There are two type of traders in the market: the SHEEP & the TIGER.

Sheep traders are about 90% of the total traders in the market. The trade based on news, instinct, tips and research report. They do not have a trading system and always trade without a plan. They are always on the losing end.

Tiger traders are professional traders. They are also known as the “smart money” because the market is actually created for them to make money. They know how’s the sheep will react to the market and always have the edge to see the whole market condition (who are buying, who are selling and how much). Tiger traders have a trading plan and system. They’ll have an edge over the others who don’t. That why Tigers will always have the Sheep as meal!

So..do you want to be Tiger or Sheep????? I’m sure the answer is Tiger. But you CAN’T. Because these are professional traders with very big financial support behind, usually the market makers or syndicate traders. However, you can think like them and trade like them.

You must have PLAN.

TRADING PLAN must have the following:

1. Knowledge of the market

Reading charts, books, attend workshop / seminars & understand the cycle of the market (supply & demand).

2. Capital Management

Risk management (how much I can lose in each trade), position sizing (how much to trade), assessing probability.

3. Tools

Charting software, Internet and online trading fascilities (reduce trading cost)

4. System

Entry strategy, exit strategy, profit objective, duration of trades (short term, medium term and long term)

5. Psychology

Emotion control & confidence (by doing back testing)

Last of all, which is the hardest to have and most important to have: DISCIPLINE. No point having all the system and plan in the world, but you can’t adhere to it. Stick to the plan and discipline yourself to act on the plan. The only way to make you believe in yourself is to practise. back Test will be a very good start.

Let me know if you want to know more about this. Wish you all the best in your trades. Start your TRADING PLAN today and you’ll be the 10% and have an edge over the others.

If you have entered previously, you should have exited at RM7.60 or higher level. The accumulation before the big push indicates that a lot of insiders already knew about the news yesterday (about the record high profit of Petronas. 60++ billion ringgit). The accumulation level is usually shows when the price is sideways with not much volume (June 23^rd – July 14^th).

Reversal Point – Doji, Topping Tail & Bottoming Tail

Everyone in trading wants to know two things: when to buy & when to sell. There is no holy grail to this question.

So you might ask, “Is there nothing we can do?”

No, there is! By knowing the potential reversal point, we will have an edge over the others.

When there’s a high volume Doji bar, topping tail or bottoming tail, there’s a high chances of reversal. Why?

Doji

When there’s a doji bar, it means that the market is uncertain about the direction. It could go either way. Therefore when there’s a high volume Doji Bar, exit the market if you have position. Else wait to the next bar for confirmation before entry.

Topping Tail

This appears after a few up bars. The traders try to push the price higher but the market is not interested. Therefore you’ll see the price being pushed high but close much lower than the highest price. The volume indicates that the market makers are stopping the up move and distributing their previous “long” position. Prepare to switch position if there is a follow through next bar (drop bar). Put your Stop Loss @ the close of the topping tail.

Bottoming Tail

This appears after a few down bars. The traders try to push the price lower but the market is not interested. Therefore you’ll see the price being pushed down but close much higher than the lowest price.. The volume indicates that the market makers are stopping the down move and distributing their previous “short” position. Prepare to switch position if there is a follow through next bar (up bar). Put your Stop Loss @ the close of the bottoming tail.

1. Prepare capital. If you would like to trade 1 contract, at least RM20k of capital is required. 1 contract will cost approximately RM6500 (for deposit with the securities company), but more capital will give you some confidence. You would not worry if you’ve done a few losing trade.

2. Open an account with trading house (securities). A few reputable one will be CIMB, Maybank or OSK. Unfortunately at this moment, there’s no online trading facilities for KLOFFE.

3. Get a real-time data feed. This will provide you a platform to perform technical analysis real-time. This is only necessary if you’re an intraday trader. Long term traders (daily) only needs the daily End-Of-Day data.

For Real-Time data feed, Telequotes and NextView are recommended. Telequotes is also a good (and cheap) End-Of-Day data provider.

4. You’ll need a charting software. Metastock is a good software. It has a very comprehensive technical indicators and very user friendly user-interface. If you’re subscribed to any of the Real-Time service (Telequotes / NextView), you’ll required to have Metastock since their charting system is good enough.

5. Now you have the facilities to trade the KLOFFE. Next is just pick up the phone and place your order from your broker.

Remember a good trader can only be good if he/she trades. Good luck!!

Extremely low trading volume on Petronas Dagangan (Code: 5681)  yesterday. Perhaps due to the uncertainty in Parliament. It seems like testing the HIGH @ RM7.50.

It requires trading volume to break through this resistance. Else it will retrace back to RM7.35 if fail to break the resistance.

Keep an eye on the Stop Loss if you have entered.