Technical Analysis conference in Paris on March 26/27 (pt. 3)

Here's the final installment of my observations of Paris's 10th annual TA conference.

The last speaker I checked out was El Mostafa Belkhayate. He is widely recognised for his trading analysis expertise, and he recently launched his own funds with Deutsch Bank and Crédit Suisse.

Belkhayate's lecture touched upon 3 main areas. First, he took some shots at the FED and the US gov't in general. The Fed is manipulating the value (or devaluation, rather) of the dollar by printing shitloads of it. Why would it do such a thing? Well, the lower the value of the dollar, the easier it is to repay all of its debt! (The US has a huge amount of debt, much of which needs to be paid back to China and other "loaning" nations)... In addition, Merrill Lynch, Goldman Sachs and JP Morgan are also guilty of manipulating the markets for their own benefit...

His second point related to how we use the RSI (Relative Strength Index) indicator. Whereas most traders typically look to sell when the RSI hits 70 or 80 (or buy when it drops to 30 or 20), Belkhayate advises that traders add 2 green lines to their RSI indicator, one at 40 and the other at 80. Next, you would also add 2 red lines, one at 20 and the other at 60. Now, whenever you see prices evolving within the "green" tunnel, that means you have a rising market and it's safe to buy. Just the same, when prices are evolving in the "red" tunnel it means the market is heading south. This seems quite sound, especially as it gives a whole new perspective of the index. Instead of trying to pick tops and bottoms you simply go with the flow.

His last point was less technical in nature, but also seems to make good sense. He advises all traders to specialise in one specific 90 minute trading period. Instead of trying to trade all day long or for several consecutive hours, he says that you should specialise in one 90 minute period, the same period every day. This way, you truly become a specialist of that specific 90 minute timespan. He goes even further, suggesting that you avoid trading when the "sharks" in Wall Street or other markets are trading. Since everyone eats and sleeps at the same time (in one time zone of course), avoid trading when other big-bank traders are in front of their screens. Trade when they're out at lunch or when they're home sleeping, or, at worst, trade when traders are near the end of their day (and thinking about partying, sports, girlfriends, eating/sleeping, etc...).