Sunday, October 09, 2011

Learning takes time

HSI rebounded sharply after the break. Up 530+ points on Friday.

20MA : Genting and Maybank resisted at 20MA. Yes, today many in downtrend, so we could use such short-term MA-lines as resistance.

Trend : Up, sideway and down. Yup ... we could easily use MA to check on trends but many do NOT know its significance and how we should be trading such different situation. At the moment, many are still below 20MA, so we said that the stocks still traded in DOWNTREND. That is what I shared with my new tratles yesterday. There are 11 of them(tho I do limit the class to 10). I dont know how many of them actually could understand 20-30% of what I was talking about!! I was talking for the long 3 hours non-stop!! haha.

It takes TIME .... and more TIME to understand. It takes practise and lots of practices to understand how a simple SMA could be used. It takes experience and ... observations to use MA + RSI together. That is what I think we all should be doing --- learning one at a time!!.

Majority of people around THINK they could learn things in days!! I told them that I learnt how to use RSI for about 6-8 months!! Ridiculous ... right? You see, we do not need to know the formula or detailed definitions. But, we need to experiment an indicator in DIFFERENT situations such as : How you apply RSI in uptrending, sideway or downtrending stocks? We should explore diffirent situations with different indicators to understand ... that is why I will have to emphasise to MANY that learning takes ... TIME. It takes time for the stock-prices to move up, consolidate or diving lower. In my belief, it should takes us at least 5 years of continously learning before we could understand its applications.

SERIOUS ... there is no replacement for EXPERIENCES. No matter how 'young' a person trying to talk to you about technical, it is his/her in-sufficient experiences in REAL trading-markets that shown. I am a non-believer in pure technical-analysis. I will certainly adding in FA. Stocks are businesses.

With that, I hope my 20+ tratles under me will UNDERSTAND that we need to take time to learn, explore and experience. It is a loooong gruelling journey to actually learn how to trade. It could be a lonely-painful journey for some and will give up soon.

Boxing : SAM, a most experienced tratle of mine gave me a good idea to write about trading-investing. It is like boxing with 10-long bouts. First round, you are fresh ... you get few pouches and you survive(hopefully) the bout. Then, by the second round ... you started to feel tired and you get a few pounding into your cheek. Ouch ... use your imagination --- could your stand these gruelling painful rounds? 10 rounds = 10 years!! Thanks SAM for the 'analog'. haha

Keep It Simple, Stupid (KISS)

When it comes to trading, complicated does not equate to better. So with that said, here’s a quick checklist you can use to keep your trading simple.

1. Keep a core portfolio of positions you like.

TEH : I do have watch-list, check-list and stalk-list which I do update in weekly basis.

Learn to locate new trades, identify patterns, and employ the best strategy given the conditions.

TEH : Yes, this will take some time ... as we could see that we need time to understand the characteristics of a particular stock. SIME or Supermax should be traded with very different strategy with the current give conditions.

If the pattern confirms, enter the trade.

If the pattern fails, exit the trade.

If your target is met, reduce position (if momentum is still present) or exit completely.

TEH : Yes, he is speaking my mind. It is good and I will keep these words for my tratles. They need to learn such mechanical ways of seeing a trade rather than being emotional in their trade.
Trading might not ever be EASY, but you can make it simple.

TEH : It is not easy, honestly. But keeping it simple will be very good. Make it practical and use what works for you. Filter what is not.
Trade Like a Bandit!

TEH : A bandit? haha

Jeff White
Producer of The Bandit Broadcast

TEH : I am totally agreed with the author as trading is already VERY complicated. Our task is to find what works for us, simplest to OUR own understanding!! At the moment, it is downtrending ... so, talking about RSI or Stochastic or such making it doesnt make much of senses!! For example, of coz RSI at 30 or lower, oversold. That doesnt me I am going to buy, right?

I was trying to share with my tratles yesterday ... try to make trading as simple as possible. If u dont understand EMA, fine. Use SMA than ... no big deal, no diffrence much!! USE LOGIC ... that is needed.

For my cohort-1 and cohort-2 : Trading Psychology

1. You are your own worst enemy.

2. When to quit and when to push.

3. Taking your stop-list.

4. Hitting your target.

5. Control fear, greed and hope.

6. Discipline, discipline, discipline.

Average Traders

1. No trading plan.

2. No money management.

3. Emotional swing.

4. Nervous in trades.

5. Giving back your gains.

6. Revenge trading.

7. Glued to your monitor.

8. No follow-ups in trades ---- win or lose.

9. Are you losing money? 80% of them are, dont worry. Feel comfortable that you are in the 'herd mentality'.

How to Control Your Emotions When Trading - Part 2

1. Idiots in you ---- employ boss-employee relationship.

2. Have a detailed trading plan to take the emotion OUT of your trades. technical analysis helps us to put emotions out.


Having a bad flu now ... need to rest well for yet another looooong week ahead.

Sunday ... time to rest and be with family.

Have a nice Sunday ahead.


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