KLCI Updated

Share prices continued to recover last Thursday amid improved trading sentiment as fears of a global credit crunch eased. The KL Composite Index rose 28.23 points to settle at 1,283.62. Market breadth was positive with gainers outnumbered losers by 771 to 173. While on Friday market close at 1273. Gainers 481. Losers 363. On Friday night we also can see that the Dow Jones Index gain another 142 points which I expect that next week KLCI will also follow this positive change.

I was on holiday for the whole week recently and no update is written on this blog. I also have problem with my KLCI chart which I think just for temporary. Problem to download data.

I'll update and continue monitor market this week.

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The Seven Secrets of the Highly Successful Trader! - 6) VIEW TRADING AS A SCORE IN POINTS AND NOT MONEY

Simply put, forget about the money. Follow your rules and pretend you are playing with chips. Be happy that you stuck to your rules and are winning the game. But if you think too much about the money then the losses will eat you up. You have to look at the big picture and the best way to do that is to forget about the money. In action terms, it means to stop looking at the newspaper every morning to see if your stock has gone up or down. If it hasn't triggered one of your actions (like exit or another entry) then don't worry about it because it doesn't concern you until action is required. If you stick to your rules then you really shouldn't even need to know anything about your stocks or your money until action is required (and even then you can automate most of those processes). The top traders never saw their trading as a cash box. They were either running a business or playing a game. It just is not possible to become a top trader if you view every single tick in the market as money lost or money gained.

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Malaysia Market

KLCI Daily Chart

Share prices tumbled again yesterday as investors reduced their equity exposure due to the uncertain U.S. market outlook and worries about credit market risk. Some Asian stock markets saw the biggest losses since the Sept. 2001 attacks on the U.S.

I will stay away from the market at the moment.

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The Seven Secrets of the Highly Successful Trader! - 5) POSITIVE SELF-BELIEF

The top traders know that it is the discipline displayed in following their rules that make all the difference. If you do not believe in yourself and your system then you are going to have difficulty following your rules. Following your rules is the most important aspect of successful trading. But even if you do follow all your rules, if you are constantly doubting yourself then you aren't going to have any fun at all, plain and simple. You will be miserable. Although this step is important, it should come naturally if you follow the other rules because positive self-belief can be obtained through repetition and success. If you follow your rules and continue to strive towards developing and sticking to your system then the success of your plan will likely improve your belief in yourself and your system. If you are not believing in yourself then there may be a problem with your system... it may not be suited for you.

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The Seven Secrets of the Highly Successful Trader! - 4) WORK HARD AT LEARNING HOW TO TRADE PROPERLY AND KEEP WORKING

In other words, once you have put the time and energy into determining your system, your work is not done. You have to constantly evaluate and assess your system via education. Now, I'm not saying that you have to worry about your plan every time you make a trade. That would contradict Secret number 3! What I'm saying is that if you were a brain surgeon would you stop learning new techniques and new technology after you finished your internship? I certainly hope not! Hopefully, you'll keep educating yourself so that, at minimum, you can keep up with the changing times. At maximum, you keep improving until you become one of the best. Keep learning...even when you think you know everything there is to know about investing.

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Stocks Analysis

Scomimr Daily Chart

Price already break the trendline and make lower high during this market crisis. Technical indicator 14-period RSI also break the support line and already tested at 2 last candle then pointing down. But it doesn't mean the overall scomimr will downtrend. From the chart we can see that price retrace at 61.8% fibonacci line (golden ratio) which has been tested two times. Current support is 1130. The last candle hammer showing that sellers already exhausted and the buyers took control. I know this will contradict with the earlier statement. What's next?

Hexza Daily Chart

Hexza in my last analysis was trapped in symmetrical triangle. Recently the price breakdown and break the trendline. The 14-period RSI already touched near oversold area, still pointing down and close at the support RSI line area. The last three candles showing that Hexza in consolidation and find a support at 0735 which is near the fibonacci 50% line (0730). We will see next price action by next week...

Jaks Daily Chart

Recently in my analysis showing that Jaks was in symmetrical triangle. Jaks already break the existing resistance and shoot out the sky. But after 2 trading days failed to hold the price and went down. 14-period RSI already break the RSI support line and pointing down. Price consolidate at the moment and I defined no clue.

From my comments above, I will not recommend any trade at this moment due to market crisis which uncertainty. Trading during this time needs a very good skill to interpret the price action. As a new trader, I try to learn as much as possible what will the market action.

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Trading Moving Averages - How to Use Moving Averages

Moving averages help us to first define the trend and second, to recognize changes in the trend. That’s it. There is nothing else that they are good for.

Many traders will try and get cute using all kinds of various combinations and really it is just a waste of time.

You do not have to keep adjusting the period of a line on a chart hoping to find the Holy Grail. It isn't there!

I won’t be getting into the gory details about how they are constructed. There are about a zillion websites that will explain the mathematical make-up of them. I'll let you do that on your own one day when you are extremely bored out of your mind! But all you really have to know is that a moving average line is just the average price of a stock over time. That's it.

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KL Composite Index

KLCI Weekly Chart

KLCI weekly chart showing that KLCI turning down at the moment due to US subprime mortgage issue this week. Most stocks analysis said that Asia market will fluctuating by next week since most investor and floor trader will trade carefully until market showing good sign and quite stabilize.

On Friday, KLCI closed at 1287.7 points after touched the fibonacci 38.2% line at 1275.13 points. The last 3 black candles with high volumes and 14-period RSI turning down suggest that overall market still down.

The KLCI pattern movement at moment is volatile therefore if you playing counters good trading skill is a must to overcome the high risk and protect your capital. You may choose to stay aside if you are lack confident during this situation. Pay books and attend courses to learn is better rather than pay to stock market. Don't pay high cost for the simple learning. Do mistake in trading is not strange but once you do mistake, take it as a part of trading lessons. Don't repeat the same mistake or you will gain nothing.

Happy learning and happy trading!

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The Seven Secrets of the Highly Successful Trader! - 3) PLAN A TRADE AND TRADE A PLAN

The point of this rule is that you must develop a system that is right for you and then stick to it no matter what. As a result, your plan must be able to cater for every eventuality. Once you put your money down then you no longer can control what happens. You won't know what the prices will do so you can't worry about anything except following your plan. What will you entry be? What will your exit be? What happens if there is a merger? What happens if the price gets close to your stop order? Do you see what I'm getting at? You don't want to have to answer these questions AFTER you put your money down! You want everything to be automatic by that point. So make sure that your system plans for everything. Then you just need to follow your rules and you won't have to think (or stress) at all.

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The Seven Secrets of the Highly Successful Trader! - 2) HAVE A SYSTEM THAT FITS YOU

Every successful trader, investor, money manager, etc. has a system that perfectly fits his or her ideals and personality as an investor. The system really doesn't matter, it's secondary. Value investors like Warren Buffet have made millions with their value approach. Day traders have made millions with their system. I have colleagues who have made millions with momentum investing. So it can't be the system per se. Instead, it's the fact that those winning traders have discovered and developed the system that fits them best. If you are a very worrisome person who absolutely cannot take losses without getting ulcers then I would not suggest day trading as part of your system. On the other hand, some investors would go crazy if they had to buy a stock and hold on to it for a year or two. So how do you find a system that works for you? You have to work backwards by discovering what your objectives are. What annual rate of return are you looking for? Do you want to trade full time or just leisurely? Would you get stressed with daily gains and daily losses? Are you extremely patient with your investments? Do you need to make lots of decisions? Which trading systems do you know and feel comfortable with? How much research have you done? There are so many questions to ask yourself because it is absolutely vital that you choose a system that really works for you. If you are not comfortable with your system then you will always be tempted to break your rules. Your health will likely suffer as much as your portfolio.

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The Seven Secrets of the Highly Successful Trader! - 1) TAKE COMPLETE RESPONSIBILITY

The successful trader knows that every action he takes is his/her action. You will never meet a successful trader who is looking to blame someone or something else for his or her losses. This is a critical step in understand how to become a successful trader because until you take complete responsibility for all of your trades, you will never feel comfortable with your system and you will never reap the rewards. Additionally, when something goes wrong with a trade or an investment endeavor, the traders who take complete responsibility for their actions will look at those "failures" as learning experiences. The trader who takes responsibility will try and determine what went wrong and what needs to be done in order to avoid similar mistakes in the future. The trader who does not take complete responsibility will simply say "the market wasn't right" or "my broker is an idiot". That trader will likely make the same mistakes again and will never understand why he/she cannot win in the stock market. This step is critical. Before all else, you must accept everything that you do as your responsibility. The game can only be won out of luck if you don't follow this first step.

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Trendlines Tips

Uptrend Chart

Downtrend Chart

• The more times a stock touches a trend line, the more significant it becomes.
• It takes two touches to draw a trend line, but 3 to confirm it as being a valid one.
• In a down trend, draw the line along the highs of prices.
• The steeper the trend line, the less reliable it will be.
• A trend line break does not mean that the trend will change.

Drawing trend lines is an art form. Everyone has their own way of drawing them. There is no perfect way to draw them and it seems that no one can agree on the best way! Mastering the art and will find that the trend will more likely on your favor.

Even trade based on trendlines could make a profitable trading but don't just buy a stocks just because it is hitting the trendline. They are just a piece of the puzzle.

Happy learning!

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Market Correction?

KLCI plunge another 6.21 points today after sharp fall down 34.22 points yesterday. The weaker market is partly due to US down investor sentiment since end of last week. The impact not only influence Malaysia market but all the world major index.

Most stock analysis said that this is only temporary correction due to US sell down sentiment. They expect the market to be volatile over the short term and overall long strategy still intact. They still confident of meeting the 1,480 mark year end.

Most of price stocks in market become cheaper and more cheaper during this time. But don't catch a falling knife if you want still alive. Trend is our friend. Don't go against it. Discipline, patience and wisdom are traits that we must have to become a successful trader.

Happy trading!

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