to market open, after he knocks off from work, how I think GS is going to move for the day. Most time, I tell him whether it's going to be a bearish or bullish candle on the daily chart, what the range is and how long the body is going to be. For today, I told him GS' going down.
But of course GS gapped up from its close of 178.79 yesterday and opened at 181.95 today.
D stared at his screen and gasped,"GS's going up!".
I was looking at something else on my screen (probably reading my mails, surfing some unrelated sites, etc)."It will come down" I commented casually.
I usually ignore the first half hour of the action coz GS behaves erratically at the start of the session frequent enough for me to not want to waste my time and energy staring at the screen.
When asked how much it will go down, I told him about my green channel and said it should stay within.
So when GS was around $181.2 (shortly after I close my losing position),where price was not too far down from the day's high, D was tempted to buy puts - he figured the only way it's going from there is DOWN. Coz I said so, according to him at "confession time" (see, I always ask D for reasons he wants to enter a trade, just to ensure that he actually has a strategy, and not just using his "gut feel").
And so after market closed at 1am, when we were having a smoke outside our home (the common walkway with a scenic view 27 storeys below shared by us and our only neighbour), D started counting the number of winning trades he would have made had I not stopped him from executing them. I was amused and teased him about his "gambling" style of trading.
He quickly countered that I was worse, and that in future, I should print out what I wrote on my blog and have my "prediction" highlighted so I'll not trade against it.
He got me :-)
Thursday, July 3, 2008
GS 7/3 (Trades)
Losing trade.
Bought a call in an uptrend and entered on technicals.
Good setup in both 5 and 10 min time-frame.
Exited/cut loss once a doji emerged.
GS consolidated and went down in a series of long-bodied candles after that; at the time of my writing (at 1130pm), GS has never gone up to the level where I entered my trade.
I'm glad I cut my loss in the nick of time.
Mistakes and failures always offer a lot more to learn than successes. What I learn from this trade is:
1) Volume is important - despite the good setup, volume was low, way below the average
2) NEVER to trade against my own view of the direction of the stock - this is my third loss since I started trading with real money and on all three occasions, I traded against the direction of what I thought GS would go for the day. It could be a confidence issue, or it could simply be that all my preparation prior to the open of the session has given me a fairly accurate prediction of GS' trend and I should really adhere to my view...
3) Never to enter during a choppy session - market has been really choppy and GS has been going up and down with the market. Inspite of that, I entered. Pure arrogance on my part to think that I can now trade in the window that I have before today always avoided trading in.
4) Doji is magical. Almost always halts an on-going trend.
Bought a call in an uptrend and entered on technicals.
Good setup in both 5 and 10 min time-frame.
Exited/cut loss once a doji emerged.
GS consolidated and went down in a series of long-bodied candles after that; at the time of my writing (at 1130pm), GS has never gone up to the level where I entered my trade.
I'm glad I cut my loss in the nick of time.
Mistakes and failures always offer a lot more to learn than successes. What I learn from this trade is:
1) Volume is important - despite the good setup, volume was low, way below the average
2) NEVER to trade against my own view of the direction of the stock - this is my third loss since I started trading with real money and on all three occasions, I traded against the direction of what I thought GS would go for the day. It could be a confidence issue, or it could simply be that all my preparation prior to the open of the session has given me a fairly accurate prediction of GS' trend and I should really adhere to my view...
3) Never to enter during a choppy session - market has been really choppy and GS has been going up and down with the market. Inspite of that, I entered. Pure arrogance on my part to think that I can now trade in the window that I have before today always avoided trading in.
4) Doji is magical. Almost always halts an on-going trend.
Pre-Market Analysis - GS 7/3
Very briefly, my take is that GS is continuing in its current downtrend within my pink channel. Range is probably 175 - 180 (enveloped by my green and pink channel). Given the bleak market outlook and sentiment, GS is not going up further from it's slightly upward move yesterday. At least not today.
GS 7/2 (Trades)
There's only one word to describe tonight's session: havoc.
I missed the only good setup to buy calls (In my earlier entries today, I did mention that I was expecting gs to continue to trade within the uptrend channel on my daily chart)- coz I had gone to take my nice warm shower...$%*#(@(* - and bought mostly puts (going against my take on gs' movement...well, I was being flexible and going with the trend...after all, trading is more of an art than hard science to me...)
Anyways, today's definitely not the most fantastic day to trade.
Nonetheless, I did 5 scalps, and none was based on technicals. 4 was profitable; 1 was a loss. Net loss: 13cents per contract.
Something I learnt about myself - trading is more like a game to me than a way to make my living. I am quite sure I'm starting to get addicted to scalping...I'm not as sure that it's necessarily a bad thing though.
Anyways, here's a snapshot of my trades today:
GS' daily chart showing today's candle (traded up my green channel indeed):
I missed the only good setup to buy calls (In my earlier entries today, I did mention that I was expecting gs to continue to trade within the uptrend channel on my daily chart)- coz I had gone to take my nice warm shower...$%*#(@(* - and bought mostly puts (going against my take on gs' movement...well, I was being flexible and going with the trend...after all, trading is more of an art than hard science to me...)
Anyways, today's definitely not the most fantastic day to trade.
Nonetheless, I did 5 scalps, and none was based on technicals. 4 was profitable; 1 was a loss. Net loss: 13cents per contract.
Something I learnt about myself - trading is more like a game to me than a way to make my living. I am quite sure I'm starting to get addicted to scalping...I'm not as sure that it's necessarily a bad thing though.
Anyways, here's a snapshot of my trades today:
GS' daily chart showing today's candle (traded up my green channel indeed):
Wednesday, July 2, 2008
Pre-Market Analysis - GS 7/2 again
Think I see a Bullish Divergence too...gs could be going up towards channel's resistance in the next few sessions.
Was just looking at DOW's daily chart and noticed a long-legged doji followed by a hammer; on top of that, i see a bullish divergence. I'm seeing bullish signals. Job data looks really bad, and oil is hitting higher highs - throw in credit crunch issues and inflation concerns - and I see a downtrend that's continuing. If DOW goes up today, it'd merely be another correction.
Was just looking at DOW's daily chart and noticed a long-legged doji followed by a hammer; on top of that, i see a bullish divergence. I'm seeing bullish signals. Job data looks really bad, and oil is hitting higher highs - throw in credit crunch issues and inflation concerns - and I see a downtrend that's continuing. If DOW goes up today, it'd merely be another correction.
Pre-Market Analysis - GS 7/2
On GS 1 Jul 08
Candle for yesterday's session is sitting on the floor of the green channel that was drawn yesterday (see entry on GS 1 Jul 08). Candles are not forming any significant patterns - other than the tug of war that's going on between the bulls and the bears at higher than average volume in the past 3 sessions. Bears seems to be losing steam and bulls are making some progress..but given that yesterday's bullish candle closed so near to the low/close of the bearish candle 2 sessions before, I tend to think that gs' likely to trade quite flatly today.
Now, on non-farm payroll... Well, that's tomorrow, and I really think that the market has already priced in their expectations by now. So I'm going to skip it. Life's complicated enough.
Back to my daily chart above. I see a Bullish Hidden Divergence - which means that I can still assume that my green channel is reliable, provided that there's no surprise coming from the market or the US government...
Without too much else to rely on, and to make my life simpler, I'm going to give my channel a little faith ie. gs is not going to go down further. My gut feel (very bad words, I know. Can't help it. I haven't a crystal ball. Who does anyways??) is that GS' likely going to go sideways, with small bodies and within a moderate range of $4-6.
Ok, I'm done playing prophet for the day.
Candle for yesterday's session is sitting on the floor of the green channel that was drawn yesterday (see entry on GS 1 Jul 08). Candles are not forming any significant patterns - other than the tug of war that's going on between the bulls and the bears at higher than average volume in the past 3 sessions. Bears seems to be losing steam and bulls are making some progress..but given that yesterday's bullish candle closed so near to the low/close of the bearish candle 2 sessions before, I tend to think that gs' likely to trade quite flatly today.
Now, on non-farm payroll... Well, that's tomorrow, and I really think that the market has already priced in their expectations by now. So I'm going to skip it. Life's complicated enough.
Back to my daily chart above. I see a Bullish Hidden Divergence - which means that I can still assume that my green channel is reliable, provided that there's no surprise coming from the market or the US government...
Without too much else to rely on, and to make my life simpler, I'm going to give my channel a little faith ie. gs is not going to go down further. My gut feel (very bad words, I know. Can't help it. I haven't a crystal ball. Who does anyways??) is that GS' likely going to go sideways, with small bodies and within a moderate range of $4-6.
Ok, I'm done playing prophet for the day.
2692
Thanks, 2692, for your comments.
I don't know who you are, but based on how much you know, I'm guessing you're from within the circle.
I appreciate your advice. The result of my trades tonight is an indication that my state has not been affected ie. I've let live :-)
Thanks for having made my night. :-)
I don't know who you are, but based on how much you know, I'm guessing you're from within the circle.
I appreciate your advice. The result of my trades tonight is an indication that my state has not been affected ie. I've let live :-)
Thanks for having made my night. :-)
GS 7/1 (Trades)
4 Scalps for now (1st half of trading session). Time for a nice warm shower...
Today turns out to be a really nice day for both scalping and momentum trading. 2 divergences after 1225pm- one bullish, followed by a bearish - offered 2 very clear trends based on which one can make quite a killing during the 2nd half of the session.
Here's a snapshot of all my scalps today:
Today turns out to be a really nice day for both scalping and momentum trading. 2 divergences after 1225pm- one bullish, followed by a bearish - offered 2 very clear trends based on which one can make quite a killing during the 2nd half of the session.
Here's a snapshot of all my scalps today:
Tuesday, July 1, 2008
Pre-Market Analysis - GS 7/1
Daily Chart
I see a Bullish HIDDEN Divergence for the 2-day period 29-30 Jun, which I interpret as a possibility that the downtrend (pink channel) is ending
To help me visualize where GS could go, I've drawn an uptrend channel (dotted lines in green). I'm thinking that today could either be another day with a close that's not far off from the open (ie. GS' consolidating), or, a mildly bullish day with GS trading up and within my green channel.
As far as sentiments among the financial sector are concerned, nothing much has changed ie they aren't good. But I was telling D last night that because sentiments are so negative, contrarians will probably start going long, so will those who have been waiting to scoop up fair-value stocks especially if they think that financials have bottomed out. The industry is currently being monitored rather closely by regulators and several changes in policies have been imposed on them; some have taken the initiative to do something ie. reviewing corporate governance rules. All these at first glance seem to be taking the wind out of the industry's sails, but could just prove effective in winning back some investors confidence
Yesterday's very choppy session with relatively long bullish and bearish candles tells me that the views on financials are quite polarized now, mirroring those of the market in general.
So I'm going to shut up now and suggest that as scalpers, we make sure to watch our technicals, keep the news on (briefing.com is a blessing), always wait for price confirmation before even considering an entry, then check to see if indicators are telling consistent stories, and use at least 2 time-frames for entry and monitoring of our positions.
Also, watch the indices. Although sometimes i wonder which is leading which (market leading or individual stocks leading), and GS has this habit of not trending with the market, i still think it's a good practice to keep tabs on the movement of the major indices. For those who find it easier to look at changes in absolute value rather than percentage, simply enter the index's symbol on your trading window like this:
I see a Bullish HIDDEN Divergence for the 2-day period 29-30 Jun, which I interpret as a possibility that the downtrend (pink channel) is ending
To help me visualize where GS could go, I've drawn an uptrend channel (dotted lines in green). I'm thinking that today could either be another day with a close that's not far off from the open (ie. GS' consolidating), or, a mildly bullish day with GS trading up and within my green channel.
As far as sentiments among the financial sector are concerned, nothing much has changed ie they aren't good. But I was telling D last night that because sentiments are so negative, contrarians will probably start going long, so will those who have been waiting to scoop up fair-value stocks especially if they think that financials have bottomed out. The industry is currently being monitored rather closely by regulators and several changes in policies have been imposed on them; some have taken the initiative to do something ie. reviewing corporate governance rules. All these at first glance seem to be taking the wind out of the industry's sails, but could just prove effective in winning back some investors confidence
Yesterday's very choppy session with relatively long bullish and bearish candles tells me that the views on financials are quite polarized now, mirroring those of the market in general.
So I'm going to shut up now and suggest that as scalpers, we make sure to watch our technicals, keep the news on (briefing.com is a blessing), always wait for price confirmation before even considering an entry, then check to see if indicators are telling consistent stories, and use at least 2 time-frames for entry and monitoring of our positions.
Also, watch the indices. Although sometimes i wonder which is leading which (market leading or individual stocks leading), and GS has this habit of not trending with the market, i still think it's a good practice to keep tabs on the movement of the major indices. For those who find it easier to look at changes in absolute value rather than percentage, simply enter the index's symbol on your trading window like this:
GS 6/30 (Trades)
Havoc day, but it's been fun :-)
Momentum Trade
My first momentum (paper) trade:
Bot 10 GS Jul08 180 Put $8.30
Sld 10 GS Jul08 180 Put $9.06
Didn't capture a screenshot of the trade before logging out of the simulated platform and trade record was not there anymore when I logged in again...
Momentum Trade
My first momentum (paper) trade:
Bot 10 GS Jul08 180 Put $8.30
Sld 10 GS Jul08 180 Put $9.06
Didn't capture a screenshot of the trade before logging out of the simulated platform and trade record was not there anymore when I logged in again...
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