Most of us select stocks to trade based on technical signals such as MA & support line. However, with the market down trending for almost 2 years with technical support broken every time, most traders are losing confidence relying on the above signals for entry. 

Every destruction is a good time for a new construction. We have been using the above “traditional” way to identify a price bottom but it always fails us. As investors in the stock market, we want something more solid. An analysis that can tell us a precise price bottom than an analysis that is guessing whether the price will rebound or bottom. 

That’s where we ditch the “old fashion” way of analysis & study how the big boys move the stock prices to find the precise TIMING for each price up or down. No longer need to trade with guts, hoping the price to hit the profit target & never hit the cut loss point. Trade at the lower price & securing profit before the price falls, never get trapped at the high price again.

We will explain our analysis with our previous trades below. If you are not prepared to accept & don’t believe that you can find a lower entry point lower & exit nearer to the price peak than the common technical analysis. You may stop reading from here.   

Price & volume before stock price rebound

1 of the reasons we can’t find the price bottom is because the common technical analysis knowledge we learned is too general & the focus of the market force is wrong. The old way is always about the “market” including us having the influence towards the price, which is not in the real market it is not. Retail investors like us won't have the same valuation, how can we sell & buy at the same time to cause the stock price to fall? There must be a group that is transacting at the same time to cause prices to go up or down at the same time, we call them “the big boys”.

We need to understand these big boys' operation style, with the price & volume movements to find out their next intention towards the price movement. A very simple way to understand them is through price & volume analysis, which most of us know the basic principle of price & volume analysis. However, most of us apply P&V analysis in the wrong way, that’s why we never get to know the next price movement. 

Common technical analysis courses or learning material for KLSE always focus on daily charts. Because the candlestick forms better than those in 5 mins charts which the price is just a dash or a rectangle like the one below :

This is why many investors missed out the opportunities to identify good entry & exit following the big boys. The 5 mins chart is where it tells us the “full story” of the big boys next move. It can tell us the volumes are created by selling pressure or forms at the price bottom on the day of price fall. Most retail investors will panic & judge the stock is bearish when they see long-down candlestick with high volume. Many “gurus” teach us to read the “books by its cover” with the daily candlestick only, but we were never taught to read the “content of the book”.

Now you know how to read the book cover, let us share with you how to read the “content” with the 5 mins chart. We take the example of the chart above where the stock price falls with high volume. But when we take a look into the pages of the intraday price & volume movement. We will notice the volume is mainly created at the day low, it is not from the selling with price fall. 

Example : HARTA

High volume + Low Price = Demand In

Basic law of price & volume, price down with high volume means huge selling pressure. When price stays or limited price down with high volume, most of us are taught that the stock price is “indecisive”. That’s why most of us who learn this are indecisive in our trade too. 

In fact, it is decisive that the big boys are supporting the price now. Try to ask ourselves, if the selling pressure is high, why is the price not falling with such a high volume? Why do they create such a high volume at the same price? It is because they want to support the price & planning for a price rebound after this. Now we need to wait for the big boys to show us that they are ready to mark the price higher. 

How to mark the price higher?

When you want to move the price up, you will need to take the shares at the higher price & MAINTAIN it at the high price. Then you can continue to mark the price higher to attract investors' attention to buy this stock. When we start to see the price is maintaining at the higher price with volume, rather than maintaining at low price with volume. It is telling us that the big boys are ready to markup. 

Example : ECOWLD, Enter next day morning after 21/10 price up

This is how we can time our entry more precisely & don’t need to wait for technical confirmation at the high price for entry. This also helps us to avoid “stock price fall after we buy” symptoms. 

What we share here is just 10% of our school of thought & you can apply this 10% to find the price bottom or short term rebound in the future. However, if you want to improve your trading performance by applying our analysis. You will need to understand 100% of this analysis & the trading plan. Or else, you won’t be able to improve with just 10% understanding. 

Understand more in our upcoming webinar before you decide to go 100% joining our school.

Catch the rebound at the right timing

Date : 

SUN | 30th OCT | 7:30PM

MON | 31st OCT | 8:30PM

WED | 2nd NOV | 8:30PM

RSVP :

https://attendee.gotowebinar.com/rt/5171779867173565196

About Us

Malaysia's stock market is a unique market; hence it requires a customized trading approach to tackle & swerve. Many existing traders in Malaysia apply a plug-and-play strategy from the overseas stock market, but it is not necessarily the best strategy to trade in KLSE. This is due to the difference in local and overseas stock market regulation and the size of market participants of institutional funds & retail investors.

“True traders react to the market.” is the backbone of our trading method. Our findings and strategies are developed through years of trading experience and observance of the operating style in Malaysia’s stock market.

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Disclaimer :

This blog is for sharing our point of view about the market movement and stocks only. The opinions and information herein are based on available data believed to be reliable and shall not be construed as an offer, invitation or solicitation to buy or sell any securities. Round & Surge and/or its associated persons do not warrant, represent, and/or guarantee the accuracy of any opinions and information herein in any manner whatsoever. No reliance upon any parts thereof by anyone shall give rise to any claim whatsoever against Round & Surge. It is not advice or recommendation to buy or sell any financial instrument. Viewers and readers are responsible for their own trading decision. The author of this blog is not liable for any losses incurred from any investment or trading.