What Makes Prices Move? | Bradley Gareiss | FX360®

What Makes Prices Move? | Bradley Gareiss | FX360®

Is Swiber pattern accumulaton or distribution?

Chart patterns fall into 3 categories:

1. Continuation
2. Reversal
3. Both of the above

Symmetrical triangles like the one printed on Swiber chart falls into the third category. This type of chart pattern can show either accumulation by the market or distribution. Usually we need the market to 'show hand' before we can tell. The support and resistance provides clues to how traders can manage reward and risk.

Various divergences in Dow

Despite the Dow Jones Industrial Average continue to rally, we can see various hints that a turning point may be looming. There are six (6) basic tenets of the Dow Theory and now two (2) of them support this observation.


Excerpts from Wikipedia on the Dow Theory:

5. Stock market averages must confirm each other

Dow's first stock averages were an index of industrial (manufacturing) companies and rail companies. To Dow, a bull market in industrials could not occur unless the railway average rallied as well, usually first. According to this logic, if manufacturers' profits are rising, it follows that they are producing more. If they produce more, then they have to ship more goods to consumers. Hence, if an investor is looking for signs of health in manufacturers, he or she should look at the performance of the companies that ship the output of them to market, the railroads. The two averages should be moving in the same direction. When the performance of the averages diverge, it is a warning that change is in the air.

6. Trends are confirmed by volume

Dow believed that volume confirmed price trends. When prices move on low volume, there could be many different explanations why. An overly aggressive seller could be present for example. But when price movements are accompanied by high volume, Dow believed this represented the "true" market view. If many participants are active in a particular security, and the price moves significantly in one direction, Dow maintained that this was the direction in which the market anticipated continued movement. To him, it was a signal that a trend is developing.

Coming to our charts, we can see the following divergences:

1. As the Dow Jones Industrial Average makes new highs, the Dow Transport and I add the Dow Utilities are making both only the same and lower low correspondingly.
2. The rally in the DJIA is supported only by declining volume. The other two (2) averages are also supported on declining volumes in the rally phase.
3. MACD shows declining momentum.

21 May 2008 EOD

5JS - IndoAgri Resources - SGD 2.57
H17 - Hi-P International - SGD 0.58

Screened with Amibroker. Both long and short signals may be included.

Swing trading ideas using real-time intraday chart

Binni Ong will be talking about swing trading Singapore stock at the investor seminar at Rock Auditorium this coming Saturday. She will be looking at the use of intraday charts.

Details here.

07 May 2008 EOD

B2F - MobileOne Ltd - SGD 1.94
K50 - Kim Eng Securities - SGD 2.10
R07 - Rotary Engineering - SGD 0.95
W81 - Sky China Petroleum Svcs - SGD 0.35

Screened with Amibroker. Both long and short signals may be included.

Baker Technology rally with heavy volume on rumours

It broke a long downward trendline with heavy volume. Weekly chart shows a triangle pattern with a base at SGD0.24. Nearer support at 0.275.

05 May 2008 EOD

E6D - Raffles Education - SGD 1.23
M35 - Wheelock Properties - SGD 2.20

Screened with Amibroker. Both long and short signals may be included.

Pay $4k for 'get rich' trading tips

May 4, 2008

Investment seminars claim it's easy to make big bucks, but how good is the promise?
By Nur Dianah Suhaimi

If you are clueless about the bulls and bears, and about forex markets and options trading, but still want to make big profits, some catchy advertisements promise help.

The pitch of the ads, placed in newspapers here, includes 'Even a newbie can make thousands of dollars!' and 'Forex can make huge $$$$$$$$$!'.

'Preview' seminars are free, but not the courses that invariably follow, which can cost thousands of dollars.

But professional traders interviewed say it is impossible to become an expert trader overnight, and the Consumers Association of Singapore (Case) has received two complaints about these seminars.

So what exactly happens at these events?

On a recent weekday night from 7 to 10pm, The Sunday Times joined some 100 people at a preview seminar in a room in Parkview Square.

The speaker, predicting tough times in a United States-led recession, proffered options trading as a panacea.

In a nutshell, options trading involves strategies to buy or sell shares at a later date at pre-determined prices. Profits or losses depend on the trader's pricing strategy.

The speaker cited examples of ordinary people who chalked up more than 7,000 per cent in profits through options trading. At the end of the three hours, the audience was invited to attend a three-day course conducted by the same speaker. Cost: $3,995.

Each day, at least five such speakers advertise their free preview seminars in newspapers.
Some of the ads feature testimonials from ordinary folk who earned big bucks thanks to these free seminars and the courses, which can cost up to $5,000.

The Sunday Times spoke to 20 people who had attended previews, although not all signed up for the courses. Only six said they had benefited.

Mr D. Wong, 33, attended a preview seminar and was urged to pay more than $4,000 for an options trading course two years ago. He refused as he was sceptical about their claims that there are 'easy ways to make money'.

Businessman T.H. Lee, 42, spent $3,600 on a forex course last year, but said he learnt nothing. 'If there are profits, they are very minimal,' said Mr Lee, whose losses have totalled $2,000 so far.

Mr S. Russell, 40, an options trader with three years' experience, and who has attended some of these seminars, said they merely sell hope.

'The tactics they teach don't really work. At least 99 per cent will get slaughtered and lose money to the trading experts because they are not equipped.'

But businessman Clifton Tang, 38, is one of the luckier ones who made some money. He paid $3,800 for a forex course in May last year and has since earned enough to recoup his fees.
'I really studied and practised hard for six months to earn this money,' he said.

In March last year, 38 people who attended options trading courses conducted by Freely Business School went to the Small Claims Tribunal to seek refunds for more than $3,000 in course fees that each of them had paid.

In their joint claim, they said Freely 'over-promised but under-delivered' in its courses.
Freely has since filed a writ of summons against 17 of them, alleging that they conspired to disparage, disrupt and destroy the company's business operations.

Case has received two complaints. A preview seminar participant complained about being exposed to hard-selling tactics. The other complainant said he paid $3,000 for a two-day investment course which was misleading.

Mr Rafee Salleh, president of the Option Traders Club of Singapore - whose members include commodities, futures, forex and equity traders - said it is impossible to be an expert trader overnight.

'Any kind of trading involves a lot of hard work, preparation and practice,' he said.
Retiree Steven Lee, 65, who started trading two years ago, felt rookie traders should buy some guide books instead of spending thousands on courses. 'You can even borrow the books from the library or read up online,' he said.

ndianah@sph.com.sg

Have you ever attended any of these preview seminars or courses and have a story to share? Please e-mail suntimes@sph.com.sg

Consider risks

'Very often, the risk is not highlighted. If it is too good to be true, it probably is.' MR SEAH SENG CHOON, executive director of the Consumers Association of Singapore, which has received two complaints about investment courses

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Technical Analysis class conducted for beginners in Mandarin is now recruiting

The 2-day class is conducted by trainers from TerraSeeds Market Technician Pte Ltd.

Date:

Part 1 - Tuesday 18 March 2008 from 10.00am - 5.00pm
Part 2 - Thursday 20 March 2008 from 10.00am - 5.oopm

Information is available from jishufenxi.blogspot.com