Stock Market Seminar

Nik Ihsan Raja Abdullah, MSTA, CFTe President, Malaysian Association of Technical Analysts (MATA)

Chartist, Retail Research, Maybank Investment Bank Berhad

Full Members of United Kingdom Society of Technical Analysts (UK STA)

Colleagues, International Federation of Technical Analysts (IFTA)

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The Speaker

Nik Ihsan Raja Abdullah

President of Malaysian Association of

Technical Analyst (MATA)

• Chartist for Research and License Investment

Advisor, Maybank Investment Bank Behad

• Certified Technical Analyst and been recognized

by United Kingdom Society of Technical Analysts

(UK STA) and International Federation of

Technical Analysts (IFTA)

• Lecturer for MSTA Diploma Program under

collaboration between PRIBUMI-MATA and UK STA.

• Former Institutional Sales Dealer with BIMB

Securities

• Former Investment & Technical Analyst for UOB

Kay Hian

The Definition of Trends

TREND

TREND IDENTIFICATION

ACTUAL TREND

• How trend develop?

• How trend can shifted from bullish to bearish?

• Sign of weakness / strength

MARKET STRUCTURES

TREND DEVELOPMENT

H

HH

HH

LH

LH

L HL

SHIFT IN TREND

• How low it has to go down in order we confirm trend has turn?

SHIFT IN TREND

• ASDASD

SHIFT IN TREND

ICHIMOKU KINKO HYO

The Ichimoku Cloud, also known as Ichimoku Kinko Hyo, is a versatile indicator that defines support and resistance, identifies trend direction, gauges momentum and provides trading signals. Ichimoku Kinko Hyo translates into “one look equilibrium chart”. With one look, chartists can identify the trend and look for potential signals within that trend. The indicator was developed by Goichi Hosoda, a journalist, and published in his 1969 book. Even though the Ichimoku Cloud may seem complicated when viewed on the price chart, it is really a straight forward indicator that is very usable.

(Sources: stockcharts.com)

INTRODUCTION

• Tenkan-sen (Conversion Line)

• Kijun-sen (Base Line)

• Senkou Span A (Leading Span A)

• Senkou Span B (Leading Span B)

• Chikou Span (Lagging Span)

ICHIMOKU COMPONENTS

ICHIMOKU CHART

• Tenkan-sen (BLUE LINE)

• Kijun-sen (RED LINE)

• Senkou Span A (DARK BLUE LINE - CLOUD)

• Senkou Span B (PURPLE DASH LINE - CLOUD)

• Chikou Span (ORANGE LINE)

CALCULATION

Source: stockcharts.com

The trend is UP when prices are above the Cloud, DOWN when prices are below the Cloud and

FLAT when prices are in the Cloud.

THE INTERPRETATION

• Trend Confirmation

• Trend Strength or Weakness

• Support and Resistance

• Crossover Signals

THE USAGE

TREND CONFIRMATION

Trend Confirmation: When the price is above the cloud it

indicates an uptrend, when the price is below the cloud it

indicates a downtrend.

TREND STRENGTH OR WEAKNESS

When Span A is moving up and away from Span B it

indicates the uptrend is gaining momentum vice versa.

A thickening cloud helps confirm the current trend. A very

thin cloud shows indecision, and a potentially weak or

weakening trend.

• The cloud is projected out 26 price bars to the right of the current price, providing an idea of where support and resistance may develop in the future.

• During an uptrend, the price will often bounce off the cloud during pullbacks and then resume the uptrend.

• During a downtrend, the price will often retrace to the cloud and then continue lower. Therefore, the cloud presents entry opportunities into the trend.

SUPPORT AND RESISTANCE

• Price, the Conversion Line and the Base Line are used to identify faster, and more frequent, signals.

• It is important to remember that bullish signals are reinforced when prices are above the cloud. Bearish signals are reinforced when prices are below the cloud.

CROSSOVER SIGNALS

• Thicker the cloud – The stronger trend would be

• Cloud as confirmation

• Cloud as FUTURES SUPPORT & RESISTANCE

• Tenkan & Kijun as REENTRY METHOD within the bigger trend

REMEMBER!

Bullish Signals:

• Price moves above Cloud (trend)

• Cloud turns from red to green (ebb-flow within trend)

• Price Moves above the Base Line (momentum)

• Conversion Line moves above Base Line (momentum)

SIGNAL SUMMARY (BULL)

Bearish Signals:

• Price moves below Cloud (trend)

• Cloud turns from green to red (ebb-flow within trend)

• Price Moves below Base Line (momentum)

• Conversion Line moves below Base Line (momentum)

SIGNAL SUMMARY (BEAR)

• May generate false signal particularly when trend start to shift. COUNTER – Add indicators e.g DMI, Money Flow Index etc.

• The cloud is also just essentially a pair of moving altered moving averages, which may or not provide support during an uptrend, or resistance in a downtrend.

• All calculations are also based on historical data, which means trade signals may appear late or at inopportune times, because historical short-term tendencies (which the indicator captures) may not repeat in the future.

LIMITATION

CASE STUDY 1

CASE STUDY 2

CASE STUDY 3

CONCLUSION

The Ichimoku Cloud is a useful indicator, especially for new traders who want some help with gauging trend direction, momentum, spotting trend reversals and finding entry points. Traders will still need to control risk with a stop loss and also find a way to profitably exit trades. With all its lines, the Ichimoku Cloud can appear scary, but basically if the price is below the Cloud, the trend is down; look for short positions and avoid long positions. When the price is above the Cloud, the trend is up; look for long positions and avoid short positions.

CONCLUSION

CONTACT US

FACEBOOK / PAGES

• Personal Facebook - Nik Ihsan

• MATA Facebook – Malaysian

Association of Technical

Analysts (@malaysianchartist)

WEBSITE / OTHER MEDIA

• www.malaysianchartist.com

• Telegram Channel –

https://t.me/matatechchannel

• Email:

admin@malaysianchartist.com