ZenTrader has put up a chart of the KLCI in his latest post, and asks the question, is there a “Super Cycle” in the making? And I’m helping to spread the word – so you guys can decide for yourselves if this is going to be the year of the bull after all…
Interestingly some stock-broker friends of mine had showed me a similar chart some weeks back, and alluded to the same thing. I thought they were all crazy the first time I heard it. 🙂
I’ve always wanted to believe in the power of charts to predict where prices are headed but whatever amateurish charting attempts I made in the past always ended in me missing the boat when it came to picking the right stock. So now I just stick with the fundamentalists.
Tips on how to manage your money 
Emily,
See how fast W2020 was sold out? Less than 30min and still many many people crying cannot get it. This bull has a lot of free money sideline.
In fact there is a fundamental story for this bull. It is called Petro Dollar – those hot money from middle east. They used to invest their oil money in Western countries but recently the trend is reversing to our side including China.
Zen
http://zentrader.blogspot.com/2006_06_01_zentrader_archive.html
“Gamuda (5398) to monitor RM3.16 for direction.”
I picked this counter purely based on chart and it is up more than 20% from the directional breakout price. I usually use chart to hunt for good counter (counter that’s going after by smart money) and then look for fundamental story to reconfirm the chart story. Basically chart I think cannot predict price future but a good tool to discover the smart money’s insider movement.
Both TA and FA I think have to co-exist. Just like husband and wide kind of thing. Just my view. 🙂
Hi Zen, do you have special charting software? Or do you subscribe to a research house? What kind chart do you use – MACD, RSI etc – just curious how the “pros” do it! 🙂
Emily,
I like to see chart pattern and use trendline to look for trading opp and then use other technical method ie MACD, RSI, BB to reconfirm what I think I see.
To me I like to keep thing easy and simple.
Those online chart provided by Yahoo, TheStar is good enough.
Zen
Okey doke – thanks for the tip. Will give it a go, and drop by your site for (hopefully) more tips.
I used to analyze Bollinger, RSI, Candlesticks but did not help me too much. But mine was an Excel sheel – definitely in the amateur category. That’s prob why it didn’t work for me :p
Yeah, I should add that beside Yahoo, TheStar website, Excel is one of the best trading tool. I have done a lot of trading simulation using it.
Larry, beside plotting the excel sheet, try to play with the calculation. It is hackable! Don’t tell this to too many people or else I will be given out my trading edge for free. 🙂
Wah wah all sounds very “canggih” but not sure if I understand what you mean by “play with the calculation”….maybe best if you drop a hint here every so often on some of the potential movers and shakers. Hehe!
Bursa super bull coming?- Isnt this for extremely developed ecomomies? should this develop (in the charts- thats another volume of discussion all together) I would think thats because we are hinged to the ecomnomies of Japan and US nothing to do with our own standing really.
technical indicator tends to use averaging data for their calculation and the buy/sell signal actually is a delayed data.
http://stockcharts.com/education/IndicatorAnalysis/indic_RSI.html
Check out the RSI formula, you will know what I mean. 🙂
There are some school of thought that do not give much weight to TA. The data that is aquired is the history of the price/volume movement and the remaining trends that one make out of it is cooking the data with different spices, eg, moving averages, 14 days, 24 days etc etc, and then weighted m av etc.
Another school of thought is that the prices will do a random walk. Only willing buyer and willing seller, how you make out of the prices and vol etc is co incidental. Many believe the jury is still out. Thats how the FA will think.
And thats why its so much fun!
Hi Zen, I think I only got as far as playing with the no of days used to calculate Moving Average and BB. These were the 2 most useful Technical Analysis tools for me. But have not really had time to do it now, relying more on fundamental analysis to take longer term positions.
Bursa Malaysia basically is a pressure cooker. Everything is crooked one even their books. See how [deleted by moderator] do with their account?
To me TA is a good tool to detect what the insider is doing. Only these people can understand the book. In any market, price action will come before actual news! Trading is about deman and supply but cannot say FA is not important lah. Just like husband and wife and then you can have your baby. 🙂
I am no rocket scientist either (I read somewhere some of them formed a fund and went bankrupt) what ever that makes money,….. good luck.
Famous one is LTCM, they lost US$4.6 billion in four mths period. Bad luck! 😦
Maybe can put it this way. When we cannot truly understand the earth composition and its movement the best we can do is to put tsunami sensor to detect its wave movement. True or false alarm … that depends a lot of one’s luck too. Sound better this time?
Actually, you are very close to the truth, trading is really dealing in an environment where you can only react to the information that you come across, what you dont know, you will have to make do with it,….stop loss is your only net.
And yes, there was once a British boy, Nick something who brought down a British bank for betting on the wrong side and the Kobe earthquake shook him up real good, ha, ha,…. but that is history.
That boy cooked the book too. Those who buy the company shares would never know about the true fact. Same to Enron, Worldcom …
This counter was up more than 20% after my posting. Luck or TA … I don’t know. 🙂
http://zentrader.blogspot.com/2006/09/tebrau.html
TA needs quite a bit of discipline… one of my weaknesses is the “cut loss” scenario – I think many people tend to hang on to bad stocks or bad positions where they really should exit it.
Larry,
Take a look at the recent public bank chart, ( i think there was some one who wrote on an article somewhere recomending a sell), at the time of his article, the formation looked like a descending triangle, and then it further developed into a triple bottom, (which means it turned from a bearish formation into a bullish formation) and then it built a base building formation and it MOVED UP, forming into an ascending triangle, with a breakout nearing its apex?
So, if you have faith in your chart, you would be selling off at the descending triangle, and buying back at the triple bottom, and probably loose out as the third leg was lower (thereby tripping your stop loss,) than the earlier two, and then buy back when it was base building?
I would go mad and pull out my hair!
Have fun!
I should rename this post “TA (and FA) in practice”. 🙂 Great insight into the world of TA’s. In CFP course, we learnt that to do FA is much more time-consuming compared to TA, but it sounds from Jeffrey that you could be spending hours just interpreting the chart signals too…and you lose hair…
Hi,
Just my humble comments:
There are many people who use TA to trade in the stock market. Ever seller must meet a buyer before the trade can be done. Both the seller and buyer could be using TA to make their decisions. Who is correct?
TA is extremely dangerous if not apply correctly. It could gives us false confidence. One must master the art of TA before one consider to trade in the market.
Mastering the art to TA is not enough. One must also understand how crowd behave. Most important of all, one must have a very good RISK MANAGEMENT strategy in place before one trade.
Zero Sum Game! Stock trading whether long term or short term is about taking money out of someone else pocket. Scared?!! 🙂
Not sure this one is TA or pure luck?!
http://zentrader.blogspot.com/2006/09/malaysian-airline-system-bhd.html
Hope all of you make big money whether it is unit trust, or stock market or real estate. Also hope the super bull will come. But will it???
Also Emily must be very busy (on site visit?) this few days. How come no new posting? 🙂
Looks like I was a bit late on this one but it’s really a good post. I’m thinking about a reply on my site . . .
Looks like I was a bit late on this one but it’s really a good post. I’m thinking about a reply on my site . . . Art Of War
?ok G?zel Bir Payla??m Te?ekk?rler.. Web Adresim rss
Very nice i?ve bookmarked it. mantolama