A Stock Broker's Trading Diary

Dr. Alexandra Elder

noreply@blogger.com (Fan Jun) — Mon, 13 Feb 2012 08:30:00 +0000

Dr. Alexandra Elder whom write the popular trading books " Trading For a Living", "Come to My Trading Room" in town over the weekends, below are some of his sharing.

The "3M" in successful trading
Mind, Method, Money

Ocean of ignorance
We live in an island of knowledge and surrounded by an ocean of ignorance. As our island of knowledge expands, our boundary of ignorance increases too. The more things we learn, the more things we find that we do not know or understand. There is no way one can totally understand what the market is doing.

Elephant vs. Rabbit Hunting
I'm not claiming one style is better than the other, but one must find a method that is comfortable to execute. I'm a rabbit hunter – someone who trades in and out within a short period of time, taking smaller profits as compared to someone who trades for a longer time frame. I don't try to catch big trends like an elephant hunter. I am happy with a rabbit.

Keep a journal
The trading journal is necessary for a trader to improve his skills. He should grade his results in 3 areas.
Buy Grade (high – buy point) / (high – low). More than 50% is considered a good buy
Sell Grade (sell – low) / (high – low)
Trade Grade – how much of the moving envelope range did you capture? 30+% = A. 20-30% = B. 10-20% = C.

Learn to Ssurvive First
As a newbie, the most important thing is learn how to survive. The two causes of trader's mortality are

1) a single disastrous loss
2) numerous small losses that add up to disaster
To survive, a trader must apply the 2% and 6% money management rules. Never risk more than 2% of your capital per trade and never risk 6% of your capital for your entire position. In other words, if you risk 2% per trade, you can only get into 3 trades.

Technical Analysis
There are 4 styles in trading
1) Insider trading
2) Fundamental analysis
3) Technical analysis
4) From the gut
FA cannot determine the waves of optimism and pessimism of the market participants. TA on the other hand is the reflection of psychology of the crowd. Dr Elder finds that TA suits him the most. Fundamental analysis may take a long time to realize profits. For example, Boeing had orders fully booked for the next 6 years but its stock price still fluctuates day to day.

Separate the Analyst and the Trader
In big institutions, there are analysts and traders. The analyst will plan trades while the trader will execute them. As an individual, you have to be the analyst and the trader. However, you can only be either one at any one time. Be an analyst outside trading hours and make your plans and decisions without emotions. During market hours, be the trader and execute the trade plans accordingly. The trader must adhere to the trade plan faithfully.

Why do people lose money in trading?
Many people traded out of boredom. A typical trader is a college educated 50 year-old who finds his work boring and mundane. He wish to trade his way out of the current lifestyle. He is trading for fun, and not for money. This is why most people lose, because they are simply engaging in the activity for pleasure. There are two objectives in every trade
1)To make money
2)To become a better trader.

Focus on Trading not Money
Although one of the objectives is to make money, one should not focus on how much money is made or on the Profit and Loss statement. The analogy given was about the medical doctor who runs a clinic. If you ask him how his business is doing, he would roughly estimate the number of patients he have seen. He is not going to say he had made $x amount of money. Focus on trading quality.

STI Facing 3000 Resistance

noreply@blogger.com (Fan Jun) — Fri, 10 Feb 2012 07:24:00 +0000

Continue its strong bullish momentum these days, STI hit high of today at 2994.5, about 6 point to the importance psychological level 3000. Most of the stocks seen from downtrend turned to uptrend already.

However, as STI has extended its bullish run up these days, most of the blue chips are in overbought region now. A healthy retracement is expected. Today, STI retracing back to 2960 support as at 3pm, down 21v points from yesterday's close. Next support is 2940. This round of rise since the beginning of the year may come to a stop for now. As of today, STI has rebounced for about 350 points or 12% from last year end at 2650. It hitting its long term downtrend line as well.( See chart below).

My STI momentum indicator also showed extremely bullish momentum, in the highest of 180 reading. It's where the possible points market turn around.

Raffles Edu and TechOil& Gas

noreply@blogger.com (Fan Jun) — Thu, 09 Feb 2012 05:20:00 +0000

Raffles Education breakout from its multi months consolidation from 47c, with super high vol. It closed at 52.5c yesterday and is trading at 50.5c now(1.15pm) due to profit taking. Any price near to 47c will be a good opportunity to enter for long.

TechOil & Gas:
Breaking out from its consolidation 88.5c yesteray, more room to upside.

STI Uptrend in Good Shape

noreply@blogger.com (Fan Jun) — Wed, 08 Feb 2012 04:08:00 +0000

STI is moving higher steadily, breaking Resistance, it's uptrend has been well intact so far, and I see couple of stocks is positioned to move up further.

Cosco
STX OSV
Genting sp
HKland
Techoil & Gas

STI Momentum Update

noreply@blogger.com (Fan Jun) — Tue, 07 Feb 2012 04:23:00 +0000

STI is at its overly bought stage, with target of 161.8% fib level at 2954 reached yesterday. Current STI price at 2945( 12.15pm), is also the gap resistance area. Probability of a retracement on STI has increased now.

On the other hand, my STI momentum chart also shows STI has exceeded its top band, which indicate extremely bullish and overbought, a retracement will usually follow through when market gets too hot.

Immediate support level to watch for STI is 2940, then 2918 will be the next major support if it closed below 2940.

Golden Agri Breakout

noreply@blogger.com (Fan Jun) — Tue, 07 Feb 2012 00:59:00 +0000

Golden agri breakout from its resistance 74c, target is 80c, it closed at 76c yesterday.

OCBC Breakout

noreply@blogger.com (Fan Jun) — Mon, 06 Feb 2012 00:42:00 +0000

OCBC breakout firmly from its resistance level 8.6, more room to upside. With target price at around 9.4 to 9.5

Major Market Update

noreply@blogger.com (Fan Jun) — Mon, 06 Feb 2012 00:39:00 +0000

Good morning everyone. Below charts are the major Indices updated in my weekend workshop, for those who unable to attent.

STI closed an inch below its important 50% level at 2918, more upside to go if it can break and close above this level.

DJI marginally break above its multi year high on close last Friday. Very bullish.

S&P 500: at Resistance level last Friday.

Nasdaq: the strongest one among the three US indices. Breaoutout its major resistance level on Friday.

Hang Seng: similiar to STI chart, HSI at its important 50% level 20734 now, more upside if it can break and stay above this level.

Shanghai Index: one of the worst performer in the world. Shanghai index lagging behind a lot, still got a lot of room to catch up.

Long Candidates

noreply@blogger.com (Fan Jun) — Thu, 02 Feb 2012 00:39:00 +0000

Good morning, a quick notes here for your reference, market is poised to move upside, I have below counters in focus today ( Long candidate):

Buy on pull back:
Genting sp
Tiger
SMRT
FraserCT
ChinaMin Zhong

Breakout:
SIA Engg
Libra

SIA Engg Breakout

noreply@blogger.com (Fan Jun) — Wed, 01 Feb 2012 09:29:00 +0000

STI recovered its early lost in the late afternoon on Chinese manufacturing expands. STI managed to hold above its support 2900, closed at 2904.76 today.

SIA engg breakout firmly today. More upside is expected. It closed at 3.54, up 7c today.

" 炒股必胜法”

noreply@blogger.com (Fan Jun) — Wed, 01 Feb 2012 04:07:00 +0000

Small Caps in Play

noreply@blogger.com (Fan Jun) — Tue, 31 Jan 2012 02:06:00 +0000

STI is still holding in a narrow range, showing signs of resilience. Small caps such Yoma, IEV, Meiban, SeeHS and Sky one has gone up quite substantial, in terms of percentage.

I have two long candidates in sight today:
Mapletree Industry Trust @ 1.13 now(9.58am), huge volume pick up ahead of dividend, do note, XD is on tomorrow 1 Feb.

Q&M strong support at 80c, its weekly chart looks nice with high vol breakout.

Straits Times Retraced

noreply@blogger.com (Fan Jun) — Mon, 30 Jan 2012 06:17:00 +0000

Good day everyone.
As STI retacement is expected( or at least consolidation), I'd rather stand sideline monitor first. As some asked me what time I usually update my post here. I'd say I'm rather irregular these days to post, as whenever I say an opportunity I will update throughout the day. ( I used to post quite regularly in the morning before market open). One thing you can do if you want to get update as soon as possible is you can subscribe to follow the blog, just fill your email on top right hand side under "Follow By Email".
Below chart is the 50% level at 2918 for STI. Cross above this line, more upside otherwise, a retracement is expected.

Straits Times Approaching 2900 Resistance

noreply@blogger.com (Fan Jun) — Thu, 26 Jan 2012 04:21:00 +0000

STI opened gap up this morning and continue went up to as high as 2917.59 then selling off a bit to 2883 now(12.13pm), slightly down 8.7 as compare to yesterday close.

STI is at an importance resistance level 2900 (point (1) in below chart)now, after three weeks consecutive run up, for a gain of 230 points. It should be pull back or at least consolidate for a while if it were continue go up to point (2). The middle point between year 2010 and 2011 closing price is at 2918, which is an inch higher than today's high 2917.59, amazing isn't it?

Small Caps Catching Up

noreply@blogger.com (Fan Jun) — Wed, 25 Jan 2012 02:22:00 +0000

Ying Li: Breaking out its long term downtrend line, indicate its change of trend. Currently 0.325c, +3c.

Jaya Hlg: Formed a nice round bottom, its major downtrend line already broken. More upside is expecetd.

Mewah: Pay attention to Mewah, especially its volume, looks very "interestingly" high when price up. Is there big position building taking place?

Happy Lunar New Year!

noreply@blogger.com (Fan Jun) — Fri, 20 Jan 2012 09:18:00 +0000

Dear Readers, It's fruitful day today, next Monday and Tuesday market closed for CNY holiday. Wish you all Happy Chinese New Year.

Genting sp Up 5%

noreply@blogger.com (Fan Jun) — Fri, 20 Jan 2012 07:48:00 +0000

Genitng sp going up 7c today (4.89%, 3.47pm) to 1.61. My target is 1.64(gap resistance).

Starhub Retraced

noreply@blogger.com (Fan Jun) — Fri, 20 Jan 2012 05:37:00 +0000

The long term uptrending, the champion of the year 2011--starhub has retraced more than 5% this week, from 2.91 to as low as 2.76 today. It hit 2.76 just now and rebounding to 2.78 ( 1.35pm), 2.77 is its long term uptrend channel support. There is a high probability to bounce up from here.

Incredible Dance

noreply@blogger.com (Fan Jun) — Fri, 20 Jan 2012 05:26:00 +0000

Next Mover: Wilmar

noreply@blogger.com (Fan Jun) — Fri, 20 Jan 2012 01:40:00 +0000

All the blue chips under my radar more or less already moved up quite a lot as my "planned", the slowest mover is capitaland which moved up yesterday. Finally.

And i have one heavy blue chip to focus from now on, which is Wilmar. It has NOT moved at all in this long up run, stuck within the range between 5.0-5.15 for quite some time. It will move higher if it can CLOSED above 5.15. Target is at least 15c to upside--5.30.

Wilmar +4c at 5.19( 9.40am)

Mewah Breaking Out

noreply@blogger.com (Fan Jun) — Thu, 19 Jan 2012 03:04:00 +0000

Mewah breaking out its resistance 50c, now 51c(11.03am), nice uptrending, more upside expected.

Long Candidates

noreply@blogger.com (Fan Jun) — Thu, 19 Jan 2012 00:54:00 +0000

Good morning everyone. A quick note here before market open.

My focus today for upside move: Genting sp (1.535) and Osim(1.195)

OSIM Nice uptrending

noreply@blogger.com (Fan Jun) — Wed, 18 Jan 2012 03:38:00 +0000

Osim works out today, it up 4.5c now at 1.215(11.38am), target is 1.3. Nice uptrending stock.

STI Next Target 2900

noreply@blogger.com (Fan Jun) — Wed, 18 Jan 2012 00:53:00 +0000

STI closed at 2815.85 yesterday with 59.36 points up. the next target is 2900.

I have some "late comers" starting to move up only yesterday. Are they going to continue move up in coming days? Let's see

Osim
Wilmar
Genting sp
CWT
Citydev

Long Candidate: CWT

noreply@blogger.com (Fan Jun) — Tue, 17 Jan 2012 06:12:00 +0000

CWT has been consolidated for more than one month since mid Nov last year, it had a breakout on last Thursday with high volume--a textbook consolidate and run example. It did pullback on Fri to support 1.015, today rebounding up. Now 1.03 +0.015c.