If we look at the collective participation in the markets, we find many different kinds of people, different kinds of beliefs, and different kinds of theories. These differences create price movements and patterns. To understand and exploit these opportunities, we first need to understand ourselves. We will then be able to choose the kind of strategy […]
Many new to trading have the tendency to liquidate positions that show a small profit, yet they keep those positions that show a loss as are unwilling to take a loss, in hope that prices will rebound. Such a counter-intuitive strategy will result in small wins and large losses, but why do people still do it? […]
Despite what people may otherwise tell you or any preconceived ideas you may have, there are only two things that move stock prices. They are supply and demand – nothing more and nothing less. This is the foundation of basic economics as shown in the graph below. Since quantity remains the same, price is what […]
The random walk theory, which started off from academic offshoots, put forth the idea that one should give up trying to predict or beat the markets because it was impossible to do so. In theory, this theory sounds plausible, but in practice, financial history has proven otherwise, with both investors and traders consistently beating the […]
Today, I was invited as a guest speaker to give a talk at 2009 AGM of STATS (Singapore Technical Analysts & Traders Society) on the “Strategic Outlook for 2010”. Before the talk, there was a poll, and it seemed that the general consensus is for a correction in the medium term. Here also some of […]
