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Introduction to Trading &                  Technical Analysis &                  Proprietary Trading &                  Ca...
Emily Tseng        GGSB MBA in Finance with        Distinction        MSTA & IFTA Qualified        (Society of Technical A...
objectives                  Understand the basic of                  trading & technical analysis                  Career ...
What is financial trading?                  Trading is exchange of securities - stocks, bonds, commodi-                  t...
“   The top 25 hedge fund managers combined                      appear to have earned more than all 500 of the           ...
oct_2012.indd 6                     0                                                               50                    ...
the basics of Trading                    Technical Analysis                    Fundamental Analysis                    Tra...
“   Technical analysis is the                                                “                      study of past price ac...
Why Technical analysis                            can predict the futureuake                         fear                 ...
Over                                                             Overreaction                              confidence     ...
Analysing the best trades using                         technical analysisoct_2012.indd 11                                ...
LINE CHART                                                                   Types of Charts                              ...
basic features of    charts    •	 “Support” - a price level       buyers come in.    •	 “Resistance” - a price       level...
Trader’s job is to ride       the trends until they are       exhausted, when a trend is       exhausted, the trader can  ...
target                            Double top – the “M pattern”oct_2012.indd 15                                           2...
target                       Double bottom - the W pattern”oct_2012.indd 16                                        27/10/2...
target                   Triple top – the 3 peaksoct_2012.indd 17                              27/10/2012 14:22
target                     Triple bottom - the 3 lowsoct_2012.indd 18                                  27/10/2012 14:23
target   Head & Shoulders- most reliable pattern of alloct_2012.indd 19                                                   ...
target                       Ascending Triangle - the neutral pattern with a bullish bias.oct_2012.indd 20                ...
target                            Descending Triangle-the neutral pattern with a bearish bias.oct_2012.indd 21            ...
target                       Symmetrical Triangle-the neutral patternoct_2012.indd 22                                     ...
target                       Bull Pennant- after a very steep riseoct_2012.indd 23                                        ...
target                            Bear Pennant -after a very steep falloct_2012.indd 24                                   ...
target                       Bull Flag – after a very steep riseoct_2012.indd 25                                          ...
target                            Bear Flag– after a very steep falloct_2012.indd 26                                      ...
Moving Average smoothes   the price action to define   the trend direction with   time lag because they are   based on pas...
Moving average crossovers   – give BUY & SELL signals.   Andrew Hall took home   $100 Million in 2008 from   this trade.  ...
This SELL signal would                   have more than 5437%                   return on investment                   wit...
RSI and price divergence      give highly reliable      trend reversal signal      and therefore a very      popular indic...
MACD was       developed from       moving averages       to give buy and sell       signals.                             ...
Parabolic SAR                                   is a trend indicator,                                   while stochastic c...
There are over 200                            candlestick patterns                            of which the Bearish        ...
Royal Bank of Scotland       weekly chart, in October       2007, point and figure       already give a price target      ...
The Elliott Wave is used       to forecast  trends by       identifying extremes       in investor psychology,       highs...
Fundamental Analysis                                                            Macro Economics                           ...
German index (DAX)       tends to have an       inverse correlation       with the German       Government Bond       (Bun...
BP’s stock fell by 52%     in 50 days after the     Deepwater Horizon Oil     Spilloct_2012.indd 38              27/10/201...
economic calendaroct_2012.indd 39            27/10/2012 14:23
TRADE PLAN 02-02-2012 •	 9:30am – UK PMI    Construction: Watch for GBP/    USD and FTSE •	 10:00am – European    Monetary...
Jobs                   After theoct_2012.indd 41                   Credit Crunch..27/10/2012 14:23
oct_2012.indd 42   27/10/2012 14:23
You need experience!!                                                              YES                                    ...
Financial Institutions          Career Paths   Trading part-time                          Trading fu                      ...
Woorking in a fiancia institution                   Working in Fiancial Institutions                                      ...
30% stay at Amplify                        part time traders                   Most part-time traders have full           ...
Full tim                            e   traders                                                        of                 ...
Thank you                   Emily Tseng                   inxni888@gmail.com      Any questions?                   07445 9...
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Oct 2012

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My lecture slides at London School of Business and Finance October 2012

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Transcript of "Oct 2012"

  1. 1. Introduction to Trading & Technical Analysis & Proprietary Trading & Career Paths as a Trader Emily Tseng MBA MSTAoct_2012.indd 1 LSBF log in corner 27/10/2012 14:22
  2. 2. Emily Tseng GGSB MBA in Finance with Distinction MSTA & IFTA Qualified (Society of Technical Analysis UK & International Federation of TA) Prop Trader at Amplify Trading Presenter & Technical Analyst at Beta Financial Groupoct_2012.indd 2 27/10/2012 14:22
  3. 3. objectives Understand the basic of trading & technical analysis Career opportunitiesoct_2012.indd 3 27/10/2012 14:22
  4. 4. What is financial trading? Trading is exchange of securities - stocks, bonds, commodi- ties, currencies, derivatives and financial instruments (where with insitutions of exchange) for “cash profit”.oct_2012.indd 4 27/10/2012 14:22
  5. 5. “ The top 25 hedge fund managers combined appear to have earned more than all 500 of the S&P CEO’s combined. This trend accelerated. In 2007, top 5 hedge fund managers earned more than all 500 of the S&P CEO’s combined!! “ The Economist 22 September 2010oct_2012.indd 5 27/10/2012 14:22
  6. 6. oct_2012.indd 6 0 50 100 150 200 250 300 Portfolio Manager GBP 282,000 Investment Banking Analyst:GBP 99,000 Proprietary Trader GBP 85,000 Prop Trading Analyst GBP 71,000 Qualified Accountant GBP 45,000 Business Manager GBP 42,000 Average Gradates GBP 28,000 Data from Trovit Jobs and financial times27/10/2012 14:22
  7. 7. the basics of Trading Technical Analysis Fundamental Analysis Trading strategy Trading Psychologyoct_2012.indd 7 27/10/2012 14:22
  8. 8. “ Technical analysis is the “ study of past price action in order to predict future price action.oct_2012.indd 8 27/10/2012 14:22
  9. 9. Why Technical analysis can predict the futureuake fear Greed font: Because human behaviour does not change therefore history will repeat itself oct_2012.indd 9 27/10/2012 14:22
  10. 10. Over Overreaction confidence Loss From aversion sheep effect Fear & Greed... miscalculate Regret probabilitiesoct_2012.indd 10 27/10/2012 14:22
  11. 11. Analysing the best trades using technical analysisoct_2012.indd 11 27/10/2012 14:22
  12. 12. LINE CHART Types of Charts CANDLE STICKS O OX BAR CHART O OX OX OX O OX O OX OX O OXOX OX O OX OX O OX OXOX OX O XO X O X O O X O X X O X X O XO X O X O X O X O X X O X O XO O X O XOX X X X X O X OX O O O XO POINT & FIGURE O X X O X O X X Ooct_2012.indd 12 27/10/2012 14:22
  13. 13. basic features of charts • “Support” - a price level buyers come in. • “Resistance” - a price level sellers step in. Support & resistance Reflect buyers & sellersoct_2012.indd 13 27/10/2012 14:22
  14. 14. Trader’s job is to ride the trends until they are exhausted, when a trend is exhausted, the trader can position for a reversal. • Primary trend > 6 months • Secondary trend = 1-6 months • Minor trend= 1 min -1 month The trend is your friendoct_2012.indd 14 27/10/2012 14:22
  15. 15. target Double top – the “M pattern”oct_2012.indd 15 27/10/2012 14:22
  16. 16. target Double bottom - the W pattern”oct_2012.indd 16 27/10/2012 14:22
  17. 17. target Triple top – the 3 peaksoct_2012.indd 17 27/10/2012 14:22
  18. 18. target Triple bottom - the 3 lowsoct_2012.indd 18 27/10/2012 14:23
  19. 19. target Head & Shoulders- most reliable pattern of alloct_2012.indd 19 27/10/2012 14:23
  20. 20. target Ascending Triangle - the neutral pattern with a bullish bias.oct_2012.indd 20 27/10/2012 14:23
  21. 21. target Descending Triangle-the neutral pattern with a bearish bias.oct_2012.indd 21 27/10/2012 14:23
  22. 22. target Symmetrical Triangle-the neutral patternoct_2012.indd 22 27/10/2012 14:23
  23. 23. target Bull Pennant- after a very steep riseoct_2012.indd 23 27/10/2012 14:23
  24. 24. target Bear Pennant -after a very steep falloct_2012.indd 24 27/10/2012 14:23
  25. 25. target Bull Flag – after a very steep riseoct_2012.indd 25 27/10/2012 14:23
  26. 26. target Bear Flag– after a very steep falloct_2012.indd 26 27/10/2012 14:23
  27. 27. Moving Average smoothes the price action to define the trend direction with time lag because they are based on past prices Moving Averagesoct_2012.indd 27 27/10/2012 14:23
  28. 28. Moving average crossovers – give BUY & SELL signals. Andrew Hall took home $100 Million in 2008 from this trade. Moving Averages Golden Cross - BUYoct_2012.indd 28 27/10/2012 14:23
  29. 29. This SELL signal would have more than 5437% return on investment within18 months. Moving Averages Dead Cross - SELLoct_2012.indd 29 27/10/2012 14:23
  30. 30. RSI and price divergence give highly reliable trend reversal signal and therefore a very popular indicator by traders. RSI: Relative Strength Indexoct_2012.indd 30 27/10/2012 14:23
  31. 31. MACD was developed from moving averages to give buy and sell signals. MACD: Moving Average Convergence Divergenceoct_2012.indd 31 27/10/2012 14:23
  32. 32. Parabolic SAR is a trend indicator, while stochastic cross over gives buy and sell signals Parabolic SAR & Stochasticoct_2012.indd 32 27/10/2012 14:23
  33. 33. There are over 200 candlestick patterns of which the Bearish Engulfing is one of the most commonly used p Candlestick Patternsoct_2012.indd 33 27/10/2012 14:23
  34. 34. Royal Bank of Scotland weekly chart, in October 2007, point and figure already give a price target of below 20 pence when the share was traded at 550 pence, RBS hit 9.8 pence on 19th of January 2009 - what a great short! Point & Figureoct_2012.indd 34 27/10/2012 14:23
  35. 35. The Elliott Wave is used to forecast  trends by identifying extremes in investor psychology, highs and lows in prices, and other collective activities.  Elliott’s Waveoct_2012.indd 35 27/10/2012 14:23
  36. 36. Fundamental Analysis Macro Economics Corporate Earnings Economic Calendaroct_2012.indd 36 27/10/2012 14:23
  37. 37. German index (DAX) tends to have an inverse correlation with the German Government Bond (Bund). DAX vs BUNDoct_2012.indd 37 27/10/2012 14:23
  38. 38. BP’s stock fell by 52% in 50 days after the Deepwater Horizon Oil Spilloct_2012.indd 38 27/10/2012 14:23
  39. 39. economic calendaroct_2012.indd 39 27/10/2012 14:23
  40. 40. TRADE PLAN 02-02-2012 • 9:30am – UK PMI Construction: Watch for GBP/ USD and FTSE • 10:00am – European Monetary Union: Watch out for the EURO and DAX. • 13:30 – US Initial and Continuing Jobless claims: Watch for US indices and US Dollar Index • US market movements tend to affect markets worldwide. Economic Calendaroct_2012.indd 40 27/10/2012 14:23
  41. 41. Jobs After theoct_2012.indd 41 Credit Crunch..27/10/2012 14:23
  42. 42. oct_2012.indd 42 27/10/2012 14:23
  43. 43. You need experience!! YES YES No No No No No No No No No Nooct_2012.indd 43 27/10/2012 14:23
  44. 44. Financial Institutions Career Paths Trading part-time Trading fu ll-timeoct_2012.indd 44 27/10/2012 14:23
  45. 45. Woorking in a fiancia institution Working in Fiancial Institutions ber of Sma ll num aduates sful gr succes ce related nc rop in fina come P les s be course r Analyst ro o Trader ment Banks st in Inveoct_2012.indd 45 27/10/2012 14:23
  46. 46. 30% stay at Amplify part time traders Most part-time traders have full time jobs and using trading as a way to increase income.oct_2012.indd 46 27/10/2012 14:23
  47. 47. Full tim e traders of an 30% Less th rs can de the tra tly make tan consis nd they a money s desired a choose lifestyle & careeroct_2012.indd 47 27/10/2012 14:23
  48. 48. Thank you Emily Tseng inxni888@gmail.com Any questions? 07445 979997 www.emilytseng.com @inxni888oct_2012.indd 48 27/10/2012 14:23

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