Trading Q&A

Keep the questions coming guys and gals!

30 Nov 05, 01:17Quest: in other words, if you decide to hold a position in a stock but the stock refuses to make any significant moves, how do you decide when to close the position?

Ans: If I am trading, volume plays a part in my decision to sell. Typically, I look out for strong volume but unable to break highs for 2 straight sessions. Shooting star or a big down day with volume. This is my trading system, it's only for your reference. If I see a better breakout signal and no cash. :P

If I am investing, I will only sell if I see big bear market coming just like 2002.

30 Nov 05, 01:16Quest: if a stock price goes into a tight trading range, how does one decide the holding period?

Ans: It is anybody's guess when it will breakout. No T.A will be able to pin point accurately. You just have to learn to watch the volume. Chartered is a recent example of a few tight sessions before the breakout today. You can check my Chart request blog for the chart.

29 Nov 05, 17:47Wynx: What's a married deal?


Ans: The price transacted is agreed by the parties concerned and is usually not more than 10% off the closing price of the share.
It it just two or more parties buy/sell shares without putting the shares in the market. They just have to cross the shares transacted on the exchange (for reporting purposes).

What is shares overhang? Stale bulls?
29 Nov 05, 10:48decipher: Share over hang means buyers buy at $4.00, then price declines, and now it is resting at $2.00. There are buyers at $4 waiting to sell thus makes it difficult to rebound

29 Nov 05, 10:44Quest: lets assume one is competely new to stocks and wants to trade some. what kind of methodical approach would you teach that person on screening for stocks?

Ans: I would advise picking liquid stocks. If you are looking for a whole series of stock screening, there are plenty out there on the book shelf. The cheapest and best book I had came accross is "How to make money in the stock market" by William J. O'Neil. For $20, you can start to trade like a pro. Trust me!

29 Nov 05, 00:43KopiO: Dear Decipher, I got 10,000 of AsiaWater but I dun understand the rights and warrant issuedrecently. Can you explain? Based on 1st Day trading of warrant, do you think i should subscripe or let go?

Ans: You should make clear and decide....are you buying because you want to invest for the long term? Or do you want to trade the trend? Base on this, you should make a better solution.

# posted by decipher @ 6:34 AM 0 comments

Thanks for the questions. Looks like you guys are not newbies! haha I was expecting questions on how to get started. hahaha One reminder, I will not update as frequent as my growmoney.blogspot.com, due to time constraints. However, I will surely spend weekend answering all questions posted in the week should I have no time during weekdays.

coldfusion: Hi Decipher, just one Q. Should a trader go long immediately after a breakout of a trading channel or wait for opportunity to go short instead? Your views pls..thks..:-)

Ans: It will depend on what you base your breakout on. As for me, my breakout plays must have 3 elements, volume, chart formations and price. If all 3 are present, then the odds are higher. However it is very seldom to see all 3 occurs. That is where your cut loss strategy comes in. Do not be fooled by a breakout without volume or a huge volume with little price movement.

jeme: how do u select a good stock in e first place?.. tons of them in sgx

Ans: Jeme, I select stocks base on, high liquidity (High average daily volume of at least 3 million), Fundamentals (I avoid shoddy companies), Chart formations, breakouts or simply bluechips. Although i'm very much a technical analyst, I do own SPH for long term. In trading, I open my eyes and ears to everything. It is important to approach this game with an open mind.

Ley San: how do you determine the resistance level?

Ans:By simple drawing recent highs in a straight line. For longer term resistance, use major peaks, short term resistance, use minor highs.

Ley San: how do you read charts? i just want to learn more abt RSI & MACD.

Ans: : ) How do I answer this? I find Alexandera Elder's Trading for a living very useful. It explains some of the most common indicators. If you look carefully, there are advertisers on my website, you can visit them as some are educational website like mine. Or you can do a google search. Plenty of free explanations.

Quest: are you a fulltime day trader? what do you trade in?

Ans: Nope, I hold a full time job. I prepare my analysis at night. It's what you do after the market close that is more important. There is no need to monitor intra day for me, as I do not trade intra day. I have experience in Simsci futures and shares.

Lily: I understand that there is an Inside Two method variant too. Apart from this variant, are there more variants to the original Inside Three Method?

Ans: Sorry, I am not aware of such methods. :P

Lily: How do you trade an Inside Three Method? Where should I place my entry and how to place my stops?

Ans: For Inside Three Method, I don't have the answers. As for entries, stops, i would place them according to technical indicators or chart formations.

Lily: Hi, may I ask something on candlestick charting patterns?

Ans: Yes Lily. I am trained on candlesticks as well.

sacredmarket @ SI: u trade the SIMSCI? how did u get started and what u use to base your decision on?

Ans: As I do not have live data feed at that time, I depended on my trading kakis for charts they share generously to me. I go long when MacD histogram is below zero line and sloping up and there is a bullish candlesticks formation on the 30 mins chart. Otherwise I will look out for bullish divergence or bearish divergence to go short. Last but not least, I always get a clear direction of STI and trade to that major direction.

wuiwui: i dunoe much abt TA. can help?

Ans: You must get started by reading...pick up one indicator at a time...do not rush..Market will still be there even if we all die. If you haven't started on anything, pick up candlesticks. Pay attention to the psychology behind the formation of candlesticks. It is important.

Quest: my question is what good newsfeed is there to subscribe to? for singapore market news. or is listedcompany the best(and free) way for this?

Ans: Actually, I shut my ears and eyes to news feed. Over time, I found that it is the least important to focus on. It clouds my mind. But it's always good to know what's happening. I am a member of Shareinvestor.com so that is my only source.

Dudes & dudettes,

It's very important to start early. So if you are just fresh out of school. Do not think trading needs a large sum of money and close your mind to it. Learn now and when the opportunity comes, strike! I have limited help back then and learn through losses! You should not be doing the same! Start winning now.

I'm providing a free coaching here for everyone to learn. Feel free to ask questions you not sure about getting started on stocks investing/trading in the chat box and I will reply them. Let's treat this as my form of returning to the society on top of the charity i do every month. Cheers!