Friday, March 27, 2009

Internal and External Factor

Indonesia Stock Exchange (IHSG) as part of the world's capital markets continue to develop its own right. And as the investment vehicle, the financier invested also come from many nations, not only domestic investors. The impact of all the systematic risk (systematic risk) for the Indonesian Capital Market also be increased. If only first in the country's economic policies such Bank Rate, political and economic reference into systematic risk, is now no longer as Indonesia Capital Market is the world.

In other words, systematic risk in the Indonesian capital market now is not only come from within the country only, mortgage in America shock that occurred in the last example is a global exchange real stock price correction due to external factors.

Before investing a good capitalist should first understand the risk that problems may be encountered. Related to this risk, at least, there are two categories of risk must be understood for a capitalist market share in the unsystematic risk and systematic risk. Unsystematic risk is the risk that arises from the body of the company itself, for example, related to the company's operational, financial reports and company performance. Risk is also often called risk factors because internal. When the decrease in stock prices, companies have the ability to improve, for example, to improve the performance of the company. If the company is experiencing a failure in producing goods or services by itself can be improved, for example, by making corporate action. This is surely because the company can be done in the unsystematic risk is only associated with the business risk and financial risk from internal company.

While the systematic risk is the risk that arise because of factors outside the company, for example because of policy, market conditions, psychological aspects. Systematic risk in the management of this company at all or can not do anything because it comes from factors outside of the company. Included in this systematic risk is market risk, bank rate risk and liquidity risk.

Many of the risk as it is said that the risk is influenced by external factors. Because the operational factor despite external company to run well, and stock prices there is no reason to go down but it's just the market reacts negatively because the emergence of psychological conditions that affect the market expectations on the stock.

Systematic risk associated with this, it seems many examples that we can ask for easy understanding of this risk. For example, when the social-political and economic systematically changes will also changes the result in a stock price correction. The fact, when the leadership changes in the country is suddenly torn stock prices react. Irrespective whether the changes positive or negative for the market, that conditions can be categorized as systematic risk of stock investment. Now, systematic risk is also not only come from within the country only because of local factors but also because of external influences such as that which occurs at this time due to U.S. economic un consistent cause investors to be cautious in investing.

Tuesday, March 24, 2009

BULLISH TREND, Time to buy!!!! IMPORTANTT!!!!!

In this prediction I using Indonesia Stock Exchange (IHSG) as the main source of all stock sector in Indonesia, If IHSG is good all the sector is good also, but choose BANK and Mining sector, because they take the lead now!!! Watch the picture carefully!!!

Indonesia stock exchange 23 march

1.Symmetrical Triangle Pattern already confirmed, The Triangle Top at 18 march. Candlestick breaks up The Triangle at 10 march.

2.LOOK Relative Strength Index with 30 days period already moved above 50% line, after one month. Its a long time to wait.

3.Moving Average 30 days and 40 days already broken up by candlestick. But without big volume, its only small signal for BULLISH.

4.Watch Moving Average 30 days and Moving Average 40 days getting tight. If MA30 crossing up MA40 its confirm BULLISH. That’s calls GOLDEN CROSSS!!!


6.Bollinger Band upper line broken up by candlestick but, after 4 days candlestick did not back again inside Bollinger lines, That what I call UP trend!!

Watch out, maybe one or two days later will occur profit taking. Do not panic it just small down to back up again. Next target will be 1442.

It is BULLISH TIME, but not to BIG. HMM you think its time to push all your money to stock market, you are wrong, just use half of your money. WATCH OUT, okey, I will tell you later if ALL THE MARKET TOTALLY BULLISH!!! HAPPY TRADING ALL!!!!


Monday, March 23, 2009

Bollinger Band

Bollinger Bands developed by John Bollinger. Bollinger Bands displayed with three lines. If you are short term trading used 10 day moving average, and 20 days moving average for intermediate term trading and 60 days for longer term trading. Price is tend to stay within upper and lower band.

The characteristic of Bollinger Bands is the space between two lines based on volatility of the prices. If price have high volatility the band begin more widen. During The Stagnant Price the band become narrow. Line in the middle is simple moving average line.

For The standard deviation I suggest you to used 1.5 till 2.5. Lower the standard deviation tighter The Bollinger Band, used this for 10 day moving average. Higher the standard deviation wider The Bollinger Band, this is good for 60 day moving average. Standard Deviation is a statistical term that provides a good indication of volatility. Uses this can make the bands react quickly to price movement and reflect periods of high and low volatility.

Click Picture to ZOOM:

Indonesia Stock Exchange

BUY signal confirm happens when: Candlestick reach the lower band or moves below lower band. When candlestick penetrate the lower band and remain above the lower band and back to lower band. Second lower band lower than first one that’s good signal to buy. BULLISH condition confirmed when the price moves above the middle moving average!!

SELL signal confirmed when candlestick move above upper band. Or creates two tops. The BEARISH TREND happens when price cross down the middle band


Friday, March 20, 2009

Relative Strength Index

RSI (Relative Strength Index) created by J. Welles Wilder. One of The Popular momentum oscillator. RSI shows range from 0% to 100%. It only takes periods of time which used in the calculation. Welles recommends using 14 days period, but Me always use 30 days period. Smaller the time period that you use, faster your trading system as I said week trader or day trader.

Relative Strength Index has overbought and oversold line. If RSI line over 70% it calls overbought, RSI line under 30% it calls oversold. Watch if RSI line cross up 50% line its BULLISH trend, when RSI line cross down 50% line its BEARISH trend.

How to calculated Relative Strength Index? I use 30 days period. First, calculate the sum total gain price and divided by 30 it call Average gain. Second, calculate the sum total loss price and divided by 30, it call Average loss. Then divide average gain by average loss that’s RELATIVE STRENGTH INDEX. When average gain better that average loss RSI line will increase!!

Buy and Sell signal. You are day trader try to use 7 days period, when RSI line cross up 30% buy it when reach 70% sell your stock and wait till back 30% line. You are investor use 30 – 60 days period, buy stock if RSI line cross upside 50% line, sell it if cross downside 50% line!! Look Picture below:

Relative Strength Index


Wednesday, March 18, 2009

Ascending and Descending Triangle Pattern

When a price increase and try to break resistance and can not break it two times but still in BULL position, that The Ascending Triangle Pattern. To make Ascending Triangle pattern you must draw two lines, first line its resistance line, and second lines is diagonal line which trace the series of ascending troughs. Check picture below :

ascending triangle pattern

When a price decrease and try to break support and can not break it two times but still in BEAR position, that The Descending Triangle Pattern. To make Descending Triangle pattern you must draw two lines, first line its support line, and second lines is diagonal line which trace the series of descending troughs. Check picture below :

descending triangle pattern

I have to tell you that this two type of triangle pattern is good for short and medium term. Because they break very fast, just need only 2 or 3 weeks. You can buy and hold only for one weeks or two weeks. Target price, many of trader who used this pattern have 7 to 10% gain!! But you can HOLD MORE THAN A MONTH IF THE VOLUME TWICE THAN AVERAGE, you can gain almost 25% or more!!!


Monday, March 16, 2009

Buy Stocks (Shares)

In addition to the regular market or secondary market, investors can buy shares in the prime market. Prime market is the first time the stock market was published by the company. Generally much more beginner investors know the market first prime market is rather regular. In general, this market investors who buy, sell so take advantage in the regular market. Top reasons for that is that not a few investors who fight in the prime market in order to gain advantage in the secondary market. Sometimes buy shares in prime market have long queue, because the position of selling more than position of buying. So to avoid things that investors need to understand the condition of whether the price is really cheap? Then the management companies that do offer these, and then the guarantor and the structure of industrial emissions from the company doing the bidding public.

Practical way to compare easily.

From the industry, for example, investors can be guided in the industry that is already in Stock Exchange (Dow Jones Industrial, Nasdaq, IHSG, Nikkei, etc). If the guidelines in determining the choice of investors, stock prices in the PER (price earning ratio) then the investor needs to know that PER offered by the company will go public is really cheap.

Easily like this, if the average PER industry have 20 times the number of shares that will then make a general offer should be below 20 times. In addition to PER, before buying shares in the market of investors can also make guidelines on the position of the company. Whether the company is a company who are leaders or classified growth company. If the leader is almost certainly shares the company will affect the other, so that the stock was worth to be purchased.

In addition to buying shares in the prime market, buying shares directly to the guarantor emissions (in the prime market), investors can buy shares in the secondary market or the regular market. Through regular market trading is also through members of the company or exchange effects. Can not purchase shares directly but investors have to effect the company or through exchange members. Investors' orders are handled by the company effect ago the company that will effect the transaction to continue the exchange floor. To order to buy will buy a pair on order and selling order will be installed in order selling.

The optimal investment choose the company that really understand the purpose of investment investor. Use the effect that the company stock to become a member (because there are companies who are not members of the effect exchanges).

Members have a seat on the exchange so that transactions can be treated directly. If members use a stock transaction with such fee charged is cheaper rather than the effect the company who are not members of stock exchange, because exchange members more efficient, ie, from the investor directly exchange members. Different effects with the company who are not members of exchanges, where your order to the effect that the company will be forwarded to members through the exchange market so there are two parties before the order to the market investors. In addition, also need to get the attention of investors is related to the services provided the company an effect. Adjust the effect the service company (or a member of exchange) to the needs of your investment.


Saturday, March 14, 2009

Support and Resistance

Prices formed as the result between BUYER and SELLER. If seller push higher than buyer it is BEARISH, price will go down. If buyer push higher than seller it is BULLISH, price will go up.

Dow Jones Industrial Chart

Click Picture to ZOOM!!!

I used Dow Jones Industrial chart to help me to identified Support and Resistance. At May 2006 Dow reach its top position at 11700 then go back down to 10667 and next October 2006 Dow broke its resistance level (11700) and reach new high price!! At February 2007 reach NEW TOP AGAIN (12800) after that formed little hole, hoho BUYER getting more serious and break its top again (Resistance 12800). More-more buyer came for the party until it reach 14000, it went back down till 12800, then go back up again but it could not break its resistance LEVEL AT 14000 (October 2007), OH NOOOO TIME TO BEARISH!! TIME TO SELLL.

At December 2007 candlestick went down but did not break support 12800 (August 2007). Oh BUYER back again up up up up but not reached resistance 14000 (July 2007). The market slumped at January 2008, broke its support 12800 (August 2007). SELLER TOOK THE MARKET!!! Then made new STRONG support 11900 (January 2008). Till June DOW JONES INDUSTRIAL SLUMPED. Broke its STRONG support 11900 and BREAK BIG THREE YEARS SUPPORT 10677 (October 2008)!!


Thursday, March 12, 2009


Have a high income from invest in the Stock Market is not only a dream. Relatively high transaction liquidity provide opportunities for investors to optimize their incomes greater. How to be sure to understand the market risk and to understand the shares that you choose. Choose the specific stocks shares with high liquidity, and make a portfolio that consists of several types of shares.

Formed portfolio that includes some type of stock is the absolute requirement that must be met by investors who want to invest in Capital Market. Because the portfolio is formed at the same time investors can press the various risks, whether the risks that arise due to systematic risk and unsystematic risk. At the beginning investor to invest jut buying one type of stock. As a result, the stock is down, making the investor change his share with shares that have increased due to market factors. Instead the increased market share that already sold have an increase rather than the new shares that investor purchased.

So these factors, which then makes the investor would not want to have to create a portfolio that consists of several types of shares. In this form the portfolio are a number of ways that investors can be, for example, by combining some of the characteristics of stocks, ranging from blue chips stocks (First Line), growth stocks (Second Line) or attractive stock (Third line) or shares that provide higher capital gain as the market increased. Essentially the basic formation of this portfolio is "do not put all your eggs in one basket." Principle means that the investor must make investment diversification to minimize risk that might occur.

After establishing portfolio, investors can have dealing with the various risks that may appear on the stock market. We know the risk factors in the Stock Market be calculated high enough. In theory the high risk in the Capital Market reflects the high level of return or income that can be obtained. There are some risks that are dominant in the stock investment, which is big enough impact on the performance of stock exchanges. At the macro scale, for example, the performance of investment in IHSG (Indonesia Stock Exchange) influenced by other stock exchange, economic global conditions, political stability, and performance of other securities exchange both regional and global. In addition, the activity is also very sensitive to the various rumors and News. To understand the condition of the company and the economy entirety, is the primary requirement to avoid a variety of information and rumors.


Tuesday, March 10, 2009


News do not listen to it. Many people and trader listen and watch MSNBC, Bloomberg News, CNBC, or Metro Tv all day long. The one who talking on the news know very little about market dynamics and market price action. Very few, if any, have ever even traded a one lot in a market trade. They claim as experts trader on stock market. if you listen to it or watch it do not receive that news 100 percent, you must compare it with politics condition, because many News in Television or paper controlled by Strong Politician to create market that politician likes!! WATCH IT!!!!!!

Before becoming a trading and markets expert, the guy on TV reporting hourly from the Bond Pit, was a phone clerk on the trading floor. Obviously this qualifies him to be an expert! He, and others, can provide no utility to you. Treat it for what it really is entertainment.

The fact is: The reporting that you hear on the business programs read old news. The story has already been dissected and consumed by the professional market participants long before the news has been shown to public. Do not trade off of the reporting. TRUST YOUR SELF YOU ARE THE BEST!!!


Sunday, March 8, 2009

You are THE MAN

Create Your Own Method and stick with it. Write down your own method try and learn it. Do not change your method every day. You must have a game plan. If you are wrong, write it down in your paper or computer and do not delete or throw it. If you have a proven methodology but it doesn.t seem to be working in a given trading session, don.t go home that night and try to devise another one. If your methodology works more than one-half of the trading sessions, then stick with it.

You are THE MAN (BEST), not your friend. Do not follow someone tricks, just stay tune on your method, try to be YOURSELF because you are the BEST. Learn to accept your comfort zone as it relates to trade size. You are who you are.

NEVER put yourself in Danger Position, so you do not want to play again. Do not used all your money. Never put yourself in the precarious position of losing more money that you can afford. The worst case you can not trade again because you already used all money, so you need submit more funds.

Do not SPECULATE, you will lose. Speculator never success, because it is impossible to speculate and consistently print large winner. The probability of a winning day of week is greatly increased if you trade short term: small winners and even smaller losses.


Friday, March 6, 2009

Three Route for Stock Trader

10 people on the mountain slopes, and they will begin to climb.

Route 1 - the road smooth, uphill and curvaceous curve but this route has the farthest distance and take more time to achieve, but will be more secure because not many cliff, steep, mud, wild animal, etc..

Route 2 – Holey road, up-down, and occasionally face with wild animals but the distance that is being adopted relatively.

Route 3 – many cliff, steep, muddy and full of animals such as venomous snakes and lion, but very short distance to reach top of the mountain .

So, some people will choose the route 1, a few select routes 2 and some choose the route 3. But in stock market, amateurs usually selects route 3!! Best Trader or as I said small amount of people who success in stock market choose route 1!!

How to think about the end of this climb? All hands to return to each climber. A clear possibility of success will be greater when people choose the route 1, but take longer. Similarly, people who select route 3, if he successfully overcome all the obstacles he will also work with the bonus time is very short because of the short routes, but he failed also likely be greater because so many obstacles, once he does not climb carefully he will drop.

Therefore we also we in stock market. Any way go to achieve the results that we want always remember Risks & Rewards. But in stock market, amateurs usually selects route 3!! Best Trader or as I said small amount of people who success in stock market choose route 1!!

Thursday, March 5, 2009

Think Positive in Stock Market

10 HOW to Think Positive
People always think positive in a good condition or not is a good person who truly enjoy their lives. There are 10 characteristics that people think positive:
1. See problems as challenges, must breaks it not avoid it!
2. Enjoying life in good or bad situation.
3. Minds open to receive suggestions, ideas, and critics.
4. Chase away the negative thoughts as soon as that thought move in mind.

5. Grateful that you have
6. Do not listen to gossip, that are uncertain
7. Do not ask “why?”. Do not talk more. But DO direct action startin NOW!!
8. Using positive language!
9. Using positive body language!
10. Concerned about the image of self!
Therefore think positive in the face of all things, and you will enjoy your life. If you can think positive you can trading well in stock market! Do not follow your emotion just trust your skill and mind! Trust me and DO IT NOW!!!


Wednesday, March 4, 2009

Breakout Trading Principles

New highs and new lows in commodities are significant price junctures watched by both trend traders and contrarians. From a psychological perspective alone, the ability of a market to exceed a previous high or low is a powerful signal that can attract traders and cause chain-reaction buying or selling.

Obviously, for markets to establish long-term bull or bear trends, they must continue to make new highs or new lows. Breakout players and trend followers monitor market behavior at important high or low levels (for example, 20- or 50-day highs or lows) to look for evidence of emerging trends, while floor traders and swing traders also watch these levels and attempt to capitalize on false breakouts.

The theory behind breakouts new is that if a market moves to new highs or new price (or new lows), it is exhibiting the necessary great volume to establish a significant trend. The more significant the volume and more significant the market penetrates (longer terms), the more strength of the market is showing, and the bigger the resulting trend.

For example, a market exceeding the highest high of the past 10 days does not necessarily imply the inception of a major trend. By contrast, if the market exceeds its 40- or 50-day high, it's showing much greater strength and the chances of a major trend forming are more significant. (In a way, penetration of longer-term highs or lows confirms the penetration of shorter-term highs or lows.) In other words, for a bull or bear market to develop, the commodity will have to first pass through these levels first. The other level is the volume, higher the volume, better The trend line!!


Tuesday, March 3, 2009

Symmetrical Triangle

Symmetrical Triangle pattern in stock market formed when a stocks price vacillating up and down and covering towards a single point. Its back and forth oscillations will become smaller until the stock reach critical price, breaks out of the pattern, and moves drastically up or down. When investors are unsure of stocks value, The symmetrical triangle formed.

If jump UP, stock market will become BULLISH. If jump DOWN, stock market will become BEARISH.

To form Symmetrical Triangle pattern, draw two lines. First from top or high prices, second from bottom or low prices. That should form a triangle, where the peak is in the right side!!

symmetrical triangle

Watch for :

1.Sideways movement before breakout. Break up=BULL. Break down=BEAR!

2.Watch The Volume, the greater the volume the greater certainty of successful!

3.You can sell or buy when it reaches 3 / 4 of the way from break point.

As with all patterns, knowing when to get out is as important as knowing when to get in. Your

target price is the safest time to sell, even if it looks like the trend may be continuing.

For symmetrical triangles, sell your stock at a target price of:

1.Entry price plus the pattern’s height for an upward breakout.

2. Entry price minus the pattern's height for a downward breakout


Monday, March 2, 2009

Technical Analysis analyzing come from???

Since we would all have the same completely logical expectations, prices would only change when quarterly reports or relevant news was released, like politic issue, unemployment news, annual report, demand, and etc. Investors would seek "overlooked" fundamental data in an effort to find undervalued prices. This theory concludes that it is impossible to forecast prices, since prices already reflect everything. That the future can be found in the past

If prices are based on investor expectations, then knowing what a security should sell for (i.e., fundamental analysis) becomes less important than knowing what other investors expect it to sell for. That's not to say that knowing what a security should sell for isn't important--it is. But there is usually a fairly strong consensus of a stock's future earnings that the average investor cannot disprove.

Technical analysis is the process of analyzing a historical prices in an effort to determine probable future prices. This is done by comparing current price action (i.e., current expectations) with comparable historical price action to predict a reasonable outcome. The devout technician might define this process as the fact that history repeats itself while others would suffice to say that we should learn from the past. The roulette wheel In my experience, only a minority of technicians can consistently and accurately determine future prices. However, even if you are unable to accurately forecast prices, technical analysis can be used to consistently reduce your risks and improve your profits.

Contrary to popular belief, you do not need to know what a price will be in the future to make money. Your goal should simply be to making profitable trades. Even if your analysis is as simple as determining the long-, intermediate-, and short-term trends, you will have gained an edge that you would not have without technical analysis. While the company may have great earnings prospects and fundamentals, it just doesn't make sense to buy this stock until there is some technical analysis evidence in the price that trend is changing.