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Ztrader – Trading Decisions 港股博弈

http://clcheung.wordpress.com/2013/10/19/ztrader-trading-decisions/

How do you decide to trade ? Give some examples:

 

Fundamentals

F1 – US bond yield going up, bet on # 0945

F2 – Coal price keep dropping, bet on electricity sector

F3 – Q3 result announced, out of expectations

 

Event

E1 – placement, market overreacted

E2 – IPO

E3 – Insider keep buying (selling)

E4 – special events (special dividend, change of ownership, injection of assets, …)

 

Other people’s advices, rumors

R1 – Financial actors, ibanks, newspaper, paid services, friends, famous blogger, sing good

R2 – insider information

 

Market situations

M1- market panic, 80% stocks oversold

M2- market too hot, too many 52 weeks new high stocks

 

Relative valuations

V1 – Corresponding sector is strong in US, HK is behind

V2 – stocks in a particular sector very behind

V3 – sector is relative behind compared with other sectors

 

TA

T1 – your indicators give a signal
T2 – a stock making new high / new low

 

Or, you would mix the above, say:

F2 + T1, you know the electricity sector shall be good on lower coal price, but you want to wait for the best time to enter.

 

M1 + T1, you know oversold situation can last long, you want to avoid risk of early entry.

 

V2 + T1, you don’t know the reason why that stock is so behind, you don’t want to be trapped. A famous example is # 0246, which is very behind before gameover.

 

F3 + T1, you know the result looks good, but you want to confirm the market reaction first.

 

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So is the above common trading decisions you want to make everyday ? Part of Ztrader is built to support the above decision processes. I don’t want to press 10 keys to find out which stock in a sector is behind. I don’t want to go to HKEX to search if an insider is selling or buying a stock recently, I want it display on screen immediately. I don’t want to check how Home Depot performed daily when I own 669, I want it display immediately. Part of Ztrader is just to integrate available data together to help making a trading decision.

Other than data integration, how do you know if a particular TA indicator is a good indicator for your trade decision ? What is the historical performance ? Can you tell if trade on a particulr oversold signal can give you how much return on average ?

 

Another part of Ztrader is trading system. To build a sound trading system, one may have to go through a design, testing, performance evaluation, risk evaluation, and implementation cycle. Trading system is a much bigger topic, will share more later, if it can be shared.

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