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Saturday, December 6, 2008

You Are Your Biggest Enemy / FMB-2nd Board Index 05/12/2008 / 富时二板指数 2008年 12月 05日

You Are Your Biggest Enemy........... By Zhuge Liang

Your biggest enemy, when trading, is within yourself. Success will only come when you learn to control your emotions- Edwin Lefevre

Excitement (and fear of missing an opportunity) often persuade us to enter the market before it is safe to do so. After a down-trend a number of rallies may fail before one eventually carries through. Likewise, the emotional high of a profitable trade may blind us to signs that the trend is reversing.

Wait for the right market conditions before trading. There are times when it is wise to stay out of the market and observe from the sidelines.

Have the courage of your convictions: Take steps to protect your profits when you see that a trend is weakening, but sit tight and don't let fear of losing part of your profit cloud your judgment. There is a good chance that the trend will resume its upward climb.

Concentrate on the technical aspects rather than on the money. If your trades are technically correct, the profits will follow.

Stay emotionally detached from the market. Avoid getting caught up in the short-term excitement. Screen-watching is a tell-tale sign: if you continually check prices or stare at charts for hours it is a sign that you are unsure of your strategy and are likely to suffer losses.

Focus on the longer time frames and do not try to catch every short-term fluctuation. The most profitable trades are in catching the large trends.

Expect the unexpected.
Investing involves dealing with probabilities – not certainties. No one can predict the market correctly every time. Avoid gamblers’ logic.

Average up - not down.
If you increase your position when price goes against you, you are liable to compound your losses. When price starts to move it is likely to continue in that direction. Rather increase your exposure when the market proves you right and moves in your favor.

Limit your losses.
Use stop loss orders to protect your funds. When the stop loss is triggered, act immediately - don't hesitate.

The biggest mistake you can make is to hold on to falling stocks, hoping for a recovery. Falling stocks have a habit of declining way below what you expected them to. Eventually you are forced to sell, decimating your capital. Human nature being what it is, most traders and investors ignore these rules when they first start out. It can be an expensive lesson.

Control your emotions and avoid being swept along with the crowd. Make consistent decisions based on sound technical analysis.


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FBM 2nd Board Index Daily Technical Analysis 05/12/2008

On Friday, the FBM2nd Board Index continued its consolidation, ended 21.65 points lower to close at 3940.22 points.. Currently, the 4000 points level is still the resistance for the FBM2nd Board Index while, as indicated by A, the Bollinger Middle Band is still serving as the dynamic resistance. Even though the Bollinger Bands Width is contracting slowly, which suggests a consolidation for the FBM2nd Board Index, the immediate outlook for the FBM2nd Board Index remains bearish biased for the FBM2nd Board Index is still below the Bollinger Middle Band.

Nevertheless, since the FBM2nd Board Index has touched another new low, there is no reliable support level for the FBM2nd Board Index at the moment.

As circled at B, the Stochastic is moving sideways below the 30% level, which shows that the short term market movement of the FBM2nd Board Index is still bearish biased. If the Stochastic should break above 30% level, it would be a signal suggesting a beginning of a technical rebound.

As circled at C, the MACD histogram is still rising slowly, while showing a rounding bottom signal. The rounding bottom suggests a consolidation for the FBM2nd Board Index, and as long as the MACD histogram is still rising, the consolidation is expected to continue, and the FBM2nd Board Index might even have a chance to regain its strength.

富时二板指数每日技术分析 05-12-2008
如图所示,富时二板指数周五继续的横摆,全日微跌21.65点以3940.22 点挂收。根据目前的图表分析,4000点依然是富时二板指数的阻力水平,同时,图中箭头A所指示的布林中频带(Bollinger Middle Band)也继续的是富时二板指数的动态阻力水平。虽然布林频带稍微的收窄,表示富时二板指数正处于巩固的格局。但是由于富时二板指数依然处于布林中频带之下,所以后市还是有下跌的风险,直到富时二板指数成功的突破布林中频带为止。由于富时二板指数创下了新低,所以暂时没有明确的支持水平。


如图中C圈指示,平均乖离的震荡指标继续的上升,所以还是显示着圆底(Rounding Bottom)的讯号,这表示了富时二板指数正处于巩固的格局。若平均乖离的震荡指标能够继续上扬的话,富时二板指数将持续的巩固,甚至有转强的机会。

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