Weekly FKLI & FCPO Outlook: 24 to 28 July 2017

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Publish date: Mon, 24 Jul 2017, 10:53 AM

FKLI & FCPO Video Version

Text Version:

FKLI

In last week's video I mentioned that FKLI's market structure is downtrend and had a high chance of downtrend. FKLI then created a low of 1,751 on Friday morning before closing at 1,762. When the market opened and broke 1756 support zone, I did not short because it did not give us a good risk to reward ratio. I normally won't make rushed decision during market opening and when market had a knee-jerk reaction. As a result I did not lose money when the market shot up to 1,762. Now I don't want to brag that I am a good trader. I want to talk about this because there is an important lesson for us which many gurus did not teach. The lesson: if market does not give you a good risk to reward ratio, do not execute the trade, even there is a breakout at that moment.

The latest chart showed us a completely formed a bear trap at 1,756-54 zone. In addition, the market also had a strong resistance at 1,765 zone. This tells us that the market is transitioning from lower lows & highs to sideways. In other words, this is a first clue of a potential trend reversal to uptrend, however we need to wait for a much clearer signal and use our TLSC & MTF methods to spot high quality trades.

If you are impatient and you long here, there is a high possibility that you are entering into a market trap. This is because the professional traders, the bankers, know retail traders are impatient and greedy, so they will go opposite of your trades and take your money. We don't want that happen to us and so we will wait for prices to close above 1,765 and form higher highs. In addition, if EMA8-13 forms a golden cross, it gives us an extra confidence that the market is starting an uptrend and I will go long. My risk management zone will be 1,754 and uptrend targets will be 1,772 and 1,782.

On the other hand, if there is a candle close below 1,754 and EMA8-13 remained deadly cross, I will short. My risk management will be 1,765 with support targets at 1,749 and 1,741.

This simple “if this happen, then I will do this” method I just applied to FKLI is how I approach just about every situation, whether in FKLI, FCPO or Forex. The simplest approach is often the best; that’s certainly been my experience since I began trading.

FCPO

In my last week's video, I mentioned that FCPO will continue uptrend if prices can stay above 2,540. To be honest, FCPO first dropped to 2,500. Good thing that we put 2,540 as our stop losses. I personally suffered around 20+points losses when I long. We have to accept the fact that losing is part of trading. However if you have a good risk management and keep your losses small, you will able to recover your losses.

Moving on, FCPO then triggered our exclusive TLSC long signal at 2,550 on Thursday. We had a good trade so far. I covered all my previous loss and earn a nice net profit. Now I am bullish on FCPO because 1) there is a double bottom in the day chart, 2) EMA8-13 still golden cross, and 3) market formed a higher lows, which tells us that the dominant market structure is UPTREND. Many retail traders spent thousands of dollars attending software/robot trading courses but they often forgot that this simple approach already enough help them identify the main market trend. My risk management is 2,540 zone while my uptrend targets are 2,600 and 2,650 for the time being.

Now it is still early to say the market is starting a downtrend. I only short if there is a candle close below 2,540 and EMA8-13 deadly cross. My risk management for short will be 2,550 and downtrend targets are 2,500 and 2,450.

Events to watch out this week (Msia Time)

Every 10th biz day of month, Malaysia Palm Oil Board’s Palm Oil stocks data. Expect some price volatility for FCPO. Take good care of your trades.

Every 10th, 15th, 20th, 25th and last biz day of month, ITS & SGS Palm Oil export data. Expect some price volatility for FCPO. Take good care of your trades.

26 July, 10.30pm, Weekly Crude Oil Inventories. Expect some price volatility for WTI Crude Oil. Take good care of your trades.

27 July, 2am, US FED Interest Rate Decision. Expect some price volatility for USD currency pairs & US indexes. Take good care of your trades.

DISCLAIMER

The information contained in this article is for reference only. No individual financial goals & risk appetite have been taken into account. Futures trading involve high risks.

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