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Technical Analysis and Fundamental Charting.
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warrenbegger
Elite |
31-Dec-2010 00:29
Yells: "Anyhow Buy Anyhow Die ^_^" |
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I like this wedsite and post here, good for idiot like me :) My trading strategy is buy 100 big 100 small and 24 all beat, not he die then i die style :) | ||
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Leinadgnow
Senior |
30-Dec-2010 09:40
Yells: "Retired" |
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x 0 Alert Admin |
Merry christmas and happy CNY to all.. please confirm with your charts and please check before buying.. this is just what has been given to me.. and i've only check some stocks ...  |
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SGG_SGG
Master |
09-Dec-2010 11:51
Yells: "karma karma karma chameleon" |
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x 0 Alert Admin |
Thanks for the post! Should read this post from time to time to remind ourselves 
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Leinadgnow
Senior |
09-Dec-2010 11:31
Yells: "Retired" |
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45 reasons for new traders alike to follow and try to remember.. it's not written by me.. but by a professional trader Jim Young and i think i should share it with others first.. 1) Knowledge Deficiency – Most new FOREX traders don’t take the time to learn what drives currency rates (primarily fundamentals). When news or a statement is due out they must close out their positions and sit out the best trading opportunities. They are taught to only trade after the market calms down. So essentially they miss the whole move and then trade the random noise that follows a fundamental price move. Just think for a moment about technically trading the aftermath of a price move; there is no potential. 2) Overtrading - Trading often with tight stops and tiny profit targets will only make the broker rich. The desire to “just” make a few hundred dollars a day by locking in tiny profits whenever possible is a losing strategy. 3) Over leveraged - Leverage is a two way street. The brokers want you to use high leverage because that means more spread income because your position size determines the amount of spread income; the bigger the position the more spread income the broker earns. 4) Relying on Others – Real traders play a lone hand; they make their own decisions and don’t rely on others to make their trading decisions for them; there is no halfway; either trade for yourself or have someone else trade for you. 5) Stop Losses – Putting tight stop losses with retail brokers is a recipe for disaster. When you put on a trade commit to a reasonable stop loss limit that allows your trade a fair chance to develop. 6) Demo Accounts – Broker demo accounts are a shill game of sorts; they’re not as time sensitive as real accounts and therefore give the impression that time sensitive trading systems, such as short-term moving average crossovers can be consistently profitably traded; once you start dealing with real money reality is quick to set in. 7) Trading During Off Hours – Bank FX traders, option traders, and hedge funds have a huge advantage during off hours; they can push the currencies around when no volume is going through and the end game is new traders get fleeced trying to trade signals. There is only one signal during off hours – stay out. 8) Trading a Currency, Not a Pair – Being right about a currency is half a trade; success or failure depends upon being right about the second currency that makes up the pair. 9) No Trading Plan - Make money is not a trading plan. A trading plan is a blueprint for trading success; it spells out what you see your edge as being; if you don’t have an edge, you don’t have a plan, and likely you’ll wind up a statistic (part of the 95% of new traders that lose and quit). 10) Trading Against Prevailing Trend – There is a huge difference between buying cheaply on the way down and buying cheaply. What was a low price quickly becomes a high price when you’re trading against the trend. 11) Exiting Trades Poorly – If you put on a trade and it’s not working make sure you exit properly; don’t compound the damage. If you’re in a winning trade don’t talk yourself out of the position because you’re bored or want to relieve stress; stress is a natural part of trading; get use to it. 12) Trading Too Short-term – If you’re profit target is less than 20 points don’t do the trade; the spread you pay to enter the trade makes the odds way against you when you go for these tiny profits. 13) Picking Tops and Bottoms - Looking for bargains works well at the supermarket but not trading foreign exchange; try to trade in the direction the price is going and you’re results will improve. 14) Being Too Smart – The most successful traders I know are high school graduates. They keep it simple and don’t look beyond the obvious; their results are excellent. 15) Not Trading Around News Time – Most of the big moves occur around news time. The volume is high and the moves are real; there is no better time to trade fundamentally or technically than when news is released; this is when the real money adjusts their positions and as a result the prices changes reflect serious currency flow (compared to quiet times when Bank traders rule the market with their customer order flow. 16) Ignore Technical Condition – Determining whether the market is over-extended long or over-extended short is a key determinant of near time price action. Spike moves often occur when the market is all one way. 17) Emotional Trading – When you don’t pre-plan you’re trades essentially it’s a thought and not an idea; thoughts are emotions and a very poor basis for doing trades. Do people generally say intelligent things when they are upset and emotional; I don’t think so. 18) Lack of Confidence – Confidence only comes from successful trading. If you lose money early in your trading career it’s very difficult to gain true confidence; the trick is don’t go off half-cocked; learn the business before you trade. 19) Lack of Courage to Take a Loss – There is nothing macho or gutsy about riding a loss, just stupidity and cowardice. It takes guts to accept your loss and wait for tomorrow to try again. Getting married to a bad position ruins lots of traders. The thing to remember is the market does crazy things often so don’t get married to any one trade; it’s just a trade. One good trade will not make you a trading success; rather it’s monthly and annual performance that defines a good trader. 20) Not Focusing on the Trade at Hand – There is no room for fantasizing in successful trading. Counting up and mentally spending profits you haven’t made yet is mental masturbation and does you no good. Same with worrying about a loss that hasn’t happened yet. Focus on your position and have a reasonable stop loss in place at the time you do the trade. Then be like an astronaut – sit back and enjoy the ride; no sense worrying because you have no real control; the market will do what it wants to do. 21) Interpreting FOREX News Incorrectly – Fact is the press only has a very superficial understanding of the news they are reporting and tend to focus on one element and miss the point. Learn to read the source documents and understand it for real. 22) Lucky or Good – Your account balance changes don’t tell you the whole story about your trading; fact is if your taking a lot of risk and making money you will eventually crash and burn. Look at the individual trade details; focus on your big loses and losing streaks. Ask yourself this; if I had a couple of consecutive losing streaks or a couple of consecutive big loses, how would my account balance look. Generally, traders making money without big daily loses have the best chance of sustaining positive performance. The others are accidents waiting to happen. 23) Too Many Charity Trades – When you make money on a well thought out trade don’t give back half on a whim; invest your profits from good trades on the next good trade. 24) Courage Under Fire – When a policeman breaks down the door to a drug dealers apartment he is scared but he does it anyway. When a fireman climbs onto the roof of a burning building he is scared but does it anyway; and gets the job done. Same with trading; it’s ok to be scared but you have to pull the trigger; no trigger – no trades – no profits – no trader. 25) Quality Trading Time – I suggest 3 hours a day of quality, focused trading time; that’s about all your brain allows. When your trading being 100% focused; half way is bullshit’ it doesn’t work. Don’t even think that time spent in front of the computer watching the rates has any correlation to profitability; it doesn’t. Spend less time but when your trading be 100% focused on trading. 26) Rationalizing – Killer. Absolute Killer. Put your trade on and let it run. If it hits your reasonable pre-determined stop your out. Think of yourself as a prizefighter; you just got knocked out. Moving your stop is like getting up after being crushed with a knockout blow; it’s pointless; things will only get worse. Don’t ignore the obvious; your wrong – get out. Come back the next day and try again. A small loss will not hurt you; a catastrophic loss will. 27) Mixing Apples and Oranges – Have you ever done this; you see the EURUSD trading higher so you buy GBPUSD because it “hasn’t moved yet”. That’s a mistake. Most of the time the reason the GBPUSD hasn’t moved yet is because its already overbought or some 4:30am UK news was bearish. Don’t mix apples and oranges; if EURUSD looks bid buy EURUSD. 28) Avoiding the Hard Trades – Bank FX traders have an axiom; the harder the trade is to do the better the trade. This I learned from experience; when I needed to buy EURUSD and it was hard to get them that’s when it’s necessary to pay up and get the business done. When it’s easy to get them then sit back and wait for better levels. So if your trying to get into a trade or more importantly get out of a trade don’t putz around for a few points; get your business done. 29) Too Much Detail – If your trading more than 2 indicators then you need to clean house. Having many indicators stifles trading and finds reasons not to trade. A setup and a trigger is all you need. 30) Giving Up Too Easy – Your first trade of the day may not be your best but certainly it’s no reason to quit. I have a preset daily trading limit and I use it; you can’t make money by making excuses; getting trades wrong is natural and should be expected. 31) Jumping the Gun – Don’t be penny wise and dollar foolish; wait for your trade signal to be clear; put on your trade and give it a decent size stop loss so that you don’t get knocked out by random noise. Do trades don’t’ buy lottery tickets (extremely tight stops). 32) Afraid to Take a Loss - trading is not personal; it’s business. Don’t think that a poor trade is a reflection on you. It could be your just ahead of your time or a commercial order hits the market and temporarily creates a small unexpected move. Again, place your stop beforehand and NEVER increase your pre-determined risk; if it’s going bad it will probably get worse; I think that’s Einstein “in motion stays in motion…” 33) Over-Relying on Risk Reward – There is zero advantage in risk reward; if you put a 20 point stop and a 60 point profit your chances are probably 3-1 that you will lose; actually with the spread its more like 4 to 1 (from entry point if it goes down 17 points you lose or up 63 you win; 17/63 is close to 4-1). 34) Trading for Wrong Reasons – Because the EURUSD is going up is not in itself a reason to buy. Buying EURUSD because its not moving so little risk is even worse; you’re paying the toll (spread) without even a hint that you will get a directional move. If your bored don’t trade; the reason your bored is there is no trade to do in the first place. 35) Rumors – Rumors are rumors almost 100% of the time; think about where in the motion you heard the rumor; if EURUSD is up 50 points in last 15 minutes and the rumor is dollar negative, well then you missed it. Whenever you trades determine where in the motion you are entering. 36) Trading Short-term Moving Average Crossovers – This is the money sucker of the century. When the shorter term moving average cross the longer term moving average it only means that the average price in the short run is equal to the average price in the longer run. For the life of me I cannot understand why this is bullish or bearish. Easy to set up on software, complete with lights, bells and whistles, and good for the seller getting thousands for the software but in terms of creating profit it’s a zero. 37) Stochastic – Another money sucker. Personally I think this indicator is used backwards; when it first signals an overdone condition that’s when I think the big spike in the “overdone” currency pair occurs. To be overbought means strong and oversold means weak. Try buying on the first sign of overbought and selling on the first sign of oversold; you’ll be with the trend and likely have identified a move with plenty of juice left. So if %k and %d are both crossing 80; buy! (Same on sell side; sell at 20) 38) Wrong Broker – A lot of FOREX brokers are horrible; get a good one. Read forums and chats in several different places to get an unbiased opinion. 39) Simulated Results – Watch out for “black box” systems; these are trading systems that don’t divulge how the trade signals are generated. Great majority of them are absolute garbage. They show you a track record of extraordinary results but think about it; if you could build a trading system with half a dozen filters using the benefit of hindsight, couldn’t you too come up with a great system. Of course going forward is an entirely different story. High-speed number crunching capabilities allows for building great hindsight trading systems; BEWARE. 40) Inconsistency – Every business (FOREX trading included) requires a business plan (trading plan). Unless you have taken the time to write down a set of rules that you can and will follow, it’s likely your trading will remain unfocused and directionless. Make a plan, have rules, follow them set goals that are realistic and you will achieve them. 41) Master of None – Focus on one currency for technical trading; each currency has a unique way of trading and unless you get intimate with it you will never truly understand its underlying idiosyncrasies. Don’t spread yourself too thin – focus – master one currency at a time. 42) Thinking Long Term – Don’t do it. Stay in the moment. Especially if you’re a day trader. It doesn’t matter what happens next week or next month, if your trading with 30 to 50 point stops restrict your thought process to what’s happening right now. That is not to stay the long-term trend is not important; it is to say the long-term trend will not always help you when your trading a significantly shorter time frame. 43) Overconfidence – Trading is not easy; statistics show 95% failure rate. If your doing well don’t take your success for granted; always be on the lookout for ways to improve what you’re doing. 44) Getting Pumped Up – The trick is to maintain an even keel; when you are in a trade you want to think exactly as you would if you didn’t have a trade on. To do this requires a relaxed disposition; this is not a football game; don’t get psyched up; relax and try to enjoy it. 45) Staying in the Game – I don’t recommend demo trading because traders learn bad habits when trading with play money. I also don’t think “letting it all hang out” right away is wise either. Start off doing trades and taking risk that is relatively small but still makes a difference to you if you win or lose; about a quarter to a third of what you expect to reach as your trading matures is reasonable. Works for both shares and currency trading.. he is an author on forex.. but i think it applies to shares as well.. |
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iPunter
Supreme |
09-Dec-2010 08:56
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x 0 Alert Admin |
A very good refresher for young and old alike... Well done, Daniel...  |
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epliew
Supreme |
09-Dec-2010 08:52
Yells: "no worries be happy !" |
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x 0 Alert Admin |
okay i am watching.
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SGG_SGG
Master |
09-Dec-2010 08:52
Yells: "karma karma karma chameleon" |
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x 0
x 0 Alert Admin |
Fantastic... now, folks who wanna read what you have to say don't have to go north south east west to look for it!  |
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extinct
Member |
09-Dec-2010 07:49
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excellent thread for newbie like me, thanks for sharing.  |
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des_khor
Supreme |
09-Dec-2010 00:13
Yells: "Tell me who is the God or MFT from this forum??" |
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Thank you very much ! | ||
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eastcivic
Elite |
08-Dec-2010 23:27
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congrats on your new thread, looking to learn more from you! 
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iPunter
Supreme |
08-Dec-2010 23:13
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x 0
x 0 Alert Admin |
Excellent thread!... |
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Leinadgnow
Senior |
08-Dec-2010 22:55
Yells: "Retired" |
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Firstly, you have to understand the basic reasoning behind charting. As i have mentioned way back, shares/stocks are like a form of trajectory following certain laws and paths that will occur given all else constant (ceteris paribus) however, due to the psychology and maddening risk of the crowd (mackay 1824 RECOMMENDED READING). It almost certainly never happens. However, what the chart does for you is give you a rough idea/gauge in where this path is going to.For instance, 1+1 = 2 and 2x1 = 2 and 1x2 = 2 and 1x1+1 =2 ... random variables with some of it falling faster.. some times rising faster.. but the same possible outcome. In order for us to know that, there are a few grounds rules we must first follow. 1). Fear, greed, hope and ignorance according to jesse livermore are the main reasons why we end up mostly in losing trades. We allow ourselves to be overridden by those emotions. Before you start trading everyday, tell yourself to rid it of these emotions.. easier said then done.. but if it possibly might be able to bring you success.. why not try it? 2). Accept the fact that the market never lies.. the market is never wrong.. and if you lose money it ultimately is your own fault. Your analytical skills as well as reasoning does not add up some where.. and along the way .. you took 1x1 = 2 which is wrong.. hence you lose. 3). Accept the fact that the are certain inalienable truths Truth's of momentum (reconsolidation) Truth's of external factors influence.. and most importantly, truth that there is a chance that you might be wrong despite all the planing you have done... Don't beat yourself up about it.. but rather, learn from it since you have already lost that money. Okay, so now that you have that 3 golden rule drilled into you .. take the time to think about whatever i have said so far... especially the truth about momentum and reconslidation. I'll be right back after a bathe and a smoke :) |
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Leinadgnow
Senior |
08-Dec-2010 22:40
Yells: "Retired" |
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Disclaimer.. This thread is really really long and took me over 3 hours to write it. I assure you much thought and consideration has been put into it.. and i am here to share.. not to slam .. nor to be slam .. So even if you disagree.. please give me credit for taking the time to write it when i could be doing other things. Like going prawning/ trading on forex/ playing rugby/ gymming/ running etc. If you wish to learn some technical analysis and try to figure out what i am talking about please download this FREE software Chartnexus ( just go google and type Chartnexus) it is neither affliated to me nor am i earning any form of commission or revenue from them. It is the software which i will be using to try to share with you technical analysis and fundamental news. I personally like it alot.. it is free as well as the paid version xpert trader is pretty decent and worth your money.. so go check it out. I will be using Chartnexus in my pictures and illustrations.. but otherwise, the standards which i have written below is all the same. You can use any kind of platform and set it to my settings which i will be using. Hey all, i decided to start my own thread because i didn't wanna spam other people's thread.. so here i am.. charting once again.. For those haters of TA and Nay sayers.. i'm providing a free technical analysis for those who even bother so if you aren't happy with a technical analysis/ charting which people actually do pay outside for financial consultants.. please reframe from coming to this thread or making disparaging/stupid remarks. For those who want to criticize/ put in more constructive inputs/ comments.. you are more then welcome to.. please feel free to comment/ tell me what you think about the analysis and add in more stuff because it is impossible for me to cover indepth all the signals.. Some of which i have no idea i.e. ichimoku system etc. So that aside, this is what i use to analyize charting and what i use for my own technical set skills.. I believe that information and education should be free for all and not merely paid. Just have the hunger to learn will do. There are NO teachers or Masters around.. we all learn from each other and so, please treat everyone with respect because we are simply, learning. I have spent hours and weeks tweaking, charting and following/ learning from both forex eur/usd as well as STI stocks... It's not a 100% accurate.. but i would say that my Hit rates are about 70%.. for those who wish to see my journal/ trading portfolio/ wins and losses.. please go to www.diaryofasingaporetrader.blogspot.com (i will try to up load a screen shot of my excel sheets) Without much further ado .. here i go . Technical analysis used.(Complicated for fast charting on intraday charts, 15min charts, 5 min charts and anything less than 4 hrs chart) 1. MACD (Set to 26D 12D) Signal (9D) Method 1 and 2 are VERY VERY interlinked and helps me using a setup that i created myself. You need to use both for confirmation and not rely on one only) 2. Parabolic SAR (0.02 and 0.2) 3. MA 15,20,50,100 days. (For reverse divergence setup i use MA 89 and only MA 89 that is for long term trading across the board for over a 6 month period minimally more details about that later) 4. Stochastics (14,3,3 or 14,3,5 depending on how fast you are trading for EUR/USD and STI intraday chart) 5. Smoothed RSI and RSI (14D) 6.Momentum (10D I don't care what anyone says.. i swear it is a leader and not a laggard.. if you don't understand this fundamental of why it is a leader and not a laggard.. i will explain to you later on in the thread) 7. Bollingerband. 8. Candlesticks signs. ( I confess.. though i know that it is very very important and it's accurate, i don't really use it much because i'm a). lazy b). when i trade eur/usd in mins chart it is simply too fast when i scalp to try to remember all the candlesticks signs.. it's something that i'm trying to learn and remember the signals.Hope i can remember more after i write this to share with you peeps.) Okay. So basically, 1 and 2 are closely related and MUST be used together in accordance with each other. 3 and 7 Are interconnected and i use them for confirmation. 4,5,6 are very pertinent because they are leaders in their own rights and tells you how the stocks/shares/pair is going to move. We will first explain 1 and 2 together.. followed by 3 and 7 and 4,5,6 .. and then candlesticks. REITERATION: This is for the fast charting on intraday charts, 15min charts, 5 min charts up till the daily chart. Does not apply on weekly and monthly.I call this the scalping / raw technical setup. Okay.. time to take a breather.. go tweak your settings first before i continue sharing. |
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