Trading Edge

(SGX/RHB 2015 Malaysia trip (part 1: Malacca/Subang)

Defining your trading edge through knowing market sentiments, with additional edge through understanding price action (with candle sticks) … …

I've just come home from a trip to Malaysia (Malacca/Subang) to help SGX create awareness of our Derivatives products, as well as sharing some of my trading edge (including winning mindset) to traders there.

To show appreciation to the hospitality by the organizers (RHB Investment Bank Berhad management & staffs), as well as the wonderful audience group, for showing me your full enthusiasm throughout the 3-hours presentation session, I'm writing this article to briefly summarize my presentation there.

I've shared the following concepts:

A) My emotion lines to gauge market sentiments

B) Quantitative Analysis of Index losing 20% to declare a bear market

C) My four seasons (color) to know which phase market is in, with just a glance ***Go to Archive Apr25 to revise "Trade with the four seasons"

D) How candle stick PRICE ACTION offers the ultimate edge of market entry

E) Combining your edge

F) Learning from history

G) Contrarian Approach

***Go to Archive Jun28 to revise "China market plunged ..."

H) A Sniper trader's beliefs/mindset

A) My emotion lines to gauge market sentiments

1) Looking at the most recent history in 2007/2008, emotion lines gave me the message when market first shouted "I'M GREEDY". Best entry point for catching trend, when lines "open UP", from squeezed position.

2) When emotion lines open up wide, that's when volatility is also expected to increase. While profession traders can take advantage of the increased volatility, it's not the ideal market condition for beginners to handle. This is also when you can expect greed to turn into EUPHORIA.

3) Emotion lines gave me the message when market turns from greed to FEAR. Considered the first exit signal for long positions for trend investors, while bears can start to deploy their "short strategies".

4) When market shouts "I'M FEARFUL" again, and buyers still do not react or take the appropriate actions, then don't blame the government.

B) Quantitative Analysis of Index losing 20% to declare a bear market

Among the few Asian markets which I follow, these 4 have screamed FEAR since 6-weeks ago (some earlier). They have lost between 14-18% from their respective highs. If they were to drop "a bit more", it would enter into "bear market declaration".

C) My four seasons (color) to know which phase market is in, with just a glance ***Go to Archive Apr25 to revise "Trade with the four seasons" D) How candle stick PRICE ACTION offers the ultimate edge of market entry

I shared with the audience these 2 basic, but absolutely useful candle signals, the Shooting Star, and Hammer, using them to identify swing high and swing low points.

E) Combining your edge

Using their own index to illustrate, you can visually identify there's definitely trading edge, over the last 3-years data, using only these shared indicators. F) Learning from history