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Saturday, July 12, 2008

Parkson Trade Update, Grepstrader, Tom Boleh and Samgang on Trading Advice

Disclaimer: Skip this article, if you are not interested in Parkson rebound trade or the topic. The reason I wrote this follow-up article is because at least 2 TA bloggers have blogged contrary positions to my July 4 article.


July 4 Alert is not a Buy Call for Novice

A week ago (Friday, 4 July), I posted a quick article at lunch time, after Parkson price hit $4.24 bottom in the morning here - http://fusioninvestor.blogspot.com/2008/07/parkson-observations.html. After my alert, Parkson could be bought at around $4.34-$4.38 (Reference price). As a trader, I backed my views with my own money with stop loss, prior to posting that article.

I would like to share with you two quotes from that lunch article:

"Parkson HK is now at a critical level. If the support breaks, we could see more falls ahead. On the other hand, if in the less likely event that it recovers, the buy at $4.24 this morning might turn out to be very cheap indeed.

To me, this market is more suited to a trader with a successful sell stop discipline, than an investor, due to the high level of uncertainty surrounding Parkson HK's future prospects over the rest of this year and quite possibly the next year."

This is NOT an explicit and categorical Buy Call. I deliberately didn't scream out a Buy. Instead, I deliberately point out both possibilities of price rising and price falling. Why?

Because we are still in the middle of a long-term Bear market. If you are a new trader, if you cannot execute sell stop, or if you don't know when to exit yourself, you will more likely than not be killed if you attempt this rebound trade and wait for others to tell you when to exit ... I certainly have no intention to hold a new trader's hands all the way from entry to exit. I prefer to share with you some key concepts on how I fish, than to give you a fish.

Further, if you are a seasoned trader, you should know what to do after reading my post. I expect the seasoned trader to call up Parkson charts himself without me prompting him, study the charts himself, and then, make his own decision on whether to buy or stand aside. It appears at least 2 TA bloggers have done this.

And I'm definitely not recommending the long-term investor to buy now, because I believe it is possible for prices to make new lows later, in a longer-term Bear market.

So, what has happened over the last week after my July 4 alert?

On July 11 (Friday), Parkson closed $4.56, after touching a high of $4.60. If you had bought at $4.36, there is a 20 sen profit after a few days. And I have taken some profits. (*Grin*).

It's nice to see Mr Market proving me right, although I consider this lucky since I thought the odds were tilted towards lower prices (and I was prepared to execute the stop loss if this happens).

I had expected the price to be "choppy", i.e. "volatile sideways".

So, I did play partial "ping pong" with this counter the whole of last week (July 4 to July 11). Sell some $4.48, Rebuy $4.42, Sell $4.48 again, Rebuy $4.40/$4.42, Sell 4.48, Rebuy some $4.56 (breakout buy with new stop loss), and my current open position is 50% of peak. All this in a short space of 6 trading days.

Which is why I could never hold a new trader's hand.


Comments from "grepstrader" - a TA blogger

Interestingly, on July 5 (a day after my post), I received 2 comments from "gt". His comment was "Nice view about Parkson, you guys can check also another view about Parkson ...". Full article here - http://grepstrader.blogspot.com/2008/07/parkson-chart.html.

At first reading, he didn't appear to agree with my analysis. His first 3 points are bearish - that should put most people off Parkson despite my article. His 4th point was ... "for stocks crazy people"... "Buy anything above friday hammer close and the target at most 5.20/5.50 level.". .

Since July 4 close was $4.48, he is calling a buy at the open on July 7 at $4.50 or higher. He supplemented his call with this phrase "Meaning if u guys buy around 4.52 n ..."

Well, after his explicit Buy call (for "stock crazy people"), Parkson fell to a low of $4.38, before closing $4.56. I am not exactly sure what is his stop. In fact, I didn't see him explicitly discussing the Risk, but only the Reward based on Target Profit. To me, this is risky for new traders, since new traders typically only consider the Reward but not the Risk. I note with interest that the blog viewer was below 1,000 when I first saw the article, which suggest to me that grepstrader is probably a relatively new blogger.


Comments from Tom Boleh - another TA Blogger

Tom was a lot more explicit and has a much stronger position. On the same day after I posted (July 4), he also posted a counter-article on the same date July 4. His full article is here - http://talkandsharemah.blogspot.com/2008/07/darlie-singh-you-are-wrong.html. His actual words are

"STAY AWAY FROM PARKSON!! Applying Livermore's and other trend traders' "Buy High, Sell Low", stay the freaking way out of Parkson. Please take a look at the chart below:".

Naturally, I was surprised. I haven't followed his blog before, but I couldn't see his past articles prior to June. Perhaps he is also another new blogger.

What I find interesting is that Tom, Grepstrader and myself were looking at the same TA chart for Parkson on July 4.

Yet, all 3 of us have different interpretations of what to do with that same chart!

Grepstrader says to wait and buy at $4.52 on July 7.

Tom says to avoid it at all cost.

I went in to buy below the reference price of $4.34-$4.38, with a stop loss.

So, who is the Trader and who is the chartist?

And more importantly - Are all TA traders the same? (*Grin*)


Since we are talking about Tom Boleh's blog article of July 4, I would like to take this opportunity to comment and advise on the other aspects of his article.

Point 1 - Tom's Blog

When I first saw Tom's July 4 article yesterday, I was naturally surprised. It was only later that I noticed the sub-title of his blog.

It says "Market Talks, Tips, Rumors. Bullshit. Showoff. A Subsidiary Blog of TalkOnlyMah.Blogspot.Com"

Kakakaka ... I had to chuckle when I saw the phrase "subsidiary blog".

However, my sincere advice to Tom - if he wants to improve his trading skills - stay away from Tips, Rumors, Bullshit and Showoff.

Don't rely on Tips, learn how to fish yourself.

Don't listen to Rumors, learn how to enter and exit a trade yourself.

Don't bullshit, try to seek the Truth.

Don't show off, try to be humble. Especially to Mr Market.

These are just my advice. It's up to you whether you want to take it. I find it inspiring to see young men with big dreams like Jesse Livermore. I wish you all success in your future endeavour Tom.


Point 2 - Darlie Singh

I don't want to talk too long about this.

Firstly Tom, I would greatly appreciate it if you could just refer to me as "Seng". Not Darlie Singh. This goes to everyone who reads this post. For me, the joke is wearing thin, so, I would appreciate your support and understanding.

Second, as you know, Samgoss is the creator of "Darlie Singh" in his blog. I just want to point out what should be obvious to most people, that there are actually 2 different Darlie Singh there.

The first "Singh" - copied and pasted from my chatbox - is supposed to be me. At first glance, he appears to just replace my name "Seng" with "Singh". I have no idea if he has copied faithfully, or have applied creative editing. He has certainly applied creative commentary. I personally find some of that slightly distasteful, and just ignored it.

The second "Darlie Singh" - who provided comments under his articles - is DEFINITELY NOT me, contrary to what others have asked me before in my cbox (e.g. newbie). I would definitely use my own handle "Seng" if I want to comment in Sam's blog. You will definitely know it is me.

Now, it begs the question who would want to pose as me in Sam's blog. Well, let me ask you. Why did Sam write articles attacking me? Who would then want to pose as me and mislead others that it is me? For me, I have a reasonably good idea who that imposter is, based on a number of factors. But I'm really not interested in discussing this question. I know you know who it is. And I know that Sam knows that I know who it is. And to me, that's all that matters.


Point 3 - "The war is launched by Samson against Darlie Singh as usual, but the attacks getting fierce."

Firstly, let me say this clearly that there is NO war between Sam and me. I repeat. No war. Why?

Well, if there is a "war" then, we would be going at each other's throats immediately.

In a war, countries must launch an "all out attack" against the enemy, to prevent the enemy from inflicting damage on them. "Inaction" or "late action" will have very serious casualties as your enemies hit you first. So, you must inflict damage first and quickly right?

So, how about this instance? Is there really such a need for me to launch "an immediate and all out attack" on Sam? Have you seen me firing retaliatory permanent articles? If not, why not?

To answer these questions, let me ask you more questions:

First, is my survival and financial well-being threatened by Sam's articles? What about those around me - the investment community at large and Malaysians at large? Are their survival and financial well-being threatened by Sam's articles so strongly that I must wage a war against Sam?

Second, what could possibly be the benefit of me waging a war against Sam? How will this benefit the investment community and Malaysians at large? Is the benefit so large that I must wage a war against Sam?

I think the answer is obvious. There's no need.

In the context of Malaysia or the investment community, who is Sam? Is he like our BN MPs who are corrupt and pockets Rakyat's monies? Is he like our MSM who distorts the truth to over millions of Malaysians? Are Sam's readers as easily fooled?

Certainly, by all means, wage a war against Corruption in our country. I strongly urge you to join those who are currently waging a war against Corruption in the Net. Wage a war against MSM when they only report propoganda to millions of Malaysians. Wage a war against the corrupt politicians, MPs, judiciary, AG, IGP, Police and everyone else who abuse their power and positions for selfish reasons, at the expense of Rakyat's survival and financial well-being.

But please lar ... don't expect me to wage a war against Sam. It's not like I'm that free a person with no other responsibilities. And why should I care what Sam thinks of me?

To me, it is sufficient that I alone know the true nature of Sam as an individual. You will learn - as you get older - that you can tell a lot about the nature of a person by their words and actions.

And let me ask you this question also - does Sam consider me a "threat"? Is his survival threatened from my presence? Is his financial well-being threatened? Those around him threatened? If not, then is he waging a war at me? I trust everyone here is intelligent enough to answer these questions for themselves.

So, let me repeat it here. I am not at war with Sam. On the contrary, I am at peace with Sam.

And the reality is that there is only one person in this world who can control Sam. And that is Sam himself. Sam is already an adult, not a 16 year old minor. I trust one day, he will realize the folly of his actions, and be mature enough to do the right thing.

Peace be with him and everyone here.


Point 4 - "Maybe the support will hold, maybe it will break resistance, maybe it has bottomed... " Sounds familiar? I said a lot these kind of maybe shits. My apology, I have learned that there is no maybe in TA, just strict entry or exit."

You have misquoted me in your blog.

The reason I said that is to illustrate my belief that future prices are unpredictable. I.e. I am not that smart enough to be able to make 100% accurate predictions on future prices over the near term.

Which means, to me, I must trade with a stop loss (an initial stop loss and a rising trailing stop loss) in such a situation (my July 4 article). Why? Because "Maybe the support will hold, maybe it will break resistance, maybe it has bottomed... "

But what is more important to understand is that the "maybe's" did not result in inaction in my part. Instead, I put my own money on the table on July 4 prior to publishing my article. The "maybe's" forced me to know my stop level, BEFORE I put on the trade. And it forced me to raise my trailing stops when the move works with me.

Anyway, I hope you were NOT looking for me to hold your hand, in terms of specific Entry Level, Exit Level and Stop Loss. For rebound short term trades, I don't give out free fishes.

But if you like to learn how to fish, then, feel free to join my chatbox. I'll be happy to chat.


Point 5 - "Seng, You Are Wrong!

Just a short note to say that in the final analysis, when you put on a trade, the opinions of others simply doesn't matter at all.

Tom, I hope you don't mind that I used your published opinions here as example. At the end of the day, your opinion of whether I am right or wrong on July 4 doesn't matter to me with an open trade. In the final analysis, only Mr Market matters to me. And if Parkson price falls to my trailing stop loss, I will not hesitate to execute.

I trust this article is clear. If not, feel free to drop a comment.



gt said...

Helo bro Seng,sorry if u misquoted me, yupp i do mention buy anything above hammer around 4.52 n it totally drops to 4.38. My mistake i didnt tell the stop/cutloss point, but if u know the meaning of buy anyting above the hammer u should understand u must put the stop under the hammer thats is at under 4.24 and after 6 7 days the hammer low not yet triggered with as macd turning slitely bullish. We all have our own view n yupp u r rite again i'm a new blogger but i already trade since 1995 in stocksn futures, options, forex in US, Spore, Hongkong n definitely Msia n as u c on my blog i'm more to futures currently. thanks for the highlight about my blog n please give ur view time to time. Thanks again bro...

gt said...

seng, i add a bit more ahh, my buy above 4.52 the initial stop at 4.22 n already adjusted to 4.38 (10/07 low).. n the buy call still stands till today n stop adjusted already n i'm a futures trader STOP is my priority b4 any profit made. Sorry i forgot to mention the stop order in my blog n i agree its not a suitable call to buy for investor, but more to traders/punter with strong stop order...adios bro

gt said...

its me again seng, i reread ur parkson review on July 4th.. u also make the same mistake as i am u dont even mention anything about stop order price, u only say "successful sell stop discipline", where's the stop price n u also say the "buy at $4.24 this morning might turn out to be very cheap indeed", the way u fish this is typical punters style not TA entry n u really "catching the falling knife". U mention on July 12 "I did play partial "ping pong" with this counter the whole of last week (July 4 to July 11). Sell some $4.48, Rebuy $4.42, Sell $4.48 again, Rebuy $4.40/$4.42, Sell 4.48, Rebuy some $4.56 (breakout buy with new stop loss), and my current open position is 50% of peak. All this in a short space of 6 trading days", i check all your buy entry using 1min, 5min, 15min chart n my conclusion is your buy all pure punters style, totally no technical ability into it. So can you explain n enlighten me about your technical reading. I blurr actually seing your buy n sell.. adios. You can sent to my email

Seng said...

Dear gt,

No problem. As we just know each other, better to clarify than to ass-u-me. Glad to hear you've been trading since 1995.

Yes, I agree stops are important. I do agree also that at $4.22 or so, the psychology of the stock will have changed significantly, although I'm sure you are aware of setting the stop at $4.24/$4.22 - it's an obvious place for syndicates to run stops.

In my blog, I've been advising my readers not to publicly disclose the exact stops. The main reason is that if many people follow the advise, then, it could lead many to the slaughter house. Clever syndicates can take advantage of this, to the detrement of many of the readers here.

So, it has been my long-standing position in my chatbox, that I don't disclose the exact stop. But I tell them to have stops of their own. I've also written articles advising readers to keep the actual stop prices to themselves, and not disclose the actual stop price publicly.

As for my intra-day trading, I'm more of a man with many styles. If I see an intra-day opportunity, I'll take it. If I see a swing-trade opportunity lasting days or weeks, I'll take it. If I see a longer term position trade opportunity that might last months, I'll take it.

Take Parkson as example. On some days, there are clear break-out days (either on the up side or the down side), but on some days, you also know that it's going to be "choppy" (particularly on days when trend ends). On the choppy days, I would take advantage of the intra-day range, to play "ping pong" using part of my existing holdings. On trendy days, I would then buy it back on breakout. I would overlay my own views as to whether we are in a bear market or a bull market via position sizing. For example, a breakout on the upside in the current bear market don't get full position sizing, but I do buy back some on breakouts on the upside. And vice versa. I keep a tight stop loss. Basically common sense stuff once you've traded based on your own observation. My belief is that the choppy days is longer than the trendy days, and so, I should come out ahead on a net basis.

I think if you focus too much on textbook theory using 1 minute charts, you will have missed this obvious point.

Much of the time, I just queue the buy and sell on a range that I expect to be hit on choppy days.

This of course assumes that one has better than 50/50 chance of calling a choppy day vs a trendy day.

It helps that I don't observe price movements of all stocks, but just a handful of stocks (nowadays, less than a dozen).

I'm just sharing my own experience in this instance.