Seeing Diamond

Correlation Trading

Article taken from:
http://club.ino.com/trading/2009/10/the-giant-flaw-in-correlation-trading/

---------------------------------------------------------------------------------------------------

The Giant Flaw In Correlation Trading

October 26, 2009 · By Brad · Filed Under Guest Bloggers

Last week Jason Fielder gave us some general insight on correlation trading, but today he pulls out ALL the stops and dives deep into a proven method for successful correlation trading! Jason said the only way he would teach this much is if I mentioned his free webinar that focuses on correlation trading! I’d recommend you attend (as I’ll be there) and let Jason teach you even more then you ever knew about correlation trading. But sign-up AFTER you read the article below so you know you won’t be wasting your time October 28th.

====================================================================

I have some unfortunate news for you Trader’s Blog readers, correlation trading does have one GIANT FLAW.

While correlations will tell you that a move is about to occur, correlation alone doesn’t tell you which pair is moving or the direction it will be moving in.

In other words, you know you need to put on a trade, but you don’t know which pair to trade or whether you need to buy or sell short. This massive limitation in correlation trading has stifled traders for years, which is why so few traders use correlations despite its obvious benefits.

Of the handful of traders who did trade with correlations, most just used it as a filter to increase the accuracy of an already-profitable system.

Well I for one wasn’t willing to stop there…

You see, as a full-time trader, researcher and system developer, I know that identifying PREDICTABLE VOLATILITY is half the battle. Determining entry and exit points is simply a matter of testing and a whole lot of trial and error.

It took the better part of 12 months, but eventually my team and I researched, developed and tested 82 different strategies for capitalizing on correlation trades. When the dust settled we were left with only 8 that made cut…and because you’re a Trader’s Blog reader, I am now going to share one of my favorites with you.

Follow The Leader

The strategy is called “Follow the Leader”, and while it’s one of the simplest of the 8 strategies my team and I developed, it’s no less important. Honestly I’m giving you this method because I really want you to attend my Correlation Webinar that is on Wednesday!

The “Follow the Leader” Correlation Trade like all correlation trades, “Follow the Leader” waits until two correlated pairs go “out of whack”, and then quickly capitalizes on the opportunity to scalp some quick pips out of the market.

Here’s how it works…

For this system I like to trade the EUR/USD along with the GBP/USD. These pairs are positively correlated, so as expected they are more or less moving parallel to one another (as seen on chart below). But when we’re trading with correlation, we’re not only looking at direction…we’re also looking at the RANGE.

“Range”: The difference between the high and the low prices during a specified period of time.

We know, for example, that the GBP/USD normally has a much larger range than the EUR/USD (NOTE: I don’t have the time right now to go into why the range of the GBP/USD is larger, but if you look at the two charts side-by-side you’ll be able to see with the naked eye what I’m talking about.). In other words, while these correlated pairs will generally move in the same direction, the GBP/USD should have lower valleys and higher peaks than the EUR/USD. So, when we see that the range of the GBP/USD is lagging behind the range of the EUR/USD for one bar (see chart), we have a potential trade setup. Once the “range lag” is 20 pips or greater, we take the trade with the expectation that the GBP/USD will make up the “gap”, and overtake the range of the EUR/USD within a few bars.

Remember, we know this is an extremely high probability trade, because “Fundamental Law” dictates that the pairs MUST remain in correlation, so therefore we know that they will eventually “snap back”. Like I said, it’s a simple strategy, but because it’s backed by market fundamentals it’s one of the most accurate (and profitable) intra-day strategies I’ve ever traded.

OK, let’s check out the chart as mentioned above:

Right now the range of the GBP/USD is lagging the EUR/USD by 8 pips. That’s enough of a lag to take notice, but it’s not enough to take the trade yet.

Remember, I like to see at least a 20 pip lag before I take the trade, so I’ll watch it for another bar and see what happens…

When the second bar closes, the range is now lagging by 15 pips. It’s still not enough for me to take the trade yet, but the fact that the range lag still hasn’t corrected itself (and is actually growing wider) has me very excited.

I’ll wait and watch it for one more bar and see if the “range lag” or “crack” widens enough for me to take the trade…

The third bar has closed, and the “range lag” has now widened to 24 pips. That’s greater than the 20 pip minimum I need, so I’m going to take this trade and go long on the GBP/USD.

My expectation is that the GBP/USD will at a bare minimum make up the 24 pip “range lag” or “crack”…and possibly even go beyond that since historically the range of the GBP/USD is supposed to be LARGER than the EUR/USD

And again, when we’re trading with correlation and something goes “wrong” (as is the case with this “range lag”), that usually means there’s a profit opportunity just around the corner.

Now that we’re in this trade, let’s watch it and see what happens next…

As you can see, the very next bar the GBP/USD made up the “range lag” and returned to“normal” just as we expected it to. We then exit the trade at the end of the bar and
pocket the 24 pips.

So there you have it…the “Follow the Leader” strategy!

So to recap, all you need to do is:
1) Watch these 2 pairs simultaneously.
2) Track the movement of both pairs at the close of each bar.
3) Once you see one of the pairs begin to pull away, pay attention because you are now looking at a potential trade setup.
4) Calculate the “range lag” or “crack” and when it exceeds 20 pips, you’re ready to pull the trigger, and you know what your target will be, as it will be always be about equal to the “range-lag”!

I’m confident that this one strategy alone will make you a more confident, accurate and profitable trader, as these trades are ultra high probability trades to take, and I LOVE when they set up…

Now that I’ve given you a PROVEN method of Correlation Trading I ask that you please take time on October 28th to come to my webinar where I’ll REALLY teach you about Correlation Trading!

Jason Fielder
The Correlation Trading Webinar FREE sign-up

------------------------------------------------------------------------------------------------
Article taken in whole, credit given to the authors and original poster with all links provided.
I do NOT claim any credit for this excellent article.

Ace of Clubs

The quest has begun...

Ultimate Wisdom

In ancient China times, there was this one emperor whom decided to embark upon a journey to discover the ultimate wisdom in the world. He summoned all his advisers and told them their mission - to find the ultimate wisdom in the world.
His advisers immediately scrambled to find the ultimate wisdom as ordered.
A year later, the advisers compiled the "wisdoms" which they find very true during their era of time. The emperor was submitted with their findings. The emperor, being a light headed fellow with no patience of reading what was the sweat and hardwork of his advisers summoned his advisers again.
"Its too thick to read for my royal eyes. Summarize them" He ordered.
As it was the decree of His Royal Highness, his advisers once again scrambled to carried it out.
One month later, they summarized into a single page and was pretty satisfied with their work.
Yet, again, the Emperor was not satisfied. That Royal (feather-brained) Emperor decreed, "Summarize them yet again."
His advisers were aghast with the decree. How can that be possible!? How on earth!?
What an idiot, we have as an emperor!?
"But he IS the Emperor!!!"
And during the era, capital punishment of the whole clan was common.
Fearing such dreaded punishment, the advisers have no choice.
Yet, they have no idea or any clue how to carry out their latest decree.
They decided to have lunch in a nearby restaurant.
Then it struck them.
"There is NO free lunch in this world"
Hence it was presented to the Emperor and became the undisputed ULTIMATE wisdom in this world.


And when it comes to Trading? What is the ultimate wisdom?
If one were to be asked, what is the single most important thing in trading, how would he answer?
After a long thought, with inspiration from Dark Mocha and Issac Newton, I think it has something to do with apples and lemons.


Yes, apples and lemons. When the market offers apples, take it. When it offers lemons, take it. No sense wanting apples when it is offering lemons and vice versa. It is really, something beyond our control. Unlike in the fields of business or management, there isn't much to do save for recognising what it is offering. Apples and lemons, anyone?

Saving Private Ryan

Charting is an Art

Technical Analysis vs Technical Indicators

Article shared by FLO.
Original author unknown.
Bold emphasis, rightly or wrongly, done by myself .

-----------------------------------------------------------------------------------------------

Technical Analysis VS Technical Indicators

There is a common misunderstanding about Technical Analysis, in which people has treated Technical indicators as Technical Analysis.



Above is chart of National Distiller (USA) dated back 1926 -1934. As you can see, chart patterns existed as soon as the stock market price was plotted. It is because the rising and falling of stock prices was mainly caused by human's emotion of greed and fear, and these human emotion shall never change, and it's still happening to everyone of us now.

Over time, some may favor MACD to RSI, then later found out that the method is no longer working, and soon another technical indicator is used. However, all the while, analysis of chart patterns remained unchanged!

Therefore, instead of trying to fine-tune and search for the "perfect" indicator, it is much worth while to study chart patterns for it is ultimately the core in technical analysis.


Common Misunderstandings of Technical Analysis

Generally, most beginners had mistaken Technical Indicators as technical analysis, and as a result, they search for the sharpest indicators, the fastest indicators, and tune the indicators' parameters into their "perfect" indicator. Some works for a certain time, and does not work on the others, and they failed. We must understand and realized that technical indicators are always "secondary" product of stock prices, and quite often they produce wrong signals.

When price is trending, be it uptrend or downtrend, indicators signals are usually more accurate. However, when price is moving in an sideways, indecisive direction, indicators produce many whipsaws. It is quite reasonable for most beginners to pay more attention to indicators signals than anything else, for indicators signals are objectives and clear. As a result, most beginners had forgotten or had ignored the importance of trend, support and resistance.

Another common misunderstanding is that they believe in technical analysis can forecast the price movement in the future. This is, by far, the most serious misunderstanding. Technical analysis was never meant for forecast the price movement. Perhaps this is caused by some people who had, unfortunately, perceived a wrong context about technical analysis.
Technical analysis is a form of statistic "poll-taking" of the price movement. It uses the past historical data to judge whether the current market condition is still favorable, thus outline the risk and potential of the current price level. Thus, reducing the unwanted risk in the uncertain market. And most of all, technical analysis help users to understand trends, and trade with the direction of the trend.

Although technical analysis does not forecast the price movement of tomorrow, it helps investors, if being used properly, by preparing them for any possible changes, thus extremely helpful in planning every trades. For example, when price formed a head-and-shoulder top patterns, chart readers will know the importance of the support at the neck line of the head-and-shoulder top. If the support is taken out, chart readers will reduce their position thus reducing the risk of holding losing position.

Miley Cyrus - The Climb

A special dedication... have faith... have faith :)

http://www.youtube.com/watch?v=NG2zyeVRcbs

Lyrics to The Climb :

I can almost see it.
That dream I'm dreaming, but
There's a voice inside my head saying
You'll never reach it
Every step I'm takin'
Every move I make
Feels lost with no direction,
My faith is shakin'
But I gotta keep tryin'
Gotta keep my head held high

There's always gonna be another mountain
I'm always gonna wanna make it move
Always gonna be an uphill battle
Sometimes I'm gonna have to lose
Ain't about how fast I get there
Ain't about what's waitin' on the other side
It's the climb

The struggles I'm facing
The chances I'm taking
Sometimes might knock me down, but
No I'm not breaking
I may not know it, but
These are the moments that
I'm gonna remember most
I've just gotta keep goin', and
I gotta be strong
Just keep pushing on, but

There's always gonna be another mountain
I'm always gonna wanna make it move
Always gonna be an uphill battle
Sometimes I'm gonna have to lose
Ain't about how fast I get there
Ain't about what's waitin' on the other side
It's the climb

There's always gonna be another mountain
I'm always gonna wanna make it move
Always gonna be an uphill battle
Sometimes I'm gonna have to lose
Ain't about how fast I get there
Ain't about what's waitin' on the other side
It's the climb

Keep on movin'
Keep climbin'
Keep faith baby
It's all about, it's all about
The climb
Keep the faith, keep your faith, woah

[ The Climb Lyrics on http://www.lyricsmania.com/ ]

Last Bullish Engulfing Pattern

Description:

A variation of the Engulfing Bullish pattern is the Last Engulfing Bullish pattern. This pattern looks similar to the example above and is found after an extended bullish trend. The Last Engulfing Bullish pattern represents the bulls final attempt to drive the market higher. If one is long and a Last Engulfing Bullish pattern forms, one should identify a protective stop level near the lows of the Last Engulfing Bullish pattern to protect any profit in the trade.

From: http://www.ment.com/training/CSENG.htm

Credit goes to Mang Kong Ng who highlighted this to me :)

Of hyprocrites and disillussioned

Been a long time since I last updated. Been a long time since I posted with many words. So what the heck. So free nothing to do...
One the things I dislike about people is how hypocrite they are. On one hand they critisize. On the other hand, they do the same thing. Then they are disillussioned coming out with their versions of truths which exists only in their own world.

Yeap. I did post to short somewhen earlier this year. But then things changed. So needed to be flexible, cut loss and turn around.
And how is this different from the Samgang's TMI backhand cut loss?

Well, there is one difference. I do not post calls to buy or sell in my blog. He does.
And when he cut loss, he didnt announce until days later. Therefore, you wouldnt even know if the price he cut is the same as he announced or not, since it was done days later with more market movements.
I did posted to long. Though it was in bizfun shoutbox.
Didnt bother to inform Samgang as I owe him nothing. No need to tell him whether I am long, short or sidelined.

Actually, malas also want to tell the idiot. When I shorted and made a profit back then, posted in his blog, he said it was not TA woh... it was market sentiment...
But then later when market up, he went and made an assumption that I was still short, and then say TA doesnt work. Aiyah, apa-apalah. So giler one... must report my every move meh... worse than any obssessive wife/gf. Report! Where are you now? Who are you with? What time coming home? Wakakakakakkaa... siaw meh... wakakakakaka

Then of course, everytime I am highlighted in Samgang's blog, there ll be some idiot who went around and post as my nickname. Aiyah... unsecured chatbox mah. Use what name also can la. Who so mou liu? This one, I think Samegang managed to catch the idiot. Likelihood is Samgang himself.
Do check out the Samegang's website. See for yourself. Multiple nicknames. Evidence provided.
http://samegang.blogspot.com

And to the well wishers, some via MSN, YM and even SMS... no worries la. Profit and loss is common in trading. And I ve been trading for sometime now. OK one la. Dont be alarmed.
If I am that bearish, wouldnt have posted in Samegang's blog when he did a followup on Sam and my picks. I remember I posted to buy Sime. If I am that bearish on CI, I wont post to buy Sime with a target profit and a target date also la. Think I mentioned 2-3 weeks.

Anyway, main thing is the ability to be flexibile. To have less ego. Dont think that we re always right. If this Sam plays FKLI, sure mampus. Simply because ego too big. Sure, he always hold when market goes around him. His refrigerator big mah. Hahahaha. For stocks can la. Try holding futures and see. Hehehee

Flexibility

... is of paramount importance...

Flexibility Level: Scanning... scanning... scanning... results: Level 2.

The way forward :)

Bailout Monies

Try JibJab Sendables® eCards today!

Kryptonite

Hehehe

Superman

Coming soon... cinemas nationwide

Fighter

Gold vs Silver

VS

From: http://news.silverseek.com/Zealllc/1193415306.php

Silver Lagging Gold Adam Hamilton, Zeal Intelligence LLC, Zeal LLC
-- Posted 26 October, 2007 Digg This Article Discuss This Article - Comments:
0
Since the middle of August alone, gold has powered 18% higher driving a 40% rally in the HUI gold-stock index. Just a week ago the Ancient Metal of Kings closed near $768, its highest nominal levels seen since its famous January 1980 super spike. And both gold and HUI seasonals now argue for more gains in the months ahead. Today really is the best of times for gold investors.

Despite this good fortune, a nagging doubt is gnawing away at the minds of many traders. Silver, which tends to run higher with gold, has not been confirming gold’s move. While gold carves majestic new bull highs, silver hasn’t even come close yet to exceeding its May 2006 high of just under $15. Though it has run 20% higher at best since mid-August, barely beating gold’s gains is considered a failure for silver.

If silver was underperforming merely over the last couple months, it would be easier to dismiss. But this metal has been weak all year. While gold climbed higher in a definite uptrend in 2007, silver actually ground lower in a contrary downtrend! Year-to-date as of their mid-August lows, gold was up almost 3% while silver was over 10% lower. Can a gold upleg without silver confirming and following be legitimate?

Silver is known historically for wildly exceeding gold’s gains, so traders have very high expectations for it. They expect to see it not only rally with gold, but to amplify gold’s gains. A non-confirmation of gold’s strength by silver is widely perceived as a subtle warning sign, proof that something important is missing in the precious-metals sector. Today this perception has ballooned into a belief that gold’s rally is somehow flawed or false, likely to fail suddenly, since silver hasn’t come along for the ride.

If you own physical silver and elite silver stocks like me, silver lagging gold has a very tangible financial impact on your portfolio. It is frustrating watching very-high-potential silver stocks fall far behind their peers mining gold. And even if you only play the gold side of precious metals, the fears silver is sparking definitely bleed into gold in the form of negative psychology which retards its own advance. So the persistent silver underperformance has wide-ranging ramifications across the entire PM realm.

After many discussions about this with other speculators and investors, I realized that I didn’t understand the historical interaction between gold and silver well enough. In order to attempt to determine how serious and anomalous silver’s relative underperformance to gold has been in 2007, I really needed to dig into the metals’ interrelationship historically. This essay details my explorations, which happened to significantly alter my expectations for silver going forward.

The raw speculative potential for silver is so extreme that a kind of mythos has developed around the metal. Some of the popular silver lore is true, but over the passage of decades since the last silver super bull incorrect assumptions have crept in too. Silver enthusiasts, including me, have mentally condensed the metal’s modern history in a way that distorts our expectations for its future performance.

By taking a careful look at silver’s performance relative to gold in both this bull and bull runs from decades past, I hope to realign my own expectations for silver closer to reality. Silver truly does have incredible potential to soar, but its gains are much less linear than gold’s. Silver tends to soar in fits and starts, sitting around doing nothing for a long time before suddenly rocketing stratospheric with little or no warning.

In my historical study of the interrelationship between silver and gold, I looked at several dozen charts covering 1970 to today. Unfortunately I had to narrow these down to seven charts for this essay. Each of these charts renders the silver price in blue superimposed over the gold price in red. The best place to start for realigning the silver-mythos expectations with silver reality is our current precious-metals bulls.



Not remembered by many, even in this bull market silver has substantially lagged gold. This secular gold bull stealthily launched near $256 back in April 2001. But even with gold slowly clawing higher again, silver didn’t bottom until November 2001 just over $4. In the early years of this gold bull, 2002 and most of 2003, silver largely just ground sideways oblivious to gold’s advance. By late 2003, gold was up 52% bull-to-date while silver’s own bull had only run 30% higher. Silver performed poorly relative to gold for years.

Then suddenly starting in late 2003, silver caught a bid. It soared in a massive parabolic upleg before crashing in early 2004. A second major upleg immediately erupted, but it failed in late 2004 before silver could achieve new highs. And then throughout most of 2005, silver consolidated sideways to lower while gold slowly continued higher on balance. The third major silver upleg started rocketing higher in late 2005 and culminated in the metal’s bull high just under $15 in May 2006.

Now if you examine the red line, gold’s bull ascent was pretty linear between 2001 and 2005. It made steady progress higher with relatively little drama. Gold did soar in late 2005 as it transitioned into Stage Two where it is driven by global investment demand instead of the dollar bear, but prior to that its progress had been pretty conservative. This is a radical contrast to silver’s bull-to-date behavior.

Silver, which was coined “the restless metal” by Roy Jastram in 1981, has certainly lived up to its moniker in this bull. Despite the silver bull technically running for six years now, virtually all of its gains were seen in just two fast uplegs. Most of its run from $4 to $8 happened in just two quarters straddling the dawn of 2004. And most of its run from $8 to $15 happened in just two more quarters crossing the beginning of 2006.

So over the six years of this silver bull, hypothetically one could have reaped almost all the gains by only being deployed for two separate periods running about six months each. Almost all of silver’s gains in this bull have come from two fast uplegs alone! Silver’s spastic behavior made for a couple half-years of excitement surrounded by five years of boredom. Silver investors must understand that silver’s gains are generally not linear and steady, but relatively rare and sharp.

The next three charts zoom in to look at gold and silver in each of the latter’s major uplegs in its bull to date. While uplegs 1 and 3 rendered above are quite obviously important since they account for almost all of silver’s bull gains, upleg 2 is also worthy of study. Despite popular perceptions today, silver has tended to lag gold even within the white metal’s strongest runs higher of this entire bull.


If you weren’t in silver or silver stocks before late 2003, believe me they were pretty uninspiring until silver was finally bid over $5 for good then. Silver’s first major upleg of this bull actually started in March 2003, slightly ahead of gold’s upleg of the time. But starting in April, gold surged out of the gate and left silver in the dust. Silver was climbing higher gradually, but it couldn’t keep pace with gold’s gains. By the middle of these parallel uplegs, gold was up 21% while silver was only up 19%. Sound like today?

But after the halfway point of this upleg, silver finally caught a bid. It shot past gold in early 2004 and went parabolic. Ultimately in this upleg silver blasted 89% higher while gold was only up by a third. This is the kind of huge silver outperformance of gold that traders expect. But the key to refining these expectations is that silver lagged well into gold’s upleg. Speculators didn’t really start flooding into silver until long after gold started higher.

And after its parabola topped, silver crashed. It plummeted 33% in one month, with almost half of these losses in the first week alone. Meanwhile gold also corrected, but its decline was much more moderate at 12% and it was more resilient post-crash. This behavior of silver, going parabolic late in a gold upleg and then crashing, is very typical. It is also very important as it is the key to understanding how silver tends to work.

Compared to gold, silver is a tiny market. And there aren’t vast above-ground hoards of silver like gold’s to cushion its moves. Silver is also hyper-speculative. While it does have many important industrial uses, when push comes to shove it is speculative buying that drives silver’s biggest and sharpest price moves. Only speculative buying can drive vertical parabolic ascents, and only panic speculative selling can drive crashes. Supply-and-demand fundamentals simply shift far too slowly to drive such extreme moves.

So much becomes clear when silver is considered from a speculator’s perspective. Early on in gold uplegs, greed is low and speculators are skeptical that the gold upleg is for real. Without much greed or excitement, they aren’t interested in silver. But the longer that gold powers higher, the more speculators start to think the upleg is real and sustainable. So gradually at first they start buying silver. By the second half of the gold upleg the small silver market really explodes on the flood of bids and greed ultimately fuels a parabola. But once all the speculators are in, profit-taking selling overwhelms bids and silver collapses.


Whether or not I should have considered silver’s mid-2004 upleg as major is debatable since it didn’t hit new highs, but it sure is interesting regardless. Following its crash in April 2004 after upleg 1, silver immediately started higher in upleg 2. Note that almost all of silver’s daily gains happened on days when gold was up. It is rising gold prices on a daily basis that drive speculative interest in silver, seldom the other way around. In the end, silver is always relegated to riding gold’s coattails.

Midway through this upleg, silver was up 24% while gold was up 10%. By the end of this upleg, silver was up 45% while gold was only up 22%. In this upleg, after the initial couple months where it lagged a bit, silver generally outpaced gold’s gains on the order of 2 to 1. Despite its relatively gradual ascent, silver’s biggest gains were still witnessed in the second half of its upleg. As usual, silver bidding was highest later after greed had a chance to set in.

Such parallel linear gains, with silver leveraging gold, are what traders tend to expect from silver. But as the rest of these charts below show, silver pacing gold so well is actually something of an anomaly. Believe it or not, it is this pacing that is atypical behavior compared to history. Usually silver lags gold for a long time, then greed suddenly kicks in, and silver explodes vertically and rapidly catches and exceeds gold’s gains in a short period of time.

At the end of this upleg, silver crashed again. It is this crash that makes me think this upleg is major. Once again crashes can only happen when speculators bid a price up too high and too fast and then too many try to get out at once. Greed and fear extremes define uplegs and drive their wild price swings. In December 2004, silver plummeted 17% in just over a week. Gold fell too, but it was much more resilient as usual since it is far less speculative than silver.

These silver crashes are crucial to consider too. It is always funny, as after every single silver crash silver futures traders write me and bemoan their enormous losses. They willingly chose to play a hyper-volatile and capricious commodity with margin, and then they are amazed when their leverage works against them. Make no mistake, if you decide to live by the sword by leveraging silver prices you had darned well better be ready to die by the sword too. Silver has a long history of brutal and sudden crashes as excessive greed near tops rapidly turns to black fear. Silver traders must expect periodic crashes!


Silver’s last major upleg which ended in 2006 was its biggest and most important by far. Fully 2/3rds of silver’s entire bull market gains occurred between mid-November 2005 and early May 2006! It was this magnificent run that really got investors and speculators fired up about silver again. Naturally silver stocks had stupendous gains too as they were frantically bid higher on silver’s exciting strength.

Now since this chart doesn’t have zeroed axes, it looks like silver paced gold’s gains pretty well. Indeed it did in a day-by-day sense, generally rallying when gold rallied and pulling back when gold retreated. But by early December when gold was carving exciting new bull highs, silver’s performance really wasn’t all that impressive. Gold was up 28% in its upleg while silver was just up 40%, not far beyond gold. This was certainly not the major outperformance silver traders were looking for.

Also interesting to note is that silver trended lower for most of 2005 despite gold grinding sideways to higher. The lagging silver behavior we have witnessed this year in 2007 looks an awful lot like silver’s behavior in 2005. This is a crucial lesson too. Silver is primarily a speculative sentiment play, so just because it is long lethargic doesn’t mean it is not right on the verge of soaring. Once gold’s gains stoke general PM greed to a hot-enough level, inevitably silver will catch a bid and explode.

And once again here, silver’s greatest gains accrued in the second parabolic half of its upleg. It ultimately powered 133% higher in this third major upleg which easily exceeded gold’s 75% run. Provocatively gold also went parabolic at the end of this run for the first time in its bull. And since gold was driven vertical by greed, pure speculative buying, it also crashed just like silver tends to do. The parabola-crash cycle is the most classic signature of heavy speculative buying followed by big selling straddling major interim highs.

Now that we have examined this silver bull to date, I have had to realign my own expectations. Unlike gold which tends to rise fairly linearly, silver tends to lag gold considerably early on in uplegs before rocketing higher later to catch up with and surpass it. Silver really doesn’t offer much excitement until enough speculators believe a parallel gold upleg is the real deal. So it is generally in the second half of gold uplegs, as faith in gold returns, that capital starts flowing into silver futures again and bidding up its price.

And you know what, these should have been our expectations for silver all along. Its modern historical record is much the same, albeit even more extreme. Despite the silver mythos which has conveniently edited out all this hyper-volatile and spastic history, silver didn’t do all that much in the 1970s and 1980s until late in major gold bull runs. Silver will ultimately follow gold’s lead like it always does. But it usually takes some pretty serious gold moves to ignite speculative fervor in silver.


Between 1971 and 1974, which is probably around when the majority of today’s silver speculators were being born, the precious metals awoke from a long slumber and launched a mighty bull run. While some remember the spectacular 1974 silver high, few remember the bumpy road silver took to get there. Between 1971 and 1973, gold greatly outperformed silver. Silver was lagging gold tremendously for most of this run.

While the red and blue lines above really highlight this silver underperformance visually, the raw gains empirically verify it. By mid-1973, gold was 235% higher while silver was only up 111%. Today if we saw silver merely double while gold tripled, it wouldn’t surprise me to see mass suicides in the silver camp. It would utterly shatter the hardcore silver bulls’ psyches to see their beloved silver lag gold to such a horrendous degree.

But finally in late 1973, speculators started believing the gold run was for real so they piled into silver to play this smaller market. Once again over 2/3rds of silver’s total bull gain in this run occurred in just its final couple of months in early 1974. Silver’s parabolic ascent from just over $3 to just under $7 in early 1974 utterly dwarfs anything we have seen in our current bull. By the end of this tremendous run, silver was up 420% which sounds awesome. But amazingly gold wasn’t all that far behind at 377%.

Not only did gold easily beat silver for most of this bull, since silver’s gains were more parabolic it crashed right after unlike gold. While silver struggled and consolidated lower as speculators contended with their own greed and fear, gold soon carved a new even higher high in late 1974. Déjà vu? Today in 2007 traders are worried because silver isn’t testing new highs while gold is. But there is nothing new under the sun in the financial markets because they will always be driven by the same greed and fear.

So even in the early 1970s, silver was a spastic speculation. It lagged gold for years before suddenly rocketing higher in a speculative mania in the end to catch up. And then it promptly crashed. Silver’s consolidation-parabola-crash cycles we have witnessed since 2003 are just echoes of this restless metal’s usual behavior stretching back decades.


Certainly the cornerstone of the popular silver-outperforming-gold mythos stems from the entirety of the 1970s precious-metals bull. From their early 1970s lows to January 1980, silver gained 3627% while gold “only” gained 2332%. On a closing basis silver went from $1.29 to $48.00, 37x higher, while gold went from $34.95 to $850.00, 24x higher. So yes, silver certainly did outperform gold in the 1970s bull. But the devil is in the now-forgotten details as always.

This chart shows the second half of that 1970s bull run, from 1976 to 1980. Once again for several years gold handily outperformed silver. By mid-1979, gold was up 200% since 1976 while silver lagged well behind at 154%. Then suddenly through two massive parabolas that each lasted a matter of months, silver soared vertically. Of its fabled run from just over $1 to just under $50, fully $40 of it happened in just the last five months or so of silver’s entire bull market! If you totally ignored silver until August 1979, theoretically you could have still reaped 4/5ths of its entire gains of the 1970s!

So was silver a better investment than gold during the 1970s as popularly believed? Certainly technically yes. But this was only true for a half year straddling the dawn of 1980 when silver rocketed parabolic in its greed-driven speculative-mania bull climax before promptly collapsing in a massive crash. Just like today, back then silver tended to do nothing exciting for years and then suddenly explode in a greedy frenzy that just as quickly dissipated when it was over.

After the silver and gold super spikes of late 1979, both metals crashed. But since silver’s gains were far more speculative and less fundamentally sound, it plummeted much farther than gold. And provocatively, from 1976 to early 1980 in the second half of this bull of legend, silver ran 1158% higher while gold ran 732% higher at their respective bubble peaks. While silver’s outperformance was indeed substantial, it certainly didn’t approach the 2-to-1 leverage a lot of traders expect today.

More than any of my other research on silver lagging gold this week, this chart bothers me. I constantly hear silver advocates describing the 1970s as if silver’s gains were more linear, spread out, and practically achievable for a trader of the time like gold’s. But when 4/5ths of silver’s entire decade-long bull run happens in just five months, the metal seems far more appropriate for gun-slinging speculators than investors. Exquisite timing was necessary to ride this super spike.

If your expectations are for silver to make smooth linear gains like gold, you really ought to consider resetting them to expect lots of boredom with periodic stunning parabolas. Silver will still be a great investment, but it will require lots of patience and nerves of steel to hold it long enough, and then sell it quick enough, to capture these parabolas. All throughout modern history silver has usually waited until late in gold bulls/uplegs to really shine and show its true colors.


This final chart highlights a little-remembered precious-metals bull in the mid-1980s. It is interesting because this is a cyclical, not a secular, move. Yet silver exhibits the exact same type of lagging-gold behavior in this mid-secular-bear environment that it did in both the 2000s and 1970s secular bulls.

It all started in 1985, when gold ground higher while silver bucked the gold strength and ground lower. So is 2007 all that odd, to see silver not responsive to gold strength? Definitely not in light of history. While this gold bull started higher in early 1985, silver didn’t join the party until mid-1986 when speculators finally started getting interested in the precious metals again. By midway in this run, gold was 54% higher while silver lagged far behind at 23%.

And then yet again in early 1987 silver exhibited its characteristic hyper-speculative behavior. While gold continued higher in a nice fairly linear fashion, silver exploded vertically. Almost all the gains of this entire silver upleg occurred at the very end. Ultimately silver’s 109% gain would handily exceed gold’s 67% gain. But silver really only outperformed gold for the last five weeks of a gold bull that ran for over two years!

After this silver parabola in early 1987, not surprisingly it promptly crashed. The kind of greed that can drive vertical ascents is simply never sustainable. Meanwhile, since gold was more fundamentally driven, it retreated modestly but didn’t crash. And late 1987 again highlights silver’s incredibly speculative nature. As the US stock markets crashed, silver was dragged down with them. Speculators were universally scared and wanted nothing to do with any speculative trades, period.

But while silver languished, gold soon rose to a new high after the 1987 crash. Although silver has largely been a speculators’ playground for all of modern history, gold offered safety and strength in a very trying time. This just underlines the crucial point that in terms of price action silver is not just like a more-volatile version of gold. Since greed and fear have a far greater influence on its price than fundamentals, silver is a radically different beast entirely than gold.

To be honest with you, at this point I feel let down and misled. All my life I have drank the Kool-Aid of the silver mythos that states it should outperform gold most of the time. Yet this is just not true in history. Regardless of what you or I want to believe about silver, the historical data is crystal clear. Yes, silver does tend to outperform gold at the very end of precious-metals moves when popular greed waxes extreme. But before those climaxes silver tends to lag gold considerably for the majority of the total time these moves take.

In light of this revelation, silver’s underperformance in 2007 shouldn’t frighten any precious-metals investor or speculator. It is simply par for the course. Silver will more than likely fly during this gold upleg, but most of its move higher will start in the later months after gold’s own run has already restored confidence, bullishness, and greed to PM speculators. Silver will eventually surge to catch up with gold in its own good time. All silver’s non-confirmation of gold’s run today signals is an absence of general PM greed so far, which is a good thing since it suggests this gold upleg remains young.

At Zeal we have long invested in and speculated in physical silver and silver stocks. I first recommended physical silver as an investment to our subscribers in November 2001 when it traded at $4.20. One of our long-term silver-stock investments, recommended in April 2002, is now up about 1200%. So our capital has long been deployed in silver and elite silver stocks and will remain so until the end of this commodities bull a decade or so into the future.

But for individual gold uplegs, this research will alter my trading strategy. Early on in gold uplegs, speculators will probably get better results in gold stocks. Silver stocks should do best later in gold uplegs after gold’s strength restores general greed to silver futures speculators so they start driving up silver prices. If you want to mirror our own actual silver-stock trades in this gold upleg, please subscribe today to our acclaimed monthly newsletter. It is where we actually apply our research to profitable real-world trading.

The bottom line is there’s a little too much myth in the popular silver mythos today about it outperforming gold. While silver does tend to soar and surpass gold near the end of any given major move, most of the time it lags significantly early on before general greed takes root. This makes sense, as the silver market is so tiny compared to gold’s that it is much more susceptible to wild swings driven by pure speculative trading. Silver is a weathervane reflecting PM greed and fear.

While this long-established silver behavior doesn’t alter long-term bullishness on silver one bit, it really should readjust trader expectations. Like soldiers describing war as mostly boredom punctuated by occasional sheer terror, so is silver trading. We need to expect long periods of boring consolidations and relative underperformance to gold before silver suddenly shoots parabolic and earns us fortunes within months.

Adam Hamilton, CPA

October 26, 2007

So how can you profit from this information? We publish an acclaimed monthly newsletter, Zeal Intelligence, that details exactly what we are doing in terms of actual stock and options trading based on all the lessons we have learned in our market research. Please consider joining us each month for tactical trading details and more in our premium Zeal Intelligence service at … www.zealllc.com/subscribe.htm

Questions for Adam? I would be more than happy to address them through my private consulting business. Please visit www.zealllc.com/adam.htm for more information.

Thoughts, comments, or flames? Fire away at zelotes@zealllc.com. Due to my staggering and perpetually increasing e-mail load, I regret that I am not able to respond to comments personally. I will read all messages though and really appreciate your feedback!

Copyright 2000 - 2007 Zeal Research (http://www.zealllc.com/)

Indifference & Focus

The secret to Focus - Indifference.

Trading Anomaly

Some say it shows strength or weakness in a certain market, I say, the only way to trade anomalies is to fade the move.

Its converging!!!

All the markets seemed to be in the process of converging... From currencies to Gold, Bonds. Now awaiting for Oil, DJI, SSEC and others to join in. Then all it needs is a Catalyst. One crash will lead to the fearsome Domino Effect - The PERFECT STORM.

The Gambler

On a warm summers evenin on a train bound for nowhere,
I met up with the gambler; we were both too tired to sleep.
So we took turns a starin out the window at the darkness
til boredom overtook us, and he began to speak.

He said, son, Ive made a life out of readin peoples faces,
And knowin what their cards were by the way they held their eyes.
So if you don't mind my saying, I can see you're out of aces.
For a taste of your whiskey I'll give you some advice.

So I handed him my bottle and he drank down my last swallow.
Then he bummed a cigarette and asked me for a light.
And the night got deathly quiet, and his face lost all expression.
Said, if you're gonna play the game, boy, ya gotta learn to play it right.

You got to know when to hold em, know when to fold em,
Know when to walk away and know when to run.
You never count your money when you're sittin at the table.
There'll be time enough for countin when the dealins done.

Now every gambler knows that the secret to surviving
Is knowin what to throw away and knowing what to keep.
cause every hands a winner and every hands a loser,
And the best that you can hope for is to die in your sleep.

So when hed finished speakin, he turned back towards the window,
Crushed out his cigarette and faded off to sleep.
And somewhere in the darkness the gambler, he broke even.
But in his final words I found an ace that I could keep.

You got to know when to hold em, know when to fold em,
Know when to walk away and know when to run.
You never count your money when you're sittin at the table.
There'll be time enough for countin when the dealins done.

You got to know when to hold em, know when to fold em,
Know when to walk away and know when to run.
You never count you r money when you're sittin at the table.
There'll be time enough for countin when the dealins done.

To All The Girls I ve Loved Before

To all the girls I've loved before

Who travelled in and out my door

I'm glad they came along

I dedicate this song

To all the girls I've loved before

To all the girls I once caressed

And may I say I've held the best

For helping me to grow

I owe a lot I know

To all the girls I've loved before

The winds of change are always blowing

And every time I try to stay

The winds of change continue blowing

And they just carry me away

To all the girls who shared my life

Who now are someone else's wives

I'm glad they came along

I dedicate this song

To all the girls I've loved before

To all the girls who cared for me

Who filled my nights with ecstasy

They live within my heart

I'll always be a part

Of all the girls I've loved before

The winds of change are always blowing

And every time I try to stay

The winds of change continue blowing

And they just carry me away

To all the girls we've loved before

Who travelled in and out our doors

We're glad they came along

We dedicate this song

To all the girls we've loved before

To all the girls we've loved before

Who travelled in and out our doors
We're glad they came along
We dedicate this song
To all the girls we've loved before

EPF Investment Scheme

Obtained from http://www.kwsp.gov.my/



Member's Investment Withdrawal Eligibility

Effective 1 November 2007

Basic Savings is an amount to be put aside in Account 1 progressively at various pre-determined age levels to enable a member to accumulate a minimum savings of RM120,000 at age 55.



Conditions For Investment Withdrawal
Effective 1 February 2008, members can invest not more than 20% of their credit in excess of Basic Savings in Account 1 in products through approved external fund managers.
The minimum amount of savings that can be withdrawn is RM 1,000 and can be made at intervals of three months from the date of the last transfer, subject to the availability of the Basic Savings required in Account 1.
There are no other changes in conditions for the Member’s Investment Withdrawal.
Please refer to the Appendix for the Basic Savings Table and examples of allowable withdrawal for the Member’s Investment Withdrawal.




How to Make Withdrawal
Before submitting the withdrawal application, you must obtain 'Penyata Caruman Yang Boleh Dilaburkan' from any EPF office. To obtain it, you need to produce your Identification Card at the counter. Enquiries made through the telephone or e-mail will not be entertained.
Your request will only be entertained if you are eligible to make an investment withdrawal at that particular time. You then need to open an investment account with the chosen fund manager (unless you already have an account with that fund manager).

Documents needed for submission to the fund manager are:
Form KWSP 9N (AHL) which is duly completed;
'Penyata Caruman Yang Boleh Dilaburkan' statement; and
Member's Identification Card/Smart Card or Police Identification Card :
For Police Identification Card holder, please produce a letter from Police Department confirming your Identification Card number.
For Smart Card holder, please produce a photocopy of your Smart Card and affix your right and left thumb impression on the copy.
'Amaun yang dipohon' field on the form should be filled in after members have discussed with the respective fund manager on the amount that they wish to invest on condition that the amount does not exceed the maximum amount allowed. The fund manager will submit the duly completed Form KWSP 9N (AHL) to the EPF to be processed.
It is important that you fill up the right forms correctly and make sure that all your supporting documents are in order. This is to avoid unnecessary delays in the processing of your application.
Please take note that thumbprint impressions are required for the application form and MyKad photocopy. You must use the thumbprint pad that is specifically meant for making thumbprint impressions. Use of other types of materials such as the inkpad for rubber stamps is not acceptable by the EPF.

FTSE Bursa Malaysia

From http://www.klse.com.my/website/bm/market_information/fbm_klci.html

Bursa Malaysia together with FTSE, its index partner, have integrated the KLCI with internationally accepted index calculation methodology to provide a more investable, tradable and transparently managed index.

The KLCI will be known as the FTSE Bursa Malaysia KLCI and the enhancements will take effect on Monday, 6 July 2009.

The FTSE Bursa Malaysia index calculation methodology emphasises free float and liquidity screens for a clearer representation of the market.

A smaller basket of 30 stocks makes it easier to manage and more appealing for the creation of Index Linked products to promote market liquidity.

Increasing the frequency of index calculation from every 60 seconds to every 15 seconds tracks the market pulse closely and more efficiently.

SELECTION OF FTSE BURSA MALAYSIA KLCI CONSTITUENTS
The FTSE Bursa Malaysia KLCI comprises the largest 30 companies listed in the Main Board by full market capitalisation that meet the eligibility requirements of the FTSE Bursa Malaysia Ground Rules.
The two main eligibility requirements stated in the FTSE Bursa Malaysia Ground Rules are the free float and liquidity requirements as indicated below :-
• Free Float
Each company is required to have a minimum free float of 15%. The free float excludes restricted shareholding like cross holdings, significant long term holdings by founders, their families and/or directors, restricted employee share schemes, government holdings and portfolio investments subject to a lock in clause, for the duration of that clause. A free float factor is applied to the market capitalisation of each company in accordance with the banding specified in the FTSE Bursa Malaysia Ground Rules. The factor is used to determine the attribution of the company’s market activities in the index.
• Liquidity
A liquidity screen is applied to ensure the company’s stocks are liquid enough to be traded. Companies must ensure that at least 10% of their free float adjusted shares in issue is traded in the 12 months prior to an annual index review in December.

Any constituent changes will be implemented after close of business on the 3rd Friday in June and December.

VARIATION TO THE KUALA LUMPUR COMPOSITE INDEX FUTURES (FKLI) AND KUALA LUMPUR COMPOSITE INDEX OPTIONS (OKLI) CONTRACT SPECIFICATION

My Comments for the Challenge

OK here comes my comment:
1)YTLPwr-WB
As this is warrant, it depends on the mother share. But instead of looking at FA stuff, I m merely going to compare the mother chart and the baby chart.
Grandma story:
YTLPwr was in uptrend until end 2007. Thereafter we see a huge drop - downtrend. In Apr 2008 onwards, the price move in range signalling potential accumulation process begun. However, the recent weeks runup has met some resistance and currently unable to break the resistance.

Grandma story 2:
YTLPwr-WB begun and price dropped since. At end Nov, the price ran up. Recent weeks unable to break the high. The runup is in tandem with the runup in the mother share.The resistance now also in tandem with the mother share.

Sam's Comment:
Sam's comment to buy YTLPwr at less than 0.55 looked very likely.

My recomendation:
Current moment: SELL
Potential buy price target: When YTL Power is around 1.65 and YTLPwr WB is around 0.45. If YTLPwr WB goes to 0.45 while YTL Power is higher than 1.65, this price target is invalidated.


2)KNM
Grandma story:
Runup from cents region to ringgit region begun in 2006.In 2008, distribution took place. Uptrend line broke in Jul 2008 signalling downtrend stage begun. High volume registered in Oct and price downward momentum decreased signalling potential accumulation begun.

My recommendations:HOLD first.
Potential to buy around 0.40 remains high. Price to run high high, belum lagi. Wait for two more months. For long term people, can accumulate around this 0.40 price target.


3)SIME
Grandma stories:
Runup begun late 2007. Late 2008 to beginning 2009 distribution took place. Super Gap (my own term, not TA :P) happenned in Mar 2009 signalling super downtrend. Currently while price is at prior to runup, no signs of assumulation process begun.

My recommendations:NO BUY.
Wait until accumulation begun for long term buyers. For TA buyers, as usual, wait for uptrend signals.


Hehe, sorrila with the grandma stories... but at end also got to the point summary. Can accept?

So over to your comments Sam. Sam, rubber more safe, but less shiok. If want really safe then ma no need to do, then sure safe! Hahaha. There ll always be risk of pregnancy even with rubber. Haha. They say, Everytime we choose safety, we reinforce fear.

I d like to think now I graduated from primary and secondary TA school liaw. Of course, belum dapat diploma, degree, master, phd whatever lagi lo. But maybe I am wrong who knows... Time will tell. If not, I go study SPM again. Hahahahaha :)


Dear Theng,
OK, FKLI part, I challenge you, can? Look like you think my simple strategy very lousy.
So here is my challenge:
My position will be as follows:At opening bell tomorrow - 19 Jan 2009, I ll take short position; whatever the price. Then I ll hold until end of month - contract expiry. Look at the settlement price in newspaper, then thats the price close. Then calculate profit or loss for me there. Margin 4K. Capital 10K per lot.The temporary increase one nevermind one la. Sap sap sui. After 3 days they reduce loh. In between if margin call also, got T+3. Hahaha. So far, I never kena margin call love letters yet. Thank you for your concerns.
Thereafter every 1st day of the month, short whatever the price. Until Aug contract expiry.

Still I am not sure why you sound like you hate bizfun so much. If they are nothing to you, why so "kek tong"? Relaxla. Bizfun forum taught me a lot of things. Helped me make money. So, thank you for your concerns but I dont feel that I am being misled there la.

OK, so you re old bird in FKLI and FCPO. Whats your approach then? If you re an old bird, my simple challenge above will be no problem to you right? Anytime can beat that. So accept my challenge?

Anyway, still got many fund managers there la at bizfun. I met some of them also. Namecard ada pun. Some I open account with them also. Some of them taught me how to play other markets. Shared with me their experiences also. Got a lot of nice ppl there too.

By the way, why my comment on rollover is a joke? Big funds rollover, sure I know. But whats the point for small fellas like me? Roll or not roll also, it will be realized profit/loss. The question was raised by another forummer whether rollover can become unrealised or not. So, what did I comment wrong?
You say - How are u going to roll-over until aug with your rolling skill in kindergarden stuff? A beginner also knows how to roll-over, ok? That is the basic in playing this game!I say - No need roll roll over la. Simple enough. Short current month contract. Keep until settlement. Following month new contract, short again. Keep until settlement. Simple right? I dont want to confuse ppl who dont play FKLI. Senang sikit for them to see this strategy also. If take into account of rollover, then need to track more things, susah. We keep simple simple for everybody lo. I dont think you re big fish la btw. If really big fish, then why so kek tong reading my comments? You should be very happy mah. If I get it all wrong, then that means every month income for you I got contribute one...

For those who dont play FKLI, FKLI is what ppl call zero sum game. For one to win, another must lose. Therefore, for big fish to win, all the other small fish must lose. Or other big fish lose loh. So Theng, apamacam? Accept my challenge to beat my ROI based on my simple strategy? (Maybe negative ROI I will get, who knows) hehe.

Maxforce said...
GPacket...Well Sam, maybe you see it as weakness la. But the way I look at GPacket, it ll come down again. Yes la, naik from bottom a lot liaw. If you use percentage like that, how? Cos u compare from bottom. If compare from top, the percent very small only.
So lets add GPacket to our challenge.
My recommendations to those holding Gpacket now: SELL.
What is your recommendations, Sam?

Sam accepts Challenge. Theng baits for a Challenge

Samgoss said...
^V^Ha ha..k..deal...!

Let start with ytlpwrwb , actually i am eyeing to buy back ytlpwrwb @ price below my selling point , I think d chances for me to buy back @ <>

D second stock is KNM , what is yr TA analysis max ?

D third one is SIME , how ?Bear in mind max , i want u to tell us when to buy ? or it is a sell at current level !? we dont want to hear grand mother stories, can ?

Yes , rubber (FA)is not 100% safe but it is much much safer than withdrawal (TA)! bukan ?

Ha ha ..u said u r only a TA student, what make u think u r qualified to tell sour seng , he cant beat me with his TA ? ha ha..seng , see ? a TA student said u know nut about TA , if i were u, i will find a hole to hide my bloddy head inside liaooo..ha ha2

Theng , about d FKLI part, i leave it to u , u monitor it 4 me ..k ?

------------------------------------------------------------------------------------------------

Theng said...
Bizfun people did nothing as they are simply nothing to me! Like I said maxforce at least a reasonable guy. However, maxforce was with a group of foolish who believe TA is everything and TA is so important. I have nothing against those ‘closed minded’ people. It is just that I seen how a real expert and how a big fish being bullied when he tried to educate the entire close minded people there.

maxforce, you do not belongs there and please do not waste your time being mislead by the so called FKLI/FCPO expert there. What u wants me to learn? Believe it or not, I am a real ‘lao jiao’ in FKLI and FCPO. So, what do u wants me to learn from the idiots and small player there? Who are they, by the way?

A real fund-manager was presented there while the idiots there do not know how to appreciate. So, what do u want me to learn there? I only comment in blogs / forum with qualities. Your gratitude theory is totally wrong on my side. I respect Sam, simple as that!

You owe them for learning from the FKLI expert there that makes u a better in FKLI/FCPO? Are u sure? Your latest comment on roll-over was a real great joke. Your sifu there teach you that? Hahahaha, like I said, you do not belong there. With your good attitude, you should seek for better sifu, ok?

“FKLI. Manyak senang. Short now until Aug. That ll be my position”

- How are u going to roll-over until aug with your rolling skill in kindergarden stuff? A beginner also knows how to roll-over, ok? That is the basic in playing this game!

“Make money in the market? Due to FA or TA or our brain power strong? Actually I think its neither loh. I always think I make money not because I am smart. Just because the operator let me make only. I am such a small fish. If they want to kill me, anytime they can.”

- Come on lar, just because you and your gangs there are purely small fish, who the hell do u guys think u are? Big fish wont have time to kill you all lar…. Your small lots contribution does not require big fish’s attention. So, please stop blaming big fish when u are losing, ok? You are losing simply because of your skill. Big fish wont have time to look at you, ok? Not believe ah? Ask me lor, big fish like me prefer to look at how you guys talk kok rather than looking at the few lots you have in hand! Besides, your sifu will be ashamed when u said you are neutral on this. Fyi, he’s looking at you now, ok?

“Ha ha ..u said u r only a TA student, what make u think u r qualified to tell sour seng , he cant beat me with his TA ? ha ha..seng , see ? a TA student said u know nut about TA , if i were u, i will find a hole to hide my bloddy head inside liaooo..ha ha”

– this I seriously like it. sorhai seng is just another who hides in his own small world.

"Dont count the CNY higher margin la. That one temporary only."

- Oh.... your sifu teach you no need to calculate temporary higher margin ah? like that ah? so, let's assume RM 4000 stuck for the rest of the year with once in a while a higher margin, how much you wanna reserve to trade 1 lot? max, you can refer to your sifus, then only answer us. I wanted to know how TA skills / your accounting stuff can help you on this.

Sam, the game is getting exciting. I bet sorhai seng wanted to get involved, but too bad; he's not invited as we rather face maxforce (a reasonable guy at least)then 'paying piano with the sorhai bull'对牛弹琴, right?

-------------------------------------------------------------------------------------------------

Sam adds another counter to the challenge

Samgoss said...
Wowww, never thought that we hv an "old bird Theng " in FKLI/FCPO ! woww! big player worrr ! ha ha..good good ! seems like lot of hidden tigers reading my blog silently..ha ha2 Theng , u can comments whatever u like in my blog..but pls dont use vulgar words lah..

i am not pretend to be innocent , i did speak one or two vulgar words once in a blue moon , but pls give some respect to our lady readers here ..boleh ? if u feel " pei song " without these vulgar words , y not u put it in short form ? such as " S H " , " M F " .. boleh ?

ha ha..My Dear Theng , d fkli part..i leave it to u liaoooo.. u monitor 4 me ..ok u know lah..i dont trade future n cpo one mah... I know there r lot of loop hole there , we need ppl like u to monitor his call 4 us ^V^

Come back to max .. Max said : At 0.60 in Nov, TA did not suggest to buy. Neither did it suggest to sell. However, it did suggest that accumulation is taking place. Volume spike after a downtrend while prices remain stable - ie the down range is not that big anymore, suggests that selling momentum is decreasing. Accumulation will start to take place. Short term buy is possible, but not a strong buy suggestion from TA. As a matter of fact, till today, it is still in accumulation stage.

*****Wait ! u said till today @ 1.10+- , gpacket is still under accumulation stage ?? OMG ! from 0.63 to 1.10 , up almost 100% liaooo...she still under accumulation stage ? still not confirm uptrend yet ? then tell us when to confirm uptrend ? 1.30 ? if that's d case .. If those who jump in @ 1.30 after seeing confirmed buy signal, obviously they will take a higher risk ! what if d manipulators throw all to u guys @ 1.30 ? like that mati lohh !! no wonder seng get his fingers burnt so badly ! ha ha See guys ? this is TA ! u need to wait 4 uptrend signal..by then it has already rose more than 80% liaooo ! Max..u see d weakness of TA here ?

My reply - The Challenge

Haha lone TA fella here sure kena tembak... but thanks Sam for the defence. Much appreciated your gentleman style. I too free nothing to do this weekend, so post a lot hehe but also your comments quite interesting, else I also wont reply :)


Dear Theng,
Thank you for highlighting where I came from. Not too sure what bizfun ppl did to you or what they say make you not happy. Hopefully it was not me. Haha. Anyway, I owe the bizfun forum because I learnt a lot there. Maybe you didnt learn anything there but as I did, of course it is only natural I feel gratitude right? Its like you feel gratitude towards Sam here. Same thing loh.


Dear Herbert,
I ve been silently reading this blog for some time as mentioned earlier. Sam post his buy and sell calls. But I have not read a more detailed analysis as like those in newspaper or magazines. Maybe I am wrong, but I think Sam does not do so much homework like the fund managers, investment analysts etc and his results are superior than those fund managers/investment analysts right? So perhaps homework need to do, but not that much as those by the analysts?

As for the cycle, Sam corrected my wording used - I should have said Market rise and fall; instead of originally Stock rise and fall. But the whole premise I was trying to say is that it is based on the economic theory of rise and fall due to supply and demand. And TA is centered around this idea. Yes, some good stocks can have strong fundamentals that is why demand is high then price go up. But for some shit stocks also price can go up one woh... if not goreng, I dont know what that is.

Which blog show TA more superior? Actually, so far, I have yet to see any blog which are superior... no offense... I started off in the net visiting many many forums. Then visit many many blogs. Often I stay for a few days to a few months. Most initially look very good. Then found out its not so good. This blog I havent really track yet. Will track loh. Then see if really this blog is good. No offense ar, Sam. Just I belum tahu lagi.

No offense taken on my part. No worries. Van Tharp once said, Everyone of us will have a version of the truth of which may or may not be the truth. Or something to the effect la. Maybe you re right, maybe not. I dont know. Time will tell.


Dear Theng once more,
Correct me if I am wrong, but Moo guy is a strong advocate of FA no?
I remember arguing once kaukau with him. Because I borrowed Buffett's idea of "Selling when the reason you buy is no longer there" into TA. - he not happy. Then he say because I used foul language. All I said was that I have bastardized Buffett's idea and put it into TA. Yeahla... bastard is foul word la. But in that context, it merely mean I change it loh. But he cannot accept.

What to do.Btw, I m better at FKLI/FCPO than stocks... so well if you think I dont know FKLI/FCPO... aiyah... apa macam mau bikin... no need to challenge me in stocks also. Because my stock picking skills lousy mah. Right in the beginning already say loh.


Dear Sam,
OKla... Seng knows nuts about TA la. Happy? He started his blog that time was pure FA. I was the one introducing and convincing him TA can pakai. Then he started looking at TA and to learn TA. Until now how long only? In time la, he ll be better in TA. Is like, how long you took to master FA? Dont tell me born with it one ar... hahahaha
Anyway, yeahla, I pusing pusing then say the same thing. This one call polite mah :P

Yes, shit stock if delisted then relist is unlikely to recoup losses if one bought earlier. But well, my point is just that they might come back - thus the cycle. Anyway, as said above and earlier, I ll mention Market Rise and Fall from now onwards, instead of Stock. Actually I didnt say stock rise because of TA. I merely mention I didnt bother with the why loh.

How to define accumulation and distribution? Well... earlier I did mention that in accumulation, price doesnt move much; got some volume. And accumulation happen AFTER downtrend.
Distribution happen AFTER Uptrend. Price moves in range, volatility quite high. Volume remain high. But the price is in range only. Dont go make new major highs etc liaw...

Aiyah... if I know when... then maybe I no need pakai condom leh? Then I use the withdrawal style loh... :P Yes la... risk is higher. But rubber also not 100% mah. And more shiok without rubber. Hahaha.

FKLI. Manyak senang. Short now until Aug. That ll be my position. I m not that active in blogging, so if you want me become like you to post before hand, then susah la. You got followers. I dont have.You enjoy posting then let others make. I dont care loh others make or not. Not my bank account also. OKla, you can say me selfish. I accept one. But if you like, you can assume I take one contract every month. Margin is RM4000 now. Dont count the CNY higher margin la. That one temporary only. One point is RM50. End of every month see the ROI is how much. Maybe negative also can hahahaha but ROI number is big. So thats why if you say you earned 1500% ROI, I wont disbelieve just based on the number 1500 one. I am fine if you base this as my "performance".

Make money in the market? Due to FA or TA or our brain power strong? Actually I think its neither loh. I always think I make money not because I am smart. Just because the operator let me make only. I am such a small fish. If they want to kill me, anytime they can. Even PB Aneas with 400mil fund also mati... so if they dont want to let me make very easy for them to do only.

So now if you want practical, can be either the options below lo:
1) You choose 5 stocks. Then I comment. Then you comment. I comment first because I am outsider unproven fellow. You would not want me to follow your comments right? This blog is owned by you, so home ground advantage, you comment later lo.

2) You track my assumed ROI per month by assuming I short every first day of the month until Aug. Margin - the capital is RM4000 per lot. Then kautim loh. I already analysed and my analysis tell me should short until Aug. Maybe I am wrong. Maybe I am right. Dont know one ar... if right, make money lo. Wrong ma lose money lo. Simple ma.So Sam, apa macam?

Whichever also can. Once again, I thank you for coming to my defence. Appreciate it a lot. If you do come to Klang, let me know. Bakuteh on me. :)

One thing, I d like to stress though... I am not a master of TA. I am a student of TA. If say Sam agrees on the challenge and then I lose, it ll only mean one thing... my knowledge not enough. Then I ll put in more efforts in learning :)And if I win, then it ll only mean I must learn to remain humble. Either case, it ll not mean FA or TA is more superior. Just that it mean we ll have to keep learning.

Happy learning!

Sam's reply - Why vs When

Samgoss said...
Woww max.. what a fast reply , thanks 4 taking my reply seriously ^V^

I like yr answer on seng knows nut about TA . well, no need to go one big round n then come to say, yes he knows nut about TA , yr answer Is as same as mine "y, d length of our fingers r not d same ? 十个手指有长短! ", too bad, seng is d shorter one.

Yr reply , Yes, some shit stock drop then died. Never see them again. Maybe later they will relist. Who knows?
Well, even they can get listed later, it is quite unlikely 4 u to recover yr losses after d restructuring n bail out .

Yr fourth reply , my reply is to tell u that stok rises n falls r due to FA not TA , not like what u claim that it is solely TA !D

fifth one : U says : Well, my statement earlier refers to accumulation process to uptrend. Yours are referring to distribution then downtrend .
My reply is: I am asking u “ how u define it is accumulation or distribution ? it is just like, buy low sell high , how to define low is low, n high is high ? boleh ?

D sixth n eight : u keeps stressing on timing , timing is TA tool, I stressed on :why” , bcos why is FA tool ! only when one knows “why” then only he can make money ! not when ! give u one example, if u know “why” caused women to pregnant, then only u know how to avoid it by using condom , u cant avoid pregnancy by using when ? by calculate “when” her period over to avoid pregnancy is quite unsecured ^V^ bukan ?

D last one :U says : After I went full fledged into TA, I went into FKLI and FCPO. Later went into US Futures - DJI (YM), SP500 (ES) but timezone difficult, health issues a lot. Finally stopped after kena tembak from doctor. Played a bit of forex too.Stock picking is something of which you re good at. Not something I am good at. Yes, can use TA to pick. But then I ll need to screen through so many stocks... and whats the point leh... in the end, its something you re good at not something I am good at.
Sam says “ ok..since u said FKLI is something u r good at..k…perhaps u can show us yr TA talent in FKLI ^V^what is so difficult ? boleh ?Come 2 yr additional comments , U r talking about manipulation , no one can make money if d said stock was manipulated , be it FA or TA , u can hv a best buy signal or best fundamental of it, they can still put u in deep shit whenever they want . But then horr…it is very unlikely to be happened in bluechips stock due to their proven earning records.

Cut it short , If u want ppl to believe that TA is workable , u must show it to us ! like Theng N Herbert said “ so far, we see none of d TA blogger can do that ! none ! I know u will tell me that u hv no obligation to prove it 2 us.. Well..if that’s d case,,then y u claim that u r not d “shorter finger” among d TA learners ? not that ?


Samgoss said...
2 Theng n all , as I said, there is nothing wrong of being a banana man , cos they didn’t choose to be banana , some r due to parent n environmental factors, hence, it is not right to lough at them !

fyi, most of my best friends r banana also , but then they r very humble n nice like maxforcen n TL ^V^ if u wanna to shames them , shames those who think they r one class above d others n also those who look down to their mother tongue n culture like sour seng !

2 me , maxforce is a nice humble gentlemen , I hereby welcome maxforce to drop his comments in my blog whenever he wish to ^V^ max..u hv my assurance, as long as u r giving sense comments, no one can tembak u in my blog ^V^

U said “Sam:Do u know who is Max huh? Max came from http://www.bizfun.cc/forum/index.php . looks at how quiet the said forum and you will know how stubborn these peoples there on defending TA. If I am not mistaken, you have been invited to join them once. Unfortunately, due to their stubbornness and 'closed' minded, you rejected to join in. At the end, there are two experts there getting trouble with these "closed" peoples there. Maxforce I think still consider a reasonable guys. But; others...... what can I said? Look at the quietness of the said forum and it shall explain all. In short, the said place is also the place for people to syiok sendiri. Ask the Malacca fella and he really knows how to enjoy himself there.

“Yes, I still remember that , thanks 4 yr alert ^V^ fyi, I only visited bizfun once when I was asked to join them last year, since then.. ha ha..u know lah ^V^like Theng said : 人在做﹐天在看 ...... ^V^2 ET , yr "Can u tell us is Lin Chi Ling waiting for u? bcos u r 有才华+长得帅+挣钱.. ha ha "I am definitely not ! may be u r referring to cyt i guess ha ha..right cyt ? ha ha