FKLI May 06 – AT Trade 6 – Closed with a net gain of RM700

Setup Information

- This is the 2nd attempt on AT breakout. It has high chances of success since the 1st attemptfailed and the 2nd attempt is only 2 days after the last attempt
- CI formed a trend-confirming pattern

April 26 06
1. Long 1 contract: 941.5, 1 tick above the next month contract as April 06 contract is exipring
2. stop is 947, less4.5 point loss.

May 10 2006
a. The price opened 856.5. I immediately sold the position. I was happy with RM700 gain (15 x RM50 less RM50 commission).
b. I later checked the price. It hit high at 958. I felt regretted but I took my action as planned.
c. The price then hit the low of 952.5 before closing at 955 with lower volume.

Trade executed according to plan? Yes

My initial and planned exit options:
a. Sell at MOC when there is a long white candle with blow-off volume and CI gained a lot with volume greater than 1 billion.
b. Sell when the price opened gapped up again after the long white candle with blow-off volume.
c. Trail my stop according to chart.

My actual exit options:
- Sell when the gap is filled at 957.5
- Sell at MOC at 960
- Sell at next day open of between 958.5 and 960.
- Sell the open

What I have done best:
a. I do not predict the market. I trade what I see.
b. I sell based on chart. I sold late but I did it any way because I did not see the chart clearly because:
i. I predicted the price my come down and go up like Singapore chart.
ii. The price has not reached my target yet.
iii. I do not have a clear exit strategy in place or I has not rehearsed well.

What I need to improve:
I will not let the emotional and historical bias affect my trading decision.
I sold late because I did not see the chart clearly because:
i. I predicted the price my come down and go up like Singapore chart.
ii. The price has not reached my target yet.
iii. I do not have a clear exit strategy in place or I have not rehearsed well.
However, I have found the improved strategy after this trade.

What I have learned:
a. The power of trend-line and trend cannot be denied.
i. The breakout of consolidation can see price move up fast.
ii. Go with the gap with the direction of the trend. The gap with the trend is much bigger than the gap against the trend.
iii. The trend is always your best friend.
b. The AT or DT trade will not be closed after the price moves back to the consolidation zone even on the breakout day. Let the market take your stop out.
c. If the trend is up, the gap-up range is bigger then gap-down range. In this case the price gapped up 1.5 points from previous day’s high and 0.5 point on gap-down 2 days ago.
d. The following are the possible selling on market top if you have a long position. It is not recommended for shorting yet:
i. There is white or black evening shooting star,
1. If the volume is higher than that of prior day, it is more reliable.
2. If there is one long white candle with WR7 pattern with very high volume of more than 7000 (blow-off volume), it is more reliable.
3. The star is at the gapped-up and the gap gets filled.

ii. I do not want to predict the price may not reverse and it is quite reliable signal based on book, FKLI and FCPO. I will follow it if I have a long position. I will wait for more information to short the market.