Trading and investing are my something I enjoy – an outlet for my analytical side.
- Have a rough plan on how to in/out incl. dates, fibonacci, target $ & the corresponding profit.
- Routinely check eod charts for entry.
- Whilst still working full time, I will go in/out med term 1-3 years, based on chart/dates (for stock).
- Once I can devote a good time on stock research – full time – I can do value investing more thoroughly i.e. know know my stock’s business operations.
Style of (stock) trading
- Medium term 1 – 3 years (trending for stock)
- Blue chip
- Top down – fundamental in the right (economic) cycle for the industry & the best company (Strategic)
Style of (forex) trading
- Top down – fundamental in the right (economic) cycle for the trade (short/long)
- Ranging (70% 80% of the time)
- Trending upwards
- Trending downwards
- Overlapping Bollinger Bands with standard deviation 1 and standard deviation 2
The ones overlapped are indicators to buy or sell or do nothing.
- ATR (below 25, no trend, above 25, there is a trend)
- Leading indicator: Divergence
Continuation = Hidden divergence
Reversals = Regular divergence
Lagging: test strength using ADX
If above 25, trend is strong
Trading in a ranging trend
Note to self: my favourite.
Identifying the ranging trend:
- Low ATR is below 20 = ranging
- Increasing ATR = increasing volatility
- Decreasing ATR = decreasing volatility
Indicators for trading
- Oscillators: RSI and stochastic overbought and oversold
- Support and resistance line
Trading in a ranging trend – be wary of reversals and retracement
- Fundamentally supported
- Broke through strong support or resistance levels
- Broke through trendline
- Fibonnacci won’t go past 50%
- Won’t break strong support
Trading in a ranging trend be wary of breakout
Note to self: I look for safe and secure profits, I have incomes from elsewhere, I don’t trade on breakouts.
How to gauge the volatility
Contract or tight = low volatility
Big band = high volatility
Low ATR is below 20 = ranging
Increasing ATR = increasing volatility
Decreasing ATR = decreasing volatility
- As simple as body of the candle (1day completed, at min)
- Economic data
- Business calendar
- Most importantly, the fundamental *and* the sentiment supporting the price change
- I won’t cover the rest.
- I won’t trade breakout.
Oscillators:RSI & Stochastic
What to use
- Trend line
- Candlesticks double bottom or double top
- Support or resistance lines
- RSI or MACS lines only
If trend line of the candles are going up (remember how to draw trend line properly) and,
the peaks or troughs of the momentum indicators forms the opposite direction trend line,
Indicator = reversal.
If price trend changed direction recently, and
momentum indicator is still on the old trend,
Indicator = price will continue on the new trend.
Exit point –
when HH is being established
Key points used:
- Fibonacci extension
- Dates (company (results hearings/div announcements/etc), economic data calendars, and global eg key election dates, key public holiday (of US, EU, AU), trade wars, IMF, G20, etc.)
- Yahoo Finance
- Note: check only at end of day is sufficient