$ComfortDelGro(C52.SI)

The importance of multiple timeframe analysis.

I will use $C52 as a example here.

Look as the daily chart below

Looks very bearish right? Even a small kid can tell that its in a downtrend.


What about weekly chart?

Also very bearish and clear downtrend!


Now lets see the monthly and apply the supply demand strategy.


Remember the first announcement of potential uber alliance? Price gapped up and retailers jumped in to catch the boat only to realise later it was a fakeout?

I actually did warn here on IN that it was a fake out and it was an opportunity to go short rather than going long.

Why? Look below on the weekly chart.

Price was in the middle of nowhere on monthly and current trend in down and price spiked up to weekly supply so obviously selling has higher probability. And that was how the fake bullish pinbar was created on the monthly chart.


So now after the bull trap, what will retailers do? Revenge trade! SHORT SHORT SHORT!

But price was actually heading towards monthly demand inside a 3 months demand area. Look at the 3months chart below.

Rally base rally demand zone on the 3 months chart with monthly demand zone inside it!

Now will you still go short now when price is at this area?

Of course not, this is where SMART money will look to cover their shorts to take partial/full profits. Coincidentally the announcement of the confirmed uber and comfort alliance occured at the lowest point in the monthly demand zone.


There was actually a rally base rally (marked in orange box) above it that failed.

That demand zone did not remove anything unlike this demand zone that removed the strong resistance. Therefore the odds are lower. Even if you took a long there you would still get about 2.8RR (make 2.8% return by risking 1% of your capital) excluding dividends.

Personally i wouldn't take a trade setup offering below 3RR.


Let's look at the BIG BOYS timeframe:

6 months

Clear uptrend with higher highs and no lower lows


12 months

Clear uptrend with higher highs and no lower lows.

There’s also a nice rally base rally demand area below.

So if the current 3 months demand area fails, we could see price heading lower towards this demand area.


From looking all timeframes, you will avoid making mistakes such as buying too high and selling too low. Always go one time frame higher than your entry timeframe to check where price is currently at. Remember every timeframe has its own trend.


So from these charts i hope you guys can see why i don't use

indicators/volume and even FA.

News can mislead retailers, volumes can be hidden/manipulated but the charts DON’T LIE.


This is my 88th post and my last (for now).

I realised i have spent too much time here and i have been procrastinating on a new project that i want to start on (using options to trade stocks using supply and demand).

I will come back here when i'm done with that and maybe i'll start my own blog or something.


Do a youtube/google search you want to learn more. There are many many free content. That's where i started as well. Most importantly you need to backtest it first and then forward test and then only do it on a live account. All the tests and live trading done must be journaled! I have not met any CONSISTENT profitable traders (if you made money for the past few months and is on a winning streak you are not considered a consistent profitable trader yet) that doesn’t journal their trades and backtests.

Start with a small live trading account first. To be profitable you need to be consistent. If you can’t make 10% every month on a small account then how the hell are you going to make 10% on a much bigger account size?

It’s going to be a loooooong process but it will be worth it.


Remember this,

To be a successful trader, you must do what unsuccessful traders were UNWILLING to do!



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57 likes 28 comments
donaldchin

Zeeq, please do Creative as part of your 88th post;
This would be Marking point for your post!

Hui

Good post ,thanks zeeq :)

nihao

Yes, I love the triple screen of the 3 time periods. Been seeing too many charts showing 1 time period or even worse, just saying huat with no explanation why.

luxcan

I really like your writing, do keep writing when you are free!

chewkengsiang

Thanks for sharing! A great insight to another perspective of looking at charts.

G0ngJ140We1

Hi thanks for the info, wolfberry am interested to know if you have any chart take on sembmarine?

zeeq

Reply to @WolfberryofWallStreet : posted here 1 month ago: https://www.investingnote.com/posts/683533

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$Dutech(CZ4.SI) & $ComfortDelGro(C52.SI) are showing the same monthly chart setup

but the data on $CZ4 is not to same therefore giving me a different outcome for my analysis.


On IN its showing 0.60 as the all time high. But on my tradingview pro account it's showing 0.49 instead.


This makes a whole lot of difference in my decision making to go long off that demand zone.

If the ATH was 0.49 i will definitely go long as it took out an all time high therefore making that blue zone a trade-able demand zone. Any idea which is the correct inception price?

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zeeq started a poll

Is it really possible to time the market?

I personally believe it is possible but not 100% of the time it will work.
Please take a look at my blog where i show the before and after fact to prove it is actually possible to time the market.
Timing the market allows you to minimize risk and drawdowns therefore maximizing your returns.



Stocks featured in post:

$Raffles Medical(BSL.SI) $ComfortDelGro(C52.SI) $Best World(CGN.SI) $ISOTeam(5WF.SI) $UMS(558.SI) $ST Engineering(S63.SI) $Tai Sin Electric(500.SI) $Sarine Tech(U77.SI) $Duty Free Intl(5SO.SI) $Moya Asia(5WE.SI) $QAF(Q01.SI) $STI(^STI.IN) $AEM(AWX.SI) $SoilbuildBizReit(SV3U.SI) $DBS(D05.SI) $UOB(U11.SI) $OCBC Bank(O39.SI) $Keppel Corp(BN4.SI) $Sembcorp Marine(S51.SI) $POSH(U6C.SI) $YZJ Shipbldg SGD(BS6.SI) $Hi-P(H17.SI) $FB


https://zeroindicators.wordpress.com/2018/...

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We have a new weekly uptrend confirmed on $ComfortDelGro(C52.SI) !


Posted a potential rebound 8 months ago here

https://www.investingnote.com/posts/215836:


And exactly 1 month later(19/08/17) price reaches this demand zone. Subsequently, there was a barrage of bad news from the media reporting that comfort driver are jumping over to GRAB blah blah.

There was so much speculation.

But when price reached this zone i noticed a changed in the daily timeframe where there were new bullish impulses happening. And i updated this on IN here:

https://www.investingnote.com/posts/399769

And i got a sarcastic remark that it was madness.

In fact @jansenchew even told me that i was buying against a downtrend here:

And when price reached the demand zone for the first time, @andrewko told me that bloomberg reported volume has doubled and price dropped 4% here:

And 3 months later, the daily printed a new daily uptrend with new higher high and higher lows which i updated here:

https://www.investingnote.com/posts/511881

Someone even warned it might be a trap. @jackytan2

Another 3 months later which is now, the weekly has printed a new uptrend as well.


So should you go and rush to buy the shares next week since weekly is now in an uptrend?

Hell no..its too late in terms of RR(risk to reward). Wait for retracement/pullbacks on the daily to go long.


By the way, zero FA (fundamental analysis) was done in any of the analysis i posted here. So why don’t i use FA?

In my backtesting process, i cannot access to historical news/data together with my backtesting software. So if i could backtest without these and be consistently profitable, why would i add additional variables that could mess up my edge?

Not saying that FA or indicators don’t work. There are many ways to make money, you just need to test them long enough to ensure they work before you use it on your live account.

My advice is to keep things simple. My analysis are all done in less than 5 minutes. If i don't see any setups on a particular instrument in 10 seconds when i scan through my watchlist, i will skip to the next instrument.

When u stare at the charts too long, you will start to "force" a trade setup that is not even there on the chart.

It actually takes me more time to post a setup on IN than doing the actual analysis itself.


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Let me share the basics of supply and demand.

I trade supply and demand. I buy at demand and sell at supply as simple as that.

This is the key to buying at the swing low and selling at swing high.

So what are supply and demand zones?


The picture below are the 2 demand zones that i trade:

Rally base rally (RBR) - Trend continuation pattern.

The base is a pause after a strong rally. This is where smart money accumulate thus the explosive move up after that base. This base then becomes demand zone.


Drop base rally (DBR) - Reversal pattern (stronger than RBR)

This pattern is usually a reaction to the RBR.


Supply zones are the exact opposite:

Drop base drop and rally base drop.


The strategy is to buy at demand zones in an uptrend and sell at supply zones in a downtrend.


Look at the $AAPL chart below where there are 2 RBR and 1 DBR setups


When price retraces back to the demand zone i will be looking to buy where other retail traders panic and sell or worst, short sell! So why do they panic and sell? Because they entered after a breakout from that base/pause. The typical stop loss will be placed at the last swing low and when price goes in their favour, they will move their SL to breakeven.

Smart money need to buy quietly in large quantities. So how do they do that?

Push prices lower to back the retail traders entries and SL which also happens to be a demand zone!


This is why i don’t use any indicator or volume. Smart money can hide/manipulate volume but they cannot hide the prices that are printed on the charts.

Of course this supply and demand strategy is not as simple as buying at all demand zone and selling at all supply zones.

I use a mechanical ruleset to filter out which demand and supply zones to trade from.


See if you can spot the demand/supply zones on the setups i have posted on:

$Raffles Medical(BSL.SI) $Hai Leck(BLH.SI) $Best World(CGN.SI) $ComfortDelGro(C52.SI) $ISOTeam(5WF.SI) $UMS(558.SI) $Sheng Siong(OV8.SI) $InnoTek(M14.SI) $STI(^STI.IN) $Venture(V03.SI) $Mapletree Com Tr(N2IU.SI) $ST Engineering(S63.SI) $Tai Sin Electric(500.SI) $Sarine Tech(U77.SI) $Duty Free Intl(5SO.SI) $Food Empire(F03.SI) $Moya Asia(5WE.SI) $QAF(Q01.SI) $KrisEnergy(SK3.SI) $QAF(Q01.SI) $AEM(AWX.SI) $GLD US$(O87.SI) $SoilbuildBizReit(SV3U.SI) $Sembcorp Marine(S51.SI) $Keppel Corp(BN4.SI) $POSH(U6C.SI) $DBS(D05.SI) $UOB(U11.SI)$OCBC Bank(O39.SI) $OKP(5CF.SI) $SGX(S68.SI) $Micro-Mechanics(5DD.SI) $Spindex Ind(564.SI) $StarHub(CC3.SI) $Creative(C76.SI) $bs6

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$ComfortDelGro(C52.SI)
Rumors/news are useless for trading simply because its the same information that is available to the public.
This is why i trade purely based on candlestick charts, the charts don't LIE as long as u know how to read it properly(took me thousands of hours of screen time).
The only fundamentals data i use are the dates of important events(earnings,ex div etc).
Just the DATE and nothing else.
I look for setups during such important events as that is when price gets volatile and as a trader, i need volatility to make money.

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