Trading Tips

TIP 1 Read both the books by Mark Douglas which cover trading psychology BEFORE you read or do anything else. If you don't, I'll say I told you so when you hit a failure barrier and don't know why.

TIP 2 Stop loss policy - you MUST have one and practice, more practice and even more practice at sticking to it. It will not be easy but it is an essential discipline to profitable trading.

TIP 3 Trading plan / system. Again, you MUST have one! Then you must practice sticking to it. Do not try and second guess or trade against your indicators - wait until they give you a concise signal before acting on it.

TIP 4 TRADE WITH THE TREND. DO NOT trade against the hourly trend of the market unless you are VERY certain the market has turned. Check this by watching a long term moving average (say 80 SMA on 15 minute chart)

TIP 5 Learn to sit on your hands and not trade! It's better to wait for good quality trades than take a mediocre one and loose money. A day of no trades is better than a day with one loosing one. If you don't like the market, just walk away. It will always be there later.

TIP 6 Don't set yourself false targets and expectations. Trading is not an EXACT science and if you do you will only become frustrated by your failure to meet them. Take what the market gives and be satisfied. Greed will kill you as a trader, both mentally and monetarily. .

TIP 7 The market is rarely your friend in a trade that goes against you. Cut your losses quickly and accept them as an inherent part of trading. You will not be able to trade without some loosing positions. Manage them well!

TIP 8 Try hard not to get out of profitable trades too early. Try operating a trailing stoploss of say 15 to 20 pips behind the trade (on 5 minute timeframe) and maximise your good trades by letting them run. Be patient!

TIP 9 Ensure you fully understand how to generate and use pivot points and camarilla points on your trading platform. These are crucial decision points for daily trading and you will struggle without them.

TIP 10 DO NOT overtrade your account. Read up on money management in trading to make sure you fully understand why this is important and develop a strategy which fits with your personal trading capital. NEVER risk wiping out your account because believe me, it can happen. I've done it twice myself!

TIP 11 Learn about FIBONACCI levels and how to apply them to your charts.

TIP 12 Keep your trading system simple. Do not have too much information on your trading screen. It is unnecessary and will only cause you to be confused and delay you making your trading decisions.

TIP 13 Always think in terms of probabilities. Trading is all about thinking in probabilities NOT certainties. You can make all the "right" decisions and the trade still goes against you. This does not make it a "wrong" trade, just one of the many trades you will take which, through probability, are on the "loosing" side of your trading plan. Don't expect not to have negative trades - they are a necessary part of the plan and cannot be avoided.

TIP 14 Ensure that the candle is fully formed on the timeframe you are trading BEFORE you enter your trade. Trade what you see, not what you would like to see. Read More...

Oil Rebounds From 21-Month Low on Possible Early OPEC Meeting

Crude oil rose, rebounding from its lowest in 21 months, after a plan was put forward for OPEC to hold a full meeting in Cairo this month before its scheduled December gathering.

Ministers and officials from the Organization of Petroleum Exporting Countries are having consultations by phone and may expand the Nov. 29 Cairo summit for OPEC's Arab leaders to a full group meeting, according to a delegate. Oil earlier dropped below $55 a barrel as the International Energy Agency made the biggest cut to its oil demand forecast in 12 years.

``OPEC may decide to cut 1 million barrels per day at the Cairo OAPEC meeting at the end of the month,'' Johannes Benigni, chief executive officer of Vienna-based consultant JBC Energy, said today.

Crude oil for December delivery rose as much as 84 cents, or 1.5 percent, to $57 a barrel on the New York Mercantile Exchange. The contract traded at $56.81 a barrel as of 12:40 p.m. London time.


The contract earlier fell as much as $1.49, or 2.7 percent, to $54.67 a barrel, the lowest since Jan. 30, 2007.

The IEA, an adviser to 28 nations, cut its 2009 oil demand estimate by 670,000 barrels a day, or 0.8 percent, to 86.5 million barrels a day following weaker economic forecasts from the International Monetary Fund, it said in a monthly report today. The agency trimmed its outlook for 2008 for an eighth time this year, cutting its fourth-quarter assessment by 1 million barrels a day.

German Recession

The German economy entered its worst recession in at least 12 years as the global financial crisis curbs exports and spending, government data showed today. Last week, the IMF warned of the first simultaneous recession in the U.S., Japan and Europe in more than 60 years.

U.S. crude-oil stockpiles probably increased 1 million barrels in the week ended Nov. 7 from 311.9 million the week before, according to the median of 13 analyst estimates before the Energy Department report.

The department is scheduled to release its weekly report today at 11 a.m. in Washington. The report is being delayed by a day because the Veterans Day holiday on Nov. 11.

Read More...

Indonesia stock exchange says may raise upside limit

JAKARTA, Oct 15 - Indonesia Stock Exchange may increase the upside limit for share trading to 20-25 percent from 10 percent currently, President Director Erry Firmansyah said on Wednesday, but will keep its 10 percent downside limit in place.
ADVERTISEMENT
The exchange reopened on Monday after suspending trade for three days last week following a sharp fall in share prices. Stock price moves were limited to 10 percent, up or down, using the exchange's auto-rejection system.
"The auto-rejection will be the same as yesterday, with the upside and downside limit remaining at 10 percent, and today we are developing a new system," Firmansyah said.
"If everything goes well, tomorrow we might implement the downside limit of 10 percent, while the upside limit might be increased to 20-25 percent, depending on our tests."




Read More...

News focus: Indonesia ready to face impact of US economic crisis

The financial crisis which has hit the United States has come uncer public spotlight all over the world and causes more impacts on the economy of many countries, Indonesia is no exception.
"I should strongly say that the US condition will not cause any crisis to us, because we had once experienced a worst condition several years ago," President Susilo Bambang Yudhoyono said in a meeting with Bank Indonesia as the central bank, business circles, economic analysts and media editors-in-chief at the state secretariate building here on Monday.
The president`s statement was conveyed as an optimistic expression in facing the impact of economic crisis which has frequently hit Indonesia in the past ten years.
The head of state saw the economic fundamentals of Indonesia is currently much better than that 10 years ago, thus putting this world largest archipelagic country on the list of Asian countries with the worst economic problems.



In 1998, the president stressed that the government`s political transition and mismanagement had triggered an uncertainty which eventually caused panic.
"I dare say make this statement in the hope of being rational in taking decisions, formulating policies and other necessary action," he said.
The president was believed that influential factors which caused the economic crisis to happen in 1997 had to do with inconsistent policies and loss of public confidence.
He was also sure that the present policies, priorities and the the trend of the Indonesian economy were already on the right track, as marked with a better per capital income and declining debt ratio against the gross domestic product (GDP).
On the other hand, economic growth remained in a range of six percent in the past seven quarters. "But we can not underestimate the present condition. We need to be vigilant and improve our caution while jointly managing this country," he said.
In the meantime, Bank Indonesia Governor Boediono said the US financial crisis would however affect Indonesia, but it would never plunge this Asean country into the worst economic crisis as what had happened in 1997/98.
"The 1997/1998 period is different from the present, the banking condition is not the same as the present condition because the epicenter of the past crisis is not here but in the United States," he said.
According to him, the present banking supervision was much better than that of the 1997/98 period and the number of banks was under better control compared to that in the 1997/98 period.
"Banking indicators like CAR which reached 16 percent in August 2008, 3.9 percent of an NPL, and 36 percent of cridit growth constituted a preparation to face the impact of the US economic crisis," Boediono said.


Some steps

In a bid to face the impact of the US financial crisis, there were some steps Indonesia had to take, the president further said.
"It`s our task to get rid of difficult problems to ease the condition," he said.
The first point, the president called on all sides in facing global crisis to continuously promote optimism and mutual cooperation, so that they remain maintaining public confidence.
The second point, a six percent economic growth of Indonesia should be maintained by seeking export and investment opportunities and developing domestic investment.
The third point, according to the president is optimizing the state budget in a bit to generate growth by taking into account social safety net with a number of matters that should be heeded such as infrastructure, poverty handling, availability of electricity, food and fuel oil.
Yudhoyono also stressed that efficiency in the use of the state budget and provincial budget especially for consumptive allocations.
The fourth step had to do with business which could encourages the real sector.
"If it could be done, practically the tax revenues of the state could be maintained including manpower. In the meantime, Bank Indonesia and national banks should build a system for encouraging the credit system," the president said.
Therefore all parties were urged to be more creative in capturing opportunities by developing the markets in neighboring countries of Asia which were indirectly unaffected by the US financial crisis.
In response to the US financial crisis, the Indonesian Chamber of Commerce and Industry (Kadin) called on Bank Indonesia (BI), the central bank, to loosen its tight money policy by changing its policies affecting liquidity.
"BI should change its policy by, for example, reducing the minimum reserves ratio requirement linked to the loan-to-deposit ratio (LDR) and deferring the state debentures (SUN) maturity dates," Kadin chairman Ms Hidayat said on Monday.
He said Indonesia should take anticipatory and preventive steps in the face of the current global financial crisis because Indonesia had relations with other countries.
"The government is required to take immediate and correct actions in order to protect the national economy and business climate from the multiple effects of the global financial crisis," Hidayat said.
Kadin also recommended that the government speed up the spending of the state budget in order to restore liquidity in the financial sector after the withdrawal of SUNs.
BI and the government also needed to reinforce the implementation of the financial sector`s safety net and the role of lenders of the last resort
Read More...

Global crisis to hit hardest next year: economists

The Jakarta Post | Fri, 10/10/2008 10:03 PM | Business

The impact of the global financial crisis will be felt the deepest next year, economists said at a discussion on Friday.
Amid a slowing global for Indonesian products, the economists said the manufacturing industry will face a pressure from a liquidity squeeze and a slump in people's purchasing power, they said.



The above condition would impose an enormous pressure on economic expansion, which they predict, would only grew four percent instead of the 6.2 percent predicted by the government earlier in the middle of the year.
"Things will get worse next year. Manufacturing industry will be weaker, and unemployment rate will soar. High cost of borrowing on housing and vehicles will hit the middle class people," said former bank commissioner Ichsanudin Noorsy.
Instead of focusing on attracting foreign investment, Ichsan advised the government to strengthen the small-scale industry while continue reducing foreign debt.
"As you know, small-scale industry absorbs 90 percent of workers, while the capital intensive industry just three to four percent," Ichsan said.
Hendri Saparni of the advisory group on economy Econit urged the governemnt to create massive jobs for the people through state-owned enterprise.
"It will boost income, and creating bigger domestic demand then turning the economic wheel," Hendri said.
The country's manufacturing industry and commodity producers, she said, could no longer rely on exports to pump up growth while warning the government to avoid making more foreign debt. (ast)
Read More...