FKLI was closing at 1065.5 yesterday, however it was open at 1070.5 with total 5 points of gap up. Surprisingly the market failed the break 1074 and all the way go down to 1063.5. Today is another tough day for those day traders wish to ride on the trend, but i would say that most of them fail to do so. When the market going down, I'm sure there is a lot of longist ( investors that having/doing long position) cut their position when the market slide down in such a short period. However, longist start to doubt on their action when the market start rebounding from the lowest 1063.5 to 1073. At the same time, when the market hitting 1066.5, I'm sure there is another new batch of shorty coming in (investors that having/doing short position) and they eventually become the additional victim for this "V" shape market when the market start climbing up to 1073, and end up most of the investors long at the high: short at the low. As a conclusion, in this type of markets, a person that don't even has a proper trading plan are easily get caught in this market. There are few points i wish to emphasize only, 1) proper trading plan is a must 2) always be patient and never go and chase the market 3) try to play on resistance and support level with stop loss 4) never short at the highest or long at the lowest cause we never know where is the top and bottom.
Yesterday I was posting trade idea of long at 1063-1064 level and unexpected it was today lowest level. Although able to long at the lowest, however, how to get out from the market is the another issue need to be consider. If let's say the long order was executed at 1064 level, i would suggest to move the stop loss level to break even points when the trade was gaining 6 points profit. When market was hitting 1070, adjusting the sell stop from 1060 to 1065 so that no matter how the market move, u still end up with break-even. But normally I will put at least 0.5 points stop profit which a sell stop of 1065.5 so that at least 0.5 point reward for today trade. Luckily the market was hitting lowest of 1066 only, so the stop profit is not trigger yet and a long position will be take profit at market close or hold overnight.
In theory, the stop loss was very useful, but sometimes it can be another obstacle for anyone try to catch the trend. Can u imagine what will happen if today stop profit was putting at 1066,not 1055.5 and eventually there will be 6-7 points to be missed up. To share with you all, there is 1 client of mine like to play on stop loss, and normally he put 10 points stop loss on every trade. Very surprisingly, every time the market was purposely hit his stop loss then only move to his direction. So after that few times of attempt, he start to don't believe in stop loss and decide not to use stop loss. Guess what happen next.......he was get caught in a trend and the trend wipe off a lot of his capital!!! Stop loss can be very useful in trend market but on the other hand, it also cause a lot of problem in a side ways market. As a result, it depends on how investors judge on its pros and cons plus the timing only. Whether u like it or not, stop loss is another strategy need to remember always because I can understand how a trend can wipe off a person's entire capital and normally it didn't provide any signal when it is here......
Yesterday I was posting trade idea of long at 1063-1064 level and unexpected it was today lowest level. Although able to long at the lowest, however, how to get out from the market is the another issue need to be consider. If let's say the long order was executed at 1064 level, i would suggest to move the stop loss level to break even points when the trade was gaining 6 points profit. When market was hitting 1070, adjusting the sell stop from 1060 to 1065 so that no matter how the market move, u still end up with break-even. But normally I will put at least 0.5 points stop profit which a sell stop of 1065.5 so that at least 0.5 point reward for today trade. Luckily the market was hitting lowest of 1066 only, so the stop profit is not trigger yet and a long position will be take profit at market close or hold overnight.
In theory, the stop loss was very useful, but sometimes it can be another obstacle for anyone try to catch the trend. Can u imagine what will happen if today stop profit was putting at 1066,not 1055.5 and eventually there will be 6-7 points to be missed up. To share with you all, there is 1 client of mine like to play on stop loss, and normally he put 10 points stop loss on every trade. Very surprisingly, every time the market was purposely hit his stop loss then only move to his direction. So after that few times of attempt, he start to don't believe in stop loss and decide not to use stop loss. Guess what happen next.......he was get caught in a trend and the trend wipe off a lot of his capital!!! Stop loss can be very useful in trend market but on the other hand, it also cause a lot of problem in a side ways market. As a result, it depends on how investors judge on its pros and cons plus the timing only. Whether u like it or not, stop loss is another strategy need to remember always because I can understand how a trend can wipe off a person's entire capital and normally it didn't provide any signal when it is here......
No comments:
Post a Comment