Major selldown from 1998 onwards

The below is by counting, so don't quote me if wrong:

9323- HIGH - 30days (1998)
7544 - LOW - 19%
1st rebound - 21days
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11720 - HIGH - 40days (2000)
9800 - LOW - 16%
1st rebound - 9days, 2nd - 20th days, 3rd rebound- 28days
recovery: 11420 (14%) - 15days

2427 - High - 45days (18Jan00)
2020 - Low - 17% (25Feb00)
recovery: 221 (9%) - 7days
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STI sell in between these 2 selldowns
==================================
11223 - HIGH - 26days (2000)
9974 - LOW -11.1%
1st rebound - 6days, 2nd - 21st days
recovery: 10928 (9%) - 9days

2190 - High - 26days (05Sep00)
1800 - Low - 18% (18Oct00)
recovery: 2068 (13%) - 12days
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10860 - HIGH - 10days (2001)
9397 - LOW - 13.5%

1910 - High - 29days (09Mar00)
1562 - Low - 18% (19Apr00)
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10361 - HIGH - 41days (2002) - 55 days - retest and lower
7688 - LOW - 25.8%
1st rebound - 28days recovery: 9086 - 12% (20days)

9059 - HIGH - 33days (2002)
7290 -LOW - 19.5%
1st rebound - 10days, 2nd - 22th days

1724 - High - 96 days (22May02)
1340 - Low - 22% (14Oct02)
1st rebound - 27days
========================================

Intermediate Selldown

As per previous reviews, a more severe selldown is probably taking place.

We stil have around 2- 10% to go and 4 - 6 days before a reasonable rebound happen. But I notice the % seem to defer to the previous cases for STI compares to the US.

Our percentage down seem to be closer maybe due the fact we did not have a chance to work off our oversold conditions.
1460 - High 22th Feb - 14days 1363 - Low 14th Mar 0.07% low
1557 - High 20th Jul - 20days 1371 - Low 16th Aug 0.12% low
1550 - High 31st Oct - 17days 1404 - Low 26th Nov 0.09%
1404 - High 5th Jun - 10days till now 1334 - low 19thJun 0.05%

Major selldown - 18days 1500 - High 26Dec 1268 - low 23th Jan 0.15%

STI 3316 - High 2920 -Low 0.12%
3687 - High 2977 - Low 0.19%
3843 - High 3311 - low 0.15%
3216 - high 2999- low 0.07%

Trading for a Living - Alexandra Elder

Starting with Psychology which is pretty unique as a trading book but very powerful analysis on psychology

Psychology:
A successful trader must identify his fantasies and get rid of them. A loser is not undercapitalized - his mind is underdeveloped.

Undercapitalization myth
A loser can destory a big account almost as quickly as a small one. He overtrades, and his money management is sloppy. Your trades must be based on clearly defined rules. You have to analyse your feelings as you trade, to make sure that your decisions are intellectually sound. You have to structure your money management so that no string of losses can kick you out of the game


The mental baggage from childhood can prevent from succeeding in the markets. You have to find your weakness in order to change. Keep a trading diary - write down your reason for entering and exiting every trade. Look for repetive patterns of success and failures.

Trading Psychology
There is a stark parallel between an alocholic and a trader whose account is being demolished by losses. He keeps changing trading tactics, acting like an alocholic who tries to solve his problem by switching from hard liquor to beer. A loser denies that he has lost control over his course in the market.

1. When you admit that you have a personal problem that causes you to lose, you can begin building a new trading life. You can start developing the discipline of a winner.

2. Your trading records must show the date and price of every entry and exit, slippage, commissions, stops, all adjustments of stops, reasons for entering, objectives for exiting, maxi paper profit, max paper loss after a stop was hit and other necessary data

3. If you let the market make you feel high or low, you will lose money. Ultimately, the one thing you can control is yourself.

To make money trading, you do not need to forcast the future. You have to extract information from the market and find out whether bulls or bears are in control. You need to measure the strength of the dominant market group and decide how likely the current trend is to continue. You need to practice conservative money management aimed at long-term survival and profit accumulation. You must observe how your mind works and avoid slipping into fear or greed. A trader who does all of this will succeed more than any forecaster.

Chart Analysis:
Trendlines:
1. Longer the timeframe, the more important the trendline
2. Longer the trendline, the more valid it is
3. The more contacts between prices and trendline, the more valid that line.