That Trading Blog

Moved

2012-01-28T16:41:00.002+08:00

I have moved to a more aesthetically pleasing home...

VIX Update

2011-06-22T14:39:00.005+08:00

The resistances area that I have posted in my last post proved to be the turning point, this is where we are at now...

The VIX high of 24.65 coincided with the low of the ES at 1252.25. Next important resistance is 1296ish. The strength of the thrusts from the last 2 days tell me that a lot of stops from the bears were triggered. Lets see if the professionals step in at 1296 to sell the market.

An Interesting Chart

2011-06-16T21:58:00.002+08:00

On 16 March 2011, we have the volatility high of 31.28, which was the aftermath of the impact that the Tsunami disaster had on the S & P 500. Using 31.28 high as the focus point, we have 2 important resistances at 20.77-20.91 and 24.47-24.78, and we are currently at the first resistance.

The significance of the 2 resistance levels is that it might represent possible turning points for the market.

Retirement of this blog

2010-12-15T22:19:00.003+08:00

New setup in my new office. Sweet.

This blog has served its purpose. Of course, its purpose has been changed a few times. But I am the type of person that shares/rants only when I have something important to say. Since, I haven't been trading, I haven't been updating.

For now, I will not be updating this blog, as time to a trader is scarce, and I feel that I have been spending too much time doing non-trading related stuff. Come 2011, I have a definitive plan which I intend to follow, not planning to divulge too much, except that it is a path which has been my dream for years, and hopefully by beginning of 2012 I will be a professional managing a professional amount of money.

If you have been visiting to learn how to trade the Dinapoli style or to get market updates, I will be posting my thoughts on this website: dlevels.net See you there.

Everything resets back to zero

2010-12-02T03:01:00.004+08:00

Just finished the Engagement Encounter with my partner over the weekend. For the uninitiated, this is a marriage preparation course, that one has to go through in order to get married in a Catholic Church in Singapore. Personally, I feel that all couples should go experience the Engagement Encounter. This will prevent a lot of unnecessary marriages (yes you read that right) and of course that naturally leads to less unnecessary and messy divorces.

Over the past few days, I have been busy getting information from websites, forums and friends to help me build a monster machine that can provide a stable platform for my intraday trading needs. This is my build:

Intel i3-540 3.06ghz/4mb/LGA1156

MSI P55A-G55 P55/DDR3/USB 3.0/SATA3/LGA1156

Kingston Hyper-X 12800/1600 4gb Kit (2X2gb) DDR3 (CL9)

Seasonic X-Series 660W Modular Gold PSU

Sapphire Radeon HD5770 Flex Edition 1gb GDDR5 PCI-E

Hitachi 500gb 3.5" 16mb SATA

Intel X25-M SATA Solid State Drive 80gb

I am running my operating system: Windows 7 64 bit off the solid state drive, and my graphics card enables me to run my 3 monitors (2 DVI and 1 Analog) on just one card. Also, the Seasonic X-Series 660W power supply is like manna from heaven, it is so silent that I can hear my air con draft. A far cry from my previous build which adds to the stress/heat levels when I am in trade.

Next up, is finding an internet solution. Relying on a wireless connection, is asking for trouble. There were times when I was in trade and there will be no connection, and I had to scramble to see if the problem lies with the router or Starhub. Often, it was the router. This hopefully would not be an issue in 6 months time, when the Opennet guys finally get their ass to my place. For now, I will stick a LAN wire from my router directly to my PC. This is a useful website that I use to check my bandwidth from time to time: http://pingtest.net/

Can't wait to start...

Still alive and well

2010-09-11T05:26:00.002+08:00

I have been busy with my new flat, and catching up on some of my readings, but not trading is making me restless. And I will only be back trading in early November, by then I should be nice and settled at my new place. Will be back with a new direction. Stay tuned...

What I think of most Singaporeans

2010-08-02T03:00:00.003+08:00

This is one of my favourite songs in one of my favourite movie.

Most Singaporeans are stuck in dead end jobs, subservient and afraid to speak up, and because of that, they can't feel love nor feel pain, which is what made them apathetic.

Possible turning point for gold

2010-07-30T09:37:00.004+08:00

I have not looked at charts for about a week now, and the above support analysis was done last week. To the discerning eye, u would have notice tradeable bounces off all major support.

At the moment we have what Dinapoli traders call w & r, at a minimum there should be a nice bounce to 1174ish (chart below). But there could be a resumption of the uptrend from here, due to previous bulls being washed out of the market. The market does what it does.

This is how i got the 1174 numbers, why i think it will get there is outside the context of this post.
Meanwhile indicators that i use, shows that market is bullish on the intraday basis, but due to previous price action (downthrusts), I wouldn't be surprised to see sharp retracements off resistances shown.

For those that is only reading this for my analysis should close their eyes now, as I am about to start a rant. Eyes still open? Ok, the above shows the difference between a trader and a bank analyst or a newsletter writer, although I can gauge to a certain degree where price may go, I would NEVER be able to tell you thing like "Oh in September we will bottom out in the 1000 region, then by year end we will rebound to 1200" This is too general for a trader, and you will get killed by the volatility in the meantime, but the lay person would not be able to tell the difference. Predictions belong to the domain of people who writes reports/newsletters, and have no place in the trading world. What we traders have are trading bias, and this bias can change. How often the bias change depends on the timeframe of analysis. If you don't understand my last statement, then we will just leave it as that.

My mentor made videos

2010-07-29T17:21:00.000+08:00

Hiatus

2010-07-28T02:00:00.002+08:00

Looks like my bullish bias in stock indexes and bearish bias in Gold has been right. But I have very little time for charts at the moment.

I will be taking a 2 month break from trading and blogging, as I will be shifting to my new place soon, and I am taking a hands on approach to sourcing a good interior designer or contractor, which materials to use for kitchen tops, cabinets, wardrobes and solutions to troublesome layouts (the layouts of old HDB toilets are atrocious). Busy times ahead.

Quick Gold Update

2010-07-19T15:44:00.005+08:00

I am feeling generous today, hence I am sharing my opinion about Gold. If u benefit from this, then I am glad, but kindly do not repeat this elsewhere. I have seen my analysis appearing in other people's blogs before, and if I come across anymore of such behavious, I would either lock my blog or just stop sharing entirely.

Gold after completing a COP move at 1184.9, is doing a (relatively slow) measured move upwards...

240m gold futures chart. check out the price action after it hits agreement resistance at 1214.1-1216.1, downthrusts...

60m gold chart...resistances abound.

ES Analysis 19 July 2010

2010-07-19T13:33:00.010+08:00

After 2 weeks of physical activities and exercise, I feel more healthy and have more energy than ever. On a personal note, I just bought a personalised table tennis bat that costs $103! Waldner would have been proud.

Ok now to market analysis...

This is 60m ES chart.
Daily Trend is still up. ES has completed a XOP move down at 1063.50, and is currently at agreement support. We should see at least a short term bounce, question is: Does this bounce take us above 1096?

This is 5m chart showing Pivot (cash hours only). It is clear that price is supported at monthly pivot.

This is 30m ES chart. If we are long, we want to see resistances at 1069.50 and 1073.25 being overcome.

Gold Update

2010-07-08T17:58:00.005+08:00

I don't know what is up with my internet connection, has been dead slow since yesterday afternoon. Took me quite awhile to get this post out.

240m chart... Look where the market supported, almost to the tick. How the market rebounded off the COP, provided a clue that we might have a change in movement (should be now up). Shorts should have taken their profit either at 1190.4 (XOP) or 1184.9 (COP). There was no reason to still be short at these support areas.

30m chart. Up thrusts were stopped by an agreement area.

As it is there are both intraday buying and shorting opportunities. And line in the sand for me is currently at 1235ish (weekly SG and F5*), if Gold can get above this price by Friday, we should see new highs.

GLD update

2010-07-07T17:18:00.004+08:00

60m chart of GLD...this shows that support has become resistance, and we had a gap down and downthrust after respecting this new resistance (blue line). No reason to go long the GLD other than a short intraday scalp.

Something for the retail traders

2010-07-06T23:16:00.003+08:00

I understand that the GC futures contract is too volatile for many retail trader's risk management strategy, hence I am posting the chart for GLD ETF instead.

We have a weekly cross in the GLD and which could mean a major correction for GLD for the next few weeks, but I would like to see a w & r before getting too excited about the long side.

Bullish the ES

2010-07-02T15:17:00.006+08:00

In a bid to continually improve as a trader, I strive to do a market analysis everyday, even if I do not trade the markets for whatever reasons. Sometimes, I will post the analysis here, sometimes I will not. My sister always accuse me of being moody, maybe I am.

Based on yesterday's post on the big big support being supported, and yesterday's price action, I am currently short term bullish the ES or S & P 500.

The above is a 20m chart. Using dinapoli methodology, this gives me a bullish picture.

5m support. Red arrows tells me we are going higher from there...

5m resistance.

All 3 intraday charts tell me the same thing, we are going higher. Of course, after such a big slide, the market is going to encounter lots of resistances ahead. I have the chart, I am just not posting it, how is that for being whimsical? I blame the rain.

SPX near major support

2010-07-01T18:31:00.002+08:00

Although markets look really bearish now, folks that are still short should look to get out. We are very near to SPX major support. I have posted a more detailed analysis in a secured forum at:
http://www.dlevels.net/

Experienced traders will know that I do not mean that we should go long right now. I would like to see some form of market strength before doing that.

Gold Trade

2010-06-26T18:07:00.003+08:00

Yesterday, i posted that i expected Gold to bust the 1250ish resistance (lower purple line), and I knew just exactly where to take profits. This is a 30m chart of gold, see how 2 fib expasions coincided in the higher purple line, this makes the resistance stronger. Also note how price action oscillated around that resistance. I wouldn't have been whipsawed by substandard signals, because I have already taken my profits.

Remember this is World Cup/summer season, take your money, then go ahead and pour yourself a cup of tea, and watch football.

Gold Analysis

2010-06-25T18:20:00.004+08:00

Currently we are at long term target/resistance at 1257.5, and if market can stay above that area, Gold should continue its upward climb. And the high made so far is at 1266.5. Personally, in the short term (intraday), i am bullish because of this...

at the minimum, I expect the 1250ish resistance to break, maybe after a few attempts...after that it depends on price action. Also I wouldn't go long above 1266.5 high because of the long term resistance.

A thorough review of my trading methodology

2010-06-18T15:11:00.007+08:00

Over the past few weeks, I have been lightening up on daytrading activities, because of a project and the World Cup. I have not been happy with the way I have been daytrading, because I know that I have not been applying all that I have learnt thus far, which is really a mammoth amount of knowledge (one can say 30 years' worth of daytrading experience). Sometimes to move forward, you have to take a step back. So actually i have been busy compiling the trading version of a kungfu manual. I have also seen the light of just how some of the professionals (hedge fund) traders trade. If you have access to hedge fund managers performance, look at their drawdown and returns for this year. Most of the "trend following" fund manager, has been going through massive drawdowns over the past few months, due to a few aberrant events. Although, I say aberrant, the scary thing is that, it might be more common in the future, so risk control becomes very important.

I can now see why it is so difficult for a trading newbie to make money trading...most newbies think that to make money, all they have to do is find a few indicators that work. And it is really obvious that they are newbies coz they always have more than 3 indicators in their charts, with the nonsensical view that more indicators is better. I know coz I was once like that. A typical example is someone that has the MACD, Stochastics, different moving averages and trendlines on the same chart, and "when all the stars align" to buy, they will then buy, they have no idea at which price level to buy at. The problem with such a methodology is when do u know when u are wrong? If u buy when all the indicators says buy, what happens when one indicator says sell? Do u then close your long position? This would cause the newbie trader to go through a long and tedious and ultimately unfulfilling journey where they will experiment with different indicators and go into a downward spiral of optimising the indicators.

To the newbie traders out there, here is a 101 on building a basic trading system/methodology. Most hedge funds are trend following, so I guess the easiest most logical trading system is a trend following one.

**Disclaimer** The following is not how I approach trading, I prefer a judgemental trading system under a very specific framework.

Here it goes:

First ascertain the trend, and it is important to distinguish between trends in different timeframes.

Choose ONE to ascertain trend:

Moving Average or Moving Average Crossover
MACD
Stochastics
Trendlines

If according to your chosen indicator, it shows that you should be long, get in at a retracement. Retracements can be drawn determined by fibonacci based support/resistances or oscillator (overbought/oversold) based support/resistances. Again choose one.

For your exits, instead of trailing stops, try taking profits at fibonacci based support/resistance or oscillator based support/resistance. E.g. If you are long, u can take profit at some overbought levels.

And if lets say u are long because of the daily MACD bullish crossover, you might want to look to close if 60m MACD have a bearish crossover, because it might be a clue that your position is in danger.

In trading, the important aspect is still risk control, and it is absolutely crucial to know when you are wrong, which is sadly missing in many mechanical systems. The worst thing you can do is, if you trade based on some intraday trend signal and you hold overnight for any 1000 of reasons you can come up with, that is a sign of an amateur trader, and it is only a matter of time before such a trader gets blown out of a game. Harsh, but that is the stark reality of the game.

For the record, I only use 3 monitors. That is sufficient for intraday trading for a personal account.

Million Dollar Traders

2010-06-09T22:08:00.001+08:00

An interesting show that give clues what type of personality have what it takes to succeed in the markets. All participants were given the same basic training, but some does better than others, which begs the question are good traders born and not nurtured?

Market comment

2010-06-08T16:03:00.003+08:00

Not much time to update my blog, so just a quick comment about the market, particularly the ES. It is short term very bearish, as market closed right at its lows yesterday. And we might get some downthrusts today, I would be bearish until it hits really big big support about 30-40 points below.

Update: i shouldn't have said "bearish until"...it should be until i see price action that suggests otherwise, and there was a w & r of the previous lows as well as a stopgrabber which caused the upthrusts yesterday...

Money Management and Trade Psychology

2010-05-22T17:45:00.004+08:00

I have been really busy with a new project, and my killer sore throat did not help matters. I was supposed to be on a one-week trading break, but in the end I still pulled off some trades. Must be stricter in the future, no trading means no trading.

Looking through my blog posts, I realised that I have neglected on Money Management and Trade Psychology. If you had trolled through various retail traders' blogs, you will come across some blogs that post daily P & L statements. For the life of me, I can never understand the rationale of doing that. Trading in itself is already difficult, why would you want to add psychological pressure to yourself? The professional ones that I know, they only focus on yearly results, and I believe that is the "correct way".

I used to be an active punter in the football markets, using statistics to determine the probability of a team winning, and if the odds given is "over-valued", I will place a bet. This methodology served me well for a number of years, and I always judge results only over a year. There will be a time when I will be hit with an aberrant run, simply put, I will have a bad run of a string of consecutive losses. This is not bad luck, this is mathematics. The longer I bet, the higher probability it is to hit an aberrant run, and it is your risk management strategy that will keep you in the game, NOT your knowledge NOT your analysis.
Same with Trading.

The above is the Risk of Ruin spreadsheet that I have done. And the 2 variables that are more or less controllable is the size of your trading account, and the amount that you risk per trade (Both in yellow). The variable that you don't have complete control is your edge over your market. Hence, this does not apply to mechanical systems, where your edge is often negative. Using Dinapoli methodology, I believe (whether true or not, cannot be determined, I am just basing on past track record) that my edge is at a minimum 5% if I want to be conservative, which means my risk of ruin is less than 1% and this is good enough for me.

In Joe Dinapoli's home study course, there is one line that will always stay with me:
"The only aspect that can change the favourability of the game is time, since time is likely to lead to an increase in knowledge, therefore you must have a grasp of money management to give yourself time to learn."

Currently, after studing Dinapoli methodology for a year, it has dramatically increased my win ratio, or my edge over the market, but I still can't make a good living based on trading yet. This is due to account size. I know of a smart guy who learnt Joe's methods for 3 years, and he has made the breakthrough last year, making a 100% return over a one year period. Some might say this is not impressive, but knowing that he achieved the return while applying proper money management techniques makes it a bona fide achievement in my book. Increasing win ratio and making a good income from trading, is 2 separate issues. I would rather bet small and increase my account size slowly, with the knowledge that I would never get blown out of the game this way, than betting big and hope to get lucky. I think this differentiates the professionals from amatuers.

P.S. Folks that would like the spreadsheet, can email me.

The supposed "Glitch"

2010-05-10T17:29:00.005+08:00

Some of the things that the CNBC guests say, really boggles the mind. Of course, not all of them are bad. I do respect the things that Warren Buffett, Jim Rogers and Marc Faber say, they don't give you crap. One of the man in suit (don't know him) said the glitch meant that Technical Analysis have to be thrown out of the window, because this error would have distort the picture. If so, then shares wouldn't have obeyed support and resistance right?

Lets look at AAPL...

Why did it gapped up?

2010-05-10T17:16:00.003+08:00

I would like to claim to have special predictive powers, but alas, i am just the same decaying matter as everyone else. I thought that there was a high probability that it was going to a gap up because of all the buy stops that were created by the eager beavers who were looking to short, in Friday's session.

Possible Gap up

2010-05-09T21:46:00.003+08:00

It always amazes me when people who knows so little about the market, will try to give u advice based on what they hear on TV as if it is the God-given truths. I was in Citibank, when I met a friend who was a banker there, and I talked to him about the historical day that happened on Thursday. And he was telling me how the US stock market was related to the JPY (as the market crashed JPY went up), and just because JPY is going back down, the market will come back up, sounds strangely similar to what the CNBC guys said. I wonder if all bankers base their advice on what CNBC folks say, if so, God help their clients. Of course, my friend was wrong.

I don't like to make predictions, because the market has a habit of reminding me how little I know. But the good thing is, you don't need to be able make grand predictions to be a good trader. All you need to do is trade based on what the charts tell you, more easily said than done. On that note, I am going to give you guys a grand prediction, based on what I see from the charts, it looks like there is going to be a gap up.

Got my ass whooped

2010-05-07T03:44:00.005+08:00

The lows could be in...famous last words!

what an ass whopping! I went long at 1140ish and got killed by my own risk limit which is $2500, which i placed long time ago and totally forgotten about it. What happen was that my orders were closed out automatically, and it is not a margin call, because i had more than enough margin. It is days like today where risk management is so so important. I will remember this day for a long long time. Normally the DOM is thick with orders, but today, it looks as if nobody is around, it was just free fall all the way...i couldnt believe my eyes.

A wise man once said, a mark of a professional trader is what he does when things doesnt go his way...well i am proud to say that i managed to trim some of the risk limit loss, and my longer term account should still be in the green by the end of today.

The following is the record breaking internals:
Tick Low: -1721
Decliners high: 3086
Advancers low: 83

In my years (admittedly short), I have never seen such numbers before, I suppose seeing how the market has glided up for the past months, this is something that has been building for some time. The average americans will not be pleased, as their retirement funds is tied to the market. And alot of traders would have probably been washed out. If i didnt have my risk management in place, i would probably have been one of them...

I managed to trim my loss for the ES when i saw the RRT...I couldnt exit at AAPL at the profit target that i would like, coz my AAPL chart looks like this:

Madness!

The low might be in

2010-05-06T23:24:00.004+08:00

Almost caught the low of the day....but downthrust is strong...bought at 1149.50, never had a doubt that we would at least bounce a little. Pity I could only trade 1 ctt, coz i have other pending orders.

**Edit**
Re: "never had a doubt..."
Joe mentioned before to be on guard with the trades that you are absolutely sure of, he is right.

Gold Trade

2010-05-06T18:23:00.010+08:00

Context: I have been looking to go long Gold for a long time, finally i had a chance to look at Gold. And first thing that jumps out at me is the daily SG, this means a minimum target is now 1192.8.

All intraday trends are up, including 240m and 60m has a SG as well...

By the time I looked at the 60m chart, it has already been supported at 1173, 2 ticks off agreement support.
Then i saw that price is reacting of COP resistance, so went down another timeframe to buy at 5m support.

So i went down to a 5m chart and bought at agreement support(faded the 5m uptrend), my fill was 1177...and when market did a w & r, i wanted to buy again, but due to my risk management strategy, I couldn't.
I call this the last picture "the how lian shot"...so why didn't I go for the XOP when i think that the price should go to 1192.8? 2 reasons...firstly there will definitely be a reaction off OP, and I am hungry, so I should always take logical profit objectives. Secondly, currently my objective is doubling of account size and not maximising my profits, if u ask me, this are 2 different things. When u have a big enough account you can do more in terms of trade management (scaling in, getting out at different price objectives). If i was trading a 100k account instead of a 25k account, I would have bought a 2nd ctt when i saw the w & r, and i will then be able to hold out for a higher profit objective on my 2nd ctt.

Failed B & B and a longer term trade

2010-05-06T03:00:00.007+08:00

This is an example of a failed B & B sell on the 3m TF...i shorted earlier and already exited at a profit. So why didnt i short here again?

It is because of the 30m SG, this means that stops above 1173 is now vulnerable, and im looking at a cascading effect to break 60m K resist...

If market does a w & r at dotted line area i will place a swing short with daily trend and daily thrust as my context. Internals are still wretched. Typically, after a strong down trend day yesterday, today should be a z day (i think its linda raschke's concept), and there will be some traders that will buy at extreme down ticks.

The only matter now is if i will be around to witness the w & r, as I have been waiting the whole day for this particular trade, and the man city v spurs match hae already started!

B & B Sell

2010-05-04T22:16:00.004+08:00

Scalped a B & B LAL sell...didnt load on the contracts as it was a massive gap down, hence it wasn't a beauty. Didn't want to short again, as a node breaker is building (Dinapoli players that have attended a psem would know what i mean) But internals stinks and the low might just be 1176.75 before coming back up to catch the breakout players.

Magic of Fibonacci

2010-04-28T02:19:00.005+08:00

From my title, u can tell that i am trying my best to sound like one of the many so called gurus that I saw at ATIC. But the level drawn at 0.92 is one of the strongest possible resistance in d-levels, and as u can see we did a w & r of the level before plummeting down.

I didn't take this trade, but AUD futures is one of the instruments that i am currently tracking. I like to track an instrument for awhile first before actively trading it, abit like dipping your toes to see if the water is cold, before diving in. Capital is scarce, and I must keep my mistakes to a minimum.

Today turned out to be a blast...i will copy and paste some parts of my trades that I have done. I am not comfortable sharing everthing, as some of it is my blood and sweat. Now, where is me cup of tea?

**Edit** Just as I wanted to chronicle the trades, my charts crash, I think I have been over-taxing it...see if I get a chance to post tommorrow.

Tired from ATIC

2010-04-26T17:27:00.005+08:00

Had fun talking to some like minded people at ATIC yesterday, but it is really draining. I still prefer to be in front of my monitors.

I got a fill in the ES very early today, it was an order that i placed sometime last week, can't remember when. It was pretty big resistance, the only problem i have with this trade is that, it is an obvious area and we might have a MACD buy signal on the daily today.

I didn't like the price action prior to hitting my resistance...not enough thrusts. Nevertheless, took profits at 1213.50, coz of what i saw on the DOM and it was 30m support in the EX (since the ES cash market hasn't open yet).

but as i am typing this, the 30m support is breaking. Looks like it is going to be an exciting day today. We should get some big movement today.

ATIC 2010

2010-04-21T22:59:00.003+08:00

I am have no links with ATIC or any of their affliates whatsoever, just thought that a post looks better with a picture.

It has been a year since I decided to devote myself to learning the Dinapoli methodology, and this event was where it began. In the past one year, I have learnt more about trading, than the previous five years, which highlights the importance of having the right trading mentor. I will be hanging out at the booth, once I can get my ass off my bed. Do come over and say hi, I will be at the Dinapoli booth. Those that would like free tickets, leave comments with your email address, and I will sent u a link. If you have only cash left for one seminar, head towards Derek Ching's seminar, the rest is just a waste of time, unless you are into self improvement/self masturbation crap.

Work environment

2010-04-20T23:12:00.004+08:00

The work environment is really important, i say this because i am working in a 3 monitors setup and my freaking aircon is spoilt! And the weather hasn't been co-operative hitting a high of 36 degrees, it is like a sauna, every time I on the computer. Sweating bullets now as I am typing this...

I was looking at some of the charts that I have done some work on and I stumbled across this Gold chart...

Note that I wrote some time back in March that i suspect the market might take out the stops below 1097.3 and i can long at agreement support at 1085.4-1083.2...ignore the fib retracements drawn, coz this was the focus number was automatically updated (dinapoli traders will know what i mean). And look at the huge bounce off that support line drawn...did i take the trade? Of course not. Do i feel like I have lost out on a huge opportunity? Surprisingly no, because I am actually happy to find that my analysis was spot on, and there will always be opportunities, I just have to get my personal life sorted. No, its nothing dramatic, I just have been busy looking for a new place after renting this god-forsaken apartment for 2 years. This rented apartment I now stay in is like a bermuda triangle of sorts for electronic products...its victims include: my iPod speakers, drummie (rock band drumset), PS3, monitors, air-con and DVD player. Can't wait to move outta here!

How low volume might be dangerous

2010-04-08T00:40:00.003+08:00

One of my favourite trade plans, went long at 1179.75. But ignore the current nature of the market at your own risk. I am used to price obeying support and resistance to the tick or at most 1-2 ticks off, but price penetrated support by one full point, and I suspect it has something to do with low volume, hence less market participation.

Arrow is where i took profits. I will continue to tread lightly until some semblance of volume comes back.

This is the reason why so many newbies lose money

2010-04-07T23:45:00.005+08:00

This came in my mail today, its the usual ad for a newsletter, saying that all u have to do to make good money, is to purchase their newsletter, and just buy the recommended stocks. I am pretty numb to all the junk and fraudulent claims that this industry have bombarded me. After all, I have paid good money for a few supposedly acclaimed newsletters, and they haven't been exactly helpful in increasing my bank balance. I have learnt the lesson the hard way, as a newbie trader. I would definitely have lost money at a slower pace, had I not listened to these newsletters. Looking back at my own experience, I can say this, no self-respecting trader will ever subscribe to a newsletter and base their trading decisions on a newsletter. I am proud to declare that I have learnt to be self reliant, and I even disagree with my trading mentor sometimes on how a particular market might be moving.

Trading is a difficult game, and if for one second that u think that it is easy to make money on a consistent basis, that is when the market will take money from u. So many people I meet want me to teach them about trading, but I only have to ask a few questions to realise that not many of them are serious or even willing to put in the hard work to succeed. The worst kind are the ones that just ask for stock tips. The problem with tips is that I might have a view one day, and I am more than willing to share with u, my thoughts, but things change in a heartbeat, and if that same person doesn't ask me if my views have change, I probably wouldn't have bothered to update that person. And humans being humans, u would get no thanks when they make money, but they would blame u for their losses.

Since I have a very low opinion of human nature, I tend to just keep my opinions to myself. I am pretty sedated to human idiocy, greed and fear, but random acts of human kindness never fails to surprise me.

Like watching paint dry

2010-04-05T23:37:00.003+08:00

Just look at the dire tick volume. If I didn't have some fills at resistance, I would have called it a night.

Manipulated market

2010-03-30T22:43:00.006+08:00

No way will I put on a long term short, before the high of 1176.50 is taken out. Folks that have been to a private seminar with Joe would know why.

Meanwhile, i am seriously considering taking this blog private...i am like blogging with one arm tied behind my back, just can't share as much in a public domain.

The trade i did on Monday

2010-03-27T13:59:00.016+08:00

Although all my trades this week were winning trades, i was only proud of this particular one. That is because, it appears i understood the idea of fading the masses, but it is important to note that I didn't go against the masses just for the sake of being contrarian, I did it because i could see them trying desperately to get out of their position, when they knew they were wrong. And Joe Dinapoli's methods is the only one I know that give u x-ray vision to what the market players are doing, for that i am thankful.

Some background information...last Friday (19 March) 's close was 1156.25, and if price goes below 1152.75, the daily MACD (a popular timeframe) players will have step in to short the market...

As the overnight market opened, it gapped down and opened at 1153.25, and it is apparent that the MACD sellers shorted the market to an interim low of 1147.75. At about 5:55pm, it looks like the market was supported at 5m OP at 1147.25, and something that i noticed in pre-node breaker market action is that with the 2 prior high relatively close, somehow the market always supports at OP (maybe coz it is most widely used or easy to understand in the trading world). And the market did a w & r and made its slow ascent up, and it was about this time when, i thought about the possibility of going long instead of shorting...

The internals at opening...
The above is the advancers which was at an abysmal 178

Decliners opened at a whopping 2136

Something interesting to note from the NYSE Tick, despite the bearishness in the Adv v Decl, the tick was never below -800.

**Note** The use of internals is up to personal preferences, the beauty of Joe's methods is it can be as simple as a B&B or it can be a long drawn out story...personally (to use an analogy) I prefer to look left and right before crossing the road, because being knocked down by a monster truck can be painful.

Looking at where the stops again (in the 5m chart), it is clear that once the stops above 1151.75 is taken out, it is dangerously close to where the MACD sellers might be wrong...although at this point i know i wouldn't be short, there is still not enough context to go long. Lets look at some intra-day charts:

20m c/o was at 1150.50

30m c/o was at 1152.25 and it was these 2 c/os that bring the intraday MACD buyers to break the stops mentioned above.

So where/how did i get in?

Although my context for this trade was very strong, some people might consider this conservative, my entry to get in the trade was very aggressive. This is important to state, because i know there are folks that confuse between context and entry...

What i did was i let the market go all the way to 1m OP, and when it did that both the 20m/30m trend both confirmed up (**note to self** this is not necessary, a better entry will be to buy off a reaction of the COP)...i entered at 1155 and 1154.75, which on hindsight was not ideal, a better entry wil be at 1154.25.

In my notes, i knew that when i entered i could gun for the stops above 1165.50, but i love to take profits, its my nature... my 1st profit target was at the stops above 1156.75 and 1161.50 which was 5m OP (not shown), but in the end, i got out at 1159 for the 2nd target, not sure if it is due to something i saw or i just did not like the lunchtime consolidation. But i still consider exits my weak area which i should work on.

A note about stop placement, i saw in my notes that my stop at that time was 1152.50, and that was the 20m c/o to the downside at that time, once the first thrust manifested.

Missed opportunity due to a donut

2010-03-26T02:49:00.002+08:00

Missed an opportunity to get short using one of my favourite trade setups because i was in the kitchen heating up my donut. What an expensive donut!

How to pick market tops?

2010-03-26T02:41:00.003+08:00

There is a conventional market wisdom that says that u shouldn't try to pick tops or bottoms. Then how do you explain my back to back selling at consecutive tops?

This is not a chest beating exercise, but more to highlight that one should question everything when it comes to conventional wisdom, especially when it comes to trading.

The market is not random

2010-03-24T18:45:00.005+08:00

i would like to say the market is random, that will mean my 3 years in university is not a big waste of time. Unfortunately, the market is not random, i did a SOR off 30m OP resistance at 1170, and held it overnight, confident (the confidence is not due to intuition, but due to an advanced dinapoli technique) that the level will hold.

These are my profit objectives which i set before i went to sleep yesterday...

The market as i am typing this... it might look bearish, but the market as it has been, has been manipulated up, so i would only short at strong resistance, and wouldn't short unless my context is very strong.

If i have the time i will post a trade i did on Monday, it is interesting, because it is the first of its kind, we will see...

Essential information for the Day Trader

2010-03-24T02:54:00.003+08:00

very slow day at the office in low volume manipulated market...hence i decided to compile some useful information...

For my intraday trading, I trade primarily the Eurostoxx 50 (EX) and the S&P 500 emini (ES), i might have to add Gold too as a secondary market, if this low volume environment persists.

Daylight savings: For the US markets, it has already started on the 2nd Sunday of March and will end 1st Sunday in October. For the European markets, DST starts last Sunday of March and ends last Sunday in October.
Remaining US market Holidays based on NYSE:

2 April Good Friday
31 May Memorial Day
5 July Independence Day
6 September Labour Day
25 Nov Thanksgiving Day
24 Dec Christmas

Rollover days for the ES is 2nd Thursday of each contract month, which is 8 days before expiration, which is on the 3rd Friday...(the day got interesting right at the end, when ES finally broke through the previous high of 1165.50, and i shorted right into resistance, as i am typing this the day after, i found out i was filled at my price objectives during my sleep)

The rollover and expiry seems to be on the same day for the Eurostoxx futures (EX) and it is on the 3rd Friday on the contract month.

Contract expiration months of stock index futures: March (H), June (M), September (U) and December (Z)

As for Gold, from what i see in the booklet, it is spot + 2 months, but this is not helpful, will confirm with my broker, and update again...

Messy workstation

2010-03-23T00:20:00.003+08:00

Three monitors is the way to go, and if you are using a multiple monitor setup like me, i recommend downloading Ultramon http://www.realtimesoft.com/ultramon/ . Ultramon really helped me keep things organised, and it even gives you a taskbar for every monitor you have, i am in love...

Intra-Day checklist

2010-03-16T22:43:00.004+08:00

I used to have a mistaken idea that if i want to make a good living daytrading, then i should pull out from the market a regular amount of USD 200-500 per day. Although it is possible (well anything is possible), that will be ignoring the character of the market. I learned this the hard way, and after painstakingly going through all my daytrades, paying close attention to my losses, the way to go is to only daytrade (which i separate from swing trading) at opportune times, which will exponentially decrease the amount of heartache and frustration while managing the trade. I guess the character of the market changed, when a lot of big market players have been washed out of the game.

The lesson that i learned is that not everyday is the same, and u can only make as much as the market wants to give you, provided you don't screw it up yourself with ego/psychology/risk management issues. With this in mind, and inspired by Tony, one of my trading mates, i decided to write out a daytrading checklist:

Do not trade if tic volume is low (as defined by low peak volume based on a 5m bar) at the opening. Reason being that indicators don't work as well in low volume environment, which makes sense because if nobody is around to follow the indicators, the indicators are pretty much useless.
Is today a futures rollover day? Is it an expiry day?
Any high impact news happening during the course of today?

I will check back to add to this list.

**Note to Tony** if you can think of anything else, feel free to add to this list.

Genting B&B buy part2

2010-03-08T22:53:00.009+08:00

Shaun's comments in blue

Thanks shaun for your comments. Appreciate your valuable inputs all this while.
I had a problem with Nextview ver6.5 whereby the anchors for the fibnodes are not fixed.

Luckily this was picked up during our discussion with shaun.

I had since reverted back to Nextview ver6.2.

Context of the this trade is B&B buy in monthly tf .

Entry was on weekly stretch buy.

To mitigate risk, i spread my load over the 0.93 to 0.88. which is the K plus agreement.

"spread the load" sounds straight out of a porn movie...anyway, what you did is what Joe will call "scaling in" and it has to be thought out before the trade is done. Example, if your usual size is 100 shares, and u bought 50 shares at 0.93 and 50 shares is 0.88. Differentiate this from "averaging in", that is your usual size is 100 shares, and u bought 100 shares at 0.93 and another 100 at 0.88.

Daily timeframe

Trend has just crossed up last friday. Decided to take some profit at 0.92 which is a K and XOP agreement on the 60m.

since daily trend has crossed over to the buy side which is 1 timeframe below your context timeframe, i think u have done well to go for the next higher LPO. This is pretty advanced stuff, i myself have problems with choosing my exits.

Will exit rest of my load at 0.97 and do a reentry depending on the weekly or daily context until the end of the B&B signal.

And monitoring on the possibilty of the macdp cross on the monthly tf.

Welcome any form of feedback.

Cheers,

Rayson

it was a weekly resistance

2010-03-04T15:10:00.004+08:00

lets see how did the market react after it hits the weekly COP level of 1124.75

see how it reacted a little at OP 1118.50 and reacted much more at XOP: 1115.50? i am not saying that XOP level is stronger than the OP level, coz i know some people might mis-inteprete the chart...all i am showing is the magic of fibonacci numbers.

Why did the market come crashing down when it hit 1125?

2010-03-04T04:26:00.003+08:00

i am on my trading break at the moment, so i only have 1 eye on the market. Even so, i know that 1125-ish might be a short term top. So how did i know?

will post the answer tomorrow...

Genting B&B

2010-03-01T13:46:00.007+08:00

Last week, Genting was weekly oversold on a OP agreement.

Monthly timeframe, it was a B&B with the F3 holding up well.
Expect LPO at F5 retracement up.

Welcome any comments on my observations above?

Thanks,
Rayson

My first SOR

2010-03-01T13:25:00.006+08:00

Hi Shaun,
Thanks for allowing me to post my trades here and appreciate any feedback or comments from anyone keen.

I had done a SOR trade which did not turn out well.
Is there anything that i had missed or should have considered?

My thought process is as follows:

Weekly trend is down
Daily approaching weekly F3 and daily OP Agreement at 1.11

2 timeframes down, 30minute

Stops at previous 1.09 has already been taken out.
Expecting a MACDp down cross from 30m to reach my LPO.

60minutes.

Entry coincide with OP in 60m.

Shorted at 1.11
Looking at 30m, it refused to cross down and did a buy stop grabber against me.
I held on and waited till the macdp cross in 30m came.
Dynamic pressure is against me in the 30m after the cross came.
waited for some confirmation in 60m.
when the macdp cross in 60m came (first few bars). the price did not move.
Exited taking a loss.

Is there anything that i had missed?
How can this trade be better managed?

On hindsight, i would have shorted at 1.16 which is a XOP Agreement and a weekly F5.
Should I have waited even though the dynamic pressure is against me. ( i only looked at the first few bars after the cross)?

I alwats have this problem of not getting fills if my entry is too conservative or getting a fill at strong D level but subsequently not a very good fill.

Is there anything that i can do to gauge what will be a better entry and getting a fill like in this scenario, 1.11 or 1.16?

Appreaciate any feedback.
Thanks
Rayson

Stops create thrusts

2010-02-26T03:44:00.006+08:00

example of how crude fib players can be killed. 60m c/o in the process, might be gunning for stops above 1101.50 and 1105.50, but will have to build more consolidation to suck players in first.

Maybe Dow Cash 60m will be the one to trigger the 1101.50 stops.

some people think that it is impossible to be consistently profitable to trade the ES, which to me is probably one of the more challenging instruments (challenging is different from hard), i beg to differ. But you do need the correct tools...

B & B buy

2010-02-26T03:30:00.004+08:00

3m B & B buy good for 2.25 points. Upthrusts triggered by stops from bears.

Triggered stops caused the 20m MACD to crossover to buy which triggered more stops.

which caused 30m to crossover as well. Picture perfect market manipulation

forgotten order

2010-02-26T00:25:00.004+08:00

totally forgotten about my outstanding GTC buy order at support at 1084.50. I just finished watching Jane Austen's Emma and thought i should log on, just to see what the market was doing, and when i loaded my DOM, it told me that i was long 1 contract. As u can see 1084.50 is the low of today as of now. I placed this order days ago. i fumbled with the exit though, since i wasnt in front of the screens...i just saw +150 and just took profits since my charts hasnt loaded yet.

So it is not true that the market is totally random, it does follow a certain structure, even if it is manipulated.

looking at my charts now, the obvious place to take profits was at 5 minute OP at 1090 which is a nice 5.5 points move...i count my blessings that i didnt lost coz of carelessness.

My other passion besides trading: Liverpool

2010-02-24T07:18:00.004+08:00

(Edit/Updates in blue)

Since Liverpool's manager guaranteed 4th place, lets see how they will do against Man City, Spurs and Aston Villa for their remaining matches. Many pundits/experts think that Liverpool has the easier run in than the rest, lets make use of some statistics, courtesy of The Fink Tank Predictor:

The current standings:

Teams/Games played/Points
Spurs/27/46
Man City/26/46
Liverpool/27/45
Aston Villa/26/45

Matches on 27/28 Feb/Projected scoreline:
Chelsea v Man City 2-0
Spurs v Everton 1-1
Liverpool v Blackburn 2-0

Projected standings:
Liverpool/28/48
Spurs/28/47
Man City/27/46
Aston Villa/26/45

Matches on 6-9 March/Projected scoreline:
Man City v Spurs 1-1
Aston Villa v Sunderland 1-0
Wigan v Liverpool 1-1

Projected standings:
Liverpool/29/49
Aston Villa/27/48
Spurs/29/48
Man City/28/47

Matches on 13-16 March/Projected scoreline:
Spurs v Blackburn 2-0
Stoke v Aston Villa 1-1
Sunderland v Man City 1-1
Liverpool v Pompey 1-0
Wigan v Aston Villa 1-1

Projected standings:
Liverpool/30/52
Spurs/30/51
Aston Villa/29/50
Man City/29/48

Matches on 20-21 March/Projected scoreline:
Aston Villa v Wolves 2-0
Fulham v Man City 1-1
Stoke v Spurs 1-1
Man Utd v Liverpool 1-0

Date: 24 March 2010

Matches played from 20 March to 24 March

Aston Villa v Wolves 2-2

Fulham v Man City 1-2

Stoke v Spurs 1-2

Man Utd v Liverpool 2-1

Man City v Everton 0-2 (Games in hand)

Aston Villa v Sunderland 1-1 (Games in hand)

Current Standings:

Spurs: 30/55pts (4 pts better than expected)

Man City: 30/53pts (4 pts better than expected)

Liverpool: 31/51pts (1 pt worse than expected)

Aston Villa: 30/51pts (2 pts worse than expected)

Spurs currently look most likely to pip Liverpool to the 4th spot, but they also have the toughest run in with matches against Arsenal, Chelsea, Man Utd and Man City to come.

Projected standings:
Aston Villa/30/53
Liverpool/31/52
Spurs/31/52
Man City/30/49

Matches on 27-29 March/Projected scoreline:
Chelsea v Aston Villa 2-0
Spurs v Pompey 2-0
Liverpool v Sunderland 2-0
Man City v Wigan 2-0

Projected standings:
Liverpool/32/55
Spurs/32/55
Aston Villa/31/53
Man City/31/52

Matches on 3 April/Projected scoreline:
Birmingham v Liverpool 0-1
Bolton v Aston Villa 1-1
Sunderland v Spurs 1-1
Burnley v Man City 1-1

Projected standings:
Liverpool/33/58
Spurs/33/56
Aston Villa/32/54
Man City/32/53

Matches on 10-11 April/Projected scoreline:
Spurs v Arsenal 1-1
Aston Villa v Everton 1-1
Liverpool v Fulham 1-0
Man City v Birmingham 1-0

Projected standings:
Liverpool/34/61
Spurs/34/57
Man City/33/56
Aston Villa/33/55

Matches on 17-19 April/Projected scoreline:
Man City v Man Utd 1-1
Spurs v Chelsea 1-1
Pompey v Aston Villa 1-1
Liverpool v West Ham 2-0

Projected standings:
Liverpool/35/64
Spurs/35/58
Man City/34/57
Aston Villa/34/56

Matches on 24-25 April/Projected scoreline:
Burnley v Liverpool 0-1
Arsenal v Man City 2-0
Aston Villa v Birmingham 1-0
Man Utd v Spurs 2-0

Projected standings:
Liverpool/36/67
Aston Villa/35/59
Spurs/36/58
Man City/35/57

Matches on 1 May/Projected scoreline:
Liverpool v Chelsea 1-1
Man City v Aston Villa 1-1
Spurs v Bolton 2-0

Projected standings:
Liverpool/37/68
Spurs/37/61
Aston Villa/36/60
Man City/36/58

Matches on 9 May/Projected scoreline:
Aston Villa v Blackburn 2-1
Burnley v Spurs 1-2
Hull v Liverpool 0-1
West Ham v Man City 1-1

Projected standings:
Liverpool/38/71
Spurs/38/64
Aston Villa/37/63
Man City/37/59

I know that Villa and Man City still have 1 more match to play, which currently at this point in time hasnt been scheduled yet. But it doesn't matter, its seems like Liverpool should finish 4th rather comfortably, despite all that has been said about them. Of course, all these are all statistical projections, but machines are infinitely less biased than humans, so i would rather trust these projections than some biased journalists.

it will be interesting to compare back once everything is done and dusted...

About Trading

2010-02-24T00:23:00.003+08:00

Consumer confidence was much worse than forecast which explained the huge downthrust at news release. Trading newbies will think that the way to make money is to be able to predict if the news is good or bad, but the fact of the matter is, there is no possible way to know either ways, but there is easy money to be made after downthrusts are apparent. Some newbies even think that by owning bloomberg machines, they can make money. Not bloody likely! (in my best scottish accent)

2.5 points is not alot of dough, but it is a high probability trade which is highly repeatable, which is my approach in trading. I don't go for the home runs... especially when i know that my trading methodology produces a win ratio of 90+%. I go for small repeatable wins everyday, and with experience, all i have to do is add size to increase my income. And to me, this is what trading is about...imagine if u always go for home runs, u might get lucky one day, but how many drawdowns are u going to suffer before that lucky day. And would u have the psychology to be able to put in the trade if your last trade was a huge stinker.

Risk management is everything...

Some of the bears are killed

2010-02-19T04:20:00.002+08:00

At this point, from what i read from other blogs, some of the bears are killed or stopped out of their positions. I am now looking very closely at places to short into. Time to be vigilant...

Internals have been the weakest i have seen

2010-02-06T02:54:00.003+08:00

I can't really trade today, coz one of my monitors is down. Maybe it is a sign that i should get the 3rd monitor that i have been meaning to get.

I was re-arranging my workstation to get ready for my 3rd monitor with 1 eye on my lappy to check the prices when there huge down thrust as u can see. And suddenly i got filled, check out where is the low as of now and where is my fill. There is no other mehodology out there that is so accurate...

wouldn't u want to buy the low of the day? I of course have already taken profits, since i do not have access to my charts, but im happy with $100 when im supposed to be just cleaning up.

Internals have been strong

2010-02-03T00:55:00.002+08:00

Frantic intraday trading really takes it toll. Internals have been real strong yesterday and today. Looks like whoever wants this market to go higher is really pushing it. It is gradually looking like no new swing plays (im still bearish long term)until higher highs.

Still bearish

2010-02-02T01:06:00.002+08:00

Still looking to short higher up for a swing play.

Im flat at the moment

2010-01-22T00:58:00.001+08:00

Still bearish at the moment, have closed off all my ES shorts around the 1117 region where there was support... will be looking to short again higher up.

Internals stinks!

What happened on Morning after trend day.

2010-01-18T05:09:00.009+08:00

Some background on what im about to theorise...12 January (Tuesday New York time) was the 1st down day for the S&P 500 futures. Tuesday's low was 1127.75 and closed at 1134. MACD sell (daily) is at 1132.75 (globex + cash session) for Wednesday. (P.S. personally i prefer using the cash session alone)

There might seem to be alot of numbers here, but my point for this chart, is to show u that there are resistances from 1137.50 to 1140. And also look at the 5m Volume spike...normally when i see this, i would automatically assume that it was a data error which happens from time to time, but happens way more frequently with free data charts (i will not name names). But it was confirmed the following day that these trades were real. The volume by the way was a whopping 230k. For perspective, the previous volume bar was about 20k, so it is about 11 times the normal volume. So what happened there? Let's look at the 1 min chart.

If ES was 'allowed' to drift to 1135 (MACD sell cash session only), this will bring in the MACD sellers. Instead, somebody came into the market with large bids to crack overhead resistance. I wouldn't comment more about it, but who has that kind of money to do this? Lets go to Time and Sales...

12:03:37 (HH:MM:SS)...in the 37th second look at the number of 1000 lots, and that is not even half of it. This is no retail investor, and has to be done by a bot. Even if i am epileptic and spasmed on my mouse, there is no way in hell that i can get so many orders done in 1 second...Ok what i gathered from the full time and sales in this...at 12:03:23, the 1st 1000 lot was being bought at 1137 (near 1st gray dotted line of resistance)...price then oscillated between 1136.50 to 1137, after that price went all the way up to 1138.25 and stalled and began to go downwards to 1137.50.

Note that at this point, if price was allowed to go down near 1135 it will bring in the MACD sellers who follow the daily signal. Whoever bought at this point, doesn't want the market to go down. So what do they do? They shoved 200k of contracts into the market's throat...

My question to you the dear reader is that, which of the locals or big players, no matter how bearish they are, will dare to short in the face of this 200k bohemoth? Of course some clueless emini players will still short, ignorant of this volume, but im not talking about players that wouldnt make a difference.

So what happens after that?

We didn't get our MACD sell signal and the market went on to make higher highs for the cash market...the previous high in the cash market was 1146.75, people who were short will either place their stops at 1146.75 or 1147. On Thursday, where no big players dare to be short, and things is looking bullish on the back of that ginormous volume, and where did we end up? The market just went up to 1147 (1 tick above previous high) and thats it. If u ask me, i think it is just clearing off stops of traders who were right (The shorts)...i have a good feeling that the person/thing/robot that bought at 1137ish sold to all the sell stops at 1147, and continued to distribute in the morning session of Friday.

Oh and we finally have a MACD sell on the daily. Things are getting interesting...

Aggressive Trading

2010-01-16T01:42:00.002+08:00

How do u get into something like this if u are a retracement trader? Answer: u don't. I have 4 different trade plans, and i kept on modifying my orders down the DOM as prices slides down... but although i was happy that i kept to my trade plans, i wasn't happy that i missed out on a big move. My impatience got the better of me at one point, as i see that the market was reacting off COP retracements, so I scalped it for a 1.25point gain, not sure if its the right thing to do, even though it ended up as a profit.

Interesting thing is today the Dow Cash, the Dow futures, the S & P 500 futures all have a MACD sell (daily signal) and the market is reacting to it. Whereas the eurostoxx has a MACD sell (weekly signal) if prices stay around the current region. Advancers v Decliners is also down in the dumps, nothing is stopping me to believe that we are at the threshold of "the correction"...of course i have been wrong before, just read my earlier posts...

Nothing day today

2010-01-15T05:01:00.002+08:00

I was scared out of a trend short trade today in the Eurostoxx due to news at 6pm local time. The trade was good for at least 8-9 ticks, but instead i scratch it with a miserable 1 tick gain. Im not sure why i have such weak hands...is it the hunger? the news?

Equities basically move sideways, nothing spectacular, i still firmly believe that we should turn once USD hits strong support...it has been oscillating around agreement support at 77.06, as it approaches towards the next agreement support at 76.205-76.23, i will start to load up on SPY puts, and shorts in the equities.

No morning after trend day

2010-01-14T16:07:00.002+08:00

Yesterday, with the Bank Chiefs testifying, I thought that it would just be a typical morning after trend day. Didn't turn out that way, instead we look like we are making new highs. But counter-intuitively, the way the ES is behaving tells me that we are at the cusp of a major turning point.

Morning after Trend Day.

2010-01-14T00:10:00.001+08:00

Yesterday was a trend day down, a first in a long while. I do not expect this to continue today, we should oscillate around yesterday's close at around 1134.25.

Bad start to the earnings season

2010-01-12T21:13:00.003+08:00

AA kicked off the earnings season...i don't know the numbers, what i do know is they are plunging after their earnings report. Looking bearish.

shorts in the eurostoxx market had been working out the early session for me, i will continue to look for shorting opportunities in the late session with the S & P 500. For my swing trades i have closed out half of my position already, but im still net short in the ES.

The chart that rules them all

2010-01-12T02:07:00.002+08:00

This chart shows a sell signal that has been in play since last friday 8 Jan 2010, we have 2 major supports...we are at 1 of them 77.06, if this does not hold today the next strong support is down at 76.2ish.

Trend trades on the short side

2010-01-12T00:42:00.003+08:00

These are working at the moment, so it appears that my earlier post couldnt have come at a better time. Is this the correction that we have been waiting for?

I wouldnt hold my breath...but it does appear so.

Happy new year

2010-01-11T20:50:00.002+08:00

better late than never. Currently im short equities as we are big big resistance, cant post the numbers here. I have promised a friend that i will do a thorough analysis on the Dollar Index, which to me is like the chart that rules them all. But health does not permit me to do so at the moment.

If you are still in some equities, i urge you to take profits now. If the equities that u have bought is still not in the green after all this time since March 2009, u have to question why you have bought them in the first place.

Managed funds and trading gurus

2009-11-11T00:10:00.007+08:00

I am typing this in my room at a resort at beautiful Hua Hin, and things seemed much clearer when u are on holiday. I have decided to end my association with AHL MAN guaranteed futures series 3. The decision came after I contrasted my trading performance with those of the so called pros...that is 1 losing trade in a month compared to the pro's -3% return. Of course, I am not comparing apple to apple, as I understand that AHL's strategy is a trend following one, whereas I am trading the 5min timeframe.

I used to think that since trading is a lonely business that I should reach out to the local trading community and maybe have a network of trader friends. But my experience has been underwhelming. Maybe it is just bad luck that I have only met highfalutin people.

There is this particular one that amuses me the most, lets call her Janet Tan. Janet, like me, studied under this local trading guru called Michael Woo, and she maintains a blog as well. It would be an understatement to call Janet, Michael Woo's biggest fan. There was this post about how Michael managed to turn 3k to 11k in 2 months, with trading records to back up the story. This looks impressive on the surface. Alas, if u look at the records more closely, alot of his losses are higher than his profits, and more than half of the 8k profit is made in 3 trades. You are free to think differently, but to me this looks more like luck than consistency. And of course the fangirl gushed at these results. Funny.

To be fair to Michael, he is the least of all evils in the local trading gurus community, and without him I probably wouldn't be where I am today. But to think that u can start earning an income, or trading for a living just by taking his course, is naive. The best way to describe the course is, the dummy's guide to trading, and knowing what 90% of the trading population does to lose money. So what is my point? To be successful and consistent at trading, it is my very humble opinion to know what 90% of the losing trading population is doing, this includes your candlesticks, trendlines and other patterns.

To date, I have not met a hugely consistent and successful self directed trader based in Singapore, and it is not because there isn't any, it is due to them not wanting the limelight. I have decided that I will stop reaching out to local trading communities, as they all seem to have their own agenda. I am happy with my own progress in trading...it might be tough trading 14 hours day everyday, but I will manage. I would like to teach, but from experience, it just takes too much out of me at the moment, which brings me to the whole crux of this post...if you are good and consistent in your trading, how much time do u have left to write books, manage funds and hold regular trading seminars?

I already have some offers to manage funds from relatives and friends, but I think that it gets difficult as you trade larger and larger size, and at the end of the day, I will only manage certain relative's funds for very selfish reasons. Books and trading seminars are totally out of the question for a trader of my experience, maybe when I am a millionaire many times over, then I will consider that. So you have to ask yourself this question when you look for a trading mentor, why are they teaching you, do they need the fees to sustain their lifestyle or are they interested in helping like-minded folks that remind them of themselves?

Yesterday's trend day up

2009-10-30T12:56:00.002+08:00

Long trading day for me yesterday, since i now trade both the European markets and American markets. My overbought/oversold indicator filtered me out of short signals early in the european markets, so I only bought early in the european session due to short term very oversold condition. I think many impatient/inexperienced bears got killed yesterday, but why would you short after 4 consecutive down days? I can only assume it is the fear of missing out on an opportunity. News headlines yesterday was that Germany had better than expected unemployment numbers and US is officially out of the recession which many attribute to the 200+ points recovery in the Dow. For me, it was a simple case of being very short term oversold. In the US session, when market was not short term oversold anymore, i had 3 short signals at strong resistance, which produced 2 winners and 1 loss...the beauty of fibonacci based trading.

Today, after yesterday's rebound is neither short term overbought and oversold, and if market remains below a key number, watch out below...if not, we should be making new highs again.

Conventional wisdom not so wise after all

2009-10-25T04:05:00.003+08:00

In trading, there is this conventional wisdom that you should always have 3 units of potential reward for every unit of risk you take. My experience in football punting and trading suggests otherwise...

It might sound intuitive that if your reward is 3 times higher than your risk, then a 50% win ratio would comfortably place you in the winner's circle. I have never met anyone that can show me they have managed to this well.

Instead, allow me to introduce a concept that I have used successfully in my football punting for the past few years. I know of a statistic/footie nerd that uses a proprietary method to calculate the probability of a team winning a footie match based on number of shots on goal, corners etc... what i do with the statistic is that i use it to compare it with the bookmakers, to see if i can get "value". This is a rather abstract concept, so it will be better explained by using an example:

Let's take tomorrow's match between Liverpool v Manchester United, the probability of my beloved Liverpool winning is given at 38.8% (odds:$2.63) by the statistics genius. Looking at bookmaker's odds, the best price i could find was at $3.10, which means for every $1 (risk) placed, you get $2.10 (reward), and this translates to the bookmaker thinking that Liverpool only has 32.25% chance of winning the match (u are welcomed to email me for any calculation), which means that there is "value" in betting on Liverpool. Using this way of calculating odds, and only betting on matches with "value", i can easily make ROI: 20% every single year...

Relating this back to trading, different setups have different probabilities attached to it. What one can do is journal every single trade and the type of setup it is, and maybe with a data of more than a 100 trades, place a probability number to each trade, and as long as your reward has "value" then you can go ahead with the trade and forget the "risk 1 to get 3 reward" bullshit.

Starting my trading proper

2009-10-21T03:45:00.002+08:00

I am happy with my chart setup, the value of this cannot be overstated. Still taking things slow, as i digest the information that my mentor gave me, it is so deep that it must be digested as you watch price action reacting to the tools day in and day out.

A wise man once said, to know the right answer, you must ask the right question. It applies to me as much as to the people that wants to learn more about trading. Sometimes, i find that language can be very ambiguous and things can be interpreted a million ways. For example, how many times must you read a trading book to fully understand every nous of what the author is trying to get across? I find myself reading parts of a certain trading book for the 4th or 5th time, and i always find myself learning something new. This can't be said for most of the trash that is out there. Going by the statistic that 90% of the traders lose money, and this % includes the pros, you can safely assume that the same 90% read the same trash, that i had the misfortune of reading. But at least now i know what 90% of the trading population does...

I have no interest to blog about my trades anymore, as there are a lot of proprietary information...after 2 years of trading full time, i can finally trade with confidence, and although I don't think I can keep up my win-loss ratio, after some private mentoring (it is 100% up till today), I think it should be close. Maybe it is because my temperament is suitable for trading, I have always been accused of being sedated, and I abhor people who over-react to situations, and money has never been a huge motivation for me, but trading well is...

Interestingly, a so called local guru knows about my mentor, but sad to say he only have a very primitive understanding of his methods. I guess many newbies make the same mistakes, they think that they should learn from the best of each indicator, and think that they are smart enough to come out with their own system, I know because I made the same mistake. To each his own, I just feel blessed that I met my mentor early in my trading career.

simply not fit enough to stay in front of screens

2009-10-07T21:20:00.002+08:00

Did a picture book trade in gold yesterday, but too tired to chronicle it here, since i have already chronicle it else where...had the exact same setup today at 7:30pm and what was i doing? Happily eating my dinner...still don't have the stamina to stay up in front of screens of hours on end...this flu is draining the life out of me...but at least my trade plans are showing some consistency, to be precise it is a 100% hit rate, still cant believed how beneficial the trip to bangkok was... can't wait to take on the markets full time again.

I shudder when i think back to the times when i traded based on stochastics signals...dark days indeed...

Work has been piling up

2009-10-06T16:13:00.002+08:00

Im pretty much done with reading trading books and im chucking most of the books into boxes to clear up my workstation. Very tradeable markets during the few days that i have been sick, still feel too weak to stay in front of screens for any period of time...hope to be back trading within this week, but i have to listen to my body.

Im looking at a new market to trade and it respects my methodology the most amongst all the markets that i have been looking at, so interesting times...

If u were to ask me if im bullish and bearish right now, i wouldnt be able to tell u, what i know is that it is responding to support and resistance perfectly...we were short term oversold last friday, hence the little bounce and it is challenging resistance now, so if u are an intra-day scalper these resistance levels is like manna from heaven...easy 2-3 points from these levels.

a good break

2009-09-30T02:25:00.002+08:00

Just came back from a trading seminar/holiday from Bangkok...i feel refreshed, i will be sitting down to look at writing my trade plan over the next few days, normal postings will resume after that...

Potential Butterfly Sell in the ES

2009-09-18T22:42:00.002+08:00

Butterfly Sell building. Potential Reversal Zone from 1075.75 to 1079.25.

Quadruple witching and change of trend?

2009-09-18T13:33:00.003+08:00

Yesterday's butterfly buy worked, but terminated before hitting OP, and turned down after that. Together with the earlier RRTs, it could be a clue that whoever wanted the market to stay up, is ready to take profits or distribute their shares...

Today is quadruple witching, i doubt that i will take on any trades...have a good weekend.

Possible butterfly buy ES

2009-09-17T23:42:00.003+08:00

Possible butterfly buy...reversal zone between 1057.25 to 1053.25...but this signal is kind of at odds with the 30m RRT 1062.50...so the thrust and angle of the descent will be important.

RRT yea u know me

2009-09-17T16:35:00.002+08:00

RRT in the ES...short at 1066.50, with stop at 1068, 1st target was reached at 1063.50, next target is at 1061.25. Of course i missed this trade, i was sleeping when this happened...

Small and cute buttefly signal

2009-09-17T02:50:00.002+08:00

Finally a short setup that worked...a small butterfly sell at 1063.75 which hit (almost..it was front ran by 1 tick) OP @ 1060.50. Really strange trading action, there was tick divergence for most of the day but ES just keeps bleeding higher, only reason i can think of is the impending freaky friday (triple witching).

Butterfly sell ES yesterday

2009-09-16T14:47:00.003+08:00

Butterfly sell pattern that builds from opening yesterday...1st signal at 2am which coincided with a tick divergence...short @ 1050...

2nd signal was at 3:25am @ 1052 which terminated at OP...

One of the rare days where sell signals work.

butterfly sell ES

2009-09-10T23:30:00.002+08:00

Butterfly sell zone at 1033-1034.50...

Pattern within a pattern

2009-09-10T18:48:00.004+08:00

Daytrading is becoming tedious...im not sure if it is the summer markets or it is just me feeling burnt out. The above is a long timeframe chart of the euro and we are long term resistance at 1.4493 to 1.4514...

within that big time frame resistance, we have a daily butterfly sell at 1.456...learnt the hard way to wait for a sell trigger before shorting into a strong uptrend.

Bored beyond words

2009-09-03T23:31:00.005+08:00

Setups are really drying up going into the long weekend...Monday is US Labour day. Waiting for 1 setup in gold which didn't complete and had a tick divergence in the ES...

Gold did not complete an agreement buy at 979.8, before taking off. We should see new highs today.

Tick divergence in the ES...had to be real quick to pick up this trade...not my favourite setup but beggars cant be choosers. I feel mentally tired, really need a break.

Fib Cluster sell

2009-09-02T22:05:00.001+08:00

Fib Cluster sell at 997.25-997.50

Agreement sell

2009-09-01T17:37:00.003+08:00

Agreement sell at 1024.25 to 1025...yesterday was NR7. Be prepared for range expansion either ways.

why trading the globex session is difficult

2009-09-01T17:25:00.002+08:00

there was obvious confluence resistance at 9504-9508 area in the YM, but the market only got there during globex session...YM by itself is already a relatively thinly traded market, and it is exacerbated by summer markets and globex session. Since it has low volume, the market manipulators have an easier time to push the market where they want it to go, which is not as easy to do during the cash markets.

If u have shorted at K resistance, the obvious stop location is behind 9539 (weekly pivot) or 9558 previous swing high...it would have worked out, but you would have to take some heat before the trade turned your way.

Gartley sell for ES

2009-09-01T04:10:00.003+08:00

Gartley sell at 1020.75, stops should be above 1023.25...signal came at 4am EST, so obviously i didnt take the trade...cant wait for summer markets to be over

Summer market continues

2009-09-01T03:01:00.004+08:00

After the Dow hits important resistance, i thought it will be a start of some movement finally from the markets. Alas, the volume is still typical of summer volume...possible NR7 today. It is still a scalping market...

One of my favourite scalp setup, the tick divergence. Basically it is the market making new highs but the tick is not...

this was a 3.75 pts drop if u manage to catch the top...i didnt take the trade as it was outside of my trading period...

weekly doji?

2009-08-28T22:21:00.002+08:00

Fake breakout, after market took out 1038 previous high, it is a steady selloff...if maket close at or near 1029.25, we will have a weekly doji.

So we do have a weekly doji, which is not entirely surprising, since we have been trading at weekly overbought levels for a few months now, and huge resistance at agreement level 1047.50-1053...

agreement sell ES

2009-08-26T23:15:00.004+08:00

Agreement sell at 1030.25-1031.25...1031.25 was F5 of the entire move down from high of 1038... before the move, there was a wash & rinse of stops above 1031.50 high, before it started going down...i know coz i was one of them...
i shorted at 22:23 local time and even waited for trigger before shorting...but it came back right up at 22:36 to take out the stops above the previous swing high 1031.50 (made at 22:23), before turning lower, the clue as always was in the ticks...

the ticks showed an obvious tick divergence as tick highs were moving down as prices went up at 22:36...looking at the price action after 22:36, the long red bar down, it was obvious that it was a wash and rinse...alas, right now my account size does not allow me to have a 5 pts stop just yet...might have to scalp my way to a sizeable account first before i can partake in such moves.

i wish i didn't have more visitors for awhile

2009-08-26T21:52:00.003+08:00

that is so that my visitor counter can stay at lucky 888...

inane observations aside, we are currently at K support (intraday), but stocks look heavy today, if we break this level, the next important level is 1014...
this shows an agreement buy area at 1021.25 together with K support above

Wash and Rinse

2009-08-26T01:16:00.004+08:00

i know its alot of lines...but want you to look at the rectangle area where there was a wash and rinse of the tight stops for the fib cluster sell...The $tick captures the action better...

tick lows were climbing higher even as it hits the fib cluster resistance...probably a clue to the wash & rinse...after the event however, it is obvious that it was a wash and rinse as after tick hit day's high of +1226, there was a dramatic sell-off which broke the trendline as well...

Fib Cluster sell

2009-08-25T23:15:00.003+08:00

However if prices reach that area...it will be a failure of the MACD failure...i will wait for a trigger/confirmation to short...

MACD failure

2009-08-25T22:37:00.000+08:00

Its bearish for now...seems to be led by oil.

Butterfly sell in NQ

2009-08-25T22:30:00.004+08:00

Not enough eyes to see them all...feeling very tired already...

Buying Climax

2009-08-25T22:15:00.003+08:00

Positive consumer confidence news led to new highs...but a buying climax? (which usually acts as immediate resistance)

Agreement Sell

2009-08-25T05:20:00.003+08:00

Agreement Sell at 1027-1027.75...F3 at 1027.75 was front ran by a tick...as soon as i saw that happening, i waited for a trigger to get in short...

Although it is a legitimate agreement sell, decided to be aggressive in taking profits, as my football match was starting, so decided to take scalp profits and call it a day...of course, only when i close my short, is when the decline accelerated...