Trading Plan - En Khalid

TRADING PLAN adalah seperti berikut
- WHY kita pilih stock tu untuk dirus niagakan:biasanya berdasarkan FA info. kena cari basic info mengenai company tu, its earning, directors die, latest news etc
- WHY nak masuk waktu ni: yg ni kena rujuk ENTRY set up seperti presence of ZC atau STZC

- RISK REWARD ASSESSMENT: kena tau Entry - Stop Loss position (biasanya bawah pivot atau support) - Target. saya akan take the trade jika risk reward rationya > 1:2. contohnya macam KNM. Entry di 49 sementara stoploss di 47 dan target 55. Jadi disini RISK saya (excluding brokerage) = 2 sen, sementara expected reward = 6 sen. jadi RISK REWARD RATIO utk trade ni = 1:3. so utk saya it is worthy to take the position

-POSITION SIZING: saya catatkan jumlah yg saya nak beli. Jumlahnya berkait rapat dengan RISK TOLERENCE saya. Biasanya saya hanya RISK 3% modal. Misalnya Modal 10k, jadi utk setiap trade, saya hanya risk 3% atau RM300 bagi setiap trade. Jadi utk maintain RISK tersebut, jumlah max saham yg saya beli utk trade ni = RM300/RM 0.02=15,000 shares atau 150 lots. kena buat reality check samada modal cukup ke tidak untuk membeli saham sebanyak itu. Guna jumlah kurang dari 15k shares bermakna kita mengambil lower risk i.e < 3% modal. Dalam mana2 investment/biz pun kita kena quantify RISK yg kita ambil dan kena kira potensi REWARD atau RETURN dari risk yg kita amik

- EXIT (conditions untuk exit) disini biasanya saya catatkan the scenarios dan rules utk saya EXIT. Kena catatkan beberapa conditins yg mana apabila ianya berlaku kita akan EXIT trade tersebut. Contohnya 'bila berlaku ZC dead cross on daily chart'.

- EMOSI: catatkan juga emosi kita masa nak beli saham tu: ceria?, berkobar?2, berdebar2?, confidence?, masih ragu2 dsb.

saya panggil ni konsep W R P E (bunyi nya wrap)....

selamat mencuba.....

Understanding_chart_patterns

Identifying chart patterns is simply a system for predicting stock market trends and turns! Hundreds of years of price charts have shown that prices tend to move in trends. (I'm sure we've all heard the saying, 'the trend is your friend'.) Well, a trend is merely an indicator of an imbalance in the supply and demand. These changes can usually be seen by market action through changes in price. These price changes often form meaningful chart patterns that can act as signals in trying to determine possible future trend developments. Research has proven that some patterns have high forecasting probabilities. These patterns include: The Cup & Handle, Flat Base, Ascending and Descending Triangles, Parabolic Curves, Symmetrical Triangles, Wedges, Flags and Pennants, Channels and the Head and Shoulders Patterns. In my opinion, these are some of the best patterns to trade.

This section is designed to introduce you to some of these chart patterns, as well as teach you to identify repetitions in the market qualities, to make timely and more accurate decisions when predicting market trends.

The Cup & Handle Pattern

The Cup & Handle is the corrective action after a powerful stock advance. Generally a stock will have a powerful move of some 2 to 4 months, then go through a market correction. The stock will sell off into the correction in a downward fashion for maybe 20 to 35 percent off the old high point. The time factor is generally anywhere from 8 to 12 weeks depending on the overall market condition.

As the stock comes up to test the old highs, the stock will incur selling pressure by the people who bought at or near the old high. This selling pressure will make the stock price drift in a sideways fashion with a bias to the downside for about 4 days to 3 weeks.

The handle is generally about 5% below the old high point. A handle that is any lower is generally a defective stock and contains higher risk for failure.

The time to buy the stock, is as it emerges into new highs at the top of the handle and not the old high point set some 8 to 12 weeks ago.

I have found some of the biggest stock market winners have this very powerful formation. It is one of the best and most reliable formations to look for. However, it is important to note that the best stocks with this formation are found at the beginning of a market move after a good market correction, and not during, or at the end of a major market advance.

HERE IS A SAMPLE CHART WITH A CUP AND HANDLE FORMATION

The Flat Base Pattern

The Flat Base is a stock pattern that goes horizontal for any length of time. Very powerful advances can be had from this formation. What we look for is volume drying up as the stock stays at or about the same level going horizontally.

Draw a trend line across the top of this formation. As the stock proceeds through the trend line, the stock is bought as it breaks the trend line and volume increases.

HERE IS A SAMPLE CHART WITH A FLAT BASE PATTERN

The Ascending Triangle Pattern

The Ascending Triangle is a variation of the symmetrical triangle. Ascending triangles are generally considered bullish and are most reliable when found in an up-trend. The top part of the triangle appears flat, while the bottom part of the triangle has an upward slant. Here is a Typical Ascending Triangle Pattern

• In ascending triangles, the stock becomes overbought and prices are turned back.
• Buying then re-enters the market and prices soon reach their old highs, where they are once again turned back.
• Buying then resurfaces, although at a higher level than before.
• Prices eventually break through the old highs and are propelled even higher as new buying comes in.

As in the case of the symmetrical triangle, the breakout is generally accompanied by a marked increase in volume.

The Parabolic Curve Pattern

The Parabolic Curve is probably one of the most highly prized and sought after pattern. This pattern can yield you the biggest and quickest return in the shortest possible time. Generally you will find a few of these patterns at or near the end of a major market advance. The pattern is the end result of multiple base formation breaks.

10_golden_rules.html

1. Make sure the stock has a well formed base or pattern such as one described on this web site and can be found on the tab "Understanding Chart Patterns" on the home page, before considering purchase. Dan highlights stocks with these patterns in his newsletter.

2. Buy the stock as it moves over the trend line of that base or pattern and make sure that volume is above recent trend shortly after this "breakout" occurs. Never pay up by more than 5% above the trend line. You should also get to know your stock's thirty day moving average volume, which you can find on most stock quote pages such as eSignal's quote page.

3. Be very quick to sell your stock should it return back under the trend line or breakout point. Usually stops should be set about $1 below the breakout point. The more expensive the stock, the more leeway you can give it, but never have more than a $2 stop loss. Some people employ a 5% stop loss rule. This may mean selling a stock that just tried to breakout and fails in 20 minutes or 3 hours from the time it just broke out above your purchase price.

4. Sell 20 to 30% of your position as the stock moves up 15 to 20% from its breakout point.

5. Hold your strongest stocks the longest and sell stocks that stop moving up or are acting sluggish quickly. Remember stocks are only good when they are moving up.

6. Identify and follow strong groups of stocks and try to keep your selections in the these groups

7. After the market has moved for a substantial period of time, your stocks will become vulnerable to a sell off, which can happen so fast and hard you won't believe it. Learn to set new higher trend lines and learn reversal patterns to help your exit of stocks. Some of you may benefit from reading a book on Candlesticks or reading Encyclopedia of Chart Patterns, by Bulkowski.

8. Remember it takes volume to move stocks, so start getting to know your stock's volume behavior and the how it reacts to spikes in volume. You can see these spikes on any chart. Volume is the key to your stock's movement and success or failure.

9. Many stocks are mentioned in the newsletter with buy points. However just because it's mentioned with a buy point does not mean it's an outright buy when a buy point is touched. One must first see the action in the stock and combine it with its volume for the day at the time that buy point is hit and take keen notice of the overall market environment before considering purchases.

10. Never go on margin until you have mastered the market, charts and your emotions. Margin can wipe you out.