Monday, July 25, 2005

Muted market

Market closed mixed today. Bears lead Bulls marginally. Those china counters thought to be benefiting the Yuan revaluation gained. However from the sidelines, it seems like market looks confused, not convincing in moving up or down. Full Apex, a chart request yesterday, gained +0.015. According to T.A, this fella is in uptrend.

People's Food: It was mentioned in the forum alot today. T.A wise, a buy with tight stop loss. I would advise caution with this one as China had news of farmers dying with a mysterious virus after slaughtering pigs. If it is confirmed, then this fella might head south.

Jurong Tech: The recent heavy selldown has eroded away my profit in this counter. It sets me pondering. How should I avoid this? I refered to my trading book and remembered this "As soon as the price move away from daily average, the rule of thumb is to protect 50% of paper profit"..... Another lesson learnt. I'm lucky i can learn this from paper profit. If I had used cash. The lesson will be learnt with a price.

Raffles Education: Another trend reversed in Decipher Gems list. Dumped out of my list.

Rotary: Trading chance! Weekly trend seems to head up and this is inline with the gas and oil play reported after a rebound in oil price. Click the chart to see cut loss and buy.

SMT: A turn in the weekly trend was spotted. Trend reversed. Vested at 0.715, now cut at 0.740. A 0.025 profit.

From all my paper trading in a bid to test my trading system, I have received harsh comments that paper trading is useless as emotions are not involved. Emotions normally hinder our thinking process. I agree with that. However, it must be noted that paper trading gives you a chance to fine tune your trading system or method against good or bad market condition. It sort of get you ready to do cash trading. Why do we have fire drill evacuation? It is to allow you to know what to do when you hear the fire alarm. Now think about trading, when a sell or buy signal is generated, from all the practises via paper trading you will know what to do.
Things i learnt so far:
1) 50% profit protection
2) Buy only when the Weekly Histogram is below Zero line. In Decipher Gems, only ST-Eng is picked from below zero. The rest were medium risk decision where the histogram was above zero. Rational being, when it is under zero, it has more upside. If you have doubts, just look at the above charts posted, you will realised that right from the bottom of these reversals, the profit is much higher! Check out my blog daily. Whenever I find such GEMS, I will share with you! Although sometimes I do feel left out in rallies, but I tell myself not to be bothered as chasing rallies can result in very painful lessons.

Tomorrow Suntec Reits Results, watch out for it!

People, I had added a Fundamental link on the left. Look out for it. It contains my research on investing stocks based on Fundamental Reasons. Decipher not only knows T.A, I am learning F.A too. I think the our CPF needs to be invested in good fundamental stocks rather than just earning the miserable interest by CPF. hehe