Koon yew Yin
Introduction
First I must tell you that I am not a professional Chartist and I only use the chart to help me make decision to buy, hold or sell.
The two methods commonly used to analyze securities and make investment decisions are fundamental analysis and technical analysis. Fundamental analysis involves analyzing the characteristics of a company in order to estimate its value. Technical analysis takes a completely different approach; it doesn't care one bit about the "value" of a company. Chartists are only interested in the price movements in the market.
Despite all the fancy and exotic tools it employs, technical analysis really just studies supply and demand in a market in an attempt to determine what direction, or trend, will continue in the future. In other words, technical analysis attempts to understand the emotions in the market by studying the market itself, as opposed to its components. If you understand the benefits and limitations of technical analysis, it can give you a new set of tools or skills that will enable you to be a better trader or investor.
You can use technical analysis to:
1. Identify profitable stock patterns
2. Minimize your risk
3. Maximize your return in up and down markets
You’ll learn how to make big money on stocks using a technical analysis toolkit that has been wielded successfully for hundreds of years. That’s no exaggeration.
That makes these patterns some of the most time-tested strategies in finance. You can feel secure that you are trusting your investments to a highly refined system – not a new craze or an analyst’s hunch.
There are hundreds of patterns in stock charts that traders can look for, but I will only tell what is most trusted and reliable.
The Symmetrical Triangle: A Reliable Workhorse
You’ll recognize the symmetrical triangle pattern when you see a stock’s price vacillating up and down and converging towards a single point. Its back and forth oscillations will become smaller and smaller until the stock reaches a critical price, breaks out of the pattern, and moves drastically up or down.
The symmetrical triangle pattern is formed when investors are unsure of a stock’s value. Once the pattern is broken, investors jump on the bandwagon, shooting the stock price north or south.
Symmetrical Triangle Pattern
To form your symmetrical triangle pattern, draw two converging trendlines that bound the high and low prices. Your trendlines should form (you guessed it) a symmetrical triangle, lying on its side.
How to Profit from Symmetrical Triangles
Symmetrical triangles are very reliable. You can profit from upwards or downwards breakouts. You’ll learn more about how to earn from downtrends when we talk about maximizing profits.
If you see a symmetrical triangle forming, watch it closely. The sooner you catch the breakout, the more money you stand to make.
Watch For:
Sideways movement, a period of rest, before the breakout.
Price of the asset traveling between two converging trendlines.
Breakout ¾ of the way to the apex.
Set Your Target Price:
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:
Entry price plus the pattern’s height for an upward breakout.
Entry price minus the pattern’s height for a downward breakout.
Note: As this article is getting too long, I will post another article on how I use chart later.
Created by Koon Yew Yin | Aug 19, 2024
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Recently one smart accountant pointed out to me that KP Property has millions of Redeemable Convertible Preference Shares (RCPS). This will affect its share price. I sold all my KPP shares to buy KSL.
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Wow uncle koon this is one article that impress me most. It is heartening to see a successful fundamental investor having an open mind to absorb technical info. Maybe I should also start writing about what learn about technical !
Well done (100 times !!!)
2014-04-29 07:20
Thank you very much Mr Koon for sharing this. Very valuable for beginners like me.
2014-04-29 08:33
CheongKOK, I cannot find BDB, is it a listed company? If I cannot find it easily, how do you expect investors to buy it? I am not interested any more. I do not wish to waste my time
2014-04-29 19:03
total debt (340 million) > revenue (280 million), though most debt is long term
Bina Darulaman Berhad (BDB) is Malaysia-based company engaged in investment holding, provision of management services, oil palm plantation and property development. The Company, through its subsidiaries, operates in five segments: property development, which include the development of residential and commercial properties; quarrying and road paving work, which is engaged as granite quarry operator and civil engineering contractor; construction, which is engaged as building and general contractor; operation of golf resort and hotel, on which it owns a golf resort and operates a hotel, and trading of consumables. The Company's subsidiaries are Kedah Holdings Sdn. Bhd., BDB Construction Sdn. Bhd., BDB Quarry Sdn. Bhd., BDB Hotels Sdn. Bhd., Daraluman Asset Sdn. Bhd., Jitra Waterworld Sdn. Bhd., BDB Trading Sdn Bhd., and PT Darulaman.
2014-04-29 20:40
Uncle Koon, can you please advice on L&G stock. I am new to stock trading and had brought quite a lot on this stock a few days ago. Thanks you.
2014-04-29 21:11
Good video clips on Value Growth Investing. Also talked and briefly discussed were the Technical Analysis. 1. http://www.youtube.com/watch?v=8Ul0ciJOUvY 2. http://www.youtube.com/watch?v=lFcFE_jXy3c
2014-04-29 23:26
As I observe Gmutual and Mkland has form Symmetrical Triangles. Both are properties stock.
2014-04-30 10:27
nsk82
live to learn, bravo Uncle Koon :)
2014-04-28 22:18