🔍 Analysis & Strategy

Technical Analysis

Technical analysis is the study of historical price and volume data to predict future direction — based on 3 assumptions:

1. Market Discounts Everything — news, financial statements, the economy — everything is already priced in
2. Price Moves in Trends — prices trend, they don't move randomly
3. History Repeats Itself — human behavior repeats, causing price patterns to repeat

Candlestick Patterns — Key Patterns

• Doji — open ≈ close → market indecisive, possible reversal
• Hammer / Inverted Hammer — long lower/upper wick → reversal signal
• Bullish/Bearish Engulfing — current candle engulfs previous → strong reversal signal
• Morning Star / Evening Star — 3-candle reversal (Morning = bullish, Evening = bearish)
• Three White Soldiers / Three Black Crows — 3 consecutive green/red candles → strong trend

📐 Moving Average · RSI · MACD · Bollinger

Moving Average (MA)

• SMA (Simple MA) — average price over N days — used to identify trends
• EMA (Exponential MA) — gives more weight to recent prices — more responsive to changes
• Golden Cross: MA50 crosses above MA200 → long-term buy signal (Bullish)
• Death Cross: MA50 crosses below MA200 → long-term sell signal (Bearish)

RSI (Relative Strength Index)

Measures the speed and change of price movements, scale 0-100:

• RSI > 70 = Overbought (too many buyers — may drop)
• RSI < 30 = Oversold (too many sellers — may rise)
• RSI Divergence: price makes Higher High but RSI makes Lower High → Bearish Divergence — strong reversal signal

MACD (Moving Average Convergence Divergence)

Consists of MACD Line (EMA12 − EMA26) and Signal Line (EMA9 of MACD Line):

• MACD crosses Signal Line upward → Buy signal
• MACD crosses Signal Line downward → Sell signal
• Histogram — bars showing the difference between MACD and Signal — color change → trend shift signal

🌀 Fibonacci & Elliott Wave

Fibonacci Retracement

Key Fibonacci levels: 23.6%, 38.2%, 50%, 61.8%, 78.6% — used to find Support-Resistance when price retraces from the main trend

Fibonacci Extension: 127.2%, 161.8%, 261.8% — used to set price targets

Elliott Wave Theory

Concept by Ralph Nelson Elliott (1938) — prices move in waves driven by mass psychology:

• Impulse Wave (trend wave): 5 waves — Waves 1, 3, 5 up / Waves 2, 4 down (corrections)
• Corrective Wave (consolidation wave): 3 waves — Waves A, C down / Wave B up
• Key rules: Wave 2 should not go below Wave 1 / Wave 3 must not be the shortest / Wave 4 must not overlap Wave 1

Fundamental Analysis — Company Valuation

Fundamental analysis seeks to find "Intrinsic Value" (Intrinsic Value) of a company:

DCF (Discounted Cash Flow) Valuation

Concept: company value = present value of all future Cash Flows (discounted to today's value):

DCF Value = Σ [FCF_t ÷ (1 + WACC)^t] + Terminal Value

• FCF (Free Cash Flow) — Free Cash Flow = operating cash flow − capital expenditures (CapEx)
• WACC (Weighted Average Cost of Capital) — average cost of capital (used as Discount Rate, typically 8-12%)
• Terminal Value — company value beyond the forecast period (using Perpetuity Growth Model or Exit Multiple)

Other Valuation Methods

• P/E Multiple: Earnings per share × appropriate P/E (compare to industry average)
• P/BV Method: Book value per share × appropriate P/BV — used for banks, insurance
• Dividend Discount Model (DDM): stock value = present value of all Dividends — suitable for consistent dividend stocks
• EV/EBITDA: Enterprise Value (including debt) ÷ EBITDA — used for cross-industry comparison

🛡️ Risk Management — Key to Survival

• Position Sizing: position size per trade — Golden rule: risk no more than 1-2% of portfolio per trade
  → Example: 100,000 THB portfolio → risk per trade ≤ 2,000 THB
  → If Stop Loss is 4% → Position Size = 2,000 ÷ 4% = 50,000 THB
• Stop Loss: price level where you accept the loss and close the position — set before entering the trade — never move it!
• Risk/Reward Ratio (R:R): max loss : expected profit — only trade when R:R ≥ 1:2
• Diversification: don't put all eggs in one basket — diversify across asset classes (stocks, bonds, gold, real estate), regions, industries
• Correlation: hold assets with low or negative correlation — when one goes down, another goes up, reducing portfolio volatility

🧠 Trading Psychology

Emotions are the #1 enemy of investors:

• FOMO (Fear of Missing Out): fear of missing out → buying when prices surge → buying at the top
• Revenge Trading: lost and want revenge → increasing position size → bigger losses
• Loss Aversion: hating losses more than loving gains — causes holding losing stocks too long and selling winners too early
• Overconfidence: overconfident after profits → increasing risk → blowing up
• Anchoring Bias: anchoring to purchase price — refusing to sell at a loss waiting to "break even"
• Herd Mentality: following the herd — buying because others buy, selling because others sell

✅ How to Overcome Emotions:

1. Have a clear trading plan — Entry, Stop Loss, Take Profit — set before entering
2. Keep a Trading Journal — every trade: why entered? result? what learned?
3. Iron rule: never move Stop Loss — once set, must be respected
4. Take a break after 2-3 consecutive losses — step away from the screen, return when calm
5. Meditate / Exercise — a strong mind makes better decisions

🏛️ Asset Allocation — Portfolio Construction

Asset allocation is the factor that most affects long-term returns (more than stock picking or market timing):

• 60/40 Portfolio: 60% stocks + 40% bonds — the classic. Rebalance annually
• All-Weather Portfolio (Ray Dalio): 30% stocks + 40% long-term bonds + 15% mid-term bonds + 7.5% gold + 7.5% commodities — designed to survive all economic conditions
• Permanent Portfolio (Harry Browne): 25% stocks + 25% long-term bonds + 25% cash + 25% gold — simple, protects against all scenarios
• Rebalancing: adjust portfolio back to target weights every 6-12 months — sell winners, buy losers → automatic "buy low, sell high"
• DCA (Dollar Cost Averaging): invest equal amounts monthly — no need to time the market — achieves average cost — ideal for beginners and long-term investors

🧾 Tax Planning for Investors

• Dividend Tax (Thai stocks): 10% withholding tax — individuals can claim Dividend Tax Credit
• Capital Gains Tax (Thai stocks): Individuals do not pay tax on profits from selling SET stocks (except corporations)
• Tax-deductible funds: RMF (30% of income), SSF (30%, max 200k), ThaiESG (30%, max 300k)
• Crypto Tax: profits from selling crypto are taxable — losses can be offset — 15% withholding or progressive rate
• Property Tax: investment real estate — taxed based on assessed value (0.02-0.3% per year)