Lithium's Investment Journey 02 (Aug 10 - Dec 10)

[lithium]

HAHA, it's a long journey leh......... but so far it's a fruitful one

[winston]

No update leh

Got nice ideas must share share. Else one person celebrate alone, is very lonely ..

[lithium]

Aiya.......... my ideas are low hand one la................ there are many high hand forumers in this forum la.......... get them to start the engine first........

[lithium]

It's time to learn a new tool again!

I have decided to go for a learning journey in FA at first, so I picked up security analysis in a bookstore last week, I read and read...... I can understand how to value companies.......... but the question is, how do I know the data that I'm reading about the company is real?........ do I have the connections to confirm these data?.......... and most of the time I will end up betting on low volume companies that no one really interested in......... and wait for other investors to discover them?......... man....... value investing really doesn't suit my personality........ I want to pick a trade that will make money right away within a few days or a week........ I don't have patient to sit on it and wait if others have the same view on this company that I'm investing or not. I should get that feedback immediately. Therefore, I end up dropping security analysis, maybe another day when I gets older, when my fund size gets so big that it's difficult to trade, when I can find a good network that I can confirm these company figures with.

So, I picked up Elliot waves............ man! This one fascinates me! I can read and read thru late nights, unlike security analysis that helps me to sleep early…. ....... Here is the first impression I have on Elliot waves.

1. I can at least have an idea ahead of time how the stock or market is going be like in future.
2. Now I can pick and choose which cheap stock I want to catch falling knife with....... which breakout I want to chase momentum with.....

With this Elliot waves, hopefully I can improve my current winning trades of 45% to a higher %!

Here is a basic table I draft out about the characteristic of waves, just want to share with you guys....... as you know I'm just starting on this new toy....... so expect mistakes to be around.......

Elliot.JPG

[winston]

I have decided to go for a learning journey in FA at first, so I picked up security analysis in a bookstore last week, I read and read......

That's one of the most boring book around .

If you want to lean FA, pick up the two books by Peter Lynch ie. One up on Wall Street or Beating the Street. Or pick up any of the books on Warren Buffett.

value investing really doesn't suit my personality........ I want to pick a trade that will make money right away within a few days or a week........ I don't have patient to sit on it and wait if others have the same view on this company that I'm investing or not. I should get that feedback immediately.

That's why you must have a catalyst for your stock. This is the "N" from CANSLIM ie. New news, Announcements, Earnings Report, Placements, New Products, New Markets etc.

So, I picked up Elliot waves............ man! This one fascinates me! I can read and read thru late nights

Ha Ha... I also spent time on EW when I was trading Futures. I also have friends who swear by EW. And I also have friends that swear at EW .

My experience with EW is the same as my experience with TA

[lithium]

Yes Winston, Elliot Waves is 千变万化, it can be right in all ways because of it's corrective waves...... so we need to always keep an open mind and be very creative predicting the coming waves......... always bear in mind that we might read it wrongly........... the beauty of this is........ sometimes you can still make profit eventhought you have read it wrongly........... Anyway, I'm still new to it........ so it's a great tool in the bag for the time being.

Because it consist of elements that is missing in my current trading system.

[winston]

1) so we need to always keep an open mind and be very creative in predicting the coming waves
2) always bear in mind that we might read it wrongly
3) the beauty of this is........ sometimes you can still make profit eventhought you have read it wrongly

The highlighted words shows your bias towards this new found tool

And no matter how lousy the tool is, if we have a bias attitude towards it, we will not see it's weakness

[lithium]

If you can look at it at another angle, I actually aware of it's weakness. Not ignoring it like you suggest. Haha

[lithium]

This will be my first trade using Elliott waves, let's see how it goes. I have started catching falling knifes yesterday using HSI index futures.

From hourly chart,
1. abc corrective wave seems to have completed.
2. Hourly RSI reached 30

hourly.JPG

When I see abc wave completed, I go to minute chart to look for confirmations
3. A positive divergence showing in 5min chart.
4. MACD crossed, EMA turned up in 5min chart, BUY when EMA turned up
5. Mini impulsive 5 waves have started, currently running wave 3

Min.JPG

Now back to daily chart,
6. RSI closed at 52, day low of 22880 RSI is 48, so it bounced off from RSI 50
7. During the day, it crashed thru Fibo 23.6 at 23050 and pulled back closed above it, this will be a nice support for this trade
8. It is possible that wave 2 corrective wave already complete, but we need more conformations, it's necessary to follow step by step

daily.JPG

[lithium]

It's also possible that the current corrective wave in hourly chart, has only completed "a", that's why we need to see step by step how the coming waves unfold.

hourly2.JPG