tradingrules

In any successful trading strategies, there are a set of Trading Rules, Triggers and Gates. We at Pulzzz are no different. We would like to share with you a glimpse of what are our basic rules are so that you have an idea on where we come from.

Rule #1 - Trading Volume
Trading Volume is the utmost important when it comes to Trading. The reason, if we go into a trade with a poor trading volume, we may not have the bargaining power to exit a trade or we may not be able to exit a trade at the desired price of the stock price that we want. When that happens we get caught up and our capital is locked in and we do not want that. Our main strategy is to keep ourselves as liquid as possible. Therefore the liquidity of a stock is very, very important. In fact the most important.

As a guide only, we usually choose stocks which have at least 2 million shares traded a day on a consistent basis. We do not pick stocks that have a sudden spike in trading volume only to realised that after a few days into trade the volume has died. We want to see consistent trading volume in a stock before we enter.

Rule #2 - Price Movement
We specialised in candlestick charting. It is because it gives the clearest indication of market, investors and speculators sentiment. Very often we are able to prempt a market move before through candlestick charting methods. It is a very specialised skill and we take great pains to study, research and understand what each candle means.

Price movment is crucial, in a trading environment, therefore we put it next in our rule book.

Rule #3 - Trend
Trend is definitely our friend. We do not go against trend. However, occasionally we do go against the trend because of Rule #2. Otherwise we stick very closely to a trend. If the trend is bullish we are likely to have more Long/Buying of stocks. If it is bearish and trending downwards, our strategy will likely to have more Short/Selling of stocks.

Rule #4 - Indicators
In any trade we would use some indicators to determine whether a stock represents a good buying or selling opportunity. Indicators are laggers, therefore it is never one of the main rules. Indicators just helps us to confirm whether it would be good for us to enter or exit a trade. However we do use Fibonacci very often as it is the only indicator that is forward thinking.

Rule #5 - Set Trading Margins
This is what we called "Cash Management Strategy". Every trade we recommend, is about the same trade size. Unless the price of the stock is high, our minimum entry size is 1000 shares. That is for the Singapore Markets. Other markets such as the U.S. Markets have odd lots so it is much better to manage it in pure dollars and cents.

But for the Singapore markets, we trade in lots of shares at minimum, 1000 shares. If we are trading in CFDs, odd lots are available, we wil revert to purely the value of cash we have. That will keep our discipline in any trades we make and minimise speculation and gambling

Rule #6 - Execution
This may be the final rule but it is a very important rule as well. We execute 90% of our trades at the end of the day, 10% at the beginning of the day.

Why? Very simple. Beginners trade the beginning and the middle of the day. In the beginning of the day, you see a frantic amount of activity in the market and you see prices moving up and down and if you are caught in the market frenzy, you are likely to make the wrong decisions. We love the end of the day trade, because it is the activity of the full day and we are able to confirm where the market is going. That is why we are very intense at about 4pm to 5pm. Most professional traders trade the end of the day for confirmation on where the market is moving.

We only dedicate 10% for a beginning of the day trade because if we missed out on the previous day trade, we can enter the next day. We are never eager to enter a trade in a panic. We always try and remain as calm as we can.