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Category: Investor Education

The Complete Guide to Risk Reward Ratio (Guest Post)

The Complete Guide to Risk Reward Ratio (Guest Post)

Don’t be fooled by the risk reward ratio — it’s not what you think. You can look for trades with a risk reward ratio of 1:2 and remain a consistent loser (and I’ll prove it to you later).

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This post was originally posted here. The writer, Rayner Teo is a veteran community member and blogger on InvestingNote, with username known as Rayner and has 457 followers.

Similarly:

You can look for trades with a risk-reward ratio of less than 1 and remain consistently profitable.

Why?

Because the risk-reward ratio is only part of the equation.

But don’t worry.

In this post, I’ll give you the complete picture so you’ll understand how to use the risk-reward ratio the correct way.

 

And after reading this guide, you’ll never see the risk-reward ratio the same way again.

Ready?

Then let’s begin…

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Golden Cross Trading Strategy Guide (Guest Post)

Golden Cross Trading Strategy Guide (Guest Post)

Have you heard of the Golden Cross signal? If you listen to the media, you’ll hear about the Golden Cross (like how the market is bullish when it occurs). But is it true? Well, that’s what you’ll learn today…

What is a Golden Cross and how does it work?

The Golden Cross is a bullish phenomenon when the 50-day moving average crosses above the 200-day moving average.

Here’s why…

When the market is in a long-term downtrend, the 50-day moving average is below the 200-day moving average.

However, no downtrend lasts forever.

So, when a new uptrend begins, the 50-day moving average must cross above the 200-day moving average — and that’s known as the Golden Cross.

An example of a Golden Cross chart:

This post was originally posted here. The writer, Rayner Teo is a veteran community member and blogger on InvestingNote, with username known as Rayner and has 457 followers.

Pro Tip: The opposite is the Death Cross — when the 50-day moving average crosses below the 200-day moving average.

Now some of you are probably wondering:

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The Symmetrical Triangle Trading Strategy Guide (Guest Post)

The Symmetrical Triangle Trading Strategy Guide (Guest Post)

Have you ever traded the Symmetrical Triangle chart pattern? If you did, then you know it’s not as easy as it seems.

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This post was originally posted here. The writer, Rayner Teo is a veteran community member and blogger on InvestingNote, with username known as Rayner and has 457 followers.

For example:

You might have thoughts like…

Should I trade the breakout of the Symmetrical Triangle or do I wait for a pullback?

Where should I put my stop loss so the market doesn’t hunt my stops?

How do I know which direction the Symmetrical Triangle break out?

Now if you face any of those issues, don’t worry.

Because in today’s lesson, you’ll have the answers to these questions (and more).

OK, let’s get down to business…

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Bearish Engulfing Pattern Trading Strategy Guide (Guest Post)

Bearish Engulfing Pattern Trading Strategy Guide (Guest Post)

Do you know why most traders lose money when trading the Bearish Engulfing pattern? It’s because they treat them all the same!

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This post was originally posted here. The writer, Rayner Teo is a veteran community member and blogger on InvestingNote, with username known as Rayner and has 457 followers.

Here’s the thing:

You can have two identical Bearish Engulfing patterns but, one is a high probability setup and the other is to be avoided (like how you run away from a stinky ol’ skunk).

Why?

Because you must pay attention to the context of the market.

I know that’s not useful (like telling a blind man to watch his step).

That’s why I’ve written this trading strategy guide to teach you all about the Bearish Engulfing pattern — so you can trade it like a professional trader.

Then let’s get started…

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How Covid-19 Has Changed The Whole Dynamic About F.I.R.E (Guest Post)

How Covid-19 Has Changed The Whole Dynamic About F.I.R.E (Guest Post)

The Financial Independence Retire Early (F.I.R.E) movement has for the past few decades thrived on the ability to act on whatever you like, whenever you want, wherever you are at the expense of not anyone but yourself who can make that decision.

This post was originally posted here. The writer, Brian Halim is a veteran community member and blogger on InvestingNote, with username known as 3Fs and has 2169  followers.

The unprecedented case of Covid-19 which we are currently living through has clearly changed the whole dynamic of retiring, which as part of a subset also includes retiring early.
For many white-collar workers, including myself, we’re dealing with actual work by working from home for an extended period of time for the first time in our lives.

I must say it has been a very refreshing and invigorating experience on its own having to deal with it rigorously for the past four months or so, even if it means sometimes having to pick up calls at 8pm or catch up on work during weekends.

It works extremely well for an introvert personality like mine and not for a single moment do I relish the old hate-smell of corporate attire of long sleeve shirt and shoes in such a humid country like Singapore.
Still, the appeal of working from home does not work well universally in consensus with everyone.

While some do appreciate the flexibility of working from home, you may find it a distraction if you are staying in an unconducive environment where you have children running around the house or neighbours that are staggering noisy. Others may also prefer a face to face interaction between colleagues when discussion about work and the frequent use of online tools may be disconcerting at some stage.

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The Complete Guide to Keltner Channel Indicator (Guest Post)

The Complete Guide to Keltner Channel Indicator (Guest Post)

The Keltner Channel is a simple but powerful trading indicator. It helps you better time your entries, improve your winning rate, and can even “predict” market turning points. And if you want to learn how to do it, then today’s post is for you.

But first…

What is a Keltner Channel and how does it work?

The Keltner Channel is an Envelop-based indicator (others include Bollinger BandsDonchian Channels, etc.).

This means it has an upper and lower boundary to help you identify potential “overbought and oversold” levels.

Note: The Keltner Channel used in this post is the modified version by Linda Rasche.

Now, the default Keltner Channel settings have three lines to it:

  • Middle Line: 20-period Exponential Moving Average (EMA)
  • Upper Channel Line: 20 EMA + (2 * Average True Range)
  • Lower Channel Line: 20 EMA – (2 * Average True Range)

You can think of the Middle Line as the mean.

And the Upper and Lower Channel Line shows you how far the price is away from the mean.

Here’s how it looks like…

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The Beauty of High Yield Bond Funds (Guest Post)

The Beauty of High Yield Bond Funds (Guest Post)

When it comes to bonds, many investors still believe in owning individual bonds till maturity. It feels more right in that firstly you do not suffer from capital losses if you held the bond to maturity and secondly you get predictable coupon returns that was promised to you at the start.

This post was originally posted here. The writer, Kyith Ng is a veteran community member and blogger on InvestingNote, with username known as Kyith and has 1051  followers.

Unfortunately, the investors ran into some problems:

  1. They demanded a certain respectable interest yield on their bonds. If it is too low, they find that it is unattractive and would not go for it.
  2. They need to reinvest into another bond after the previous one matures. This maturity period may take place anytime.
  3. Prefers bonds in local currency
  4. For some, they might not have enough capital to diversify (traditionally the minimum you need to purchase bonds is $250,000)

With these requirements, what tends to happen is that these investors push themselves up the risk spectrum.

When they push themselves up the risk spectrum, they take on more geographical risk, currency risk, default risk, duration risk.

But in their mind, these bonds are as safe as a high quality government bonds.

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The 50 Day Moving Average Trading Strategy Guide (Guest Post)

The 50 Day Moving Average Trading Strategy Guide (Guest Post)

Here’s the deal: There are endless possibilities when it comes to moving average. You’ve got the 50 day moving average, 100 day moving average, 200 day moving average, etc. So you’re wondering: “Which is the best moving average?” Well, there’s no best moving average out there because it doesn’t exist (as it depends on your objective current market structure).

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Singapore Savings Bonds SSB August 2020 Issue Yields 0.93% for 10 Year and 0.27% for 1 Year (Guest Post)

Singapore Savings Bonds SSB August 2020 Issue Yields 0.93% for 10 Year and 0.27% for 1 Year (Guest Post)

Here is a safe way to save your money that you have no idea when you will need to use it, or your emergency fund.

This post was originally posted here. The writer, Kyith Ng is a veteran community member and blogger on InvestingNote, with username known as Kyith and has 1051  followers.

The 10-yr and 1-yr Singapore Savings Bonds Rate since the first issue in Oct 2015

The August 2020’s SSB bonds yield an interest rate of 0.93%/yr for the next 10 years. You can apply through ATM or Internet Banking via the three banks (UOB,OCBC, DBS)

However, if you only hold the SSB bonds for 1 year, with 2 semi-annual payments, your interest rate is 0.27%/yr.

$10,000 will grow to $10,946in 10 years.

This bond is backed by the Singapore Government and its available to Singaporeans.

A single person can own not more than SG$200,000 worth of Singapore Savings Bonds. You can also use your Supplementary Retirement Scheme (SRS) account to purchase.

 

You can find out more information about the SSB here.

Note that every month, there will be a new issue you can subscribe to via ATM. The 1 to 10-year yield you will get will differ from this month’s ladder as shown above.

Last month’s bond yields 0.80%/yr for 10 years and 0.30%/yr for 1 year.

Here is the current historical SSB 10 Year Yield Curve with the 1 Year Yield Curve since Oct 2015 when SSB was started (Click on the chart, move over the line to see the actual yield for that month):

The Application and Redemption Schedule

You will apply for the bonds through the month. At the end of the month, you will know how much of the bond you applied was successful.

Here is the schedule for application and redemption if you wish to sell:
Click to see larger schedule

You have 02 to about 25th of the month (technically the 4th day from the last working day of the month) to apply or decide to redeem the SSB that you wish to redeem.

Your bond will be in your CDP on the 1st of the next month. You will see your cash in your bank account linked to your CDP account on the 1st of next month.

How does the Singapore Savings Bonds Compare versus SGS Bonds versus Singapore Treasury Bills?

Singapore savings bonds is like a “unit trust” or a “fund” of SGS Bonds.

But what is the difference between you buying SGS Bonds and its sister the T-Bills directly?

Both the SGS Bonds and T-Bills are also issued by the Government and are AAA rated.

Here is an MAS detailed comparison of the three:
Click to see bigger comparison table

 

Once again, this article is a guest post and was originally posted on Kyiths profile on InvestingNote. 

Become a part of our community and also see what other investors are saying about the current market right now: (click on the view now button)

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Investing vs. Trading – What are the Similarities and Differences? (Guest Post)

Investing vs. Trading – What are the Similarities and Differences? (Guest Post)

The reason why I’ve decided to write about similarities as well as differences between investing and trading today is because, of late, I have noticed many newbies mix up between the two – some of them are looking to buy companies to hold for the long-term (but refer to them as “trading”), while there are some who are looking for short-term profits (but refer to them as “investing”.)

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This post was originally posted here. The writer, Lim Jun Yuan is a veteran community member and blogger on InvestingNote, with username known as ljunyuan and has 1230  followers.

I hope that, after reading through this simple post, you will have a better understanding about both investing as well as trading:

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