Trading Stock: Capitaland

First of all, I had to warn that not everyone can become a trader! It is only suitable for people who have high risk appetite. In order to become a trader, you need to be decisive and emotionally stable. You have to ask yourself, do you have two of this? If the answer is yes, then, I would say congratulation to you.

The first thing you need to learn as a trader is to manage the risk. Without that, you will end up like a gambler and losing all your money.

2nd thing, you never borrow money to do trading. It’s absolutely like kamikaze action if you do that. It’s like double edge sword when you are losing the money!

How to manage the risk? It’s a good question. Most of the trader will ask this. You need to have a trading plan and understand your tolerance for loss and profit as well.

For example, if I am trading forex, I will have the trading plan as below:

i) What is the odd for losing and winning?
If the odd is losing 1 tick vs winning 2 ticks -> in
If the odd is losing 1 tick vs winning 1 tick -> out
Always maintain the same risk and reward ratio.

ii) Cut loss and taking profit point?
-depend on your tolerance. You shouldn’t aim for the top and bottom, as most likely you will not get it.

I use an example of a trading stock (Capitaland) to explain how to use candlestick and technical indicator (Slow stochastic) as guidance.

From the chart, you see two selling signal and one buying signal:

i) First signal is an evening star, which the candlestick has a long tail at up body. It is a reverse signal, corresponding with stochastic that pointing lower trend.

ii) Second signal is bearish engulfing pattern .Again, it is confirmed by down trend of stochastic!

iii) Third signal is bullish engulfing pattern. The signal is again corresponding to uptrend sign of stochastic!