Tuesday, August 3, 2021

THE GAME --- Sure Bet ? PROBABLE bet ? Possible bet ?

All market participants MUST realize that the MENTALITY of sure bet is highly dangerous given the dynamic nature of the market trend.

The correct attitude to approach the market is to map out the POSSIBLE trend direction from the 3 and only 3 different trend directions. Next is to choose the MOST probable outcome.

There are so many news and stories ... including rumors in the media that can be so confusing.

Sometimes the market direction jive with the "stories" ,,, sometime they don't or as we say "independent".

What we will and definitely going to encounter when we use any system is the NOT so consistent results. This is not to say the system is FAULTY if you believe it is reliable. Instead the DYNAMIC nature of the trend of varying intensity will results in erratic results.

If the TREND move in ONE straight line (LINEAR) than your system will be 100% predictably perfect. Given the trend move in a NON linear state, this will result in DYNAMIC varying results.

Thursday, July 29, 2021

Chart Analysis - Price & Indicator(s)

The early price records were translated in graphical representations. Hence the birth of Price charts. Moving forward, different formats were introduced BARchart, CANDLEstick, Point & Figure,Kagi, Renko, and the list goes on.

Later some creative persons introduced Moving Averages and came different types of calculations for Moving averages into the charting software.

The next level saw "indicators" included in the charting software.

With all the "gadget tools" ... what are we suppose to do ... and use ? Or what are we trying to do or NOT to do?

What is or are the ROLES of the indicators? How do they complement price?

What does the indicators suppose to do and what do they conclude or imply?

Bottom line is whatever the indicators derived analysis or implied analytical conclusions, the price will be the ultimate CONFIRMATION.

There are many points to consider since we do not live a perfect ideal world. All textbook materials will write about divergence and divergence and divergence

 Know when divergence works and when they don't work.

 

Under what conditions DIVERGENCE fail to function properly??

 

If one can identify and isolate the high probable conditions or probability it won't function accurately, than I say you have nearly solve the biggest hurdle.   

Sunday, July 18, 2021

CPO-2, CPO-3, CPO-4, CPO-5 - The past, Present and Future


 

The Earlier spike in CPO prices have sort of narrow and converging. Will there be more divergence of forward prices?

The erratic spread between months were extreme a few months back and now back to normal range levels.

Will the anticipated squeeze in supply or Dalian Futures or Soy Oil result in near month spikes? Or maybe the market has priced in all the anomalies?

Thursday, July 8, 2021

Relationship or Correlations ......

The simple market actions are seriously complicated by human desire to find the cause and effect to a certain event. This create another bigger problem and more damaging when one get MENTALLY chained to this correlation between cause and effect.

Putting cyclical nature of the trend and placing this correlation(s) into a full cycle, one should take note that there are times this supposedly POSITIVE correlation will NOT work 100% throughout the whole cycle instead there are many times they work NEGATIVELY or some prefer to call them RANDOM unwilling to accept that the opposite happens.

The biggest challenge is the accept BOTH positive and negative correlations exist in a full cycle and how will one adapt and act accordingly.

Human by nature ARE inflexibly RIGID and takes a long time to accept the DUAL state, more so act swiftly when things change.

It is the unseen and soft metal inner self that one need to polish to enable a smoother ride 

Sunday, June 27, 2021

Money the BAIT ....

Everyone who participates in the financial markets irrespective of which products or instruments will have ONE and only objective ... i.e ENORMOUS capital gains or profits.

When probe further, how will one achieve this goal?

What about capital required?

How about the time required?

Yes $$$$$ is the bait, the motivation BUT one need to seriously sit down think over, how one is going to achieve all this.

Do you have what it take? Do you believe you have all the soft skills needed?

The Game or Business demands much more out from a person. It is not about Financial knowledge. This transcends beyond what we learn in school.

It is a demanding and punishing "work" at least for the first few years until one has a grip of what the market demands and expect from you.

 

The road to ROME are many but can you persist and last through the journey     

Sunday, June 20, 2021

Chart Analysis ...abused!!!!

Over the years, chart analysis "evolve" like car technology. The chart analysis objective end result remain the same but the approach changes. The objective of using a car is to move to a destination. Over the years cars has transformed into technology driven.

There are roles that chart analysis can contribute in daily business operations but the truth is many view this approach as some VOODOO black magic. A lot of this problems are attributed to over promising without being able to explain the different methodology.  

There are some basic rules or principles when comes to chart analysis. Human nature desiring to read and hear some complexities to a recommendations do not blend well into chart analysis. Sophistication and complexities are deemed to be credible especially when there are mathematics involved. This is why financial economic analysis will be seen more favorable than chart analysis.

The correct way to utilize chart analysis is to make it simple and keep it simple. When one add salt n spices to chart analysis, one might end up with a chart analysis that is too spicy and greasy.

It is not easy for someone who believe Financial Economic Analysis as the truth to accept chart analysis such people encounter chart users to have abused the analysis with predictions which is exactly the financial analysts are doing.

Isn't market about prediction and forecasting? Yes and NO. 

Yes, almost everyone wants to know the future but knowing the future NEED not translate into profitability. 

The other factor which chart analyst supposedly has advantage over others is trend direction as long keep this simple. This about what happen to the market trend between NOW till the predicted event.

How does one swim, walk, run, jog or fly to the prediction? In my opinion this is the GOLDEN rule of all chart analysis. TO FOLLOW THE TREND. Predictions are meaningless if one FAILS to follow the trend.

The trend is the path to $$$$

Wednesday, June 16, 2021

FEAR - - - - - The MOTIVATION

Why do people act and behave? It is people reaction to something .... or event DUE to FEAR

Fear as the driving FORCE and MOTIVATION pushes people to the edge to act and behave either rationally or irrationally.

When FEAR of MISSING OUT of the action controls the mind of the people or crowd this develops into a strong force.

When Fear of prices going higher exceeds the Fear of going lower, the force and direction tilts in the favor and direction UP

When Fear of prices going lower exceeds the FEAR of going higher, the directional force tilts in the DOWN direction.

When the motivations is not decisive who is in the driver seat, the trend will remain horizontal range.

Is GREED the bigger motivation than FEAR, I do not think so. I believe FEAR is the mother of all motivation.

 

 


Saturday, June 12, 2021

Calendar Spread - Futures Outright

 There are different "SPREADS"

1. Within the same product but different months (Intra-commodity)

2. Different products pair but same exchange (Inter-commodity)

3.Different exchanges (CBOT/CME/NYMEX vs LONDON or FRANKFURT)   

 

To make simple, we keep to Calendar Spread for the same product/instrument which we engage in BUYING ONE TRADING month and SELLING A DIFFERENT month. 

 

The challenge is one has to decide if one should remain trading calendar spread only or a hybrid of calendar spread with outright futures.

 

INVESTIGATE ...... ANALYZE ........ OBSERVE .... CONCLUSION




Tuesday, June 8, 2021

Calendar Spreads - The Fundamental QUESTIONS

 Assuming one manage to identify the "pair" to trade. The next questions 

1. WHEN DOES ONE LONG THE SPREAD ?

2. WHEN DOES ONE SHORT THE SPREAD ?

3. WHEN DOES ONE DOES NOTHING/NO POSITION ?

4. WHEN DO YOU EXIT THE LONG?

5. WHEN DO YOU EXIT THE SHORT?

 Is the relatively low margin for spread the reason to trade ? or 

Is it something more challenging that one need to explore ?

Is spread a piece of cake versus open outright futures? 

What are the challenges that one face trading outright futures versus calendar spread?

While the lower margin is one of the reasons to consider calendar spread, one should consider the risk reward profile for both instruments.

Personally, I find calendar spread more challenging as it is NOT about trading a particular month contract but rather trading TWO months.

The relationship between 2 months is "RELATIVE". This "relative" is the basis for LONG or SHORT or DO NOTHING.

1. WHEN DO THE SPREAD RISES and WHAT DOES IT MEAN?

2.WHEN DO THE SPREAD FALLS and WHAT DOES IT MEAN?

What is the correlation between Calendar spread and outright futures? Is there any correlation?

HOW many spread contracts should one take to strike an equivalent of ONE outright futures "effect" if there is correlation?

How does one optimize and balance Calendar spread trade with Futures? 

 

There is NO FREE LUNCH and one need to do detail homework before the adventure!!!  ///

 

 

 

 

Sunday, June 6, 2021

Cpo 2 - CPO 3 - Cpo 4 - Cpo 5 historical comparison


The last super bull run for CPO was 2008 with no abnormal movements and all peaks about nearly same level. This is translated into  minimal calendar spread deviation. 

This round the bull has the PEAKS are individually different resulting in abnormal wide spread values.

I am not going to dwell into the reasons to explain such anomalies. 

Question is what do we do with such situations. How do we benefit from them?


Saturday, June 5, 2021

CPO Calendar spread vs CPO Futures - LAST 200 days traded

 


                                           JULY _ AUG

                                        AUG _SEP    

                                    CPO3 - AUG

To look at the numbers without graphical chart displays, one need to be a special breed to have such quality gift. Unfortunately, I do not have special gift but to do it the "traditional" method of plotting the charts and visual analysis 

I am leaving to the readers to make their own observations and conclusions the directions of the Calendar Spread vs the Outright Futures. 

 

https://www.investopedia.com/terms/c/calendarspread.asp

 

Margin for Calendar spread is Rm1700 per contract

Margin for Futures outright is RM7000 per contract (x4 approx Spread margin)


The other question remains is what calendar spread pair is the optimal choice. Will it be

1. Cpo-3 (Active) vs Cpo-4 (NEXT) or Cpo-3 vs Cpo-5 or Cpo-3 vs Cpo-6

2. Cpo-2 vs Cpo-3 or Cpo-2 vs Cpo-4 or Cpo-2 vs Cpo-5 

3. Cpo-4 vs Cpo-5 or Cpo-4 vs Cpo-6 or Cpo-4 vs Cpo-7

or other month combinations?

 

I leave it to the readers to investigate for themselves as I have lay the basic for you to think.

 

Trading Education is about Investigation and Observation and finally the Calculations

 

 

 

 

 


 





Sunday, May 2, 2021

Did the chart fails or the user's failure?

"failures" or "errors" are like GEMS and they are the most precious things in the learning process or upgrading your skills and knowledge. While many looks at these NEGATIVELY, I see them positively. Without mistakes and errors, we can fall into the over-confident mind trap. We become complacent. We don't see the need and desire to learn or try to understand if things can go wrong.

How about charts? Let open the statement by saying that the chart has NEVER fail. It is the failure of the user to interpret the chart correctly and properly that results in failure. Unfortunately human will deflect and shift the blame to the chart!!! Unless your chart system has the AI ability to read out the analysis and interpretation plus recommendations, it is the USER himself or herself that analyze, interpret and decide the next course of actions.

The price chart display what has happened. The user has to decide the next course of action.

The indicators are "normally" tabulated with panel windows either above or below the price chart. Almost all indicators will have either 50 or 0 in the middle of the indicator window.

There are many ways to read, analyze and interpret the indicators. Some of the indicators will have 100 on the upper highest and 0 on the lower lowest. with 50 in the mid-level. Some will have NO upper and lower limit levels but 0 in the middle.

Irrespective of the 2 different type of indicator displays, the key is to about interpretations. There are "standard" analysis per "textbook" and there are many other interpretations not documented and published but personal observations due to some mistakes/errors. This is what I call hands-on experience. 

My personal opinion is whatever published materials that we read, at best it is only 50-75% of the truths. The other 25-50% will depends on your ability to observe what are not written and published. 

The most important question we should be asking is what are we trying or want to achieve with charts? What are readily available tools and How do we use them to help us achieve our objectives?

What is the "relationship" between the price and the indicators? When are the price and indicators "sync" and when they do not "sync"? What do all this represents? 

Are we using the charts to "predict" the future? Or are we using the charts to help us understand the overall market pulse?

The things we can and want to achieve is long list. Forget the numeric and enjoy the chart flexible beauty.

 Let your observation lead your imaginations

Sunday, April 25, 2021

F-KLCI ... lifeless ... listless ... Zzzzzzz


As long as the KLCI remains cruising at this level 1600 + - ... we will continue to see rotational random stocks taking the lime lights.

This is the excitement of the penny stocks .. when will this music end? It will depend if all the buyers are already in and waiting to exit.

As long as there are still buyers coming in willing to pay more or higher, than the prices will remain lofty.

Just basic commonsense.

 

The musical chairs will be removed when the buyers refuse to buy higher than you can see vertical dive down.

 

It is all a matter of time when this will explode 

Sunday, April 18, 2021

Sit back ... Reflect and Ponder ....

Prior to the availability of real-time intra-day charting platforms, the whole process involve daily, weekly, monthly or quarterly maybe yearly chart.

Probably sometime around 15-20 years online trading in Asia is the advance of intra-day real time charting. 

The question that came to my mind WAS and IS ...does intra day charting improve my profitability? Sometime ago, during the initial or early years on intra day platform availability, I use to think that this is the road or the path to profitability. After years of trading, I come to the conclusion it is NOT 101% true.

We should sit back think over what our objectives and the time horizon we are interested when you decided to put our money on the table. 

What is our realistic return during the period? 

How do we handle volatility during this time horizon with respect to mental and financial? 

What are the criteria we use to ENTER and EXIT?

Do we have some simple rule(s) to implement all the above?

 

Yes the list of questions above are not complete but they should serve as a starting point. 

 

Are we trading volatility? or Are we following trend?

 

Which time frame charts are we comfortable using?

 

Do we act on WHEN (TIME)? or WHERE (PRICE)?  

  

Tuesday, April 6, 2021

The Price - Time chart .... the miracle or ?????

The only thing that the Price chart CANNOT do is Financial Analysis!!!

The chart records what has happened. This include insiders and outsiders. The hopefuls and the despairs.

We are suppose to try understand what has evolved, what is most likely to happen next and beyond.

Yes, it is the best tool for me to guide me as I tread the water. 

What we need to understand and accept is that market move NOT in a linear straight line that makes perfect predictions into the future very very very difficult. Market move wildly at times swinging at different speed or tangent and at time it is resilient range side way. Since we know these are the only 2 behavior of the market trend, than it is easier to anticipate the trend cycle. The only greatest challenge to the cycle trend is to pin point which stage the current state versus the overall.

Once you have the ability, capability, skills and experience to locate the status of the cycle the rest will be easy.

Instead of wasting time wandering in the wilderness, going directly to the source or the center of all trend, one will avoid making mistakes and wasting time contaminating your mind with rubbish      

 

Wednesday, March 31, 2021

Understanding or Misunderstanding the Market ... Misbehavior

 Many people struggle trying to understand the market. The behavior at times are in congruent with your opinion and your opinion is a result of your analysis. So when the market perform in accordance with your anticipation than you are happy and feel greatly delighted. When market behave contradicting your analytical opinion you will either end up frustrated and dejected. This is what I can the "MISBEHAVING" market. 

So we got a behaving and misbehaving market situation. Actually it is about the direction where it is going. 

Market is more than merely about textbook analysis. Market is actually a very simple creature that goes it own way or DIRECTION independently. That is why at time it goes in the direction we anticipate and at times it goes against us!

The reason why it is difficult to understand market is due to US ... our inner software that process in the realm of the LINEAR path. Almost everyone tread this path due to our educational system and our personal experience.

If we are looking at trying to MAP the market direction, we should adulterate and mix it up with other "contaminants". 

The key word is DIRECTION and we just need to find the appropriate tools to define the market direction. 

Do not mix "VALUATION" with "DIRECTION". They are 2 different and separate matter completely.

At time market direction will be in sync with valuation and at times the market direction will not sync with valuation. 

Valuation can be "fixed" but direction is NOT fixed as it is MOVING and changes direction anytime the CONSENSUS changes.

 

So what tools are you going to use to map ... track ... market direction. This has nothing to do with finance ... not a single bit .... so don't waste your time trying to use financial analysis.

After you have selected your tool(s) than you need to define what is the directional CHANGE and what are the parameter(s) to confirm this change. Again let me repeat... THIS HAS NOTHING TO DO WITH FINANCE.

 

Lastly... do back testing on your set system above.

 

Simple .... straight forward  

    

Tuesday, March 16, 2021

F-KLCI


 KLCI Futures weekly chart shows the range with the side-way mode.

The daily tells the tight range with mix signals from the Oscillators 

The weekly also display the same mix signals.

 

WHAT IS NEW? NOTHING ...

 

The occasional and rotational play .... reminds me of the election rumors of 1990s thro 2000s with selective stocks rammed up and distributed.

 

This can only happen with the players greed seeking quick kill or be killed  

 

Saturday, January 30, 2021

The dilemma of the chart trader or the non chart trader

 I will classify the existing analysis used by traders/investors/speculators into 2 approaches namely the charts and the non-charts methods.

The non-charts method include the Financial analysis and any other methods that do not use chart technique.

The chart technique is suppose to be simple straight forward without too many "justifications or confirmations" to rationalize or substantiate the actions taken.

The history of chart began with the records of price actions - Open-High-Low-Close. Such exists prior the invention of computers. Chart is about trend and trend is a collection of price actions. Obviously someone decided to infiltrate price analysis to include volume behavior into the equation.

This brings me back to the basic lessons in physics when we refer to directional motion or directional path. When we analyze the motion of the object from the start to the end of the motion, we only record the changes in velocity along the path. The acceleration, the deceleration, the steady state and the end. Does it mean that the changes to the mass or weight is needed to confirm the object motion state?

Adding more variable(s) into the analysis do(es) not translate into accuracy or reliability. More likely it is going to add more confusion(s).

We will need to define what the trend is and anything not within the parameters is automatically classify otherwise. The oldest approach that I am aware is the TRENDLINE and later the popular Moving Averages.

The next step is to classify what is accepted as the trend change for the end of the existing trend and automatically is the start of a new trend.

The final step is to develop a plan how u manage the bumpiness or volatility between the start to end of the trend.

      

FKLCI .... update


 What I can see is 1540 ....if broken ,,,,,,, what if .. what is next?

Saturday, January 16, 2021

Sunday, January 3, 2021

F-KLi .... 2020 Closing - The chart and the truth


If one looks at... looks for ... all the so-called considerations of the financial economics, well it does not make any sense why the markets are at this levels globally????


If one just ignore the stories we read in the media and go with the chart ... this is not easy ... a personal challenge when we realize the discord or decouple between the charts and the economics .... which one do we follow?

 

The human bias is we tend and will follow the brick and mortar economic news.

 

The truth .... BITE YOUR TONGUE PULL YOUR PANTS and SOCKS ... follow the charts 

Wednesday, December 9, 2020

The Independent Market ....

 As I sit back, take stock of my venture and experience since 1987 walking this journey in the financial markets, I have seen ... experience ... all sorts of things trying to link how market behave to financial analysis ... charts ...and what not.

Does having opinion(s) or views after getting all sort of reports and inputs ENHANCE your profitability? Or will it do more harm than good?

This creature called MARKET is a unique independent force. Human are mentally brought up to think having more knowledge means you have an edge of profitability!!! 

Well this creature market is very unique because IT IS INDEPENDENT and we need to think how to make best what it presents.

We can be right about ALL and everything about the facts and figures but that do not directly translate into successful investment and profitability. We can be wrong about facts and figures yet we can make money all the way!!! 

One of the first thing I keep asking myself .. HOW MUCH DO I NEED TO KNOW and NOT OVERLOAD!!! Or maybe the least I know ... the better off I m!!!!

We are all human and the biggest danger that we face is the INNER Mental Enemy and the is called the OPINION enemy ...This enemy called OPINION is the biggest inhibitor to one's mental and paralyze your ability to see things differently. It has a TWIN brother called RIGID mind. The twins is the worst combination for everyone.

Over the years .. I know and I vouch that .. my profitable periods are the time when I trade without the presence of the TWINs. The worst draw will be the season.. I am busy entertaining the TWIN visitors.

The most objective strategy for the markets is not how much facts one know but how much one does not need to know!!! All you need to know and understand is WHAT DO YOU THINK THE MARKET WILL BE DOING NEXT and I can guarantee that your facts might or might not agree with the market next actions!!! Sometime it may be in unison .. sometime it does not!! Since it is NOT always in agreement.. do you want to emphasis on this!!!

What we seriously and really want to do is to draw and list down the things/action steps that we need to adopt and internalize which have proven to be reliable and consistently accurate.

FACTS and FIGURES are for academic intellectual discussions!

 


 

  

Tuesday, December 8, 2020

CYCLE - Trend and Volatility

 The term  CYCLE is often wrongly interpreted by many who use the word and hear the word. 

cycle[ sahy-kuhl ]


noun

1. any complete round or series of occurrences that repeats or is repeated.
2. a round of years or a recurring period of time, especially one in which certain events or phenomena repeat themselves in the same order and at the same intervals.
3. any long period of years; age.
4. a bicycle, motorcycle, tricycle, etc.
 
When we refer cycle in economic activities and financial markets, we are looking at (1) and (2).
 
Often and I dare to say that human in general do not have the ability to visualize and understand the details of things said.
 
When someone come up and tell us ,.. WE ARE in DOWN CYCLE ...
 
A) Does that mean it is down all the way directional without any sort of ups till the bottom? or 
 
B) There will be sporadic ups in the down direction until the bottom is attained?      
 
Majority will think of (A) but in actual fact (B) is the truth.
 
The worst part is during (B) the process of anti-reaction can be so confusing and convincing that we are not in a down cycle but and up cycle!!!
 
In a business economic activities, the sudden surge in spending can be either stimulus or maybe consumers decided to spent after holding back or maybe there are other incentives to encourage spending.
 
In a financial markets such rise during a down trend can be attributed to short covering or even the decision to re-balance portfolio and sometime the rise is unimaginable.
 
Sometime it takes a long time for the cycle to complete and with intermittent contradictory reactions that catches everyone by surprise. 
 
Yes, cycle exist. Cycle is a dynamic state and it is not a static ONE phase. Cycle is a combination of both actions and reactions state. It is about oscillations.
 
The best example is watching the SEA Tide. When it is high tide, the tide level does not rise like filling a bathtub. The level rises over time with occasional retreat and rising overtime.
 
Market is not about filling the bathtub with water or draining the water away where the water levels go one way UP or one way DOWN. It is about understanding the SEA tide. The ebbs and waves.
 
In my opinion, price Charts trend is the best way to track the trend within a cycle. There will always be opposing force within a cycle.
    

Monday, December 7, 2020

FKLI - IS it real or fake ... the move ?


 We have a mix signals coming from the indicators .... So there is no clear consensus which way the market can confidently move in this scenario above... So well ... what the heck ... wait it out I guess

Tuesday, December 1, 2020

F-KLI update


 Nothing for me to add or write ... except to share this updated chart. 

It depends on your interpretation skills to know if market is going up or down .....

My work has been completed and fine tuning as well ...

 

Yes these are modified improved version of the histogram to determine the trend cycle. It is NOT perfect but this is as close and as good as it gets.

 

See if you can pick up or trace where the start and the change of the trend above ...

 

As 2020 comes to an end ....this is once a life time that I experience a sort of Global lockdown ... near to ZERO international flights and to a certain extend domestic also.

 

Buy/Sell on Rumors and Exit on News.  If you are a stock trader ... we say ... buy on rumors and sell on news!!! But if you are a commodity or forex trader where you can either buy or sell ... than it is ACT on rumors .. Exit on new!!!

 

Friday, October 30, 2020

FKLI ... so is it broken or just a test???


 I don't see any bull that is for sure ... So what do you think you are looking at if it not a bull???

 

It is also known as the either ... or ... game 

Sunday, October 11, 2020

F-Klci .... update


 What is the KLCI Futures going? ............Will it go up or down? .....


If it is going up... where is the limit ???

 

If it is going down ... where is the support???

 

Or is it happily ... cruising sideway?

Friday, September 11, 2020

Bursa FKLI ..... what is next???

Add caption

The charts above across different time frame  as I do not have intra day data. ....so it is the more basic ... daily .. weekly n monthly ... which I feel is more than sufficient ///

The beauty of the chart above will depends on the eyes of the beholders.

Whether you believe or not ... can see or not ...it is up to you and not me.

 

IF you see the chart is rubbish .. than rubbish will echo in your mind and you will hear only echo that resonate inside.  

Wednesday, September 2, 2020

Believe or Don't?

 The approach I adopt when someone try to convince me or make me believe or accept what is said, I will take 3 steps back, take note of all the points presented.

Next I will draw up my road map and try to prove why I should consider what is said and next is to draw up another plan to prove why I should not.

With the results than I will weigh which direction I should be taking and consider when I should be taking the opposite if warranted. 

Sunday, August 30, 2020

Which Time frame ??? Considerations !!!!

 The older charting software that I use from the 1990s do not have the flexibility of charting intraday data except DAILY, WEEKLY and MONTHLY. This is long before INTERNET explosion and trading platform which are intra-day enabled become widely available FREE without cost.

Does this mean with real-time one become more profitable? NO. There is guarantee that real time intra day users are more profitable than EoD (End of Day) users. When one is given many time frames and spoil with many time frame options, once can become confused which ONES to use.

Trading is like cooking. The cook has to decide how high the heat or fire to turn up or down and which spices or ingredients for which dishes.

Even curry a generic word has many different variations from different countries using some different ingredients and preparations.

One should sit back, ponder over which time frames to be selected to match the relevant trends accompanied by the compatible indicators.

Take your time to think over and study the charts across different time frames with different trend !!!!


ONE or TWO game plans?


The vertical RED lines and the Yellow Zones show the 2 different possibilities for both price and indicators moving forward.

While the blue oscillator has been moving up when it was below ZERO, it can either continue to climb higher cross ZERO and continue to move up or abruptly make a U-turn and swim back down. 

The plan of trading is always having a PLAN B ...in case PLAN A comes to an END gradually or abruptly. 

Most of the time casualties is due to the failure to consider scenario B is possible and we are fixated mentally on the path despite the change. Rewiring our mind is NOT easy despite what we see.

We need to be convinced that change is happening and PLAN B has to be a serious Option to implement.

IF we think that RED lines zone on the above will continue to go up like the BLUE while it actual fact it is moving down, than we will need to weather the storm until it turn back up.

The different shapes of the Blue Oscillator versus the price trend direction only confirms the NON-LINEAR properties of the trend. The price trend rate of change is NOT uniform at times increasing and decreasing which is captured by the Blue Oscillator. 

At times you will notice the Blue oscillators rises with price and drop in-line with price retreat. 

Other time price and Blue oscillator going different direction with price going up and Blue Oscillator retreating. Follow by the next action where both Price and the oscillator moving in the same direction after diverging.

In other words, the relationship between price and oscillators will be 2 phase ...

1) Agreement in same direction.

2) Disagreement in different direction.

What is the definition of AGREEMENT in same direction? My definition is both and are moving in the same direction but different gradient or slope. Anything not within this is automatically reclassified into DISAGREEMENT.

 

Price UP with Oscillator UP (Agreement)

Price DOWN with Oscillator DOWN (Agreement)

Price Horizontal with Oscillator Horizontal (Agreement)

Price UP/DOWN with Oscillator Horizontal (Disagreement)

Price Horizontal with Oscillator UP/DOWN (Disagreement)


Anything outside of the 3 agreements state = Disagreement.

What do you do when you see the disagreements? Alarm bell goes up and trade more cautiously.


     

 

  

 

 

 

Saturday, August 29, 2020

The Rhythm ... the beat ...the pulse .... the trend ... the DIRECTION

 Today, we do not need to manually construct the charts. It is all readily available from any trading platform that one subscribe. They will have BARS, CLOSE LINE and CANDLESTICKS but the more "traditional" one might include Point and Figure or Kagi or Renko ...etc.

Irrespective of whichever format you use, the basic function is to determine whether it is going up or down and the steepness or gradient for the mathematicians. 

Well the truth is the trend moves NOT in a uniform straight line from the start till the end but ...zig -zag with different gradient in ONE direction until it do a reverse or change to the next direction.

The biggest obstacle to most people how one define the trend in motion and the trend reversal.

What and how one define trend in motion will also incorporate the temporary trend retreat before resuming in the earlier direction will decide one ability to weather volatility.

The next set of rule to define trend reversal is normally easier than the above.

 Some of the veterans will not even look at any indicators other than simple basic bar charts. The gradient will be used to define to strength and momentum. Whether it is accelerating or cruising, the veterans 

This veterans understand there will be turbulence, storm in the flight path until the destination is reached!! Experienced veterans know how to pilot the plane in all the different circumstances and that demand strategic plans to be implemented.

The modern veterans will move one step up to include indicators to help in precisions.

Is this game about precision? Or is it about ones ability to go with the flow??? 

 

  

Wednesday, August 26, 2020

F-KLCI ... update


 

Back to the Starting Point .... Basic Premise and CORE ....THE BIAS BELIEFS

 When we look at the chart ... what we need to understand are only a few things or more precisely 2 things.

1. DIRECTION

2.VOLATILITY

How about price? Well price represents your APPETITE when you see the number!!!!!!!!! Some people don't have appetite for big absolute price numbers and some have appetite for pennies!!!!! 

Some maybe bias with certain price values and some may see them as irrelevant.

 The whole idea is NOT to look at the numbers BUT look at the chart and try to write down WHAT DO YOU SEE. It is only after one is able to overcome the mental paralysis than there is no need to write what you see.

Even one should ignore the name of the chart or products or stocks or instruments.

Even one struggle with charts from past or present teachings/beliefs ... one should take 10 steps back ... re-wire ... re-engineer the whole process from the very basic foundation of CHART TREND ANALYSIS.

All the pollution and contamination comes when one start to intro and mix all sort of idea into the recipe instead of asking yourself when you look at the chart, what DO YOU SEE!!!!!

Forgot the indicators, forget the volume forget all the ratios... Just see the chart without all the makeups and cosmetics. Only than you can see the light. 

When you are proficient, you can put on chart cosmetics to add a bit more zing to the chart but be careful not to over spice it up  

The next step is to ask yourself, how do you know the direction has changed? It does not matter whether you are using candle or bar or line chart.

What do you use to track the direction and what do you use to confirm the directional change? When this can be applied  across all different products/instruments for all different time frames , than you have got a working functional basic reliable system






 

   

Tuesday, August 25, 2020

Making Sense of Market

 IS the act of trying to make sense out of so-called "irrational and erratic" market a futile effort or maybe not????

What one can do and achieve within the normal realm in this world can be conceived mentally and achieved physically. That is the power of mind and belief.

If one believe that the market is a random act, than it is highly unlikely you will try to disapprove it is NOT a random move.

IF you believe there is order in the market, than you will start to find and see ...identify the behavior is no longer random.

The biggest challenge and acceptance is that NO ONE can map the pattern or behavior 100% accuracy. Instead one should distill the evident, imminent behavior up and down.

The question is .. HOW DO YOU MANAGE THE non-normal behavior that you can't map? How will you act when you face such conditions?

What you see is an image or echo of your mind ....!!!!!

 

When one start to see things like in the most simplest form... like an innocent kid who don't know anything instead of approaching it from the high tech rocket science mindset, than you eyes and mind will be open to see what is obvious before you ..it will be

 

EUREKA 

 


Saturday, August 22, 2020

Wednesday, August 12, 2020

SELF INFLICTED injuries ... SELF SABOTAGE ... FRIENDLY FIRE

 The are many ways to make money in the financial markets BUT there a consistent way to repeat the same mistake. Sometime this act is called self-inflicted injury, self sabotage or even friendly fire. Whatever name you want to call it and how it happens will only result in losses in the trading account.

I have my own fair share in this as well and over time put in place rules to ensure this do not happen or minimize or manageable.

Two common contributor to this is the distractions cause by short term intraday volatility instead of the longer term trend or more aptly called microscopic price volatility analysis.

The other is the wrong priority between flowing with the trend versus predicting trend reversal. It took me many years to realize one of the author in one of the books I read stating .... let market worries about itself when it is going to turn. let market pick its own time and level where and when it is going to happen. You just worry and focus the in between.

Simple non-mathematical .. rocket science statement ... very philosophical ... very profoundly true!!! 

Trend don't change all the time .... only certain time and twice. This events accounts for less than 10% and 90% is the in-between.

If one spend 90% of the effort in market reversal prediction or forecasting, than one has the time allocation and priorities WRONG.

 

It need not be 200% perfect but it must be reliable and flexible to adapt into a changing/dynamic trend



Tuesday, August 11, 2020

Bursa F- KLCI ..... slumberland

 

The Futures KLCI ... .. has paused .........daily in the purple zone ....no where to go and the weekly as well 

Uncomplicating a simple process ....

 Looking back my 30+ years journey, and not many people can last that long in the arena ...I look into the different stages or phases as a "market opportunist" trying to learn, unlearn and relearn all thee different things about financial markets. The DOs and DON'Ts. The truth and the facts and the fakes.

 From the perspective of writing reports, it is how you write to prove to the readers your "academic intellect". Whether it is going to make money or not is IMMATERIAL. GAYA MESTI MAU!!!!

 From the viewpoint of managing your own personal funds, I can only say that a streetsmart approach is the right strategy. There is nothing intellectual and all it takes is to work on simple rules that is reliable. One can use the most orthodox approach and still be profitable.

I believe that the MUST get rid trait in ones mind is to completely ban the mindset of using some tools to PREDICT market like fortune telling!!! Most people will spend lots of time and effort to PREDICT the market which happen only at 2 points of the trend ..namely START and the END. The rest of the time is BETWEEN the start and the end. Probably 90% of the time. Or at least 80%.

A realistic and most streetsmart is to focus the in between where big bucks or meat is!! 

You to be in when it change and out when it change again.

 

 

 

 

 

 

 



 

      

Thursday, August 6, 2020

CPO Futures and KLCI Futures ---- Somber sleeepy heads

CPO futures seems to be holding up and waiting for some impetus to decide the next direction

Futures KLCI seems to be dragging its feet

Wednesday, August 5, 2020

Mid day ... KLCI Futures .....what a feeling

 Oh ... what a feeling what is going on to KLCI ???



Dominated by junk stocks 99.9% on the front page ... guess the cowboys are back .....noo  UMA no question asked ... Bursa need to show to create excitement even if it is DIY

Tuesday, August 4, 2020

KLCI ...Daily n Weekly chart update as of NOON 4 Aug 2020


Well well well ... let the charts tell you the story ...I might end telling you some different storyline. ...


KLCI and the rest ... USD vs the "alternatives"


The USD Index and WTI seems to have an opposite effect. The DJIA continue to be world Index leader while KLCI outperform STIndex.

Silver was a Johnny come lately while BITCoin has  decent rebound.... Unlike a few years ago the buzzword was Bitcoin ... now I don't hear people talk about it in any conversation.

Monday, August 3, 2020

Thursday, July 30, 2020

CPO Calendar Spread n FKLI .... snapshot


The Calendar Spread has returned to sober state after drunk while trend driving.


The FKLI ... seems to be reluctantly moving cautiously.... too close to call

Tuesday, July 28, 2020

Future KLCI ... Bursa morning update .. before lunch break

Well well well ... all moving in the dirt brown laterite road. So we all are stuck in this until it breaks out.

UP or DOWN when it breaks out?/??? Just be patient and what for market to show and lead us along..

No need get excited. Market will do what it wants to do. What it wants to do is the easiest task and never the hardest task. That is why it will keep doing what it is doing until it is tired and change to a different actions completely.

Don't waste time trying to tell what market should be doing... utterly waste of time. NO ONE IS GOING TO LISTEN TO US except we listen to our own voice!!! Sound like a mental unsound people self talk!!!!

CPO Oct-Nov Spread returning to earth ... Mission Accomplished


Some sort of sobriety ... Soon the Malysian DWI .. will be passed with heavier penalty. This spreader drunk drivers now need to behave!!!!

Sold spread yesterday ... now waiting to exit ....!!!!

Monday, July 27, 2020

Snap shot CPO on Friday close



The OCT month is the most active month with declining volume going forward and backwards. In the case of CPO, for its own reasons the Calendar spread seems to be actively traded.

This is the only Commodity Futures product that I know with such activities. WHY ??? I don't know and I don't understand. This is just an academic curiosity as I try to comprehend such phenomenon.

Coming back after a short diversion, looking at the table above, it shows the actions is around the active month with declining volatility beyond the active month. IT is safer to trade the forward upcoming months

Sunday, July 26, 2020

Economic Analysis versus Chart Analysis - Agreements or Disagreeements. - KLCI Futures ,,, view

Many will perceive and view the chart proponents and economic financial analysts are 2 different poles all the time. Actually they are not and the disagreements will be when they 2 schools diverge and when they converge in agreement.

In fact more we will find when prices move to the extremes, both camps will be chanting not sustainable and "expensive" / "cheap".

These are 2 moments when price at extreme peak/bottom that it is most likely the 2 different schools will be on the same page.

The major time the differences will come in during the period of in-between 2 extremes.


Monthly chart - using the old technique .....we have the GREEN mov. avg as the ceiling, RED and BLUE as the support on the big picture.



Both Weekly and Daily only tell us the trading range. It is in a state that the upthrust is a suspect and trading with the 50-100 points range until the break out happen.

Indicators interpretation is all not so rosy and the daily ones seems to agree.

Will there be a final thrust up before the fall ??? or that is all we are going to see now>>>>

Such a price consolidation will mean EVENTUALLY it will break away either to up or down side.

Let us wait for the drama to unfold....

  

Friday, July 24, 2020

CPO - Calendar Spread and Squeeze .... what a day for the SQUEEZE!!!!!








The table above shows the CPO Spread Quotes for the active months and the corresponding charts.

The big squeeze has been the OCT active months outperforming the rest in this unprecedented rise today!!!!

The bull run ... or bear squeeze is OCT and lesser in NOV ...

The forwards months are relatively quiet from Jan till June.... Looks like the CPO marketeers have manage to convince more CPO usage !!!!

Drink CPO, bath with CPO, moisturize with CPO, Soak in CPO, ......Cleanse with CPO, Sterilize with CPO, Sanitize with CPO and don't forget to DEEP FRY with CPO!!!!

With the new culture  there will never be sufficient CPO to supply for the next decade!!!!

Sensing something was not quite right, I decide to SELL the forward months in 2021 and long OCT 2020!! ...

I made the right choice and decision.

We will hear the news later why the squeeze if there are any or maybe just a typical classic STOPS triggered!!!!

Tuesday, July 21, 2020

Dual personality - Dilemna - Making the best of 2 schools

Unless one make mistakes, it is unlikely one can learn to prevent this from happening in future. Having sit on both side of the table, wearing the classic economic finance hat where I have to speak and communicate in the FINANCIAL ANALYSIS lingo and as a trader which only see the trend, this has been a struggle combating the 2 mindsets and personalities.

At times both are conflicting and at times both are in-line. Well, you guess it, the verdict and the judge is no other than the market that marks your positions!!!

As I have numerous occasion brought up and focus on this conflicting status, this are real and very challenging to try and find which direction or analysis to adopt when it comes to market.

Price is a product of 2 components namely the LINEAR and the NON-LINEAR factors.

I will define LINEAR as the Financial Economic Components and NON-LINEAR as the PSYCHOLOGICAL components.

The LINEAR components can be deemed to be MEDIAN and the NON-LINEAR as the VOLATILITY/EXTREMES around the MEDIAN.

Having said, it is highly unlikely a LINEAR personality will be able to understand the non-LINEAR paradigm unless one take the effort and initiatives to explore the other universe.

With the analogy of non-linear oscillating around the linear median, it means there will be time when the 2 personalities will agree before they separate and diverge. The linear will call the non-linear as undervalue or overvalue.

The LINEAR personality tends to portray the "giving orders attitude" that the price should be this or that. The non-LINEAR will be ignorant of the LINEAR, zoom up and down, does what it wants to do waving to standing LINEAR as it pass by to and fro.

Linear will be so preoccupied with  all the formula and analysis while non-Linear will be just surfing along.

Once one can grasp this 2 personalities, one need to come to an understanding agreement that, one need to find a methodology to latch on the non-Linear and be productive.

The mix-up characters of non-Linear come due to some that preach and focus so much about projection and forecasting like fortune telling. Than we have another school who practice trend following.

This 2 attitudes can complement each other if one knows how to manage. One can do the forecasting between NOW and THEN. What happen between now and then is actions and trends. The projection can be right or wrong only market will decide for finale. Just like market will decide the outcome. Not LINEAR and NOT non-Linear.

The conflict between LINEAR and non-LINEAR is all about EGO. Well market will say, fine, I am going my way..

Like all objects in motion, one can develop tools to track the motion activities. Sometime there is acceleration, steady state (no deceleration or no acceleration) and sometime there is deceleration. Until the price change direction, the trend will undergo all this 3 forms or velocity state before it finally concede to end the existing direction superseded by a new direction.

While one is bias to have only UP and DOWN direction, one must not IGNORE SIDE WAY as a DIRECTION. SIDE WAY IS ALSO A DIRECTION!!!

Remember we are dealing with a dynamic living creature which is NON-Linear most of the time. It is not easy to accept that one has to completely obey the market no matter how irrational or drunk market action seems to be. Until we release this knowledge ego and humbly listen/obey the market, it will be an uphill battle until we get our mind to understand what market is all about.

OBEY OBEY OBEY



Sunday, July 19, 2020

Financial markets - Commodities - FX - Derivatives - ONE DIRECTION

The financial markets is the arena where all people are welcomed to display their skills and knowledge. Many people will come with all sorts of views, ideas and opinions to test it out and to battle.

I have my fair shares of winnings ...losses ....and most of all the experience to learn and understand that market is about not how much we believe we know or need to know and believe we must know to qualify as expert. Most ignorant people comes from this tangent and are manipulate to believe this are all the per-requisites.

When the prices rise beyond the so-called "fair value", there will be voices of fundamental calling this as irrational, overpriced, overvalued, not sustainable, or maybe even some might even call for further rise with more demands or insufficient supply.


On the reverse, when the price drops below the "fair value", we will hear the opposite

The "arena" is where the fights are fought. The price gyrates with different intensity anyone who believe the financial analytical approach can discover the true value of the price will be dismayed that price can remain aloof for a long time or depressed for a long period before it finally touches the "fair value".

Market is not about fair value or any value. It is about perceived acceptable agreed value that changes all the time.

I have my own encounter buying into grain commodities future contracts, knowing that are trading below production cost and they are "undervalued bargains". Well, I did sit and waited and rolled my contracts for months until the grain contracts turn from losses into profits!!!

On the opposite, I have also experienced selling products/stocks that per textbook finance to be deemed irrationally overvalued only to see the prices scaled and climbed many times more than my exit levels.

After trading and testing and trying all the different methodologies over 30 years, I conclude by saying understand the charts.

I have my fair shares of tolerating the pain when market trend is against my positions in a rising market thinking that the economics DO NOT warrant this prices before it finally turn around in my favor. Such painful and harrowing experience can be attributed to my one and only factor - NOT listening to market fighting a battle between the "outside" world of actual physical conditions versus the market trend which is completely opposite and seems to imply the ECONOMY that we see and feel is IRRELEVANT!!!!

The message I am getting is .... market is telling me that it is is not bothered about what I think and feel with regards to the actual economy and finance. All this are irrelevant to market actions!!! If it is not time for the trend to change, it is not going to change. If it is time to change, no one can stop it and no reasons can deter it either.

When we contaminate chart analysis with economic analysis, we are bound to create more troubles and confusion. This will only lead to the inner battle struggling and mental paralysis.

WE CAN'T AVOID SEEING and READING ALL THE NEWS and ALL THE ACTUAL HAPPENINGS AROUND US. But we have to be blind and deaf to all we read, hear and see in the media including our first hand encounters. Challenge our inner personality to sense the charts and believe what we see on the charts.   We are taught, trained, groomed and wired to think in a certain SOPs. As far market is concern, this SOPs are wishful acts which has no added value to the trend. Sometime, our analysis will agree with the trend direction. Sometime they don't. IF our SOPs analytical process is correct than it should be 101% in-line with market trend. Since it is not, I guess we have to dump this SOP!!! Listen to the market. Believe what we see and stop arguing with the market.   

I have resigned to the fact that, battling the market is not going to be easy and 99.9% will be wrong. IF we are the 0.01% that are proven right, such victory will create false confidence that will definitely lead the a faster path to deadend.

It is all about the least we know, the better off we are. It is about believing what we SEE and not what we hear. It is about having no opinions about market. It is not about telling what market should be doing. It is not about imposing your beliefs, views, opinions no matter how thorough you have done your analysis.

IT IS ABOUT ACCEPTING and BELIEVING THAT IF IT IS NOT CHANGING, HAS NOT CHANGED and NOT ABOUT TO CHANGE, it is not going to change, no matter how ridiculous it seems.

WHEN THE TIME HAS COME and RIPE for a long overdue change, it will change accordingly.

I humbly accept that all my wishful thoughts are totally absolutely irrelevant to market. As long someone is willing to pay more on the way up, it is not going to come down. Until the sellers stop dumping the price lower, the price will not recover. As simple as this statements may seem, they are the truth and not complicated or sophisticated.

Market has taught me lots and if there are mistakes and errors, they are mine. When I defy my system with disbelief, I will be penalized.

Market is not at all bothered what it is doing and continue to do what it wants to do. If it wants to go up, up it will, or if it wants to go down, surely down it heads, and if it wants to stay flat, it will also remain flat.

The fact is every action is not eternity and time will come for a change. It is a matter of WHEN and WHERE.

There are "general" signs of change or symptoms. They are not foolproof but sufficient guidance.

The sky can be as dark it looks, until the rain starts to pour, we can't classify it as raining!!!

Thursday, July 16, 2020

KLCI correction??? The chart REIGNS!!!!

The alarm was ringing when I last posted the chart on KLCI.... yes I m  talking about the correction. Well...I guess I better to believe what I see and not my wishful hope ....

If my views are not in-line with the charts ... the inner struggle and the dual personality manifest. In the end I have to admit, the chart REIGNS and it is the KING or EMPEROR.

No one can defy the chart no matter what we feel or how rich we are or how high we sit in the tower or how highly educated we are. The chart trend reigns and irrespective of us and disagreements.




Wednesday, July 15, 2020

Futures KLCI ---- midday


Are we going to go into temporary consolidation??? Something is brewing from the chart ... if break the upper brown than looks like we got a few days for the KLCI to take a rest !!!!!

Monday, July 13, 2020

Bursa FKLCI .... oh la la .... Market endorse mooooohideen .......


As long the price is in the green zone heading up ... the route is still KLCI is UP ... if it goes back the brown path, than I might have to retink abit ///

Forget all the story about economy and unemployment ...... as long the Index is happily and easily want to defy gravity, nothing you and I can do anything about it. Not even the worst economy headline can stop the rise if the time to change is not there!!!!

The time will come for each of this trend to change ... so far ... looks like it is sunshine!!!!!  

oh CPO //// ... mirror mirror on the wall ...where way are you going????


Where do you think it is going next? .........The answer is the direction where it has the most support and easiest to flow.

IF the price should head south and cross the black dash line as the boundary for the blue territory between the 2 sides ....than you should know what to expect.

With the brown path holding horizontal ... means still range trade.





Looks like we need to wait a bit for trend to develop