An Introduction To CANDLESTICKS, PART 3

PART 3

Supply and Demand

A stock's price will adjust to higher or lower prices based strictly on
supply and demand principles.
In Figure 7 is shown a diagram of a green candlestick.

The green color of the candlestick indicates that the closing price of the
stock at the end of the day is higher than the opening price at the
beginning of the day.

Figure 7

As you will see, the candlestick's color and size provide very important
clues regarding the TRADER'S SENTIMENT toward a given stock's
future price.

Notice that 'trader's sentiment' is the key phrase here. In short term
trading, it is critical for the trader to have a clear understanding of
what other traders are thinking. As you will see, the most direct way to
get that understanding is through proper interpretation of the
candlestick.

Let's look at an example. In Figure 8 is shown a candlestick of XYZ
Company, which opened at 25 and closed at 25 3/8.

Figure 8

The candlestick is green in color, which gives us a quick visual signal
that the stock price has rallied higher during this period.

How can we use this information to help us understand what other
traders are thinking? To answer this question, we will follow the
candlestick's changes step by step to understand the mechanism which
is driving the stock price to move higher.

In Figure 8, we see the stock opens at 25, and then quickly rallies to 25
1/8. The reason the price moves to 25 1/8 is because there is a high
demand to buy the stock at 25 1/8, and a short supply of sellers
offering stock at 25 1/8.

Once all of the stock available at 25 1/8 is snatched up, the next group
of sellers steps up to offer their stock at 25 1/4.
All of the 25 1/4 stock is quickly snatched up because there are still a
larger number of traders willing to buy at 25 1/4 than sellers willing to
sell stock at 25 1/4.

Once the 25 1/4 stock is gone, the next group of sellers steps up to
offer their stock at 25 3/8. The 25 3/8 stock is quickly snatched up
too.

This process will repeat itself until the buyers loose interest in buying
the stock resulting in a reduction of demand.

The result of combining these steps is a green candlestick with an
opening price of 25, rallying to a closing price of 25 3/8.

During the rally period; however, the astute candlestick reader will be
able to observe the long green color of the candlestick, and deduce that
buyer demand is high.

Now there is only one reason why traders would increase demand by
stepping up to buy the stock, and that is because they think that the
stock will go up in the
near future. So by observing the candlestick color and size, the astute
candlestick reader is able to deduce exactly what other traders are
thinking, and that is that they think the stock price will go higher in the
future.

In Figures 9 & 10 we show an example of how the same principle in
reverse applies to the analyses of a red candlestick.

Figure 9

The red color of the candlestick indicates that the closing price of the
stock at the end of the day is lower than the opening price at the
beginning of the day.

In Figure 10, we see the stock opens at 25 3/8, and then quickly drops
to 25 1/4.

Figure 10

The reason the price moves to 25 1/4 is because there are many sellers
looking to unload there stock at 25 1/4, and a low number of buyers
willing to buy at 25 1/4.

Once all of the buyers have bought the stock at 25 1/4, the next group
of buyers steps up to bid for stock at the lower price of 25 1/8.

The desperate sellers quickly sell all of the stock at 25 1/8, and then
the next set of buyers step up at the price of 25.

This process will repeat itself until all of the sellers have unloaded all of
the stock that they want to sell, resulting in a reduction of supply.

The result is a red candlestick with an opening price of 25 3/8, falling to
a closing price of 25. During the stock's price fall; however, the astute
candlestick reader will be able to observe the long red color of the
candlestick, and deduce that demand for the stock is low.

Now there is only one reason why traders would increase the supply of
stock to sell, and that is because they think that the stock will go down
in the near future.

So by observing the candlestick color and size, the astute candlestick
reader is able to deduce exactly what other traders are thinking, and
that is that they think the stock price will go lower in the future.

Weekly Update & Happy Deepavali

I wish my hindu friends and readers a very Happy Deepavali and may your wish come true :))

OK, now for my weekly update >>

*FKLI still holding LONG 1505 for November month.. (initial entry LONG 1308 on 30th June 2010 n still going strong roll roll roll..) with unrealised profit stands at 208 +/-

*CPO same case still holding January contract LONG 3052.. (initial entry LONG 2736 on 27th September 2010 n still rolling.. kkekekek) hit 3210 today n unrealised profit stands at 474 +/- almost 500 points winning... my aim cpo to hit 3750 +/-.. we wait and see yaa... dont follow me ya or i'll bring you all to HOLLAND!!

I FEEL GOOOOOOOOOOOOOOOOOOODDD .. heheh

Wise Words from Ed Seykota

If I am bullish, I neither buy on a reaction, nor wait for strength; I am already in. I turn bullish at the instant my buy stop is hit, and stay bullish until my sell stop is hit. Being bullish and not being long is illogical. ~ "Market Wizards, Interview with Top Traders - Jack D. Schwager"

*that what i can describe about the way I trade, almost almost similar with what Ed Seykota says.. cool :))

Will Gold Reach $5,000 Per Ounce?

Why The Founder Of The Second Largest Gold Mining Company In The World Says That Gold Will Reach $5,000 Per Ounce!
By Richard Rockwell

If the price of gold rising to $5,000 sounds far fetched to you, you may remember it probably sounded just as far fetched for gold to go over $1,000 per ounce back in 2001...



There are 5 fundamental reasons that gold will go that high...and possibly higher!

1) Inflation

If you weren't one of the lucky ones back in 2001 to get the message and see returns of 400% on gold, hang on because this next run could allow you to easily make up for that missed opportunity MANY times over. With the worldwide Central Banks have rolled out an unheard of $12 Trillion Dollars in Stimulus programs and more than DOUBLED the US money supply! Never before in US history has there been such a massive paper print that could put the final nails in the US dollar's coffin. Remember the relationship with the Dollar vs. Gold? When the dollar is weakened what happens to gold? It goes UP, UP, UP!

2) Demand

You aren't the only one receiving this knowledge; the writing is on the wall. Investors and hedge funds alike are gobbling up more gold in more huge quantities than ever before. For those in the US that are still asleep at the switch, watch out investors in India will buy whatever you don't want. Let's not forget China, who is not shy about telling it's citizens to invest in all of the gold and silver they can afford. Can you say a BILLION people? So here's the lesson from Economics 101. When Demand increases and SUPPLY DECREASES, what happens to the PRICE? Elementary my dear Watson!

) Follow The "Smart Money"

Have you heard the phrase "If you want to be rich, copy what the rich invest in" So what are the richest people in the world investing in? Drum roll please...You got it, GOLD! Black Rock Inc. one of the largest investment mangers said that 2009 was the turning point...For the first time in over 20 YEARS the Central Banks have become Net BUYERS as opposed to Net Sellers of Gold.

4) Currency Crisis Coming

History (Fill in the blank)_______ itself. We have already seen what has happened to Portugal, Spain, Italy, Ireland, Iceland, and Greece. We have also seen the UK and countless other economies struggling. This is ALWAYS what happens with a currency that is only backed by the FAITH of the issuer. There has NEVER in the history of the world been a fiat (man made) currency that has survived...NEVER! If you're still out there thinking that the US Dollar can make a "comeback" with all that has happened, then you will be like the farmer that won't go into the root cellar thinking that the tornado heading for his house will certainly go around him! Again let me say NEVER in history has ANY fiat currency survived, and the US dollar will be no exception. If you do not have gold, what you will have will be plain and simple...paper and ink.

5) As Easy As 1,2,3

The move to $5,000 or more per ounce is sure to happen in 3 distinct phases, with each stage rapidly accelerating the previous one. Phase 1 Currency will continue to devaluate to almost nothing. HINT -- The US dollar has already lost 97% of its purchasing power since its inception! Phase 2 will be the strongest levels of investment demand the world has ever seen. By Phase 3, the price of gold will not move gradually, but rather TAKE OFF like each bar of bullion is strapped to a rocket! The price of gold today will seem like chump change in comparison!

CPO Commentary

News Bites

* Market Talk: CPO prices are likely to take a breather as weak export data points to higher stockpile level in October. Market expects palm oil inventory level to reach 1.85 million tons in October. However, concerns on annual monsoon which starts in November which might likely disrupt harvesting and lower palm output may limit the downside of prices.

Outlook

* Fundamental: We expect higher opening on overnight gains in crude oil and soyoil prices. Watch out technical for trade today.

* Technical: CPO futures broke out the hourly ascending triangle of 3086 and closed at 3092 yesterday, confirmed the short-term chart pattern with an upside target of 111 points at 3195 in the near term. Conversely, a daily spinning top candle formed yesterday, signifying prices are losing momentum and the bull may be in trouble particular when prices near its new high or during a rally. We however believe a confirmation candle to close below 3061, low of current spinning top candle, is required to confirm the reversal chart pattern.

We would advice on buying accumulation on technical correction with a stop loss at 3000, daily Parabolic SAR, and for those shorter term traders may put their stop level at 3061 as any convincing breakdown below the above said support may mean a pause to the current medium-term uptrend. Immediate resistant should refer to 3100 psychology level, then 3195, short-term target of hourly ascending triangle breakout on Nov 1.

#Courtesy Inter-Pacific Securities Sdn Bhd, for enquiries please contact 03-21427586 or email :- tanks@interpac.com.my (please mention my site http://www.fkli.co.cc/ when enquiring)

An Introduction To CANDLESTICKS, PART 2

PART 2

One of the main differences between the Western Line and the
Japanese Candlestick line is the relationship between open and closing
prices. The Westerner places the greatest importance on the closing
price of a stock in relation to the prior periods close. The Japanese
place the highest importance on the close as it relates to the open of
the same day. You can see why the Candlestick Line and its highly
graphical representation of the open to close relationship is such an
indispensable tool for the Japanese trader. To illustrate the
difference, compare the daily chart plotted with Western Lines (Figure
3) with the exact same chart plotted with Japanese Candlestick lines
(Figure 4). In the Western bar chart as with the Japanese Candlestick
chart, it is easy to interpret the overall trend of the stock, but note
how much easier it is to interpret change in sentiment on a day to day
basis by viewing the change in real body color in the Japanese
Candlestick chart.

Figure 3

Figure 4

Trader's sentiment

One of the greatest values of the candlestick chart is the ability to read
market sentiment regarding a stock. To illustrate consider the
following example of a stock traded from the eyes of a Western chart
trader and then from the eyes of a candlestick chart trader.

Western Chart Trader

At the close of the day's session you observe that the stock closed well above your entry price (2), which
leaves you very content with your trade.

After the close of day 2, you open the financial section of the paper and check the closing price of the
stock and observe that not only is your stock well above your entry price, but also has gained slightly (it is
worth mentioning
that most western papers only publish closing prices while Japanese papers publish both opening and
closing prices).

On day 3 you open and the newspaper to check the close and notice a slight dip in your stocks price but
you do not panic, because you are still well in the money.

You convince yourself that the stock has only dipped slightly relative to the entry day close (day 1), and
should resume its up trend on the next day.

On day 4, you check the close and notice that the stock has fallen significantly relative to the prior days
close.

You are now concerned about protecting the profits that you had previously bragged about just days
before.

On the beginning of day 6, you call your broker (or logon to your online trading account) and place a
market order to sell at the first opportunity.

At the day 5 markets open, the stock opens sharply lower and continues to fall.

Your order is executed at a price several points below where you entered.

You then shrug off the trade as an unpredictable misfortune, and move on to the next trade.

Figure 5

Candlestick Chart Trader

Now suppose you are a candlestick chart trader trading the same stock
using a candlestick chart (Figure 6).

At the beginning of Day 1 you enter the stock based on a candlestick
pattern entry signal (we will discuss proper entries in detail latter in
this unit).

At the close of the day's session you observe that the stock closed well
above your entry price (2) which leaves you very content with your
trade, but also moves you into a state of caution for signs of a change
in trend or reversal.

After the close of day 2, you observe the candlestick formed for the
day and notice that the real body is small indicating that there was a
tug of war between the bears and the bulls.

You also observe that the real body is read in color indicating that the
stock closed lower than the open indicating that the bulls actually lost
the tug of war to the bears.

Based on these observations you conclude that the bullish rally in the
stock has ceased, and the bullish sentiment of the market regarding
the stock is changing.

You decided to sell your position at the days close, or at the market
open on the next day to lock in your profit.

If this were a stock in the midst of an overall downtrend, you may
decide to short the stock under the low of the day 2 bearish
candlestick.

As you can see the candlestick chart trader has the advantage over
the western chart trader in that he can use the signals generated in
each candlestick to help foretell the changing sentiments of the market
regarding a stock.

The open to close relationship revealed in the candlestick is more
effective than the close-to-close relationship commonly used by
western traders.


Figure 6

CPO Commentary

News Bites-

* Market Talk: Continues talk has that October exports are likely to be steady, however exports in November should be higher due to the export levy set by Indonesia would made Malaysia palm oil the cheaper option to purchase. Moreover, China is likely to step up purchases for the Lunar New Year in February.

Outlook:

* Fundamental: CPO futures are likely to be supportive on bullish forecast and talk on higher export in November. Watch out export estimation due today.

* Technical: CPO futures corrected 24 points after an aggressive buying on Oct 28 and settled at 3068 last Friday. Note that, there is a formation of hourly ascending triangle in tandem with bullish daily indicators. Any breakout above 3086 will confirm the hourly ascending triangle breakout with 111 points price target at 3197 in the near term. With intradays’ RSI back to neutral ground, we would suggest on buying on technical correction with a tight stop loss at 3035, low of hourly ascending triangle, and for those shorter term traders to buy upon technical breakout above 3086. Should prices successfully cling on to 3086 level on closing basis today, prices may test 3100 psychology level. But should prices close below 3086, prices might likely continue consolidating within the range of hourly ascending triangle around 3035 and 3086 in the near term.

#Courtesy Inter-Pacific Securities Sdn Bhd, for enquiries please contact 03-21427586 or email :- tanks@interpac.com.my (please mention my site http://www.fkli.co.cc/ when enquiring)

FKLI roll day

*FKLI turn LONG 1505 for November month..(roll)

*CPO still holding January contract LONG 3052..

CPO Commentary

News Bites-

* Market Talk: Malaysia palm oil exports in October is likely to increase a tad by 2%-3% on month, while exports in November is likely to increase more as Indonesia's export levy would make rival Malaysia palm oil a cheaper alternative. Production is likely to taper off as seasonally high palm output period ended and annual monsoon season begins, which might prompt further decline in production and a drawdown in stockpile level.

Outlook-

* Fundamental: Expect CPO prices to be supportive on talk of higher export.

* Technical: CPO futures touched a new 27-month high again and settled at 3085 yesterday. The buying momentum also triggered hourly MACD into bullish mode and confirmed the breakout above the hourly “bull flag” of 2931 on Oct 27 with a short-term target of 3140 in the near term.

The daily, hourly and 15minutes RSI readings are however overbought at their 70s, indicating possible shortterm correction in the near term. Would suggest on buying accumulation after a correction on intradays’ RSI readings. Immediate support and resistance should refer to observed low of 3010 and 3100 psychology level, then 3140 to cap more upward momentum in the near term.

#Courtesy Inter-Pacific Securities Sdn Bhd, for enquiries please contact 03-21427586 or email :- tanks@interpac.com.my (please mention my site http://www.fkli.co.cc/ when enquiring)

CPO Commentary

News Bites-

* Market Talk: Talk that chinese regulators moves to tightening trading rules to curb speculation and cool inflation in China, as well as likely weaker India edible oils imports may both place pressure on soyoil and palm oil market. A local broking house commented that CPO prices are likely to fall towards RM2,950 a ton in the near future due to the above given reasons.

Outlook-

* Fundamental: Expect selling pressure on bearish fundamental ahead. Watch for technical to trade.

* Technical: Another daily hanging man candle formed yesterday. A particular pattern signifying bullish reversal and prices are losing some upward momentum. The candle also alike bearish dragonfly doji pattern where opening and closing are nearly identical wihout an upper wick on top, a much stronger and reliable candle compare with hanging man offering bearish signal. note that, open interest for February contract jump 71.7% or 5512 lots from 7,686 to 13,198 lots while benchmark January contract only increased 4.2% or 1136 lots to 28,062 lots, likely indication traders are building up their position in February contract.

With mix technical indications, would expect prices to consolidate between 3010, low of Aug 27 , and 3084, high of Oct 25, pending any breakout to provide a clearer picture in near term.

#Courtesy Inter-Pacific Securities Sdn Bhd, for enquiries please contact 03-21427586 or email :- tanks@interpac.com.my (please mention my site http://www.fkli.co.cc/ when enquiring)

CPO roll roll roll day

*I decided to roll CPO today to January contract >> LONG 3052..

*FKLI still no difference maintain my LONG 1461 for October month..

An Introduction To CANDLESTICKS, PART 1

PART 1

AN INTRODUCTION TO CANDLESTICKS

Technical Analysis vs. Fundamental Analysis

There are two types of ways to analysis the price of a stock, fundamental
analysis, and technical analysis. Fundamental analysis is used to gauge the
price of a stock based on the fundamental attributes of the stock, such as
price/earnings ratio, Return on invest, and associated economic statistics.

Technical analysis deals more with the psychological component of trading a
stock, and is influenced for the most part on emotionalism.

The technical analyst is seeking to answer the question "how are other traders
viewing this stock, and how will that affect the price in the immediate future".

As you will see, the candlestick chart is the most effective way to gauge the
sentiments of other traders.

History of Candlestick Charts

The Japanese were the first to use technical analysis to trade one of
the world's first rice futures markets in the 1600s. A Japanese man by
the name of Homma who traded the futures markets in the 1700s
discovered that although there was link between supply and demand
of the rice, the markets were also strongly influenced by the emotions
of the traders.

Homma realized that he could benefit from understanding the
emotions to help predict the future prices. He understood that there
could be a vast difference between value and price of rice.

This difference between value and price is as valid today with stocks,
as it was with rice in Japan centuries ago.

The principles established by Homma in measuring market emotions in
a stock are the basis for the Candlestick Chart analysis, which we will
present in this seminar.

Candlestick vs. Western Charts

The Western bar chart is made up of four parts components, open,
high, low, and close. The vertical bar depicts the high and low of the
session, while the left horizontal line
represents the open and the right
horizontal line represents the close.

Figure 1

The Japanese Candlestick Line (Figure 2) uses the same data (open,
high, low, and close) to create a much more visual graphic to depict
what is going on with the stock. The thick part of the candlestick line
is called the real body. It represents the range between the session’s
opening and closing prices. If the real body is red, it means that the
close of the session was lower than the open. If the real body is
green, it means that the close was higher than the open. The lines
above and below the body are the shadows. The shadows represent
the session’s price extremes. The shadow above the real body is
called the upper shadow and the shadow below the real body is called
the lower shadow. The top of the upper shadow is the high of the day,
and the bottom of the lower shadow is the low of the day.

Figure 2

Weekly update..

This week got nothing to update again.. hahahaha, still same position for both FKLI/CPO :))

*FKLI maintain my LONG 1461 for October month..

*CPO still holding December contract LONG 2736.. no rollover for me still..

50 reasons why you shouldn't be trading or even consider trading if...

1) you need the money
2) you hope to buy something from the paper winning in the trade you just made
3) you want to make a million bucks with 1 lot of a futures contract
4) you set a minimum profit target for the year
5) you don't want to lose
6) you never lost before in anything in your life; more like you bluffed yourself that you never lost
7) you offer people free market tips
8) your wife spends your profits and nags you about your losses
9) you graduated from Harvard or Yale or Princeton or Cornell with an economics or business degree
10) your financial blog is full of analysts reports that justify your positions even when you are losing like crazy
11) you don't allow anyone to post a contrary argument to your positions in your blog even though the market has proven those arguments correct
12) you brag a lot in other peoples blog on how you rob and pick pocket the markets but disappear when you are wrong big time
13) you criticise other traders for learning from books and say that you play by your own rules and still insist on averaging and holding on to your losses even though the market is in a super trend against you
14) you had a group of trading students whom you were teaching and they have now abandoned you
15) your ex-students are now trading successfully in markets you dare not trade and still dare not trade in
16) you thought you had a trading system, when in reality all you had was your hope and opinions
17) you've been called stubborn, egoistic or lansi lanyong too often
18) you think to accept losses is the same as to like losses
19) you think Singapore street food tastes better than Malaysia's
20) you think Ipoh Fried Kway Teow, Penang Laksa and Seremban Beef Noodles originated from Singapore
21) you know the names of all the footballers in the Malaysian football team
22) you have a new child but the last time you had sex with your spouse was over a year ago
23) you don't have a trading system and if you did ,you 2nd guess the signals
24) you don't know who Manny Pacquiao is
25) you think Floyd Mayweather Jr has balls
26) you pester and beg successful traders for their system
27) your charts are so full of indicators and lines that you can't see the price bar at all
28) your charts are so full on indicators and lines and you still don't follow it
29) you say that you'll fight the market because a few lots won't kill you
30) you want to impress a girl/guy/bapok
31) you talk about trading to your non trading friends so often that you suddenly realise that you have no real friends left and the people that hang around you now only want to borrow money from you or get a free lunch
32) you always blame others for your mistakes
33) you are a white skin worshipper
34) you invest in unit trusts
35) you can't think of any other uses for palm oil except as cooking oil and bio-diesel
36) you equate successful trading with passing exams with flying colors
37) you support Liverpool FC even when it's in the relegation zone
38) you think the voice behind Bart Simpson is a guy
39) you find Venus and Serena Williams attractive
40) you hero worship Mao Zedong
41) you are for the return of Chin Peng to Malaysia
42) you still buy 4D,5D,6D and Toto
43) your second home is the casino
44) your second home is the pub
45) you named your sons or dogs Jack ,Jim,Johnnie or Sahib
46) you spend more than what you earn
47) you are about to undergo brain surgery
48) you are about to undergo open heart surgery
49) you listen and followed the advice of Tun Dr. Mahathir not to cut your losses during the stock market crash of 1997
50) you find this article irritating and feel like killing me because I have just described YOU!

Weekly Update..

*FKLI maintain my LONG 1461 for October month..

*CPO still holding December contract LONG 2736.. no rollover for me yet.. :)

A few behavioural traits of a confused/bad speculator

In my many years of trading securities and futures, I've come across many or almost all, bad traders. They could be the ordinary jo in the gallery or the chief dealer in a big firm and the thing that catches my attention is that all of them share a lot of similar traits; not necessarily all the traits but a lot of similarities.
So here are some of the most common traits of bad traders which I noticed:

1) they spend paper profits.
Illogical as it may seem, this is the most prevalent trait among people with poor emotional control. I think most of you will realize the same thing if you think about it. How many traders(or even yourself) do you know suddenly increase their spending pattern during a bull run? They could be more lavish in their meals, change a new car, change to more expensive perfumes, more expensive in their dressing or even keep a mistress. When I ask them whether they have liquidated their positions; the answer is always unanimously 'not yet'! ..There's more, they'd be so full of themselves that they even declare that they'll make it no matter what the market condition and most of these fellas are stock traders in Bursa(Bursa being a 1 way market only)! This only shows that people do not need to be rich before they 'upgrade' themselves,they only need to feel rich!
A contrasting example would be my very succesful trading buddy Tom: he naturally liquidates the portion of his positions to pay for his Camry , an Altis for his wifey and a 3 week European holiday for himself, wife and his in-laws ;all paid for in cash.. my only gripe with him is why take his in-laws along? Sorry tommy..i can't help myself.

2)they are sexually active only when there are winning real or on paper.
Lo and behold, I broke the taboo subject that most of you don't want to admit! Think about it, bad traders are only sexually active when they get lucky in the markets! They think they are great and they go all out to conquer another person to fuel their ego of being so smart in making a rare win. They good traders (very few) whom I know personally are only sexually active when they are in a losing streak! Maybe this behavior can be explained that winning traders get their high from winning and don't need any external stimulation to cut down their high..after all,sex is more mental than physical and so too is trading. Lesson to be learnt here? Good lovers are actually lousy traders..LOL!

3) they have no life outside of the markets.
They would be restless when the market is on holiday,they'd look at charts the whole time or be drinking themselves drunk just so the holiday would past by. They would talk about the market to every person they meet showing off their limited knowledge that they possess. Or they'd go around asking for tips and tits! If they could,they'd want to trade 7 days a week.
Contrast this with the good,excellent or fantastic traders I've come across; They have a balanced life and are very passionate with their hobbies and family. They have other goals in life and look forward to a break to catch up with their other passion. Gt is passionate with his family and with his hobby of flying remote control planes and helicopter. Lesson to be learnt here; GET A LIFE!

4) they subscribe to analyst reports.
All the good traders whom I personally know NEVER bother reading analyst reports let alone subscribe to it...not even the Wall Street Journal or even Fortune magazine. But they do read good trading books like 'Reminiscences...', Market Wizards etc. Why then bad traders rely on so many news and reports while the best don't even bother? Confidence; the best knows that no one knows what the future holds. Some more,why bother paying for someone else's opinion when you can get it free in some bad traders blogs? But ask yourself this, if analysts are so sure of their reports,don't you think they'll sell everything they possess and trade? Think about it, how many analyst do you know gets fired for writing a wrong report or a series of wrong reports? Lesson here: if you want opinions ,get it FREE!

5)they never learn from their mistakes.
History repeats itself all the time and that's why we study it. How many traders do you know actually study their mistakes and try their level best not to repeat it? Or how many traders do you know keep on repeating their mistakes over and over again? Like getting wiped out more than once? It's hard to accept your mistakes more so if you have an over inflated ego. I guess that's why so few make it in this game called speculation ,but a lucrative game for those living off people's mistakes.

This is also not a conclusive traits of bad confused traders, just a few traits that are most common among them. Think about it, does it apply to you? If it does,then do something about it like STOP trying to impersonate a trader.

FKLI & CPO Update

*FKLI maintain my LONG 1461 for October month..

*CPO also same story, still holding December contract LONG 2736..

The many 'don't 'of intelligent speculation

Many a time I've been approach by friends who want to speculate in the futures markets and I always give them my copy of 'Reminiscences of a stock operator' to read 1st. If the book is not read within 1 week, I would then ask them to return back my book and tell them plainly in their face not to waste their time even to think that they can trade.
This is a hard and cruel game and you need a passion for it. But let's see how many people can be passionate about this game after reading and pondering about the 'DON"T' of speculation. Why do I start of with the 'don't' of speculation ? Because it's the most common and basic mistakes made by every beginner when they place their 1st trade.

DON"T #1 : Don't ever over trade.
This year we've come across bloggers and traders who have suspended themselves from trading for one reason or the other. My deduction is that they were over trading. What is over trading? Over trading is mainly trading with insufficient capital. What is sufficient capital? Let's take the example of CPO ,the margin requirement is RM4,ooo per lot. That means you need a minimum of RM4,000 to trade 1 lot of CPO. If you follow gt's 30% rule;you need a minimum of RM 14,000 in your trading account to trade 1 lot of CPO. But how many actually keep to such a rule? I've seen many gallery traders who trade CPO with RM5-7,000 per lot.Needless to say,they don't last long after 1 or 2 whips from the market.

DON"T # 2: Don't increase your trading position after a loss or a series of losses.
This is quite a normal thing for gamblers to do,they increase their positions every time they lose thinking that their losing streak will end soon and they get to cover all their losses in 1 hand. But how many actually know when their losing streak will end? What if the markets whips u 10 times in a row? DO you think you still be around to catch the big move in your favor? This is also a form of over trading.

DON"T # 3: Don't ever fight the trend because of your opinions.
There is a blogger (still blogging by the way) who is and I believe is still fighting FKLI by being short and even shorting higher. He quotes 'who says there is only 1 road to Rome?' . But the surest and fastest way to Holland is by being stubborn and egoistic by fighting the market! IF you think you are smart and intelligent and therefore you must be right all the time why then do you not find or even hear of Albert Einstein or Professor Stephen Hawking trading for a living even on a part time basis, since they are sooooo smart and their opinions are definitely better than yours or mine? Think about it? You think you are smarter than Einstein or Professor Hawking?

DON'T # 4: Don't ever talk about your trades with other traders.
Trading is an egoistic game,chances are if you ever talk to someone that someone will talk you out of your position;since egoistic people always want to justify that they are always right! If they can't talk you out of your position with charts ,they'll probably talk you out of it by showing you negative analyst reports or projected gloom in the economy or market. Remember, all analyst reports and projections are just opinions of the author!

DON'T # 5: Don't ever talk about trading to your non-trading friends or family.
This is the fastest way to lose friends as they'll think that you are either a braggart or a gambler.
You must see it from their point of view,it's damn boring and most inexperienced traders get carried away as they'll go on and on and on about their trades or system and will start dominating the conversation. People will avoid you the same way people avoid direct selling recruiters or pesky life insurance agents trying to load you up with policies you can't afford! But do talk trading to people you don't like ;it's a classy way of getting rid of them from your life!

DON"T # 6: Don't be a fulltime trader/speculator if 30% gain a year on your capital is less than what you are making now.
Serious, it blows my mind wondering why people even decide to trade on a full time basis when they are already holding on to decent jobs. But honestly,30% gain is a conservative figure to speculators,but how sure are you that you'll even come out ahead for the year? Most part time traders don't realize that the reason they are doing spectacularly year in year out is because of their full time job. Losses will affect you no matter what people say and losses without a full time job will affect you even more. You'll never realize just how many tricks your mind can play with you.

This list of 'don't' is not exhaustive but I think I've covered the basics . Now it's all up to you to really be honest with yourself. If I offended anyone,don't take it personally but just ponder about it.

By the way,I'm not taking in new students but the door is still open for oops n nb..since I left them too abruptly! So oops and nb do send me your email address if you want to continue your education.

Weekly Update FKLI & CPO

*FKLI now holding Long 1461 for October month (roll)..

*CPO still holding December contract LONG 2736..

ps>> for those not believers that our market damn strong and still holding FKLI Shot position, i wish good luck shorting to AVERAGE HIGH your position, watch/search this movie about Nick Leeson, dont go against the trend, the name of the movie -->> ROGUE TRADER :), maybe you guys (i mean shorties) will learn something.. Good weekend to all.. adios

Test your skill/system trading..

*You discover a super system to trade, try this website www.chartgame.com to test your "PROVEN" system to trade the market. The chart taken from real stocks traded in US/Canada, your system will compete with Buy & Hold system set by the website.

*This is my game record using my system.. hahahhaah, damn bored now playing chart games..

FKLI

*FKLI rolling day, continue LONG 1461 for October month.. good profit for September :) and officially i'm back in the black (up 50pts +/-) for this year 2010, looking forward to close FKLI this year on positive note after total heart ache for the first 6 month of the year.

CPO

*CPO turn LONG 2736 for December contract.. hmmm heavy losses for November contract, haihh

Weekly update FKLI & CPO

As expected i got nothing to post or update for past 1 week, so here goes my position again.. NO CHANGE..

*FKLI still holding firmly my September roll LONG 1426.5..

*CPO also same case, still maintain my NOV contract SHOT 2624 but looks like as i post in my cbox earlier today i going to get slaughtered by the market soon because as i typing this update, Soybean Oil jumping like shit about 2% up... knn fred hahahaha

Unit Trust vs Stock Market

Taken from : RHBInvest's forum

Written by : "I smell money"

Don't know if you guys notice this, but everyone with investment in unit trust need to take note of this. I've recently flipped through the newspaper to have a check on performance of unit trust (according to Lipper Ranking) and these are some of the findings:

1.For the 6 months period [26-02-10 - 27-08-10], the common benchmarks FBM KLCI index rose +12.8% and FBM100 rose +12.4%. However Malaysian equity funds (non-islamic) had only return +8% on an 80-member average. {WHOA!!! not too impressive return by an average fund manager}.

2. Ok, then lets look at how many of the funds beat the benchmark of 12%. Oppss .. only 10 out of 80 fund or 12.5% of fund managers beat their benchmark.

3. Ok, then we shall look at the creme de la creme of the group, and see how they have done. For the top performing fund for the 6 month category, the top fund only had a return of 15%, huhhhh!!! only 3% above the benchmark.

Ok. then its time to compare this with some of the markets 2010 favourite.

Comparison same period
1. Supermax 12% (even after it had fallen off the cliff towards the end of July)
2. TimeCom 29%
3. Axiata 19%
4. Jadi 65% (ok this one a bit too unrealistic, but if you went in around XXsen when the stock was heavily traded)
5. AirAsia 14%
6. JCY -29% (of course not everything is hunky dory, and how can anybody forget about this name)
7. Unisem 19%
8. Notion -45% (woooo, dont we hate this name)
9. UEMLand 40%
10. MRCB 21%
11. Adventa -27%
12. Talam -20%
13. BJ Corp -23%
On average +37.5% (if you spread your money across all the 13 stocks evenly).


So if anyone who wants to invest in the stock market through unit trust then they should reconsider this strategy.

*Thanks to Teh (http://cpteh.blogspot.com) for allowing me to borrow/publish his article here.

CPO & FKLI

*CPO turn SHOT 2624 today but still maintain November contract.. i not interested to trade December contract yet!!

*FKLI still same case still holding September month LONG 1426.5..

Selamat Hari Raya & Weekly update..

I wish to all reader/followers of my blog here Selamat Hari Raya & Happy Holidays to all :)) and to those SHORTIES for FKLI & CPO good luck going against my position.. hik hik hik

*FKLI still holding September month LONG 1426.5..

*CPO also same case still maintain November contract LONG 2557..

Weekly Update

Not much to do, so this is my current position..

*FKLI still holding September month LONG 1426.5..

*CPO maintain November contract LONG 2557..

FKLI & CPO

*FKLI roll to September month LONG 1426.5..

*CPO maintain November contract LONG 2557..

CPO & FKLI

*CPO turn SAR LONG 2557 for November contract..

*FKLI still holding LONG 1354 for August month..

Update FKLI & CPO

Nothing to update actually, so this is my current position..

*FKLI still holding August LONG 1354..

*CPO maintain SHOT 2652 November contract..

CPO & FKLI

*FKLI still holding August LONG 1354..

*CPO turn SHOT 2652 November contract..

Weekly update FKLI & CPO

*FKLI still holding August LONG 1354..

*CPO maintain October LONG 2445, no rollover for me... :))

Weekly update FKLI & CPO

*FKLI still holding August LONG 1354..

*CPO maintain October LONG 2445..

FKLI & CPO (Weekly update)

*FKLI roll today at close, so holding LONG 1354 for August..

*CPO still holding October contract LONG 2445..

Weekly update..

*FKLI still holding LONG 1308..

*CPO maintain October contract LONG 2445..

CPO & FKLI

*CPO I decided to roll today, very good deal rolling.. hahahaah.. so now holding October LONG 2445..

*FKLI btw remain the same, holding LONG 1308..

Weekly update

*FKLI still maintain holding LONG 1308..

*CPO maintain hold September contract LONG 2321, no rollover to October..

CPOTrader retired/pencen from trading????

*halo to all.. i just knew that one of futures bloggers already stop trading for this year.. 2010 is really a tough year for most of trend followers for fkli.cpo .. i wish good luck to CPOTrader.. for me i'll strive to continue trading with "ROJAK" system.. no doubt i'm also ROCKed by the market n just surviving now... 5month to go b4 year end.. if my system manage to "TACKLE" any good movement towards year end , MAYBE.. YES MAYBE i can close book for 2010 with profit.. all the best to all & GOOD LUCK... :))

CPO & FKLI

*CPO turn LONG 2321 for September contract...

*FKLI still maintain LONG 1308...

FKLI &CPO

^oo^... nothing to update... no i c.. still holding FKLI LONG 1308 & CPO SHOT 2373 for September contract...

FKLI & CPO

*FKLI roll to July, LONG 1308...

*CPO holding September SHOT 2373...

FKLI & CPO

*FKLI still maintain LONG 1335...

*CPO crash boom bang-bang... aaarrggghhhhhhhh turn SHOT September at 2373

FKLI & CPO

*FKLI turn LONG 1335 for JUN month..

*CPO turn LONG 2421 for SEPTEMBER contract..

CPO & FKLI

*CPO turn SHOT 2436 for August contract...

*FKLI maintain Jun SHOT 1288...

CPO & FKLI

*CPO turn LONG 2473 for August contract..

*FKLI still remain SHOT 1288..

FKLI & CPO

*FKLI roll SHOT 1288 Jun..

*CPO still holding SHOT 2451 August...

CPO & FKLI

*CPO turn SHOT August contract today at 2451..

*FKLI still remain SHOT May at 1296.5..

FKLI & CPO

*FKLI turn SHOT at 1296.5 May yesterday...

*CPO LONG August contract 2475 yesterday...

FKLI & CPO

*FKLI still maintain my rollover LONG 1347.5... kekekeke

*CPO maintain holding July SHOT 2529, i not going roll to August... no reason to roll.. haha

FKLI & CPO

*FKLI i still holding my May LONG 1347.5...

*CPO holding July SHOT 2529... gonna turn LONG soon??

CPO

*I turn SHOT July CPO at 2529...

FKLI & CPO

*FKLI turn LONG 1347.5 (May) at last rollover day...

*CPO maintain July LONG position 2522..

FKLIFutures BLog

*OK my FKLIFutures blog already re-open for viewing... very bad start for 2010.. hmmmm

FCPOFutures Blog

*As promise i re-open back my FCPOFutures Blog, to those that already sent me email to see my 2 others blog... now its time for you all to see it... i dunno how long i gonna open it to public.. feel free to ask me anything but please no email.. anything just ask through my cbox...

*and sorry to say my futures blog not like others futures blog.. i mostly post numbers.. i mean my trade.. i seldom talk talk write write anything at my posting.. anything to talk at my cbox ya.. happy trading to all...

FKLI & CPO

*FKLI i still maintain hold of my LONG position...

*CPO i exit/cut loss JUNE & LONG JULY at 2522...

FKLI & CPO

*FKLI still maintain LONG...

*CPO.. hahhahahaha i still survive the crazy jump to 2594.. n crazy whipping last week,, still holding JUN SHOT....

FKLI & CPO

*FKLI still holding LONG 1326.5...

*CPO turn SHOT at 2523..

FKLI & CPO

*FKLI maintain holding LONG 1326.5, still no sign of reverse yet...

*CPO turn LONG (SAR) today 2564..

FKLI & CPO

*FKLI roll & continue my LONG holding..

*CPO still maintain SHOT...

FKLI & CPO

*FKLI not much change still holding LONG position...

*CPO also the same still maintaining my SHOT holding...

FKLI & CPO

*FKLI still holding LONG...

*CPO rolling day & still continue JUNE SHOT..

FKLI & CPO

*FKLI still holding LONG...

*CPO today turn SHOT already...

FKLI & CPO

*FKLI maintain LONG...

*CPO turn LONG already...

FKLI & CPO

*FKLI new LONG entry..

*CPO still maintain SHOT...

FKLI & CPO

*FKLI still holding SHOT after roll.. knn

*CPO maintain SHOT...

FKLI & CPO

*FKLI still holding SHOT...

*CPO maintain LONG...

FKLI & CPO

*FKLI still holding SHOT position..

*CPO already engage new LONG position (roll) yesterday..

FKLI & CPO

*FKLI still maintain SHOT...

*CPO flowing with LONG position..

FKLI & CPO

*FKLI fresh SHOT position..

*CPO holding LONG..

FKLI & CPO

*FKLI maintain LONG...

*CPO still holding SHOT- going to SAR soon...

FKLI & CPO

*FKLI new LONG entry at closing day...

*CPO still maintain SHOT but view to SAR soon..

Dow Jones Support Line BROKEN??

*See for yourself....hmm ??

FKLI & CPO

*FKLI sideline for now...

*CPO maintainSHOT position...

FKLI & CPO

*FKLI & CPO switch to momentum trade... so NO STOP placement... similar style with my 2 other site... Stay tune with my update... or check the CHATBOX for my immediate update...

FKLI & CPO

*FKLI change to new SELLstop..

*CPO prepare to SHOT...

FKLI & CPO

*FKLI stop remains...

*CPO still waiting for signal..

FKLI & CPO

*FKLI new LONG entry today..

*CPO still blurr blurr...hmmm

FKLI & CPO

*FKLI prepare to re-LONG again... hmmmm

*CPO prepare to re-LONG ???

FKLI & CPO

*FKLI prepare to re-LONG...

*CPO no clear Signal yet..

FKLI & CPO

*FKLI SELLstop triggered..

*CPO SELLstop triggered & prepare to re-LONG...

FKLI & CPO

*FKLI change to new SELLstop..

*CPO change to new SELLstop..

FKLI & CPO

*FKLI change to new SELLstop..

*CPO change to new SELLstop...

FKLI & CPO

*FKLI change to new SELLstop..

*CPO change to new SELLstop..

FKLI & CPO

*FKLI Dec SELL & roll to LONG Jan month at close..

*CPO change to new SELLStop..

Redtone

*Redtone base from pure candlesticks already a BUY when breaks above 0.31 today 30/12/2009.. but from my signals i need one more confirmation before i jump in, so i'll monitor Redtone closely for now.

ps- Latexx making a steady move upward currently and i missed it, i just notice it today...hmmm

GPacket-wa

*GPacket-wa, entry today 30/12/2009 when it breaks above 0.725 triggered a BUY with SELLstop under 0.585 or a very tight SELLstop under 0.655

FKLI & CPO

*FKLI ready to ROLL at close tomorrow..

*CPO change to new SELLStop..

Edwin Lefevre

The spectator's chief enemies are always boring from within. It is inseparable from human nature to hope and to fear. In speculation when the market goes against you, you hope that every day will be the last day--and you lose more than you should had you not listened to hope--to the same ally that is so potent a success-bringer to empire builders and pioneers, big and little. And when the market goes your way you become fearful that the next day will take away your profit, and you get out--too soon. Fear keeps you from making as much money as you ought to. The successful trader has to fight these two deep-seated instincts. He has to reverse what you might call his natural impulses. Instead of hoping he must fear; instead of fearing he must hope. He must fear that his loss may develop into much bigger loss, and hope that his profit may become a big profit.

--Edwin Lefevre

Airasia

*Airasia BUY signal triggered when breaks above 1.35 on 28/12/2009 with STOPLOSS under 1.30... How far Airasia will go??? NO I C... let the market decide... hahahah

ps- maybe Lotus 1MF1 might effect Airasia a bit??? :)) hmmmmmmm

FKLI & CPO

*FKLI change to new SELLstop...

*CPO new LONG ENTRY triggered...

FKLI

*FKLI new LONG entry today...

FKLI & CPO... HoHoHo :))

*FKLI new dual ENTRY emerge... standby.. :)

*CPO still no i c...??

*MERRY CHRISTMAS TO ALL FRIENDS & READERS...

CPO

*CPO SELLstop triggered...

CPO

*CPO change to new SELLstop..

FKLI

*FKLI new ENTRY coming soon...hahaha

FKLI & CPO

*FKLI posible new SIGNAL/ENTRY??

*CPO SELLstop remain the same...

FKLI & CPO

*FKLI only valid SHOT once break under 1251.5...

*CPO SELLstop still remain the same..

FKLI & CPO

*FKLI no new signal..

*CPO SELLstop remain the same..

>>ACHTUNG!! my signal at this blog (fkli.co.cc) & my other blog (fklifutures.blogspot.com) not the same now, with different entry n different stop, PLEASE DONT FOLLOW MY ENTRY!! the blog i created is for my own record purposes only.

CPO

*CPO rollover day, maintain LONG..

FKLI & CPO

*FKLI BUYstop triggered... sigh...

*CPO SELLstop remain still..