9 December 2009

No quote from bursa...ji bai..make the thing worst

Risk Management Techniques For Active Traders



Risk management is an essential but often overlooked
prerequisite to successful active trading. After all, a trader that has
generated substantial profits over his or her lifetime can lose it all in just
one or two bad trades if proper risk management isn't employed. This article
will discuss some simple strategies that can be used to protect your trading
profits.
Planning Your TradesOne of Sun Tzu's most famous
quotes is: "Every battle is won before it is fought." The phrase implies that it
is planning and strategy that wins wars and not the battles themselves.
Similarly, successful traders commonly quote the phrase: "Plan the trade and
trade the plan." Just like in war, planning ahead can often mean the difference
between success and failure.
Stop-loss (S/L) and take-profit (T/P) points represent two key ways in which
traders can plan ahead when trading. Successful traders know what price they are
willing to pay and at what price they are willing to sell, and they measure the
resulting returns against the probability of the stock hitting their goals. If
the adjusted return is high enough, then they execute the trade.
Conversely, unsuccessful traders often enter a trade without having any idea
of at what points they will sell at a profit or a loss. Like gamblers on a lucky
or unlucky streak, emotions begin to take over and dictate their trades. Losses
often provoke people to hold on and hope to make their money back, while profits
often entice traders to imprudently hold on for even more gains.
Stop-Loss and Take-Profit PointsA stop-loss point
is the price at which a trader will sell a stock and take a loss on the trade.
Often times, this happens when a trade does not pan out the way a trader hoped.
The points are designed to prevent the "it will come back" mentality and limit
losses before they escalate. For example, if a stock breaks below a key support
level, traders often sell as soon as possible.
On the other side of the table, a take-profit point is the price at which a
trader will sell a stock and take a profit on the trade. Often times, this is
when there is limited additional upside given the risks. For example, if a stock
is approaching a key resistance level after a large move upwards, traders may
want to sell before a period of consolidation takes place.
How to Effectively Set Stop-Loss PointsSetting
stop-loss and take-profit points is often done using technical analysis, but
fundamental analysis can also play a key role in timing. For example, if a
trader is holding a stock ahead of earnings as excitement builds, he or she may
want to sell before the news hits the market if expectations have become too
high, regardless of whether the take-profit price was hit.
Moving averages represent the most popular way to set these points, as they
are easy to calculate and widely tracked by the market. Key moving averages
include the five-, nine-, 20-, 50-, 100- and 200-day averages, and are best set
by applying them to a stock's chart and determining whether the stock price has
reacted to them in the past as either a support or resistance level.
Another great way to place stop-loss or take-profit levels is on support or
resistance trendlines that can be drawn by connecting previous highs or lows
that occurred on significant, above-average volume. Just like moving averages,
the key is determining levels at which the price reacts to the trendlines, and
of course, with high volume.
When setting these points, here are some key considerations:

• Use longer-term moving averages for more volatile stocks
  in order to reduce the chance that a meaningless price swing will trigger a
  stop-loss order to be executed.
  
• Adjust the moving averages to match target price ranges;
  for example, longer targets should use larger moving averages to reduce the
  number of signals generated.
  
• Stop losses should not be closer than 1.5-times the
  current high-to-low range (volatility), as it is too likely to get executed
  without reason.
  
• Adjust the stop loss according to the market's
  volatility; if the stock price isn't moving too much, then the stop-loss points
  can be tightened.
  
• Use known fundamental events, such as earnings releases
  or FDA decisions, as key time periods to make sure to be in or out of a trade as
  volatility and uncertainty can rise.
  

Calculating Expected ReturnSetting stop-loss and
take-profit points is also necessary in order to calculate expected return. The
importance of this calculation cannot be overstated, as it forces traders to
think through their trades and rationalize them. As well, it gives them a
systematic way of comparing various trades and selecting only the most
profitable ones.
This can be calculated using the following formula:


The result of this calculation is an expected return
for the active trader, who will then measure it against other opportunities in
order to determine which stocks to trade. The probability of gain or loss can be
calculated by using historical breakouts and breakdowns from the support or
resistance levels or by making an educated guess for experienced traders.
The Bottom LineTraders should always know when
they plan to enter or exit a trade before they execute. By using stop losses
effectively, a trader can minimize not only losses, but also the amount of times
a trade is exited needlessly. Make your battle plan ahead of time so you'll
already know you've won the war.

too lengthy topic need time to digest...nevertheless, it's very true we have to be discipline...and always prepare for the worst...for my cj children i am willing to let go even at 2 cents loss...what to do

mystock no need so many formula...just cut loss base on own judgment

sometime i have no judgement

mystock wrote:sometime i have no judgement

in active trading such as daytrade...for me there is no rules or formula apply...just market or counter sense will do. the mother go down and up fast...i also don know how to use formula

the only main and significant danger for daytrader is overnight and market open gap down...but the benefit also..market open gap up...overall..still risk outweight rewards

morning guys,
red alert!!! stay sideline the best

kyoong wrote:morning guys,
red alert!!! stay sideline the best

congratulation1 to u all but not me..need to clear first

zzz no price how to trade? zzzz

kyoong wrote:zzz no price how to trade? zzzz

klse under attack again, now more worst, no price to c

i can see in cimb

maximent wrote:i can see in cimb

jupiter n maybank cant view zzzzz

i sold maybank cj at 1.05..lost 2 cents

kyoong wrote:

maximent wrote:i can see in cimb

jupiter n maybank cant view zzzzz

they are all using same company server...hong leong and alliance also cannot see...only cimb or osk can see

maximent wrote:i sold maybank cj at 1.05..lost 2 cents

no worry, will gain back 10 cents 1 day ^^

kyoong wrote:

maximent wrote:i sold maybank cj at 1.05..lost 2 cents

no worry, will gain back 10 cents 1 day ^^

need to see in cimb and sell buy in hong leong..very risky and troublesome

maximent wrote:

kyoong wrote:

maximent wrote:i sold maybank cj at 1.05..lost 2 cents

no worry, will gain back 10 cents 1 day ^^

need to see in cimb and sell buy in hong leong..very risky and troublesome

ya better stay sideline

bought 500000 ammb cg 0.21

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CCB really join TNB TM......................Cant online trading...............................Bursa special holiday?

market is unpredictable..hard to say will go green later..this is bursa...boleh land bursa

09/12/2009 9:40:30 AM AM
INDICESLASTCLOSECHG% CH

DJI	10285.97	10390.11	-104.14	-1.0%
Nasdaq	2172.99	2189.61	-16.62	-0.8%
S&P500	1091.94	1103.25	-11.31	-1.0%
FTSE	5223.13	5310.66	-87.53	-1.6%
Nikkei	10006.88	10140.47	-133.59	-1.3%
KOSPI	1622.78	1627.78	-5.00	-0.3%
KLCI	1260.87	1261.46	-0.59	+0.0%
HSI	22060.52	22324.96	-264.44	-1.2%
TWSE	7762.97	7768.71	-5.74	-0.1%
STI	2796.03	2805.50	-9.47	-0.3%
SENSEX	17227.68	16983.14	+244.54	+1.4%
SHCOMP	3256.79	3296.66	-39.88	-1.2%
JCI	2483.89	2483.76	+0.13	+0.0%

Overseas FuturesLASTCLOSECHG% CH

DJI	10292.0	10271.0	+21.0	+0.2%
Nasdaq	1772.5	1795.0	+4.0	-1.3%
S&P	1092.7	1090.0	+2.7	+0.2%
CRUOIL	73.1	72.6	+0.5	+0.6%

Local FuturesBIDASKLASTCLOSECHGOPEN HIGHLOWVOLOPINT

KLCI-Spot	1255.0	1255.5	1255.5	1261.0	-5.5	1256.0	1256.5	1252.5	1381	17225
CPO - 2nd mth	2300.0	2800.0	2543.0	2543.0	+0.0	2539.0	2568.0	2517.0	1814	15217
CPO - 3rd mth	2551.0	2594.0	2561.0	2559.0	+2.0	2559.0	2590.0	2535.0	8365	26049

bmwlover wrote:[You must be registered and logged in to see this image.]

CCB really join TNB TM......................Cant online trading...............................Bursa special holiday?

PAC ONLINE CAN SEE..................Really TNS [You must be registered and logged in to see this image.]

cimb screen is very lousy not user friendly

bmwlover wrote:

bmwlover wrote:[You must be registered and logged in to see this image.]

CCB really join TNB TM......................Cant online trading...............................Bursa special holiday?

PAC ONLINE CAN SEE..................Really TNS [You must be registered and logged in to see this image.]

Finally back in operation................spoiled the mood............ [You must be registered and logged in to see this image.]