Sell high and buy low is a famous recommendation in stock trading as well as everything else in the world. Despite its simplicity, most investors in the market do not know how to do it. I studied a recent historical chart of a derivative call warrant referencing a Thai stock AMATA (AMAT01C1810B) in a 30 minute time frame. To be able to buy cheap and sell expensive, we need to read the market story told in this chart from left to right.
This asset was issued by a brokerage firm BLS. It will expire in October 2018. It was first traded in the Thai exchange near 0.90 THB. At first, the price kept falling down until it reached 0.78 THB. Here the volume peaked out. The price built a sideway base of 8 bars after that. During this base building, some buyers came in for long positions. They put their stop loss slightly below this base. Unfortunately their hopes were scraped by the market makers who smashed down the price forcing the buyers to sell stocks to them at very cheap prices. When all stocks were sold out, the price went up. The public noticed this new rally. They came in to the market and bought the shares. The public got the stocks by buying from the market makers who sold the shares out gradually at higher prices. The public put their stop loss just below their buying points ($ signs in the chart) and dreamed for huge profits. Unfortunately, the market maker smashed down the price again to force the public to sell out their shares at very cheap prices. Again, the market makers came to buy those shares from the public.
We, insightful investors whose eyes have been trained to see this routine in the market can expect where the money is located in this chart. It is at the levels with $ sign. So, when the market makers have done their jobs by bringing down the price for us, we can just buy those shares along with them (buy cheap) and wait for the price to go up to sell for profits later on (sell expensive). Again, we can expect the level that we can sell our acquired shares profitably around the peak price of the recent rally. If we bought cheap around 0.76 THB and sold expensive around 0.83 THB, that would be a lucrative return of 83/76 = 9.2% in less than a week!
If your eyes have been trained, you could see another set of $ signs, buy cheap and sell expensive regions for the right half of the chart by yourselves. The market makers again could make at least 9% of nice profits in the second half of this chart.
Investors who want to learn how to read market stories from the charts can consult me (Dr. Nimit Chomnawang) at [ m.me/nimit.chomnawang ].
Do not trade if you have no plan ! Learn trade planning at [ facebook.com/lazyinvestments ].
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