Category: Trading

Tips for trading online in an economic slowdown

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In 2008, the world experienced the worst financial crisis since the depression of the 1930s. In response to the decline, the central banks lowered interest rates to stimulate lending, and started printing money in the form of quantitative easing program. These measures helped the economies of the developed countries to grow and in response, global stocks rose. In fact, all the major indices in Asia, Europe, and United States rose by triple digits.

However, markets do not go up forever. There is recent evidence that points to slowing economies. This year, central banks and leading organizations like the International Monetary Fund and the World Bank have lowered their economic forecasts.

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By looking at the economic calendar, there is evidence that a slow growth environment is the ‘new normal’. The global manufacturing PMI has declined to almost 50 while inflation remains significantly lower. In China, exports have shrunk while the Q4 growth was 6.3%. In the US, the economy is expected to grow by slightly over 2.0% this year after growing by 4.2% in the second quarter of 2018. The same trend will be seen in Europe, where Italy is currently in a recession.

As a trader, this should not worry …

What Will Brexit Mean For Trade?

Brexit

At this point it’s been over a year since the UK voted to leave the European Union in a referendum that has become known as the Brexit vote. I wrote at the time about the potential devastating economic impact of the Brexit, and indeed there were many people forecasting a great deal of turmoil for the UK economy. But now, some 15 months on from the Brexit decision (and getting closer to the actual, formal exit of the UK from the European Union) we can look back with a little bit more perspective.

For starters, it’s worth remembering that this was one of the more surprising geopolitical events in quite some time, at least to a lot of casual observers. While some experts and even some polling firms believed in the end that Brexit had a good shot at passing, we need only look to the betting markets for confirmation of the surprise factor in retrospect. Brexit set a world record for the largest sum of wagers on a non-sports event, and across the board bookmakers reported massive losses – meaning the favored outcome (that Britain would remain in the EU) lost out.

This is not merely to point …

Why Currency Values Drop After Political Change

SGX stocks

Whenever there is political change, there is currency value change. Whether such political change is for the better or worse is often a matter of opinion, but almost every time currency values seem to drop after such a change. Most recently the US dollar has experienced its worst start to a year in decades, mainly due to President Trump taking residence in the White House. There are many reasons why political changes usually lead to a fall in the nation’s currency value.

Elections and Volatility

In the run-up to any election, currency values always fall. This is because traders view it as a time of political instability, with a greater chance of the currency falling leading to a sell-off by many traders. There will likely be different financial policies from all those up for the election, meaning investors and traders will be uncertain about what the future for a currency will hold until the outcome of the election is revealed. Trade can also slow down during elections, further weakening a currency.

Changing Monetary Policies

When a new leader or political party takes charge, there is often a fresh monetary approach. This is a strong driver of a nation’s currency …

Loss aversion

Genting Singapore share price

For many wealth builders, winning $1000 in the stock market is very different from losing $1000 in share investments. In fact, many research studies have demonstrated that the impact arising from losses is twice as powerful as gains. This strange phenomenon is known as loss aversion.

Coined by Amos Tversky and Daniel Kahneman, loss aversion explains why most people prefer avoiding losses to making gains. Understanding this form of economic behavior may help us become better investors because it can shed some light on why people make irrational decisions consistently.

Stock Market

SG Wealth Builder

Our brains are geared to hold on to what we own because in ancient times, our ancestors survived by holding on to resources. As a result of such human evolution, our instinct tells us to avoid making losses at all costs. But what we don’t realize is that in doing so, we often make flawed decisions and end up being financially hurt. This is because times have changed and modern day economics have become much more complex, so we cannot afford to apply the same loss aversion mentality when managing money issues in today’s context.

Most stock investors hate cutting losses because most of us has a …

Developing your growth mindset

financial destiny

In response to my previous article “Surbana terminated 50 staff”, one reader blasted me for writing a disguised advertorial. I was a bit disappointed because my intention of writing that article was actually to encourage readers to develop a growth mindset. If you are interested in developing your potential, please do read on.

The term “growth mindset” was coined by Dr Dweck, who discovered that our mindset can shape our understanding of learning. Broadly speaking, it means that we can actually grow our brain to enhance our performance in life and indirectly increase our wealth. Arising from this, we can either choose to have a fixed or growth mindset.

Some people believe that human beings are born with a certain level of intelligence and thus, assume that they can’t do much to change their destiny in this respect. This mentality is called “fixed mindset”, which curtails learning opportunities because people who have fixed mindset choose to believe they cannot change for the better.

On the other hand, there are people who believe in growing themselves through learning. They are not afraid of learning new things and have a knack of learning from their mistakes. Such people possess “growth mindset” …

Falling from the peak

SG Wealth Builder

Borrowing a phrase from the Taiwanese, the late Mr Lee Kuan Yew described those Singaporeans born from the eighties onward as “The Strawberry Generation” because of the perceived lack of resilience. Indeed, compare to him, many Singaporeans don’t have the experience of living in the World War II period and thus do not understand what hardship really means. Due to this, we often lose the fighting spirit of our fore-fathers in overcoming life obstacles. This is especially so when we start falling from the peak of our lives.

Contrary to what most people thought, the difficult part of mountain climbing is not the ascending phase. It is actually the descending that is more treacherous because after reaching the top of the mountain, the climber would have expended all his energy and fatigue began to set in. He would not have put much thinking on the journey downward and because of this, he become complacent, which led to his downfall literally. In fact, statistics have shown that most climbers die on their way down the mountain, rather than on the way up.

Similar to our education system, you need years of training to build up your body stamina and fitness in …

5 Things That Investors Must Know About Contract for Differences (CFDs)

Genting Singapore share price

Contract for Differences (CFD), basically allows you to trade in leveraged products without forking out huge capitals upfront. This approach essentially manifests both your potential profits and losses, but with proper risk management, you can ensure asymmetric returns as a trader. To be an all-rounded wealth builder, it is important to have knowledge in different investment instruments and their associated risks. So let’s delve into the 5 most important things that investors must know about CFDs.

(1) What are CFDs? 

CFDs are derivatives because they derive their values from underlying assets like gold, shares or currency. This means that investors are not trading the assets. Instead they are actually trading the contracts with the service providers. This is important because investors are not owning or taking physical delivery of the underlying assets. Money is made or lost when the value of the asset moves either in your direction or against you. Thus, with CFDs, investors have the full option of going “long” or “short” the asset.

(2) The power of leveraging 

Another attractive feature of CFDs is that it allows you to put down a small investment capital for a much larger market exposure. As leveraged financial products, they are …

What Are The Advantages Of Trading Online

Genting Singapore share price

It won’t be wrong to say that Internet has completely changed the way many things are done these days. Today, you can buy almost everything online. You can search for information on all kinds of products and services. You can also ask for recommendations from your friends and family on social networks regarding certain products or other things.

The Possibility Of Trading Online

Thanks to the easy availability of Internet, you can also trade online. You just need a computer and an Internet connection to trade online at one of the several brokers that offer the facility of trading online. Online trading has grown a lot over the past few years. There are a number of advantages of this type of trading and here is a list of some of the major advantages.

Stock Market

SG Wealth Builder

One of the biggest advantages is that it is extremely easy and simple for individuals to conduct trades. You can buy various instruments such as stocks, currencies, commodities, CFDs and various other such financial instruments over the Internet. You do not need to give a call to the broker or do anything else to buy a financial instrument. You simply need to log onto …

Why automated trading stop losses are not always ideal (especially now)

Below is a guest post from Cynthia Siantar who is the co-founder of Call Levels, a Singapore fintech that provides free real time financial monitoring and notification service.

I’m sure we all agree that last night and this morning was a total bloodbath in the markets. But one group of people got it worse than others and who are they?
Those that had their automated trading stop losses triggered prematurely (see below), crystalised their losses, only to see the markets rebounded sharply soon after (ouch!). Not to mention there will always be that group that slept through the turmoil and wake up massively poorer. Don’t laugh, they might be someone you know.
And this is the reason why institutional investors and traders still choose to leave Call Levels: Call me when the price reaches this level with salespeople despite having the ability to set their own stop losses. They want peace of mind. When the markets go into panic mode, and none of your technical indicators make sense anymore, they want to be aware when certain price points are HIT but they don’t necessary want to execute that trade.

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As my co-founder, Daniel not-so-fondly recalls that one night

Investing: Why you should start young

Gallant Venture
The following is an article on investing by guest blogger, Neo Pok Chow, a 21 year old Singaporean trader and is the creator of http://www.optionssingapore.com/. If you want to have a better financial future, you’re welcome to learn about investing for free on his site.
 
Young people are often unaware or even clueless about their finances or money matters. Their school doesn’t teach them how to invest. Their parents don’t teach it either. Their peers have no clue. So to be fair, how are they suppose to know about it? This is actually a worrying sign. Ignorance, in this case, is not bliss. Ignoring your finance is foolish.
Young people need to realize that their age and time they have is their biggest attribute. They’re young and they enjoy their life hanging out and playing all around while being shielded by their parents. They fund their expenses using their pocket money and the occasional part time job during holidays. Life is good! They’re having fun! Why should they care?
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I’m not saying that young people should not have fun. I’m just saying that it is good to start learning about finance and investing from a young age as it