Hello, I'm 23 year old recent college graduate. I studied in the states but I've decided to take some time off between undergraduate and graduate school, so i'm back home in Sri lanka. About a month ago I got interested in trading stocks. day trading to be more specific I started reading, van K. Tharp books Trade you way to financial freedom and then went on to read Kirkpatrick & Dahlquists' book on technical analysis. I also went through John Ehler's book Cybernetic Analysis for stocks & futures. I liked ehler's book mostly because i am mathematician by education, but i also realized that he is very advanced and I wouldn't want to use advanced techniques until i am confident about my ability to apply basics. To that effect the other two books I have read have been very helpful. The Sri lankan stock exchange is doing pretty well it went up 100% last year and is already up more that 50% this year. So the times are ripe. I am about to start developing my own system, so far I am interested in using volatility breakouts coupled with high liquidity to enter the market. I have to design a proper stop, some mechanism for position sizing and risk evaluation, as well as an exist strategy. Can anyone give me decent advice about the pat of my system that I haven't finished developing as well as my entry strategy. One thing i have noticed from the data is that stocks colombo stock exchange changes direction only one or two times a day. People seem to change direction very slowly intraday. thanks Mononoke
it's pretty expensive for foreign investors to get in, they charge higher transaction cost and tariffs. I can check and see.
well i just got into the country. The overwhelming consensus is that the market is going to go up for another year or so, probably not wit the same velocity but it looks good. The war is over, tourism has gone up exponentially and the present government is extremely stable and popular if not a little ruthless and a bit evil. Also, the seems to a lot of foreign companies coming in for investing. economic growth has been going up it's currently 7-8%, it's could be higher but given the world economy i doubt it. Growth so far has been largely driven by infrastructure development. But now, agriculture, transportation, telecommunication & tourism is picking up. Of course all of this could bubble out if the private sector doesn't respond quickly enough. that is concern for me because the private sector has been very conservative and mistrusting of the government. Hmm... I'll have to wait and see, anyways if all fails i'll just go to grad school
Then you'll probably find that it's impossible to make a net profit overtime day trading stocks. Making money in the markets is as much as costs as it is profits. don't fall into the trap that so many do and think it's all about buying/selling at the right prices (of course that helps). Good luck anyway.
What's the inflation rate on the Rupee? I would start with basic trend-following. With strong MM it will give you some time to figure out more sophisticated strategies.
I know nothing about this particular stock market. For markets in general the consensus is often wrong and if the consensus is overwhelming it is almost certainly wrong!
Index: http://www.bloomberg.com/apps/cbuilder?ticker1=CSEALL:IND Do the 5 YR chart. Exchange rate: http://www.exchange-rates.org/history/LKR/USD/G/180 It has been stable for the last year, more or less.