Wednesday, 27 April 2016

Trendline drawing is fun!

Decided to do some trendline drawing practice out of boredom. Just a few stocks I was watching.
Pictures paint a thousand words? (Hack care about macd, stoch, rsi and what not... just kidding)

Can't seem to break out of its downtrend channel. Secondary uptrend occurred since my previous update but uptrend broken once ex-dividend. :(

Going sideway soon?
After being ditched by STI, will this salted fish break out to life again?

On a happy steep climb. For now.

* Disclaimer: These are NOT investment advice. Your own discretions apply in the chart usage.

Charting workflow in a nutshell

- Zoom out to 5 years or maximum, zoom in to 2 years, zoom in to 6 months or even more recent depending on your trade time horizon. See the macro and micro trends.

- Find trend, draw lines. Lines should be touching closing price of candles.
(no trend don't enter. sideway stocks don't enter. downtrend can consider shorting.)

- Determine the entry price based on an established trend, indicators or a break-out.

- Weigh the downside versus upside potential (risk to reward ratio).

- Determine the stop-loss price somewhere below the support. (eg. Stanchart can set stop-loss, put minimum selling price much lower cos if price breaks below it that would deactivate the stop loss.)

- Position sizing, calculate what is a fair amt of shares to buy (eg. not more than
x% of investment capital).

- If price follows trend channel, let your profit runs. If it fails, get out.

- Set trailing stop losses (based on new suport levels) to reap profit before trend-reversal happens.

- Sell if bad news about the company broke out or major support level broken.

1 comment:

  1. Drawing trend lines is one of the few easy techniques that really WORK. Prices respect a trend line, or break through it resulting in a massive move. Drawing good trend lines is the MOST REWARDING skill.

    The problem is, as you may have already experienced, too many false breakouts. You see trend lines everywhere, however not all trend lines should be considered. You have to distinguish between STRONG and WEAK trend lines.

    One good guideline is that a strong trend line should have AT LEAST THREE touching points. Trend lines with more than four touching points are MONSTER trend lines and you should be always prepared for the massive breakout!

    This sophisticated software automatically draws only the strongest trend lines and recognizes the most reliable chart patterns formed by trend lines...


    Chart patterns such as "Triangles, Flags and Wedges" are price formations that will provide you with consistent profits.

    Before the age of computing power, the professionals used to analyze every single chart to search for chart patterns. This kind of analysis was very time consuming, but it was worth it. Now it's time to use powerful dedicated computers that will do the job for you:



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