Aloysius Chan's Blog

Engulfing (reversal) Big long candle overtake the previous candle completely. Doji (reversal) Open and close at almost same price indicates market does not know what it want. Dragonfly doji: bullish. Open and close at the top with long lower shadow. Gravestone doji: bearish. Open and close at the bottom with long upper shadow. Stars (reversal) Morning star: long candle, short lower candle, long candle. Evening star: long candle, short upper candle, long candle. Pin bar (reversal) Hammer in bearish: small open and close with long lower shadow. Shooting star in bullish: small open and close with long upper shadow. Harami (reversal) Small baby candle after long mother candle. Bullish harami: baby at bottom. Bearish harami: baby on top. Tweezer (reversal) One bullish and another bearish long candle or vice versa of almost same height.

Strategies The last kiss: wait for retest before placing your trade in a drift (type 4) price action. There will be a breakout after the retests. Do not enter the market too quickly as there will be fake-outs. Take profit and stop loss at half of the drift (type 4) length. The big shadow: engulfing candle (reversal). Bearish candle bigger than bullish candle or bullish candle bigger than bearish candle. The bigger is more powerful. Stop loss after the wick. Wammies and moolahs: double bottom and double top (reversal).  The next test should be at least 6 candlesticks apart. Stop loss at the end of the double bottom or double top. Take profit after the next zone. Kangaroo tails: long doji (reversal, type 2 & 4). Market has gone too far and reversing its course. Open and close should be within the previous candle, or it will just be another "runaway". Stop loss after its tail and take profit in the next zone. Trendy Kangaroo (type 1) If the kangaroo happens in a strong trend...

Slow down: as you may be heading the wrong direction. Start over: if you are starting from scratch on today's price, will you buy it? You don't have to like someone, you just have to do business with the person. Find your focus this year. Avoid rushing to judgement, any luck can be maybe good or bad. Practice good habit of not procrastinating Do it immediately Schedule it Let it go Someday/maybe When you say no, mean it, and you won't needlessly lose your time.

"You can't connect the dots looking forward; you can only connect them looking backward" Steve Jobs Career operating modes Inactive Reactive Proactive Innovative Riskometer Stagnation zone Comfort zone Stretch zone Panic zone Calibration questions What is your ideal day like without money concern? What excites you most? What are you most proud of? What compliments people give you the most? What would your closed ones say you value the most? What are some powerful memories you have? Who are your 3 most admired people and why? What do you want less in your life? What challenges are you currently facing? What are you unanswered questions at the momemt? What are you missing in life? What do you want more in your life? Value clusters Connection, community, friends, family, intimacy Creativity, innovation, ideas, writing, expression Courage, risk taking, challenge Freedom, independence Financial security Gratitude, being present, mindfulness, rest and rejuvenation Health and we...

Who trades forex Flow traders: execution traders. Proprietary traders: speculative. Forward traders: beyond spot rates. Options traders: bank's portfolio. Sales staffs: intermediary. Fundamental data United States Non-farm payroll (NFP) Unemployment rate Change in manufacturing payrolls Average hourly earnings Average weekly hours Consumer confidence index University of Michigan consumer sentiment index ABC consumer confidence Institute for supply management (ISM) employment indices Regional federal reserve indices Existing-home sales New-home sales Housing starts Building permits Chicago purchasing manager index (PMI) ISM manufacturing report ISM nonmanufacturing report Philadelphia Fex index New York Empire State index Richmond Fed manufacturing index Consumer price index (CPI) Producer price index (PPI) Peresonal consumption expenditure (PCE) Institute for Supply Management (ISM) prices paid index Gross domestic product (GDP) Trade balance Current account balance Budget and defi...

One kind of intelligence is acquire while the other kind is memorised facts and concepts. Higher level of education are directly related to better health outcome, lower fertility and longer lives. People always think they are above average: over-confidence. If you are a hammer, then everything looks like a nail. Knowledge to become an expert can limit and narrow your perspective. It's not a good idea to take a forecast from someone wearing tie. The illusion of knowledge make people don't know what they are talking about. Flashbulb Memories: memories that are affected by our emotional state. Types of situation Simple: the route to work Complicated: restructuring an organisation Complex: forecasting global economics Chaotic: 911 event We are all suffering from the illusion of control. It is not the mountain we conquer, but ourselves. Treat people greatly and they will show themselves great. Types of listening Downloading: already know Factual: to gather more data Empathic: open h...

5 traits of execution factor Vision Self-reflections What could stop you from achieving your vision? How to plan more time for your vision? What will you give up for your vision? How to realign back to your vision? Getting back on track Don't get lost in thinking. Understand timing is everything. Know ideads are a dime a dozen. Make sure your vision is a business. Accept that feedback is a gift. Passion Am I willing to suffer for this idea/product/business/person/company? What is one thing in the past you are emotionally connected to? How emotionally connected are you to this thing you are doing? Action Self-reflections What was your first step? What happened? How did it make your feel? What was the results? Whatever you want to start, you need to start with the first step. Steps to employ before you start Identify additional action steps. Create a time frame. Build in accountability. Anticipate possible obstacles. Create a list of resources. Create a review process. Techniques for...

Stick to using 3 tools Tools must be universally used and simple SMA: 100 bar crosses candle = reversal Draw support level and if 100-bar SMA crosses = downtrend Draw resistance level and if 100-bar SMA crosses it = uptrend

Why traders lose money?   Insufficient education Insufficient practices Trading with the money they can't lose Lack of money management rules Over-leveraging Lack of a proper trading plan Overtrading Entering trade at a bad time Only care about one currency in a pair Dilettantism - insufficient backtest Trading too many pairs Choosing the wrong time frame Trading against the trend Using too many indicators Making careless exits Watching one pair and trading another Not assessing properly the market's technical condition Emotional downfall Acting from basic emotions related to money Being afraid to take a loss Trading on a hunch Feeling a lack of confidence Feeling overconfident Doing too much analysis Trading 24 hours a day Lacking the will to follow own rules Being fearful of pulling the trigger Moving stops Giving up because of disappointment Counting your chickens before they hatch Feeding on adrenaline Feeling the need to be in the market at all times Externalities downfall...

George Soros Global micro king Quantum fund, 16 turn $5m to $1b "The markets are almost always wrong" John Henry Technical trading genius Unique characteristics His discipline His ability to ride trends for significant periods His risk management Philosophies One must have a valid personal philosophy. There is no holy grail to trading. Discipline is more important than genius. Persistence is more important than talent. Performance is more important than capability. ***Ability to create value is more important than ability or creativity in any realm. ***Continue to look for ways and to think about how you can create value. Elliot wave 1: Middle up 2: Short down 3: Long up 4: Short down 5: Middle up A: Middle down B: Short up C: Long down Jim Simons Quant king Renaissance Technologies, Medallion fund Renat Fatkhulin   Founder of MetaQuotes, MetaTrader 4 and 5 Books A book: broker passes order to liquidity pool and earn some mark up. B book: broker deal with the order at desk.

General notes Always use stop loss. Avoid overtrading. Think of risk in terms of percent loss, not pips. Control risk through position sizing. Keep risk consistent for every trade. Do not trail stop too closely. Focus on trades with a good risk-to-reward ratio. Know when to take a break. Indicators Commodities Channel Index (CCI) Line reverse down on 100 = sell Line reverse up on 0 = buy Major events and affecting currencies ADP employment survey USD Balance of goods and services (Trade balance) USD, EUR, GBP, JPY, AUD, NZD, CHF, CAD Central bank rate statements USD, EUR, GBP, JPY, AUD, NZD, CHF, CAD Consumer confidence USD, GBP, CHF Consumer consumption USD, CHF Consumer price index (CPI) USD, EUR, GBP, NZD, CHF, CAD Durable goods orders USD, JPY Employment change USD, AUD, NZD, CAD Gross domestic product (GDP) USD, EUR, GBP, JPY, AUD, NZD, CHF, CAD IFO business climate survey EUR ISM manufacturing USD KOF economic barometer CHF M3 money supply EUR Producer price index (PPI) USD, EUR,...

  Currency Going down Rise in employment Fall in GDP Fall in exports Fall in interest rates Geopolitical tensions Natural disasters Threat of terrorism Going up More jobs Rise in GDP Rise in exports Rise in interest rates Super-stable political system Discovery of gigantic oil or mineral resources Essentials in trading Technical analysis Fundamental analysis Sentiment analysis Capital analysis Overall analysis Chart patterns Double top: trend reverse down Double bottom: trend reverse up Triple top (head and shoulder): trend fall Triple bottom: trend rise Saucer top: trend reverse down Saucer bottom: trend reverse up Rising wedge (6 points touch): trend down Falling wedge: trend up Rising wedge during downtrend: follow Falling wedge during uptrend: follow Symmetrical triangle: follow the up or down trend Rectangle (neutral): follow the up or down trend Ascending triangle: up trend Descending triangle: down trend Candle Doji: open and close almost the same price Morning star: long be...

Potential correlate markets (secondary following) Gold ∝ US dollar WTI oil ∝ USD/CAD WTI oil ∝ USD/NOK WTI oil = CAD/JPY Copper = S&P 500 Nikkei 225 = USD/JPY EUR/JPY = S&P 500 Nikkei 225 = S&P 500 VIX ∝ S&P 500 Key indexes VIX, CBOE CRB, Commodity Research Bureau CCI, Commodity Channel Index TED spread: difference of the three-month Treasury bill and the three-month LIBOR Treasury Inflation-Protected Securities (TIPS): protection against inflation Currency Weak currency good for export and bad for import. Rising inflation signals economic health, but may also lead to inflow from overseas which strengthen the home currency. Data to be used GDP CPI Employment data and NFP PPI PMI Trade balance Retail sales Housing data US pending home sales Building permits Loans and mortgage data Composite indices CB Consumer confidence index Candle stick The hammer: small top, long bottom wick: reverse bottom Shooting star: small bottom, long top wick: reve...

Popular chart pattern Ascending triangle Descending triangle Triangle Channel down Channel up Rising wedge Rectangle Head and shoulders Inverse head and shoulders Triple top Triple bottom Continuation Reversal Continuation and reversal Basic technical indicators Fibonacci Golden ratio of 61.8%, 1:1.618, 0.618:1 VT Pivot point indicator Finding potential support and resistance level Major economic announcement Election and referendum results Corporate earnings of major companies (Apple, Cisco, banks) Major political events: wars, military or terrorist attacks, warlike rhetoric Bankruptcy of major market participants Sovereign debt auction results Natural or human-made disasters Prices of commodities Government policies: deficit spending, trade restrictions Currency weaken factors Borrow too much Have large trade deficits Pay low interest rates on deposits Have low rates of economic growth High unemployment rates Engage in wars Main economic announcement Nonfarm payroll (NFP)/employment ...

 Reasons for clients to switch account Complacency Sense of entitlement Apathy and lack of communication Resentment New stakeholders Long-unaddressed needs and changes Unaddressed systematic challenges Value creation Product Good product or service Service Outstanding service Outstanding support Good product or service Business results Solves tangible business problems Outstanding service and support Good product or service Strategic partner Strategic outcomes Envision the future Integrated Relationship value and economic value of value creation Level one Transactional Product or service Vendor Level two Experience Support or service Supplier Level three ROI Tangible business outcomes Preferred vendor Level four Strategic Proactive Trusted adviser Discovery Individual = Intentional + Behavioural Exterior = Behavioural + Systems Collective = Systems + Culture Interior = Culture + Intentional Intentional Values Status Levels Types Motivation Preferences Behavioural Key performance in...

Empathy and ego drive is the characteristic for top salesperson. Top salesperson also focused on the customer instead of the sale. Rules of selling Know your product. Know your competition. Work harder. Be organised. Be assertive and consistent. Be honest. A salesperson is fearless and ask probing questions Why a salesperson fail He do not enjoy what he does. He is not finding the right decision-maker. Failure to ask questions and be curious. Not making enough calls. Sell benefits and not features. Forget about scripts, they will never work. Don't just learn how to handle objection but understand what the customer really meant. Setting goals helps the entire sales process. CRAP Caring Relationships Attitude Passion

Reasons people do not ask for help (choose 1 that best reflect your situation) Underestimated other's willingness and ability to help. Overly self-reliance, Suspect on social cost for the help. Work culture lacks psychological safety. Systems, procedures or structure of your organisation get in your way. Do not know how or what to request. Have not earn the privilege of asking for help. We could be selfish. Guidelines for giver-requesters Give without string attached or expectations of return. Give freely and know your limits to avoid generosity burnout. Ask for help freely and avoid dependent help-seeking. See it long-term as in the long run you will be giving and seeking. Examples of asking for help I am currently working on ... and I could use help to ... One of my urgent tasks is to ... and I need to ... I am struggling to ... and I would benefit from ... One of the biggest challenges in my life is to ... and I need advice on ... My biggest hope is to ... and I need ...

  Power of compounding: double it 30 times and it is a billion times better. Types of needs Certainty Variety/uncertainty Significance Love and connection Growth Contribution Understand what is driving you allows you to eliminate the self-imposed roadblocks and prioritise your needs in a more fulfilling and impactful way. If financial advisor's advises work, why they are not making themselves rich? Investment rules Have a clearly defined plan. Create a net worth statement. Know your financial goals and develop a financial plan. Run a projection. Determine if you need to adjust your goal. Construct a customised portfolio. Build a portfolio that aligns with your goals. Revisit the plan. Reducing your premium to save money. Avoid umbrella policy that does blanket cover on items you do not need or with excess coverage that is beyond your current financial standing. Annuities are like Hotel California: once you check out but never leave. Estate planning Incapacity planning Distribution ...

Builder personality Driver (Apple) Motivation Relentless, commercially focused, highly confidence. Born entrepreneur, cannot stay employed for long. Decision-making mode Initially intuition-based, then seeks data and other external points of reference. Management approach Hands-on, directive, exacting with low or no tolerance for failure. Leadership style Results- and outcomes-focused, attracts high performers and scares off weak followers. Strengths Intuition and fact-based analysis anticipate market earlier than competitors. "I know what customer wants, trust me". Tenacity, ambition, and clear focus. Weaknesses Missed market shifts with over-identifications. Impatience with people who do not get appeal to your idea. Issues with empowering expanded team. Growth strategy Converting ideas into product. Market sensing. Product-market fit. Product narcissism. Galvanising individual talent for collaborative impact. Attracts experts. Over-controlling and under-forgiving. Alignment...

Strategic leader Anticipate changes in the market environment. Challenge assumptions and the status quo. Interpret a wide array of data and viewpoints. Decide what to do after examining their options. Align the interests and incentives of stakeholders. Learn from success and failure by experiments. Tuning in to customer's signal Put yourself in your customer's shoe. Make customer's order as your own. Grow together with your customers. Action plan to see sooner Go through all the pass over threats and opportunities. Bring yourself to your customers, suppliers and other partners to solve their problems. Run a war-game to understand your competitors, legislators and other key stakeholders. Study emerging rivals, especially those who innovates. Envision future technology will redefine your market. Scan wider Identify the weak signals at the edge of your current business model. Play different realistic future scenarios. Identify and learn from other start-ups beyond your industr...

  Integrated cascades of choices What is our winning aspiration? The purpose of the enterprise. Our guiding aspirations. Where will we play? The right playing field. Where we will compete Geographies Product categories Consumer segments Channels Vertical stages of production How will we win? Unique right to win. Value proposition. Competitive advantage. Low cost. Systemic understanding of costs/cost drivers. Relentless reduction of costs. Sacrifice of nonconforming customers. Commitment to standardisation. Differentiation. Deep and holistic understanding of customers. Intensive brand building. Jealous guarding of customers. Commitment to innovation. What capabilities must be in place? Capabilities required to win. Reinforcing activities. Specific configuration. What management systems are required? Support systems. Systems, structures, and measures required to support our choices. Good strategy examples P&G Grow in core businesses and focus on core consumer segment. Extend lead...

 Quant meltdown 2007, AQR Capital Management, Goldman Sachs Global Equity Opportunities Fund and Medallion loses a significant amount of investments. Metastability is the reason for the quant meltdown. Wisdom of crowd effect If people are unbiased in their estimates and if they make different mistakes that tend to cancel out. Bernie Madoff effect He cheated 10 of billions of dollars. It was a ponzi but covered by blue chip investment of 10-20% p.a.

Introduction Oikonomia Greek word: to manage your household. Mercantilism Maximise the exports and minimise the imports for an economy. It promotes imperialism, colonialism, tariffs and subsidies on traded goods to achieve that goal. Zero sum game Classical economics Free market and free trade increase efficiency and prosperity. Adam Smith: competition produce cheaper goods. Marxism The effect of capitalism on labor, productivity, and economic development and argues for a worker revolution to overturn capitalism in favour of communism. Keynesian The government should increase demand to boost growth. Neo-Keynesian Economic growth and stability rather than full employment. Monetarism  The total amount of money in an economy is the primary determinant of economic growth. Mixed economic Combines aspects of both capitalism and socialism. Behavioural, environmental, happiness, development. Markets Supply and demand Primary driver in the market and why house become so expensive. The invis...

Introduction Good business model = good business plan + experience + intelligence + hard work Business models: creation of profitable revenue and the delivery required to keep the revenue flowing. Business plan Presupposes the existence of a strong business. Clarity of purpose and passion. Explain why the business model work, not how. Cost leadership Access to natural resources Scale Vertical integration Technological leverage Proprietary processes Differentiation Superior branding (Rolex) Unique supplier relationships (Eddie Bauer Edition Ford Explorer) First mover advantage (iPad) Location ("location, location, location) Scale (Boeing) Intellectual property (Intel) Market niche Tesla on electric vehicles (EVs) Taiwan semiconductor on fabrication Amgen on biopharmaceuticals Starbucks on coffee Amazon on books Rally on hamburger Doctor on heart surgery Business models Common aspects What problem are you trying to solve? Who needs this problem solved? What market segment is the mod...