Dear Friends,
Asia recently did indeed correct itself. On radio, we talked about both US and Asia. We mentioned that we anticipate Shanghai composite to reach a bottom at 2000, Nikkei at 12800, STI at 3000-3100, (the best is for STI to drop to near 3000), Hang Seng at 20000. All have reached its low point except STI. STI is close, 3066 being the lowest point.
Anyway, we anticipate that STI will drop at most a further of 66 points to around 3000. Most of the stocks were sold down, especially the STI component blue chips. I definitely prefer banking and property sector stocks.
Do take note that there is still a chance for US to go down somemore, we still think that the correction in US may not have finished, although Asia might have!
If you want to enter position, our idea is to break your portion of money into 3 parts. Either accumulate up or accumulate down.
Eg. If u intend to buy a stock with $30k, break down into 3 portions of $10k.
For accumulating down;
If you buy a stock at $1, buy with $10k. If it goes down 25% to $0.75, buy another $10k. If it goes down another 25%, buy another $10k.
The good thing about this is that you don't buy at one go. You have extra cash just in case it drops further.
For accumulating up;
If the stock goes up 20% buy another time, when it goes up another 20% buy another time. Whenever you buy, put your stock loss at breakeven point, to guard your downside.
Rgds
Daniel
Showing posts with label Traders Education. Show all posts
Showing posts with label Traders Education. Show all posts
Thursday, 27 June 2013
Tuesday, 25 June 2013
Psychology of how market works! China Trauma send stocks down again
Dear Friends,
China is on its own. Instead of showing strength with Asia mostly up, it plummeted another 70 points bringing all Asia index down. The positive 30 plus points in STI got wiped out. The Nikkei plus 300 points now becomes a deficit of 200 points.
China being the world 2nd largest economy sure is an influence.
It is quoted "The Shanghai benchmark plunged 5.3% on Monday for its worst finish in nearly four years, as concerns that reluctance by China’s central bank to ease tight liquidity conditions in the interbank money markets would hurt small and medium-sized banks and borrowers"
http://www.marketwatch.com/story/asia-stocks-mostly-gain-but-shanghai-down-further-2013-06-24?link=MW_home_latest_news
What a bloody June. In fact from my point of view, the "Sell in May and go Away" effect is here this year. If you look at past historical years, it either comes in may or sometimes in early june. This year it started end of may, but the fall is felt more in early june. Dow reaches the highest peak on 22nd may.
In fact a couple of weeks back, when STI plunged hard to 3100, a lot of us are still talking about buying what kind of stocks. This to me is never a sign of bottom. Psychologically, the retailers are still bullish.
Always know that the bottom will only come when not many people discusses much about buying stocks anymore! Not when everybody wants to rush in to catch the bottom. Even if there is a rebound like STI recently, from 3100 to 3250 points, it is temporary.
This is the psychology of how market works. In fact i am looking at STI breaking the 3000 barrier. That may be the point that will send the market into despair.
A very good gauge is to ask your remisier. Is he still getting orders to buy? If the answer is yes, the market probably has not bottomed. When the answer is no, that normally should be the bottom.
Rgds
Daniel
www.danielloh.com
China is on its own. Instead of showing strength with Asia mostly up, it plummeted another 70 points bringing all Asia index down. The positive 30 plus points in STI got wiped out. The Nikkei plus 300 points now becomes a deficit of 200 points.
China being the world 2nd largest economy sure is an influence.
It is quoted "The Shanghai benchmark plunged 5.3% on Monday for its worst finish in nearly four years, as concerns that reluctance by China’s central bank to ease tight liquidity conditions in the interbank money markets would hurt small and medium-sized banks and borrowers"
http://www.marketwatch.com/story/asia-stocks-mostly-gain-but-shanghai-down-further-2013-06-24?link=MW_home_latest_news
What a bloody June. In fact from my point of view, the "Sell in May and go Away" effect is here this year. If you look at past historical years, it either comes in may or sometimes in early june. This year it started end of may, but the fall is felt more in early june. Dow reaches the highest peak on 22nd may.
In fact a couple of weeks back, when STI plunged hard to 3100, a lot of us are still talking about buying what kind of stocks. This to me is never a sign of bottom. Psychologically, the retailers are still bullish.
Always know that the bottom will only come when not many people discusses much about buying stocks anymore! Not when everybody wants to rush in to catch the bottom. Even if there is a rebound like STI recently, from 3100 to 3250 points, it is temporary.
This is the psychology of how market works. In fact i am looking at STI breaking the 3000 barrier. That may be the point that will send the market into despair.
A very good gauge is to ask your remisier. Is he still getting orders to buy? If the answer is yes, the market probably has not bottomed. When the answer is no, that normally should be the bottom.
Rgds
Daniel
www.danielloh.com
Tuesday, 7 May 2013
Warren Buffett: Berkshire Hathaway’s Annual Meeting
A very interesting meeting where Legendary Buffett talks about Book value to Europe problems to his Banks investment...
http://blogs.wsj.com/moneybeat/2013/05/04/live-blog-berkshire-hathaways-annual-meeting/
http://blogs.wsj.com/moneybeat/2013/05/04/live-blog-berkshire-hathaways-annual-meeting/
Wednesday, 2 January 2013
Malaysia Stock Tip: Sell ZHULIAN, Look at PWROOT
Dear Friends,
Stock rotation is a skill that we traders need to have. Whenever a stock reach my target price, I would take note of it. Whenever a stock reaches a centennial figure, I will be careful of it!
Today Zhulian reaches $2.99, near to a centennial figure like $3.00. Probably what I would do is, sell half of my position to profit take. Leave the other half to run. Hopefully it get past $3.00. If not, once it drops back to $2.95, I will sell the other half. By selling half, I curbed my greed. Remember I am also human, so I understand your feelings too. As human, we always hope it will rise somemore.
Our recommendation on Zhulian recently when it was $2.72:
http://www.danielloh.com/2012/12/malaysia-stock-tip-zhulian-indeed-looks.html
Now I encourage you to watch another stock PWROOT! In fact today I was a bit late on this stock. In mid-day it is still hovering around $1.18. After a meeting I had in the afternoon, it shoots up across the resistance of $1.20. It ends at $1.23 today.
What I do as trader is that I always rotate my stocks portfolio. Use half of my money in Zhulian change to PWROOT. When Zhulian risk is higher now, I would rotate to another stock that might have finish consolidation or in consolidation. Chances of making money is higher!
PWROOT mid term:
stop loss: $1.15, target1: $1.27-$1.30, target2: $1.39-$1.40
Stock rotation is a skill that we traders need to have. Whenever a stock reach my target price, I would take note of it. Whenever a stock reaches a centennial figure, I will be careful of it!
Today Zhulian reaches $2.99, near to a centennial figure like $3.00. Probably what I would do is, sell half of my position to profit take. Leave the other half to run. Hopefully it get past $3.00. If not, once it drops back to $2.95, I will sell the other half. By selling half, I curbed my greed. Remember I am also human, so I understand your feelings too. As human, we always hope it will rise somemore.
Our recommendation on Zhulian recently when it was $2.72:
http://www.danielloh.com/2012/12/malaysia-stock-tip-zhulian-indeed-looks.html
Now I encourage you to watch another stock PWROOT! In fact today I was a bit late on this stock. In mid-day it is still hovering around $1.18. After a meeting I had in the afternoon, it shoots up across the resistance of $1.20. It ends at $1.23 today.
What I do as trader is that I always rotate my stocks portfolio. Use half of my money in Zhulian change to PWROOT. When Zhulian risk is higher now, I would rotate to another stock that might have finish consolidation or in consolidation. Chances of making money is higher!
PWROOT mid term:
stop loss: $1.15, target1: $1.27-$1.30, target2: $1.39-$1.40
Friday, 14 September 2012
Timing is Everything in Singapore Market!
Dear Friends,
I heard that some friends have said that Singapore Market is so unpredictable because it follows so many countries direction. There is US market affecting the opening. Hong Kong affecting 1/2 hour later. Then Europe in the afternoon session at 3pm.
I would say it is true that Singapore sometimes are pushed around. But this is the amazing benefit also! Treat this as a strategy you can bet on, MARKET TIMING!
As an example, yesterday we have a great news that probably we have not expected, QE3. It can be other good news apart of QE. Take note that QE is the extreme case.
My strategy would be to get in the morning session at the open because Hong Kong open half an hour later will push the stocks forward. You can even sell intraday if you have made some $. Bear in mind that a lot of us lose money at the open because stocks have already gapped up. Even tough Hong Kong market did push Singapore stocks further, upside is limited! You need to be fast on this timing.
But the real thing comes with the Europe opening at 3pm. The best timing I think for Singapore market to get in is after lunch, when market has consolidated. As you would expect Europe open to push the momentum upwards again. And you have time to do your homework and browse through which are the stocks that have gapped up but dies a bit in the morning session. Get in before the Europe opens.
If you are experienced and familiar with US market, sometimes I would predict what will happen in US market tonight. Park your positions before the closing bell to expect the stock market to gap up in the morning after a good run in the US market.
Btw, if you want to know more about US market and its Secrets, come for our seminar ;), hehe.
Singapore market because of its delicate nature to other markets, it really requires our traders to be more experienced in market timing and understanding of other markets... tough job right? Ha, PM Lee once said we need to be a roly-poly 不倒翁 because of our small country. That is true, but it has worked so well for us because of the flexibility and adaptability also, right?!
Good luck trading!
Rgds
Daniel
www.danielloh.com
I heard that some friends have said that Singapore Market is so unpredictable because it follows so many countries direction. There is US market affecting the opening. Hong Kong affecting 1/2 hour later. Then Europe in the afternoon session at 3pm.
I would say it is true that Singapore sometimes are pushed around. But this is the amazing benefit also! Treat this as a strategy you can bet on, MARKET TIMING!
As an example, yesterday we have a great news that probably we have not expected, QE3. It can be other good news apart of QE. Take note that QE is the extreme case.
My strategy would be to get in the morning session at the open because Hong Kong open half an hour later will push the stocks forward. You can even sell intraday if you have made some $. Bear in mind that a lot of us lose money at the open because stocks have already gapped up. Even tough Hong Kong market did push Singapore stocks further, upside is limited! You need to be fast on this timing.
But the real thing comes with the Europe opening at 3pm. The best timing I think for Singapore market to get in is after lunch, when market has consolidated. As you would expect Europe open to push the momentum upwards again. And you have time to do your homework and browse through which are the stocks that have gapped up but dies a bit in the morning session. Get in before the Europe opens.
If you are experienced and familiar with US market, sometimes I would predict what will happen in US market tonight. Park your positions before the closing bell to expect the stock market to gap up in the morning after a good run in the US market.
Btw, if you want to know more about US market and its Secrets, come for our seminar ;), hehe.
Singapore market because of its delicate nature to other markets, it really requires our traders to be more experienced in market timing and understanding of other markets... tough job right? Ha, PM Lee once said we need to be a roly-poly 不倒翁 because of our small country. That is true, but it has worked so well for us because of the flexibility and adaptability also, right?!
Good luck trading!
Rgds
Daniel
www.danielloh.com
Thursday, 6 September 2012
A useful tip as a trader: Gauge the number of losing trades in your portfolio
Dear Friends,
I may not be extremely accurate in my picks as a trader, but I am good at knowing when to buy and sell stocks or increasing my position size. This simple strategy that I am going to share with you has benefited me throughout my years of trading.
This strategy requires you to pay attention to the number of losing trades in your portfolio. This is as easy as it gets. Duh...
A good reflection of market not working that well would be that almost every single stock in your portfolio is red in colour. For me, that is a SURE sign of not going into the stock market anymore. The market isn't the right time to enter now. I do not need the technical indicators to tell me whether it is bearish or not. The stocks that you keep will "tell" you. But some of us has a habit of buying and buying again, trying to average down by entering again. That is one sure way of throwing money away.
My habit is at any one time (for my short term trading portfolio), there shouldn't be more than 3 stocks in my portfolio. 3 is the max. At any one time there should be 2 green versus 1 red in my portfolio to know the market is still right for me to go bullish. And at any one time, I tried to maintain my profits to be more than my losses in my portfolio. If not, I would probably look for ways to cut my losing stocks.
If there happens to be 3 red, I would try to liquidate all my losing positions (no matter how much the losses is now) as I aim to preserve my capital, and wait for signs of market to get better. Yes this hurts, but I know that there is always a better 2moro....
Once the market turns better (eg. one simple way is to note a triple digit increase in Dow Jones), I would "test" the market by entering a bullish position. If this position goes in my favor (in one day or two, the stock will tell you), I would up my position lot size and with bigger amount the next time I enter! Most of the times, I would make back what I lose in the 3 stocks that I cut loss the last time round.
And I would keep track of when my stocks turn red again. The market always tells me by just looking closely at my stocks.
Of course there are a lot money managing formula or strategies out there. This method is as simple as it gets. Try it...
I may not be extremely accurate in my picks as a trader, but I am good at knowing when to buy and sell stocks or increasing my position size. This simple strategy that I am going to share with you has benefited me throughout my years of trading.
This strategy requires you to pay attention to the number of losing trades in your portfolio. This is as easy as it gets. Duh...
A good reflection of market not working that well would be that almost every single stock in your portfolio is red in colour. For me, that is a SURE sign of not going into the stock market anymore. The market isn't the right time to enter now. I do not need the technical indicators to tell me whether it is bearish or not. The stocks that you keep will "tell" you. But some of us has a habit of buying and buying again, trying to average down by entering again. That is one sure way of throwing money away.
My habit is at any one time (for my short term trading portfolio), there shouldn't be more than 3 stocks in my portfolio. 3 is the max. At any one time there should be 2 green versus 1 red in my portfolio to know the market is still right for me to go bullish. And at any one time, I tried to maintain my profits to be more than my losses in my portfolio. If not, I would probably look for ways to cut my losing stocks.
If there happens to be 3 red, I would try to liquidate all my losing positions (no matter how much the losses is now) as I aim to preserve my capital, and wait for signs of market to get better. Yes this hurts, but I know that there is always a better 2moro....
Once the market turns better (eg. one simple way is to note a triple digit increase in Dow Jones), I would "test" the market by entering a bullish position. If this position goes in my favor (in one day or two, the stock will tell you), I would up my position lot size and with bigger amount the next time I enter! Most of the times, I would make back what I lose in the 3 stocks that I cut loss the last time round.
And I would keep track of when my stocks turn red again. The market always tells me by just looking closely at my stocks.
Of course there are a lot money managing formula or strategies out there. This method is as simple as it gets. Try it...
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