On Wednesday before market opening, I published a post saying that I was expecting a high pivot to form at 1376 or 1382. 1382 was hit that day just before the morning session ended, and market gradually loosing its steam. On Thursday, the general market was mostly in red, 'confirming' the anticipation I published. Following that I had received a lot of emails with very positive comments and asking how did I manage to pin point that market peak so accurately. Well, many thanks for your kind words! I am just sharing my hunch; I won't proclaim I am always right. If you are interested in how to derive that figure, ask dvd who had left a comment with his calculation. I believe readers such as yy and Sooth would also had figured that out by now. For your information, I did hint that pivot 1 was going to form in my last KLCI post. Yes, it was a call based on experience.
In the world of trading, you need discipline and good money management to get you out of troubles. In order to win consistently, you need an edge. It doesn't matter what your edge is, it could be FA, TA, or real good connection with the market makers. My edge is Technical Analysis. If you don't know what's your edge, then you haven't got one! If you haven't got one and still want to trade, you better develop one for yourself!
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2 comments:
Boon,
Great work & info sharing here TQVM. Being an amateur, just curious with the following queries. Hope to hear from you. Much appreciated
1382 as pivot 1 was an excellent call
1365 as pivot 2 on July 5th or too soon? am assuming a good time for traders to collect :)
Noted the KLCI run up from 1349 to 1382, there were miniature 1-2-3-4 pivots right? if so is this behaviour consistent?
Also noted you are using 30min interval(am guessing here) for KLCI but daily on Bullish Rising 3 Leader chart. Given the miniature pivots above, 30min interval & daily interval, guess can conclude 1-2-3-4 pivot concept is applicable to any timeframe, right?
For the 1-2-3-4 pivot concept, looks like best to long pivot 2, will give better odds to gain, right? If so, TQ for the pre-empt :)
Hello tcg82!
First of all, sorry about my late reply. I rather make a proper reply than to make a quick one.
Yes, you can anticipate 1365 as Pivot 2 and plan for a long trade. What I can tell you is, the determination of Pivot 2 is often slightly harder than Pivot 1 -- Pivot 1 is the easiest. If you do go long at Pivot 2, I would suggest you to set yourself a profit floor at 61.8% between Pivots 1 and 2, and exercise trailing stop once your profit floor is hit. This is because that such a long trade is of counter trend -- remember that we just had a down swing; is better to be more careful, as Pivot 2 could fail to take out Pivot 1.
I think most books or written trading plans will suggest taking positions that are in the direction of the initial swing -- down swing in this case. Therefore, go short at Pivot 1 or Pivot 3.
Yes, you are right, there was 1-2-3-4 Swing from 1349 to 1382.
I don't use 30-min for KLCI. That chart was just for illustrative purposes, to show the bounce off 1382 more clearly.
Yes, it is applicable to all time frames. However, what you must understand is that, not all time frames are worth trading. For a faster time frame, you will have very little leeway and experience great difficulties in timing your entry. Also, the risk/reward ratio is often not attractive. If you are trading on a behaviour you observed off a slower time frame, such as the daily time frame, you can anticipate and *home in* to the spots where pivots could occur a lot more easily. Furthermore, behaviour exhibited within slower time frames often does propagate to the faster ones.
I think I have answered your last question.
NOTE: Trade planning is an endeavor of art. There are no fixed rules. What I have written above are just my personal view for a specific situation. As you learn more and gain better understanding of price actions, you will be able to plan better. One day, you will have that special feeling that you knew a particular trade is going to be worth it and you knew you are going to win it!
All the best
Boon
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