Market View 18 October 2011

Finally, European and US stocks fell in overnight
trade and if you simply want to hear a news to
justify the fall, then this is the report, "U.S. and
European stocks fell on Monday and the euro slipped,
after Germany dashed hopes that the euro zone debt
crisis would be resolved at next Sunday's summit of
European leaders." If you choose to believe me, then
I will tell you that this is just a normal retracement from
the recent surge-up and it is just a time to reshuffle the
cards in the market now.

The perfect scenario for the retracement will be a
5-8% fall for the indexes and a 10-15% drop for the
stocks, but sometimes the scripts are just too perfect.
I believe we will still see selling for the next couple
of days as profit-taking will take centre-stage.
During this period, then we can see that who is still
strong while others are bleeding.

I will once again publish the email sent by a reader
in reply to what I posted in the blog yesterday.

"Hi stocklobang

 

Thanks for the replies on your blog, can I ask more questions?

 

1. Can you actually share with me or the other members

about some of your trading strategies? 

2. As regards to how & interpretation of charts, is it convenient

for you to share more details?

 

ANS: I will talk about how I trade in the next 2 days or so. Few months

back, I actually did mention about my trading style or methods but I

guess they are lost in the cyberspace already.

 

3. I bought some STI call warrants when the STI is 2620, although now it is showing quite decent profit, but I was unsure how high our STI index can go. From my chart, I saw resistance at 2910 or 3000 but I am guessing at 2800, there should be some profit taking, thus I would like to know your views about it? 

 

With regards to trading warrants, I can say that is not my

cup of tea as I stick to stock trading as my main focus.

I am a firm believer of using trailing stops to protect the trade,

to preserve the profits gained, and to prevent a winning stock

from going into a loss. I sincerely urge the reader to adopt it as

well as it is simply a beneficial and essential trading practice.

My view is that set a trailing stop with the warrant, and if the price

got hit, then you are stop-out with a profit. The main argument to

the trailing stop practice is that "what if the stock/warrant rebound?"

Very easy, just ask yourself truthfully, what are the success rate

and chances of such thing happening with the trades that you 

have done and completed. I can tell you that most that time the

fall will become worse, and the praying sound will also become

louder and more desperate and morale-draining if the profits

reversed into losses. I rest my case.

Enter any position with a Cut-loss level & Trailing Stop,
and Please practice strict Money(Risk)-management.
If you don't like what you see in the market,
simply don't trade.

If you have Skype, and would like to chat with me about
stocks and all others, you can ring me at my
email address: stocklobang@yahoo.com
I have currently a couple of members skyping with me
everyday,and they are having good trading results.
See their comments here:
http://stocklobang.blogspot.com/feeds/comments/default

As usual,
Stay Alert but be Aggressive too.
Audentes Fortuna Juvat !!

市场生存座右铭: 风林火山 

别人笑我太疯颠，我笑别人看不穿