12 Feb 2008 ( 10.30 p.m. - Malaysia time zone )
Today the market open at 3405 , closed at 3375. The highest was at 3446 and lowest was at 3375.
The opening of the market was within my expectation as mentioned yesterday except that after opening the market started to move up to 3446 before falling down to 2391 and moved up again to reach 3421 before lunch break. The market retraced to 3491 which was 14 points from the opening not 15 points as I have suggested yesterday. Anyway I do not recommend to buy here as my strategy is more focusing on taking position in the early part of the opening.
After opening the market moved up to 3446, there was a "clear " pattern or formation of 3 ascending Tops ; 1st Top was from the opening to 10.41 a.m., 2nd Top from 10.41 to 10.50 a.m., 3rd Top was from 10.50 to 11.06 a.m. A sell (short) position after the 3rd Top formation would incur profits to about 20 to 40 points.
An inverted formation of Head and Shoulder was also formed before lunch break. But the " pattern" was not clearly recognised, so the best thing to do was to stay away from the market. The Shoulder was clearly formed between 11.26 a.m. to 11.30 a.m., the head from 11.30 a.m. to 11.40 a.m. but the other shoulder was not clearly recognised.
After lunch , there was also a clear pattern of 3 Tops ; the 1st top was between 12.00 a.m. to 3.14; the 2nd top from 3.14 p.m. to 4.00 p.m and the other top from 4.00 to 4.30 p.m. So from this observation, I can say that there were 2 points of entry for today's market.
What about Wednesday?
Since today's market was a black bar, so I anticipate tomorrow will be bearish ( Please take note that tomorrow may end up a white bar but my strategy is to focus on after opening rather than the closing so whether the market ends up white or black bar makes no different to me);
1) Take position only if the market opens between 3426 to 3349. After opening, if the market moves up to about 11to 16 points, then place a sell here and don't forget to put a stop loss between 10 to 20 points after taking the position. If after opening the market moves up in a fast and sharp gradient, just be careful. If not sure, stay away.The best is, after opening, the market retraces down a little bit and then starts to move up slowly and steadily to reach at 11 to 16 points after opening, then put a sell position here . Any way do not forget your stop loss point.
2) If the market opens above 3426 and moves up passing 3438 to 3443 then the market may go up further.
3) If the market opens 3349 and below , the chances is that the market could move up further
4) Any way if you decide not to take any position after the opening of the market, then look for these clear formations ; 3Tops/Bottoms, 2 Tops/Bottoms, Head and Shoulder ( also inverted Head and Shoulder ) and Half Mountain trendlines. If there are no clear formation , just do nothing
5) As I mentioned earlier , this is only a prediction on the CPO market. I may be wrong! I have been wrong for quite a number of times. If in doubt please contact your broker.
Tuesday, February 12, 2008
Monday, February 11, 2008
Forecast For Tuesday
11 Feb 2008 ( 10.35 p.m.- Malaysia time zone )
Today the CPO market open at 3323 and closed at 3412 ( market opens at 10.30 a.m. and closes at 6.30 p.m.). The lowest is at 3323 and highest at 3417 ( 94 points). So the forecast for tomorrow ( 12 Feb ) is as follows ;
1) This forecast is based on the opening of the market because I believe that the opening is influenced by the price of soybean
oil (CBOT) and also the price of crude oil which were traded the night before.
2) In short term, the market is said to be bullish, so we anticipate that the market tomorrow should also be bullish. Take position
only If the market opens between 3442 to 3340.Within a short period after opening and the market retraces down to about 15
to 20 points from opening, then a buy position can be placed here and a stop loss of about 10 to 15 points should be also
placed in order to cut loss should the market goes against you. If you make a profit of 10 to 20 points, just sell. If you are an
experience trader you can possibly decide the right point to let off your position. If after opening, the market retraces sharply
down, just be careful, the market may not be what you expect, it may go further down and you may have to cut loss. The best
buy is, after opening, the market goes up a little bit and later starts retracing down constantly to about 15 to 20 points and at
this point, a buy position can be placed.
Today the CPO market open at 3323 and closed at 3412 ( market opens at 10.30 a.m. and closes at 6.30 p.m.). The lowest is at 3323 and highest at 3417 ( 94 points). So the forecast for tomorrow ( 12 Feb ) is as follows ;
1) This forecast is based on the opening of the market because I believe that the opening is influenced by the price of soybean
oil (CBOT) and also the price of crude oil which were traded the night before.
2) In short term, the market is said to be bullish, so we anticipate that the market tomorrow should also be bullish. Take position
only If the market opens between 3442 to 3340.Within a short period after opening and the market retraces down to about 15
to 20 points from opening, then a buy position can be placed here and a stop loss of about 10 to 15 points should be also
placed in order to cut loss should the market goes against you. If you make a profit of 10 to 20 points, just sell. If you are an
experience trader you can possibly decide the right point to let off your position. If after opening, the market retraces sharply
down, just be careful, the market may not be what you expect, it may go further down and you may have to cut loss. The best
buy is, after opening, the market goes up a little bit and later starts retracing down constantly to about 15 to 20 points and at
this point, a buy position can be placed.
3) If the market opens between 3339 to 3322, just be elert and if the market retraces further passing down yesterday's lowest
3317, the probability of further down could happen.
4) If the market opens at 3329 and below especially after passing yesterday's lowest between 3322 to 3317, then the market could
end in a black candle bar.( Can consider to sell here )
5) If the market opens above 3442, just be careful the market could end up being a black bar but if after opening above 3442 and
the market moves up passing 3449, then a new bullish record could be recorded.
6) If the above do not materialise and during the market being traded, any "clear" patern like 3 tops/down, head and
shoulder and 2 mountains occur, then a buy/sell position must not be missed.
Well, this is only a forecast and an opinion, I may be wrong. I have been wrong for quite a number of times.
Thursday, February 7, 2008
Day Trading
7 Feb 2008
Day trading is a process of multiple buyings and sellings which are conducted within a day. These are done with the intention of maximizing the profits. Normally, the profits taken for each transaction are small but with multiple number of buyings and sellings, the profits gathered are bigger. In CPO, day trading can only be practised if the range of votality in a day is big and so is the volume. Usually if the range is above 25 points a day then day trading is said to be viable to be considered. If ,on average, the range is less than 25 points, it is advisable to bring forward the trading to the next day before any close position is to be undertaken.
Day trading is a process of multiple buyings and sellings which are conducted within a day. These are done with the intention of maximizing the profits. Normally, the profits taken for each transaction are small but with multiple number of buyings and sellings, the profits gathered are bigger. In CPO, day trading can only be practised if the range of votality in a day is big and so is the volume. Usually if the range is above 25 points a day then day trading is said to be viable to be considered. If ,on average, the range is less than 25 points, it is advisable to bring forward the trading to the next day before any close position is to be undertaken.
In my case, at the present situation where the price of CPO is among the highest ( The highest was on 5 Feb 2008 where it touched RM3458 ) in history, I would prefer to do day trading rather than bringing forward to the next day because it is less risky especially for a small investor like myself. Anyway if the votality is too high and voilent ( the price per tick is very vast between 5 to 10 points ), then I would prefer to stay away from the market.
In general, there are a few strategies that I use when it comes to day trading of CPO futures ;
1) I would figure out the short term trend of the market. The long term trend is not to be determined.
2) After determining the trend, then I would forecast the direction of the market. e.g. If the trend today is bearish ( after the
market closes ), then I would set the entry for tomorrow either to sell or buy based on opening of the day by using
my own devised strategy.
3) The opening is very important. As I have indicated in previous postings, the price of CPO has a close relation to the price of
soybean oil in US and also to the world's price of crude oil. So if the opening today is higher than the close of yesterday,
normally it has already indicated those factors.
4) During the trading of the day , I would only use 4 types of trendlines to execute my positions such as ; Head and Shoulder
Top or Bottom, Rounded Top or Bottom, Double/Triple Top or Bottom and Middle Cut Top or Bottom.
5) If the opening of the day is not within the forecasting range, then I would simply close the computer and take a day off
Since today ( 7 Feb ) and tomorrow is a bank holidays in Malaysia, the market will only open on this coming Monday ( 11 Feb ). After the closing of that day, I would make a price forecast for the next Tuesday! As I pin-pointed earlier, my forecasting is not always right, it tends to be wrong at times!
Friday, February 1, 2008
Trading Methodology
1 Feb 2008
The use of technical analysis is common among the futures traders. Unlike the stocks, there are two schools of thought when it comes to stocks trading ; fundamental analysis and technical analysis. In futures, fundamental analysis is almost non-existing. Technical analysis is a methodology to study and forecast the price movement of the commodities through the use of charts. The technical analyst make decision either to enter or exit the market by looking at the charts.This is done by appraising the trends of the past and present.Besides, there are also other methodologies in determining the future prices of the commodities such as; Moving Average, Japanese Candle Stick, Fibonacci Retracement Ratios, Oscilltors and Elliot Waves.
My experience in futures market especially the CPO futures, indicates that there is no specific technical analysis that can be used to ensure maximum profits. The combination of one or more technical analysis is more promising. As for me, I am using Japanese Candle Sticks ( with improvisation), trendlines and my own devised strategy. In normal circumtances, you can only devise your own trading plan after fully understood and after being in the market for quite sometime.
My forecasting of the CPO prices will be elaborated further in the coming issues. One point to ponder, whatever trading plan that you use, it will not gurantee that you will be making profits on every entrance of the market. There are times when your entrance is not profitable. In a month if you have 10 positions entered and at least 6 of them generate profits, then your are on the right to success!
Further readings ;
http://www.tssupport.com/
http://www.barchart.com/
http://www.chartpatterns.com/
http://www.candlesticksforum.com/
http://www.fxwords.com/
http://www.candlesticker.com/
Having done your mock trading, the next step is to do the actual trading. There are many futures trading tools which are available in the market. Some of these trading tools can be learnt from books or by attending short courses conducted by investment companies or organisations.There are also some on-self softwares or applications which can be purchased and be installed in computer.Any way, from my experience, these apllications are no gurantee that you will be making "huge profits in a day of trading" as promised by some of the software producers. Some are good to be true. The use of human brain's capacity in analysing the strategies of entering and existing of the market is more prominent.The dependence solely on the softwares and follow it religiously may end you in the depleting of the deposits in your account.
The use of technical analysis is common among the futures traders. Unlike the stocks, there are two schools of thought when it comes to stocks trading ; fundamental analysis and technical analysis. In futures, fundamental analysis is almost non-existing. Technical analysis is a methodology to study and forecast the price movement of the commodities through the use of charts. The technical analyst make decision either to enter or exit the market by looking at the charts.This is done by appraising the trends of the past and present.Besides, there are also other methodologies in determining the future prices of the commodities such as; Moving Average, Japanese Candle Stick, Fibonacci Retracement Ratios, Oscilltors and Elliot Waves.
My experience in futures market especially the CPO futures, indicates that there is no specific technical analysis that can be used to ensure maximum profits. The combination of one or more technical analysis is more promising. As for me, I am using Japanese Candle Sticks ( with improvisation), trendlines and my own devised strategy. In normal circumtances, you can only devise your own trading plan after fully understood and after being in the market for quite sometime.
My forecasting of the CPO prices will be elaborated further in the coming issues. One point to ponder, whatever trading plan that you use, it will not gurantee that you will be making profits on every entrance of the market. There are times when your entrance is not profitable. In a month if you have 10 positions entered and at least 6 of them generate profits, then your are on the right to success!
Further readings ;
http://www.tssupport.com/
http://www.barchart.com/
http://www.chartpatterns.com/
http://www.candlesticksforum.com/
http://www.fxwords.com/
http://www.candlesticker.com/
Tuesday, January 29, 2008
Mock Trading
29 Jan 2008
Investing in CPO futures or CPO investment is one of the best way to make money. To certain people, it is a mechanism to create wealth provided if you are on the track. It is also a business opportunity whereby you could operate the business right from your home.
What is mock trading ? After you have had your account open, it is time for you to start trading but what happens if you fail ? So before proceeding to actual trading, it is better for you to practice a trial trading. This is an offline trading which the risk of investing is completely nil. It is good for beginners to test their trading skills and also to try any new trading techniques, if any. You could also open an account in the website for an online mock trading practices and you are allowed to do the trading for free of charge.
As mentioned earlier, after you have open your account at a brokerage firm and a website where you can view the real time price of the futures, you could practise doing either "buy" or "sell" position. When you are ready , then you could do the real trading with a high level of confidence. Should you pose with any problems you could always consult your broker for further information.
Further readings ;
http://www.mocktrading.com/
http://www.hedgestreet.com/
http://www.learninvesting.com/
Investing in CPO futures or CPO investment is one of the best way to make money. To certain people, it is a mechanism to create wealth provided if you are on the track. It is also a business opportunity whereby you could operate the business right from your home.
What is mock trading ? After you have had your account open, it is time for you to start trading but what happens if you fail ? So before proceeding to actual trading, it is better for you to practice a trial trading. This is an offline trading which the risk of investing is completely nil. It is good for beginners to test their trading skills and also to try any new trading techniques, if any. You could also open an account in the website for an online mock trading practices and you are allowed to do the trading for free of charge.
As mentioned earlier, after you have open your account at a brokerage firm and a website where you can view the real time price of the futures, you could practise doing either "buy" or "sell" position. When you are ready , then you could do the real trading with a high level of confidence. Should you pose with any problems you could always consult your broker for further information.
Further readings ;
http://www.mocktrading.com/
http://www.hedgestreet.com/
http://www.learninvesting.com/
Saturday, January 26, 2008
Getting Started
Saturday - 26 Jan 2008
Once you have decided to invest your own hard-earned money into a futures market, your next course of action is to open up an account. In Malaysia, opening an account is relatively easy and not that troublesome. In fact the profits which you acquire from futures or stock tradings are tax-free and not subjected to any government tax. This is done primarily as to encourage foreign investment in Malaysia.
There are a number of futures brokerage firms in Malaysia and majority of them operate in Kuala Lumpur, the capital city of Malaysia. All you have to do is to pay a visit to a brokage firm of your choice and deposit a sum of money. The amount of deposit depends on the requiremet by the firm and it varies from each other. Basically, the minimum amount deposited is around RM5000 and you are allowed to trade immediately. If you happen to make a loss, then you are allowed to trade until your money decreases to a minimum of RM2000. That would mean you are only allowed to trade for RM3000.Before choosing the right brokerage firm, it is suggested that you choose the brokerage firm which entitles you to access to its website whereby viewing of the real time price fluctuation of the contracts are available. Currently, there are two brokerage firms which provide this facility and the service is free for the account holder. Besides that, you could also subscribe to an investment company which provides a real time quote prices for a small fee.
Once an account is open, you could start immediately right from your home. All you have to do is to view the prices of the contracts, say CPO April contract, on your computer and when you decide to open a position either to buy or sell, you could simply give a call to your broker and place your position. If you decide to close your position, again you could call your broker and state your position. If you make profits and you intend to withdraw them or a portion of it, you can instruct your broker to do so and your money would be deposited in the bank of your choice on the next very day. Currently there are a number of foreign banks which have their operation in Malaysia such as Bank of America, Citi Bank, Standard Chartered and Hong Kong Shanghai Bank. This is a good business/investment opportunity for almost everybody and if you have a lap top or note book, you can trade almost anywhere in the world!
This form of business opportunity does not require you to have a proper office, save money on your petrol, no need to go through conggested traffic jam and etc....Most importantly, you do not have to have any physical products to sell and there are always ready buyers and sellers out there.
FCPO Brokerage firms :
http://www.rhbinvestmentbank.com/
http://www.ambg.com.my/
http://www.bursamalaysia.com/
http://www.kenanga.com.my/
Real time quotes :
http://www.thenextview.com/
AmFutures Sdn Bhd -
Once you have decided to invest your own hard-earned money into a futures market, your next course of action is to open up an account. In Malaysia, opening an account is relatively easy and not that troublesome. In fact the profits which you acquire from futures or stock tradings are tax-free and not subjected to any government tax. This is done primarily as to encourage foreign investment in Malaysia.
There are a number of futures brokerage firms in Malaysia and majority of them operate in Kuala Lumpur, the capital city of Malaysia. All you have to do is to pay a visit to a brokage firm of your choice and deposit a sum of money. The amount of deposit depends on the requiremet by the firm and it varies from each other. Basically, the minimum amount deposited is around RM5000 and you are allowed to trade immediately. If you happen to make a loss, then you are allowed to trade until your money decreases to a minimum of RM2000. That would mean you are only allowed to trade for RM3000.Before choosing the right brokerage firm, it is suggested that you choose the brokerage firm which entitles you to access to its website whereby viewing of the real time price fluctuation of the contracts are available. Currently, there are two brokerage firms which provide this facility and the service is free for the account holder. Besides that, you could also subscribe to an investment company which provides a real time quote prices for a small fee.
Once an account is open, you could start immediately right from your home. All you have to do is to view the prices of the contracts, say CPO April contract, on your computer and when you decide to open a position either to buy or sell, you could simply give a call to your broker and place your position. If you decide to close your position, again you could call your broker and state your position. If you make profits and you intend to withdraw them or a portion of it, you can instruct your broker to do so and your money would be deposited in the bank of your choice on the next very day. Currently there are a number of foreign banks which have their operation in Malaysia such as Bank of America, Citi Bank, Standard Chartered and Hong Kong Shanghai Bank. This is a good business/investment opportunity for almost everybody and if you have a lap top or note book, you can trade almost anywhere in the world!
This form of business opportunity does not require you to have a proper office, save money on your petrol, no need to go through conggested traffic jam and etc....Most importantly, you do not have to have any physical products to sell and there are always ready buyers and sellers out there.
FCPO Brokerage firms :
http://www.rhbinvestmentbank.com/
http://www.ambg.com.my/
http://www.bursamalaysia.com/
http://www.kenanga.com.my/
Real time quotes :
http://www.thenextview.com/
AmFutures Sdn Bhd -
Thursday, January 24, 2008
Bursa Malaysia
In Malaysia, the trading of futures contracts are conducted in Bursa Malaysia, just like CBOT ( Chicago Board Of Trade ) in US. With the advancement of internet services, one can view the fluctuation of the market price ( real-time price ) throgh his own computer at home without having to presence himslf in Bursa Malaysia or any brokerage firm. The products which are traded in Bursa Malaysia include;
* FCPO - Crude Palm Oil Futures
* FPKO - Crude Palm Kernel Futures
* FKLI - Kuala Lumpur Index Futures
* FKB3 Futures
* USD CPO Futures
* FMG3 - Malaysian Government Secutities Futures
From the above, the CPO and FKLI are the most popular futures among the investors and are traded heavily on daily basis.
CPO's contract size is 25 metric tons with a minimum price fluctuation of RM1 per metric ton. The trading hours are from 10.30 a.m. to 12.30 a.m and 3.00 p.m. to 6.00 p.m. in the evening.The contracts expire on 15th day delivary month.
Why CPO?
Malaysia is the largest supplier of palm oil in the world and eventhough Indonesia is catching up to be the next world's producer of palm oil, the palm oil produced by Malaysia is said to be off the highest quality.The nearest competitor to palm oil is the soybean oil which are produced largely by the US. Any movement of the price of the soybean oil would have an impact on the price of the palm oil and vise versa. They are said to be inter-related.
The advantage of futures trading especially the CPO is the potentiality of making huge profits ( losses as well) in a short time. At the present situation, the market price of CPO is relatively high that is around RM3000 and the fluctuation of the price is between 30 points to 100 points per day ( between RM30 to RM100 .e.g. If you make a profit of 50 points, your profits would be RM1200 per lot after deducting the brokerage cost ). With proper strategies , anybody who would like to involve himself in this form of investment would take advantage of this current market situation immediately. In fact this is the right time to invest as you can do day-trade which means you can buy and sell the futures ( or vise versa ) with out having to bring forward to the next day. Unlike stock market where short selling ( sell now and buy later to make profits ) is not allowed, the futures market practise two ways of trading ; Buy now and Sell later and also; Sell now and Buy later.
Further readings ;
http://www.bursamalaysia.com/
http://www.commodities.sgcib.com/
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