ATIC2008HCMC Truthcharts

6/3/2008
The Truth is in the CHARTS
The Truth is in the

CHARTS
For ATIC Ho Chi Minh City 2008
By Benny Lee
Copyright © 2008 by Benny Lee, NextVIEW Investor Education (www.thenextview.com)

INTRODUCTION
1996 :
• Got into the stock market frenzy while in college
• Started attending some technical anaysis seminar
• Got first charting software, MetaStock
1997 :
• Started trading the futures market in 1997.
• Was against the trend, Lost heavily
1997 – 1999 :
• Worked in a Recruitment Agency (Need to pay back debts!).
• Started to study about trading. Discovered and learned mistakes
• Developed trading strategies and traded lightly. Benny Lee
• Learned about Automated Trading Strategies
1999
• Started trading privately. Stocks and Futures, Malaysia and Singapore.
• Started learning TradeStation and Omnitrader.
• Training Consultant to a Software Company. (This was when my training experience started)
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INTRODUCTION
2004 till present:
• Still trading privately
• Joined NextView Group as Regional Trainer, later as Chief Market Strategist
Training/Coaching Experience (More than 8 years):

Professionals and Retail Investors in Malaysia, Singapore, Thailand, Vietnam,
Pakistan and Hong Kong
Speaking Engagements (More than 6 years):

Malaysia, Singapore, India, Indonesia and Thailand

INTRODUCTION
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What Matters Most – Factors that affect price
Trading Risks
Capital Your Goal

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OVERCOMING RISKS
Indicator 1: Indicator 3:
Eyes - Look Finger - Touch
Indicator 2: Indicator 4:
Nose - Smell Chemical –
Chemical
content
The more you understand, the less risk you encounter

What is TRADING in the financial market term?
BUY AND SELL
What makes a price move ?

• News and announcements,
• Speculations,
• Company’s performance,
• Economic and social conditions,
• Natural and man-made disasters,
• Different players in the market
• Many other factors
What do these factors do ?

Affects the demand and supply
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It is not easy (and sometimes

impossible) to analyze all
factors that affect price change.

What happens when demand overcome supply ?
Price goes up. Bulls win

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What happens when supply overcome demand ?
Price falls down. Bears win


How do you analyze demand (bulls) and supply (bears) ?
Price Charts
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MOVEMENTS IN PRICE IS REFLECTED IN THE PRICE CHART.
THE PRICE CHART IS AN AGGREGATE OF TRADING

DECISIONS MADE IN THE FINANCIAL MARKETS.

Technical Analysis – The Ultimate Analysis Tool
Technical Analysis
A study of price (and volume) actions in the past to determine future price actions.
The study of price against time is done on a chart
A technical indicator, as its name suggests, indicates a price action and they can
be in the form of chart patterns (that repeat frequently) and statistical indicators
(like moving average).
It does not take a long time to understand how to analyze a chart. Price
information is cheap and easily available.
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What do you understand when looking at the chart?
Without indicators, you do not

understand price actions

What do you do when you want answers from market?
You ask QUESTIONS…. The RIGHT QUESTIONS
But you need knowledge and

experience to ask the right questions!
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Questions Examples:
1. What is the short and long term trend?
2. What is the strength of the trend?
3. What is the momentum of the price?
4. Where is the support and resistance?
Apply the appropriate technical indicators to get ANSWERS

1. The Trend
30 day moving average
10 day moving average
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Using the Moving Average
1. The Trend
UP TREND : When the averages are getting higher
DOWN TREND : When the averages are getting lower
SIDEWAYS : When the averages are non-directional
2. The Strength of the Trend

STRONG TREND: When the short and long term moving averages diverge
WEAK TREND : When the short and long term moving averages converge

1. The Trend
1. Trend is UP
Long term trend is up
Short term trend is up
2. Long term Trend is weak
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3. The Momentum of a trend

3. Using the RSI to determine trend momentum
Price Price
RSI RSI
Bullish Convergence Bearish Divergence

Indicates a strong up trend. Price Indicates a weak up trend. Price has
has a high chance of going higher a low chance of going higher and
and creating new high. therefore expected to reverse down
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3. Using the RSI to determine trend momentum
Price Price
RSI RSI
Bearish Convergence Bullish Divergence

Indicates a strong down trend. Price Indicates a weak down trend. Price
has a high chance of going lower has a low chance of going lower and
and creating new low. therefore expected to reverse up

3. The Momentum of a trend
3. Up trend Momentum is weak
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4. Support and Resistance
4. A Double Top formation

indicates strong resistance

What do you understand from the chart now?
1. The trend : UP
2. The trend strength : WEAK
3. The trend momentum : WEAK
4. Support and Resistance : STRONG RESISTANCE
Trading Decision : SELL
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1. Trend
Short term trend is UP
Long term trend is down
2. Strength of long term trend is Weak
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4. Support
3. Down trend momentum is weak

What do you understand from the chart now?
1. The trend : DOWN
2. The trend strength : WEAK
3. The trend momentum : WEAK
4. Support and Resistance : SUPPORT
Trading Decision : BUY
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1. Trend
Short term trend is SIDE
Long term trend is DOWN
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4. Double bottom – Strong Support
3. Down trend Momentum is weak

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1. Trend
Short term trend is DOWN
Long term trend is UP

4. Tripple Top – Strong Resistance
3. Down trend Momentum is weak
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Criteria for Technical Analysis
1. Good Volume / Liquidity
Analysis reasons:
i) Avoid artificial price manipulation
ii) The market is an aggregate of opinions, the more participate, the more reliable the
analysis
Trading Reasons:
i) Provides sufficient liquidity to buy and sell easily.
1. Good Volatility
Trading Reasons:
i) Provides price movement to trade
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6/3/2008
THANK YOU!
I wish you all success in
Investment
benny@thenextview.com
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ATIC2008HCMC Truthcharts

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6/3/2008

The Truth is in the CHARTS

The Truth is in the

Copyright © 2008 by Benny Lee, NextVIEW Investor Education (www.thenextview.com)

The Truth is in the CHARTS

The Truth is in the CHARTS

Training/Coaching Experience (More than 8 years):

Speaking Engagements (More than 6 years):

The Truth is in the CHARTS

Copyright © 2008 by Benny Lee, NextVIEW Investor Education (www.thenextview.com)

The Truth is in the CHARTS

Capital Your Goal

Copyright © 2008 by Benny Lee, NextVIEW Investor Education (www.thenextview.com)

The Truth is in the CHARTS

Copyright © 2008 by Benny Lee, NextVIEW Investor Education (www.thenextview.com)

The Truth is in the CHARTS

The more you understand, the less risk you encounter

Copyright © 2008 by Benny Lee, NextVIEW Investor Education (www.thenextview.com)

The Truth is in the CHARTS

What makes a price move ?

What do these factors do ?

Copyright © 2008 by Benny Lee, NextVIEW Investor Education (www.thenextview.com)

The Truth is in the CHARTS

It is not easy (and sometimes

Copyright © 2008 by Benny Lee, NextVIEW Investor Education (www.thenextview.com)

The Truth is in the CHARTS

Price goes up. Bulls win

The Truth is in the CHARTS

Price falls down. Bears win

The Truth is in the CHARTS

Copyright © 2008 by Benny Lee, NextVIEW Investor Education (www.thenextview.com)

The Truth is in the CHARTS

MOVEMENTS IN PRICE IS REFLECTED IN THE PRICE CHART.

THE PRICE CHART IS AN AGGREGATE OF TRADING

Copyright © 2008 by Benny Lee, NextVIEW Investor Education (www.thenextview.com)

The Truth is in the CHARTS

Copyright © 2008 by Benny Lee, NextVIEW Investor Education (www.thenextview.com)

The Truth is in the CHARTS

Without indicators, you do not

Copyright © 2008 by Benny Lee, NextVIEW Investor Education (www.thenextview.com)

The Truth is in the CHARTS

What do you do when you want answers from market?

You ask QUESTIONS…. The RIGHT QUESTIONS

But you need knowledge and

Copyright © 2008 by Benny Lee, NextVIEW Investor Education (www.thenextview.com)

The Truth is in the CHARTS

Apply the appropriate technical indicators to get ANSWERS

Copyright © 2008 by Benny Lee, NextVIEW Investor Education (www.thenextview.com)

The Truth is in the CHARTS

30 day moving average

10 day moving average

Copyright © 2008 by Benny Lee, NextVIEW Investor Education (www.thenextview.com)

The Truth is in the CHARTS

DOWN TREND : When the averages are getting lower

SIDEWAYS : When the averages are non-directional

2. The Strength of the Trend

Copyright © 2008 by Benny Lee, NextVIEW Investor Education (www.thenextview.com)

The Truth is in the CHARTS

2. Long term Trend is weak

Copyright © 2008 by Benny Lee, NextVIEW Investor Education (www.thenextview.com)

The Truth is in the CHARTS

Copyright © 2008 by Benny Lee, NextVIEW Investor Education (www.thenextview.com)