Tuesday, June 18, 2019

CUT LOSS ???? Again and again and again CUT LOSS

The whole idea about getting into taking a position is NOT and should not be about HOPING to get it right ... if NOT ... CUT LOSS!!! Honestly, why on earth do you want to take position(s) if you are not able to determine your risks in the game. IF you can determine your risks, in theory you should be able to determine your rewards. LOGICAL????

Too often I hear this term CUT LOSS and I am totally sick of this mentally. IF you do not know if you are in the beginning or mid way of a rising trend, any short positions WILL KILL YOU. It will be so brutal that you will even doubt the charts you use and the STOP LOSS.

There is another school of SIGNAL trading. If the signal is BUY, you BUY and if the signal is SELL you SELL.  Sometime signals can be misleading and playing tricks on you. IF you happen to be in this stage than your frequent stop loss can wear you out.

IF you understand the make up of a trend reasonably well from the start to mid-way till end of a trend in real trading, than there is NO NEED TO HAVE STOP LOSS!!! Why? You will and should not be taking any positions that is NOT IN YOUR FAVOR. You can be exposed to temporary short term (a few days) of market against you but eventually it returns in your favor.

Most of time, I am not glued to the screen and quotes. I am away most of the time. Which means I must develop a system that allows me to weather the storm and ride out well!!!

ALL YOU NEED IS COMMONSENSE and LOGIC WHY YOU ARE TAKING POSITIONS and WHY YOU SHOULD NOT BE TAKING POSITIONS.

IF YOU DO NOT KNOW WHERE YOU STAND in the OVERALL TREND IN MOTION, HOW ON EARTH ARE YOU GOING TO DETERMINE YOUR RISK vs REWARD and THE RIGHT ACT IN THE MARKET.

These are all very simple basic questions one should address before even dreaming of profits. IF you do not know where you stand quite accurately, how can you tell that your action is correct!!! That means you are GAMBLING in HOPE it turn out right.

TOO FREQUENT CUTTING LOSSES WILL ULTIMATELY ERODE YOUR CONFIDENCE THAT YOU LOST FAITH IN YOURSELF
    

Thursday, May 23, 2019

CPO intra day chart for Aug 2019


Rainbow charts .... more like a Python in action.

That's all ... simple ... straight to the point!!!

Your Edge or Advantage versus the rest???

A checklist of criteria needed to be WINNER will include  having

1. Consistent profitable system

2. RRR in favor of rewards

3. Mental Psychology

4. Capital management

5. See things differently from the rest.

All materials available on the above are pretty standard and readily available - accessible to anyone who takes the effort to search. Than you are one of the NORMAL standard quality grade.

The key question is HOW DIFFERENT will your 1-2-3-4-5 above develop into a KEY ADVANTAGE that will outperform the NORM bringing you into the Top 10%.

We can all have the same 1-2-3-4-5 above BUT without the ability to go beyond the TEXTBOOK materials you will never progress to the next higher level. Your mindset will remain at TEXTBOOK level. Your analysis will remain at TEXTBOOK level. Your interpretation will remain at TEXTBOOK level.

Some subjects are blown out of proportion that one sees the tree and miss the forest. It becomes micro-scopic analysis instead of macro-analysis.


Before one attempts to Predict or Forecast targets, can you follow the most basic simple act of determining Trend direction. Next will be Direction change. Followed by measuring Trend  power.

I do not encourage forecasting if you can't get the basic foundation correct.   

I can determine Trend Direction confidently without using Candles. Can you?

I can determine Trend Power confidently without using Candles. Can you?

All this can be achieved with the aid of proper indicators and tools.
    

Tuesday, May 21, 2019

Consistent or inconsistent results? Divergence?

Irrespective of whether one uses charts or financial analysis, he or she will experience market place  wild swings. The chart promoters will always focus and sell the idea of TARGET LEVELS PREDICTION. Who would want to focus on TREND and CYCLE!!!!!!

In reality the chart is a very simple tool and in my opinion a very reliable tool as long we don't abuse and interpret it according to our mental bias but what the chart is displaying about trend and your tools are helping you guide cycle trend.

Many times I had paid my price for defying what the chart trend is telling me as I am stuck with my mental bias especially after reading "news".

The school of chart analysis are divided into many different approaches with different theories. The classic subject of chart analysis is DIVERGENCE. This terminology can either make you rich or poor. Each and everyone who walk into the realm of "technical" chart analysis encounter this magic word DIVERGENCE.

The wonder of this divergence is ONE will encounter hit and miss results! The question is WHY? Is the concept Divergence applied wrongly? YES, that is why you get more "misses" than "hits" with divergence. How is divergence applied in a trend cycle? There are more than a library list of so called fallen Gurus who died with divergence especially Novice Gurus and Amateurs.

Divergence(s) is NOT a confirmation. It is a warning!!! Confirmation comes from price trend change! On the reverse all the novice and amateurs take divergence as confirmation.

PRICE TREND versus INDICATOR CAN REMAIN IN A DIVERGENCE STATE FOR A LONG LONG LONG TIME BEFORE THE CYCLE ENDS AND PRICE TREND ULTIMATELY CHANGE!!!!!

If one act solely of the divergence concept, the results will be yo-yo. There is nothing wrong with the charts. There is nothing wrong with divergence. The only thing that is wrong is how divergence is understood, applied and how to handle divergence state.

WHEN DOES DIVERGENCE DEVELOPS IN A TREND CYCLE? WHAT DOES PROLONG or EXTENDED DIVERGENCE MEANS? WHICH INDICATOR(S) IS THE MOST RELIABLE TOOL TO UNDERSTAND DIVERGENCE?

WHAT DOES THE non-DIVERGENCE STATE MEANS and when does it happen in a cycle?

Once you are able to understand all the above, you will find engaging a Low Risk High Reward is no longer elusive but a REALITY.       
  

Monday, May 20, 2019

What is the correct accounting for your capital gains???

Do we benchmark our capital gains return using RRR (Risk Reward Ratio)? Have anyone seriously put in a bit to think if ROC (Return on Capital) is the right methodology to calculate your profit or is it ROI (Return on Investment)???

ROC is plainly the ratio how much one makes from the total capital on hand.

ROI is simply the ratio how much you make from the total capital invested. Now what happen to the capital not invested laying in the bank???

RRR is basically the ratio of estimated loss (RISK) versus estimated gain (REWARD). 
  
RRR in my opinion is probably a better way to evaluate your business risk. In a typical business one should not view the venture purely from the PROFITs or Capital Gains. One should work out the numbers on LOSSes first before counting the PROFITs.

If with $10,000 capital ... I divide my allocation into $1,000 for margin, $3,000 for paper loss and $6,000 for reserves with say $1,000 profit margin. Is this feasible business?

What is the actual capital required to make $1000 for the above? Is it $10,000 or is it $4,000? or Is it $3,000?

   

Monday, May 13, 2019

Flash back of the feb update .....GOOD LUCK

http://klsetrend.blogspot.com/2019/02/macro-vs-micro-chart-analysis.html


Sure ... everything gravitate backs to the MEDIAN .... all it takes is TIME to reach the destination. The big Question is what happens when it arrives at the MEDIAN zone ...?

1. Will it stop there ?

2. Will it go through and search for lower destination?

3. Will it skirt around the MEDIAN zone?

Good luck