Have any of you ever gone thru a period where you as a trader/investor have to take losses after losses. First, you take a trade and you find out that you made a mistake. So, the trade reaches your stop loss point and you cut your losses. You feel - unsatisfactory to say the least. You want to regain it as fast as possible. You then trade larger amounts/lots/contracts. In the end, you end up losing more. Is it down to luck? is it because you followed your broker's recommendation? NO!! It is all down to being disciplined and poor money management. You cannot blame anyone else but yourself.
I have just gone thru such a period. Losing is such a bad feeling but I guess everyone have to go thru such a period before one can learn (if one ever learns). Well, I have to just take it in stride as Bob Prechter says. Here's a part taken from Elliot Wave International's website - It's all about "Fives and Threes"
Here's how Bob Prechter, Elliott Wave International's founder and CEO, put it in his classic 1986 report, "What a Trader Really Needs to Be Successful":
"...my observation, after eleven years in the business, is that the biggest obstacle to successful speculation is the failure merely even to recognize and accept the simple fact that losses are part of the game, and that they must be accommodated. The perfect trading system does not exist. Expecting, or even hoping for, perfection is a guarantee of failure."
Trading is tough (very tough if u are a beginner), and don’t let anyone tell you otherwise. Don’t let them tell you all you need is a correct forecast, either. That is maybe 20% of your success, but you only realize that after you've traded for a while.
Wednesday, 30 April 2008
Monday, 28 April 2008
A tad more upside likely
A tad more upside is likely for both the KLCI and STI. The KLCI could break the 1,300 mark again soon before reaching a peak around the 1,314-1,320 levels around early March. On the other hand, STI could continue to climb to about 3,265-3,330. I believe that the regional and global markets have found a bottom back in Mar. This rally (wave 1) would likely end around the second week of May. Wave 2 correction could take about a month. Then we could finally see the strong and bullish Wave 3 around June/July. Investors ought to look to buy stocks when this pullback occurs. This could be the last chance saloon before the BEAR sets in. So, traders and investors alike, ought to ride this final leg. This is going to be a wild ride and everyone is going to be SUPER BULLISH!!! So, when the time comes (i.e. newspapers and magazines says that the BULL is back, BEWARE!!!) - that could be the end of this final leg :)
Stay tuned!!! Good luck trading!
Stay tuned!!! Good luck trading!
Friday, 18 April 2008
Interesting article on Bloomberg
Leading Economic Indicators in U.S. Rose in March (Update2)
2008-04-17 10:42 (New York)
By Courtney Schlisserman
April 17 (Bloomberg) -- The index of leading U.S. economic indicators rose in March for the first time in six months as cash poured into the banking system and the Federal Reserve
lowered the benchmark interest rate.
The Conference Board's gauge increased 0.1 percent, as forecast, after falling 0.3 percent in February, the New York- based private research group said today. The measure points to
the direction of the economy over the next three to six months.
The improvement is a tentative signal that the economy, after deteriorating in the first six months of 2008, may not weaken further in the second half of the year. The report
indicates the Fed's rate reductions and efforts to ease the credit crisis may help mitigate the damage from the slump in subprime lending.
``We are flat to negative in the first half and we expect some of these elements of policy to kick in the second half and start to see some improvement,'' said Peter Kretzmer, a senior
economist at Bank of America Corp. in New York. ``But the uncertainties surrounding that forecast are certainly increasing.''
A report from the Philadelphia Fed, issued at the same time, showed manufacturing unexpectedly contracted at a faster pace in that region as measures of new orders and shipments dropped.
Economists Forecast
Economists forecast the leading index would rise 0.1 percent, after a previously reported 0.3 percent decline in February, according to the median of 55 projections in a Bloomberg News survey. Estimates ranged from a decline of 0.3 percent to a 0.4 percent gain.
The increase in last month's index brings the decline for the last six months to a 3.3 percent annual pace. A drop of 4.5 percent or more over six months usually correlates with a recession, according to economists at the Conference Board.
``While latest data do not support the assertion that we are in a recession, growth remains weak, a situation that may continue,'' Ken Goldstein, a Conference Board economist, said in
a statement.
Five of the 10 indicators in today's report contributed to the gain in the index, led by a jump in the money supply. Slower supplier deliveries, which indicate an increase in orders, and a
steeper yield curve were also positive.
Credit Markets
As credit markets seized up, the Fed on March 16 gave all primary dealers in U.S. government bonds the same access to loans formerly reserved only for banks. The central bank now auctions as much as $100 billion in funds a month, making it easier to liquidate some hard-to-sell assets. The yield curve, or the differential between the Fed's benchmark rate and the yield on the Treasury's 10-year note, also widened last month. The central bank dropped its target rate by three-quarters of a point to 2.25 percent on March 18, leading to a steeper curve.
The yield differential turned positive for the first time in February after 19 months of negative readings that subtracted from the leading index. The Fed has cut its benchmark rate by 3 percentage points since September, with two-thirds of reduction coming in the first three months of this year.
A report earlier this week indicated factory sales are improving this month, in contrast to today's Philadelphia report. The Fed Bank of New York said April 15 that its shipments index rose to 17.5, from minus 5.2 in March.
Recession Forecasts
The economy probably is in a recession, according to James O'Sullivan, a senior economist at UBS Securities LLC in Stamford, Connecticut. Economists surveyed by Bloomberg News earlier this month projected growth in the first half of the year will come to a halt. A majority of those polled forecast the U.S. is, or will soon be, in a recession.
The Fed yesterday said economic growth slowed in nine of 12 districts since February, hurt by ``anemic'' real estate markets and a slowdown in consumer spending, according to its regional
business survey known as the Beige Book. Earlier today, the Labor Department said more Americans filed first-time jobless claims last week and the total number receiving benefits rose to the highest level in almost four years, a sign the labor market continues to weaken. The number of initial applications rose 17,000 to 372,000.
Claims were the biggest drag on the leading economic indicators index last month. They averaged 375,900 in March and subtracted 0.25 percentage point from today's gauge.
Negative Influences Other components that subtracted from the leading measure included decline in consumer expectations, stocks and building permits.
J.C. Penney Co. Chief Executive Myron Ullman said yesterday that the company will moderate its growth plans in the next year to cope with a ``consumer environment that's very hard to predict.''
The Conference Board's coincident index, which looks at real incomes, employment, industrial production and business sales, rose 0.1 percent in March. The gauge declined in two of the prior four months. The measures are among those tracked by the National Bureau of Economic Research in determining whether a recession has begun.
2008-04-17 10:42 (New York)
By Courtney Schlisserman
April 17 (Bloomberg) -- The index of leading U.S. economic indicators rose in March for the first time in six months as cash poured into the banking system and the Federal Reserve
lowered the benchmark interest rate.
The Conference Board's gauge increased 0.1 percent, as forecast, after falling 0.3 percent in February, the New York- based private research group said today. The measure points to
the direction of the economy over the next three to six months.
The improvement is a tentative signal that the economy, after deteriorating in the first six months of 2008, may not weaken further in the second half of the year. The report
indicates the Fed's rate reductions and efforts to ease the credit crisis may help mitigate the damage from the slump in subprime lending.
``We are flat to negative in the first half and we expect some of these elements of policy to kick in the second half and start to see some improvement,'' said Peter Kretzmer, a senior
economist at Bank of America Corp. in New York. ``But the uncertainties surrounding that forecast are certainly increasing.''
A report from the Philadelphia Fed, issued at the same time, showed manufacturing unexpectedly contracted at a faster pace in that region as measures of new orders and shipments dropped.
Economists Forecast
Economists forecast the leading index would rise 0.1 percent, after a previously reported 0.3 percent decline in February, according to the median of 55 projections in a Bloomberg News survey. Estimates ranged from a decline of 0.3 percent to a 0.4 percent gain.
The increase in last month's index brings the decline for the last six months to a 3.3 percent annual pace. A drop of 4.5 percent or more over six months usually correlates with a recession, according to economists at the Conference Board.
``While latest data do not support the assertion that we are in a recession, growth remains weak, a situation that may continue,'' Ken Goldstein, a Conference Board economist, said in
a statement.
Five of the 10 indicators in today's report contributed to the gain in the index, led by a jump in the money supply. Slower supplier deliveries, which indicate an increase in orders, and a
steeper yield curve were also positive.
Credit Markets
As credit markets seized up, the Fed on March 16 gave all primary dealers in U.S. government bonds the same access to loans formerly reserved only for banks. The central bank now auctions as much as $100 billion in funds a month, making it easier to liquidate some hard-to-sell assets. The yield curve, or the differential between the Fed's benchmark rate and the yield on the Treasury's 10-year note, also widened last month. The central bank dropped its target rate by three-quarters of a point to 2.25 percent on March 18, leading to a steeper curve.
The yield differential turned positive for the first time in February after 19 months of negative readings that subtracted from the leading index. The Fed has cut its benchmark rate by 3 percentage points since September, with two-thirds of reduction coming in the first three months of this year.
A report earlier this week indicated factory sales are improving this month, in contrast to today's Philadelphia report. The Fed Bank of New York said April 15 that its shipments index rose to 17.5, from minus 5.2 in March.
Recession Forecasts
The economy probably is in a recession, according to James O'Sullivan, a senior economist at UBS Securities LLC in Stamford, Connecticut. Economists surveyed by Bloomberg News earlier this month projected growth in the first half of the year will come to a halt. A majority of those polled forecast the U.S. is, or will soon be, in a recession.
The Fed yesterday said economic growth slowed in nine of 12 districts since February, hurt by ``anemic'' real estate markets and a slowdown in consumer spending, according to its regional
business survey known as the Beige Book. Earlier today, the Labor Department said more Americans filed first-time jobless claims last week and the total number receiving benefits rose to the highest level in almost four years, a sign the labor market continues to weaken. The number of initial applications rose 17,000 to 372,000.
Claims were the biggest drag on the leading economic indicators index last month. They averaged 375,900 in March and subtracted 0.25 percentage point from today's gauge.
Negative Influences Other components that subtracted from the leading measure included decline in consumer expectations, stocks and building permits.
J.C. Penney Co. Chief Executive Myron Ullman said yesterday that the company will moderate its growth plans in the next year to cope with a ``consumer environment that's very hard to predict.''
The Conference Board's coincident index, which looks at real incomes, employment, industrial production and business sales, rose 0.1 percent in March. The gauge declined in two of the prior four months. The measures are among those tracked by the National Bureau of Economic Research in determining whether a recession has begun.
Thursday, 17 April 2008
US Dollar on its final leg downwards
US Dollar (USD) has hit its all time low last night against the Euro. So, expect more downside for the USD in the near term. However, over the longer term, I believe that the USD is on its final 5th wave down. The 5th wave is the terminal wave for its rally/decline. After this wave is done, I see the USD rebounding strongly.
How would this affect the equities? I believe that the stronger USD would help lift the US market out of its doldrum, even if it is only for a 2-6month period. And if Wall St climbs, regional markets around Asia would also follow suit. I see positive signs for the global equities market in the short 2-6month period.
How would this affect the equities? I believe that the stronger USD would help lift the US market out of its doldrum, even if it is only for a 2-6month period. And if Wall St climbs, regional markets around Asia would also follow suit. I see positive signs for the global equities market in the short 2-6month period.
Monday, 7 April 2008
Critical week
This is a critical week for global indices... I believe that we may have seen the bottom for most global indices in March. All of the indices have rallied from the March lows. Right now, the bulls are fighting to regain the upper hand. Most indices are fighting to regain the 100-day SMA and 200-day SMAs. Breaching these levels usually means that it is bullish or bearish in the medium term. Breaking above these levels would signal that the medium term uptrend has resumed while breaking below these levels would signal more downside in the medium term. Right now, all are on the verge of breaching 'above' and hence it could be very positive. However, looking at the short term momentum - the breach is unlike to happen just yet.. global indices may pullback a tad before it can rally past these difficult resistances. So, be prepared for a pullback.
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