Chart Watch 2009-03-04

XAO - All Ordinaries

The first decline in Australia's GDP for eight years was reported today with a fall 0.5 per cent in the December quarter.  The All Ordinaries followed to close at a five and a half year low to 3,125.90 or 1.43%.

Fears of recession took hold of traders with the next 6 months looking a lot gloomy, and all sectors took a hit. 

The world markets are anticipating another Chinese stimulus package to be announced that could help limit the length and depth of the recession in the

industrialized world.

LST – Lionsel
LST came up on my TAZ scan yesterday and today a confirmation candle formed.  Volume is too light for me to take a position, and like all bullish trades, against the market timing.

1. Pulled back to Traders Action Zone

2. Respected support and 50% Fib
3. ADX above 25 indicating start of a trend

4. First pullback

Quick Trends

Symbol	Short Term (10MA)	Medium Term (50MA)	Long Term (200EMA)
XAO	Down	Neutral	Down
XDJ	Down	Down	Down
XEJ	Down	Neutral	Down
XFJ	Down	Down	Down
XHJ	Down	Up	Neutral
XIJ	Down	Up	Down
XMJ	Down	Neutral	Down
XTJ	Down	Down	Down
XUJ	Down	Down	Down

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Personal Attribute and Strategy

What every trader strives for is a low-risk, high-reward system that consistently produces results. Fundamental and Technical analysis are the two main schools of thought in the financial markets that will allow a trader to achieve this. Within these are vast range of systems and techniques that a can be utilized.

A selection Fundamental Analysis styles include Value, Contrarian and Growth.

A selection Technical Analysis styles include swing, trend and pattern trading.

Determining what style and strategy one uses depend on different factors of the trader/investor. Everyone will have their own strengths and weaknesses and these traits need to be consider when developing your trading plan. The following are a quick outline of my trading strengths, weaknesses and circumstance that helped direct me to the strategy I am trying to implement.

1. I cannot handle long-tem investing. I don’t have the patience to wait months for results, read hundreds of reports and believe someone else’s fundamental analysis. I also haven’t found a fundamental analysis technique that someone can write down their steps for me to learn and understand.

2. Unfortunately I am one of those people that want to understand why something works. It’s not enough for me to accept that something does work. I think this is why I’m a computer programmer by trade. This leads to me over analyzing a complex system, and trying to delve deeper into its workings. These then leads me to question parts of the system.

3. Working all day requires me to use and end of day system. Although I do have time throughout the day to monitor my trades and enter/exit when required, my eyes cannot be glued to the screen. I utilize Quote Tracker’s alerts feature to let me know when pre-determined levels are reached.

Conclusion
1. To ensure I stay focused to the the trade plan the system must be short to medium term
2. System should be based around technical analysis
3. System must be simple enough for me to understand why it works
4. Utilize minimal indicators
5. Allow optional intra-day entry/exit or end-of-fay entry/exit without requiring focus on ticker throughout day

Has anyone else analyzed their personal attributes to see if they match their trading strategy?

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