Trading Techniques   

Overbought/Oversold

Hi Honda, Candle stick formation also can't be played on SGX slow market.  Interestingly, because of SGX movement habit, we can detect what we can say as action price. 

If you like to observe candle stick formation, it's better for you to play fast moving counters, index and option.

Just like Hippo say, we are always tailing the Big Fish.  If possible you make a hook, and stab on their back deeply, you will have good trading then .. :D

 

Remember 1 bad new is good enough to overthrow 10 good news in the stocks market.

Look at the AUSGROUP, the price has dropped more than 25% due to profit warning.

Beside, armed with all the essential tools - charting, you need to keep abreast with all the available information.

Stock market is something like BIG FISH EAT SMALL FISH. If you are not careful, you can get burnt easily.

I always use the buyer and seller method to judge whatever i have enter correctly. For example, if the fund (UBS, Morgan, and etc) are selling to me, if the price drop more than 5%, i will cut costs and vice versa. This information can be determine by users who trade through internet - poems. The seller and buyer code is indicated upon transaction done. This tool helps you to determine who are the buyers and sellers and you can acess yourself carefully. My experience tells me that NEVER goes against the big players.

 

 

tech when you see a shooting star. .. on the observation from the candlestick. chart. does it mean it will rally up or plummet down the next day .. ( depends on the side. of the tail ) ?

 

that's why i'm not recommending the use of indicator

 

If everyone use the same techniques this market will be no movent !!

 

Hi Honda, about Why people use 12 and 26, I'm not so sure too .. I had asked some expert before, they told me that those number was created by floor trader before.  It was based on statistic.  For me it was market psychology.  If you look at MACD formula, you will know how this indicator is created.

MACD will formulating the average of highest and lowest in n day.  And gives you figure about the optimized price that fair in market in form of price coefficient. If price move up so fast, and make consolidation, MACD will give you bad signal.  You can't trade for arround 12 or 26 day depend on your MACD parameter.

 

wow.. we have tech, hippo and honda. wander who will join in ?

thanks for the macd and stochatics explanation. yah just read some technical tips given by

cimb. they also used this two to illustrate their point. .. of why it is recommended.

seem like  it is being observed that the setting for macd is as 12 , 26. <--- any reason of using this 12,26 .. tech : for your kind explaination.

 

Hi Hippo, how is your river? Do you eat enough grass?  Btw, which river are you staying now?

You are correct about MACD and stochatics should be used together.  MACD signal need to be confirmed with Stochastic signal.  You buy when stochastic signal (K) is crossing up D line bellow 20% + MACD identifier is bellow 0.  You sell when stochastic signal (K) crossing down D line above 50% line.

About MACD, some people trade or detect reversal from MACD histogram.  for example if you see 4-5 bearish histogram and you see bullish histogram next to it, it's signal to buy.  But this technique is not really often appear.  You almost can trade only every month.

Mostly MACD and Stochastic can be applied to stock with price range between .25 SGD - .600 SGD.  But you need to be good skilled to apply this ... tiring + need to be very patient ... a lot of fake signal ...

 

I am a newbie in sharejunction. Recently, i read an article released by Goldman, in Stock market, beside armed with all the technical tools and charts, you also need a lot of luck. As a matter of fact, I also like to enter and exit a counter base on the MACD and Stochastic. But, not all the times are correct. So, experience and luck are crucial. can anyone advice how to determine a counter is accumulation or trend reversial?

Happy trading and keep close watch on the Federal report on Wednesday - interest rate cut - 25 basis points?????

 

thanks tech.. yup  learn to fish  , is better to receive. will read more and ya .. select a list. first.. and do some worksheet to see the pattern.. . yup.. Have a Good week ahead.. shall be back for more discussion.. cheerss.. to good trading..

 

Thanks to all and with special thanks to "techsys" whom is good and willing to share and advice. Really appreciate the atmosphere here where members engage in active discussion and are generous in sharing.

Glad I joined this forum. The tigers' out there, hope we get a bull................ hee hee. May all have a good trading week ahead.

 

You can start by using Moving Average.  Try to use Moving Averaga 50 days, 100 days and 200 days.  Look at the price movement on candle stick.  You observe how the price is moving following the MA.  Only some of them can apply.

Next, about William R and RSI, you look at how price moves up and down, base on overbought/oversold. 

A lot of other indicators you may learn, but I don't really play indicator overall.

Next you need to focus on candlestick pattern.  Since Stock Exchange is very "stubborn", you can see how pattern can predict the next market movement. 

Finally, to optimize your profit, you need to learn about the relation of news to the price movement. 

But the first step is you need to filter out 600+ listed company in sgx, and findout which one suit your trading/investment habit.  For me, I only play/watch 250+ counters.  I can give you the list, but you won't learn ..  

 

laugh   ya.. super bike indeed.. vrooommmm..  lost touch on two wheeler... can see a lot of new model out on the road... really charming.. .. so took you 8 years to learn.. do understand that can't be

rocket.speed method.. ...  just want some pointer where to get kick start... ..

hehe.. thanks for sharing..  ..

 

Hallo Honda, like honda motor did, they learn by themselves how to create a simple bike unitl now, they create superbike.

I learn everything throught my observation.  You need to spare at least 2 hours each day to learn about stock.  No skyrocket method ... I have been trading stock for more than 8 years ... and I'm trading stock at three different stock exchange ...

 

Thanks again. sg market the range is usually low. ever read a book sharing that the volume must be at least 2000 and above the price range $1 above. than there is good chance.  hmm. how do you decide which chart to match with the particular counter. as state that property stock are relative slow. still can use overbrought or oversold method . using william or rsi.

than william 15 and 20 and EMA 100 for singtel. ..

and the golden question is where to learn . ??? :)

 

Hi Honda, I never suggest people to be an intraday trader on singapore stock.  Liquidity in singapore is very low.  Unless you play bluechip, means M1, Singtel, Cosco, Indoagri ... basically you play stock that has wide daily trading range.

But playing those counter will need you to provide some amount of money, which in my calculation is not good enough.  But if that is the thing you like to deal with, you can go for it.

About indicator, every counter has different indicator to play with.  I never use same indicator on different company.  You need to detect its price behaviour.  For example, for singtel you still can use combination of William R (15 and 20 together) and EMA 100.  But by the time, when market composition has changed (it will), indicator will tend to shift. 

You need to learn how to adjust the indicator accordingly.

 

 

THANKS Tech,  if that the case, which chart is more useful for day trading. to buy in or to sell short...

=

 

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MA crossover is one of indicator we use to detect market trend.  It is lagging signal, so you tend to get in in the wrong time.  MA Cross over can be use for counter with slow movement.  For example some property stock right now.  In technology stock, you cant use this indicator, because movement in technology counter is being more driven by market sentiment.  I can say property stock is more slow, because you have something to calculate company fundamental.

When Slow MA (longer period of MA) is crossed over by Fast MA (shorter period of MA) from bellow, we can consider market is moving up.  And market is moving down on the other situation.

If those MA line almost too close all the time, it means market is consolidating, we are not suggested to make any transaction.

 

 

Hi would also like to check on . ma cross over ... like 30 day vs 50 day , how to use this ma cross over. .. thanks in advance for the sharing.

 

Thanks for the reply, techsys.    

Have been wondering cos I tend to notice more o/b or o/s signal when a co issue more shares. 
So wonder if these signals are more "Off" (hee hee, to avoid the word "accurate") during such situation....