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The Complete Guide To Breakout Trading (Guest Post)

The Complete Guide To Breakout Trading (Guest Post)

Do you trade breakouts? Then you know breakout trading can be exciting. The price quickly moves in your favor and make it seems like you’re printing money. However,  breakout trading can also be painful.

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 notice the price breaking above Resistance.

The candles are big and bullish, so you go long.

But suddenly, the price does a 180-degree reversal.

And before you know it, you bought the highs and now you’re bleeding in the red.

Ouch.

So now you’re probably wondering:

“How do I filter for high probability breakout trades and know which are the ones to avoid?”

Well, that’s what you’ll discover in today’s post.

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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”.)

image-50

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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‘What is the Best Price to Buy Shares of this Company?’ (Guest Post)

‘What is the Best Price to Buy Shares of this Company?’ (Guest Post)

Recently, I have been getting quite a number of emails seeking my inputs on the “best price” they should purchase shares of a company. For the benefit of everyone, I would like to share with you my personal opinion on this question in my post today – from the perspective of both a short-term swing trader and a long-term investor.

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 1100  followers.

 

To begin, in my personal opinion, there is no such thing as a “best price” you should buy shares of a particular company. Everyone (whether you are a short-term trader or a long-term investor) have their own preferred prices to buy/sell a company’s shares based on their own analyses – which explains why, at any price point, there are buy and sell transactions (because at any buy price, there will be people who feel comfortable to buy, and at the same time, there will also be people who are looking to sell – hence a transaction takes place between the buyer and seller.)

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Getting Started In Trading – How To Prime Yourself For Success & Understanding Pitfalls [LIVE Webinar]

Getting Started In Trading – How To Prime Yourself For Success & Understanding Pitfalls [LIVE Webinar]

Are you interested in trading in the stock market? This is THE webinar you’d want to watch!

ig-webinar

This time, we’ve Terence Tan from IG Asia Pte Ltd, as he takes you through the journey of trading from the very beginning in a simple to understand layman terms:

✔ Making your first trades, what do you need to know?
✔ Technical Analysis 101 – the essential tools of a trader
✔ A demonstration of what goes on in the thought process of a trader when one reads the market
✔ The various pitfalls in trading

Date & Time: Thursday May 14, 2020, 8:00 PM

Register now, watch later!

button_register-here

About the Speaker
Terence Tan is a qualified Chartered Market Technician (CMT) since 2014, and is also a member of MENSA Singapore. Currently Head of Business Development & Education for IG Asia, Terence has accumulated 15 years of experience in the financial industry since 2006.

He conducts seminars in topics such as Technical Analysis, Forex Trading, Risk Management, Trading Psychology and Automated Trading Systems.


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Most Traders Will Tell You To Stay Away From Indicators (Guest Post)

Most Traders Will Tell You To Stay Away From Indicators (Guest Post)

Learn how to switch gears and use different indicators for different market conditions. Indicators are a derivative of price. They simply indicate to you what has happened, not what will happen. So you’ll never be a profitable trader if you solely rely on trading indicators to make your decisions.

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 329 followers.

Volatile stock markets are an option trader's dream — here's how ...

Most traders will tell you to stay away from indicators.
They give you reasons like:
  • It lags the market
  • It gives you late entries
  • It can’t predict what the markets will do

Nope, those are excuses.

Want to know the real reason why traders lose money with indicators?

Here’s why…

You got conned into the “indicators game”

Many traders don’t know how this game is supposed to be played.

They believe the answer lies in the “right” combination of indicators that will make them rich.

So they buy the latest trading indicators to help them crack the code.

And after many failed attempts, they wonder why they lose money with trading indicators.

Do you want to know why?

Here’s the truth…

Indicators are a derivative of price. They simply indicate to you what has happened, not what will happen.

So, no matter how many different combinations you try, you’ll never be a profitable trader if you solely rely on trading indicators to make your decisions.

Trading indicators are meant to aid your decision-making process, not be the decision-maker.

Trading indicators: Do you make this mistake?

Look at the chart below…

Now, you might be thinking…

“Look how strong the signal is.”

“All three indicators are pointing in the same direction.”

“The market is about to move higher.”

Sorry to burst your bubble.

But that’s the wrong way to use trading indicators.

Why?

Because the RSI, CCI, and Stochastic indicator belong to the same category (otherwise known as Oscillators).

This means the values of these indicators are calculated using similar mathematical formulas — which explains why their lines move in the same direction.

So don’t make the mistake of thinking a signal is “strong” because multiple indicators confirm it. Chances are, they are indicators from the same category.

You blindly copy what others do

Here’s the thing:

There are profitable traders out there who use indicators in their trading.

And you’re probably thinking:

“Since they are making money with these indicators, why don’t I just copy them?”

So, that’s what you do.

You follow the same indicators, settings, instructions, etc.

But, you still lose money with trading indicators.

Why?

Because what you see is only the surface, not the complete picture.

Here’s an example:

Let’s say Michael is a profitable trader who relies on trading indicators to time his entries and exits.

Now, the reason why Michael finds success with indicators is not that he found the “perfect” settings or whatsoever.

Rather, it’s because he knows how to switch gears and use different indicators for different market conditions.

So if you were to blindly follow what he does, then when the market changes, your trading indicators will stop working and that’s when the bleeding starts.

 

How professional traders use indicators (it’s not what you think)

At this point, you’ve learned that trading indicators shouldn’t be the basis of your analysis and why you shouldn’t copy other traders.

So now the question is, how do you use trading indicators the correct way?

The secret is this…

You want to classify trading indicators according to their purpose, then use the appropriate trading indicators for the right purpose.

So, what’s the purpose of trading indicators?

Well, you can use them to:

  1. Filter for market conditions
  2. Identify areas of value
  3. Time your entries
  4. Manage your trades

Let me explain…

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Possible Movements of 30 Blue Chip Companies in the Week Ahead(between 13 – 17 April 2020) (Guest Post)

Possible Movements of 30 Blue Chip Companies in the Week Ahead(between 13 – 17 April 2020) (Guest Post)

If you have been following my weekly posts, you probably would be aware that I’ve mentioned before that, should the STI for the week closed above 2,560 points, we could see a possible change in trend.  That said, is an uptrend in sight? In my post today, I’d be sharing with you my personal thoughts on how the STI, as well as all the 30 blue chip companies’ share price may move in the week ahead based on a weekly timeframe…

This post was originally posted here. The writer, Jun Yuan Lim is a veteran community member and blogger on InvestingNote, with username known as ljunyuan and has 858 followers.

If you have been following my weekly posts on the possible movement of STI and all 30 blue chip companies’ share price movements, you probably would be aware that I’ve mentioned before that, should the STI for the week closed above 2,560 points, we could see a possible change in trend (from a downward moving one to an upward moving one.)

When trading for the week ended last Thursday (09 April 2020), STI was at 2,571 points (above the 2,560 points.) That said, is an uptrend in sight? In my post today, I’d be sharing with you my personal thoughts on how the STI, as well as all the 30 blue chip companies’ share price may move in the week ahead (between 13 – 17 April 2020) based on a weekly timeframe…

 

1. Straits Times Index
Straits Times Index’s Movements on a Weekly Timeframe

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3 Key Points To Lookout For When Buying Stocks In A Recession (Guest Post)

3 Key Points To Lookout For When Buying Stocks In A Recession (Guest Post)

A recession is a significant decline in economic activity, lasting more than a few months. But many asked, when to buy stocks? How to better time a market entry in a recession? Well, here are 3 points to guide you along.

This post was originally posted here. The writer, Royston Tan is a veteran community member and blogger on InvestingNote, with username known as Royston_Tan and has 22 followers.

A Looming Recession? Look at Interest Rates - WSJ

For those looking to time a market entry, some data points on when might be a good time.

WHEN TO BUY STOCKS IN A RECESSION? THE IDEAL TIME TO PICK A BOTTOM

While I don’t recommend trying to time stock purchases with a crystal ball in front of you, especially during a bear market potentially as severe as the one we are currently facing, I will provide some reference point as to when might be the IDEAL time to PICK a bottom and start investing more aggressively in a recession.

This is not going to be from my GUT but instead using historical statistics to time entry. YES, I know that historical performance is never representative of the future trajectory of the stock market, especially one that is seemingly unprecedented as the current one.

Then again, having some maths behind you beats randomly pulling out some FORECAST based on your gut.

Before I disclose “my formula” on when to buy stocks in a recession, the question I like to ask is: Are we already in a recession? Seems to be a no-brainer question especially with more than half the world being on lockdown, right?

WHAT DEFINES A RECESSION?

A recession is a significant decline in economic activity, lasting more than a few months. There is a drop in the following 5 economic indicators:

  1. Real Gross domestic product (GDP)
  2. Income
  3. Employment
  4. Manufacturing
  5. Retail Sales

The current situation seems to tick all the boxes in this category.

A “simpler” definition for a recession is when the GDP growth rate is negative for two consecutive quarters or more. While it might seem simple, there might be some confusion. Should we be measuring GDP growth on a YoY basis (ie compare 1Q20 to 1Q19) or should we be measuring it based on QoQ (ie comparing 1Q20 to 4Q19).

The latter comparing on a QoQ basis is often being termed as a “Technical Recession” within the Singapore context (If you type technical recession in Google, most of the results are related to Singapore).

HOW DOES THE US CALCULATE GDP GROWTH?

In the US, the Bureau of Economic Analysis uses real GDP to measure the US GDP growth rate. Real GDP takes out the effect of inflation. GDP is calculated every quarter but is being annualized. The aim of annualizing is to remove the effect of seasons. If the BEA did not do this, there will always be a spike in the 4Q growth rate due to the holiday seasons.

The BEA provides a formula for calculating the US GDP growth rate which I will not detail much in this article.

IS THE US ALREADY IN A RECESSION?

NEW YORK CITY TIMELAPSE (EMPTY AMERICA) — fullinsight

Depending on which article you read, some might say that the US is already in a recession while others such as this Bloomberg Tracker (last updated March 11) which pegs the probability at “only” 53%, still the highest level since GFC. However, that tracker was done before the jobless claims blew up over the past 2 weeks, now more than 10m, so I reckon that probability ratio will probably be inched up significantly in the next update.

Given the COVID-19 scenario that we are facing, whether we choose to look at GDP growth from a YoY or QoQ basis, it is difficult to argue against the fact that US GDP growth will be negative in 1Q20 and 2Q20.

Even if the COVID-19 issue miraculously resolves itself today, the uncertainty surrounding a possible relapse will result in nations all over the world engaging a protectionist stance that will stymie the global economic recovery process.

My best guess, if I am to look into my crystal ball is that the peak of the COVID-19 issue for developed nations such as US, Italy and Spain will probably be sometime in late-April to early-May by which the focus will then turn to developing nations such as India and Indonesia where cases are just beginning to ramp up.

Developed nations will continue to shut off their borders to foreigners for fear of a relapse, just like what China is currently doing. The V-shape recovery which many people are hoping for is probably not going to happen in such a scenario.

HOW BAD IS THIS RECESSION GOING TO BE?

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Why Did I Add UOB (SGX:U11) to My Long-Term Investment Portfolio (Guest Post)

Why Did I Add UOB (SGX:U11) to My Long-Term Investment Portfolio (Guest Post)

Some insights about UOB ’s historical financial performance, along with its dividend payouts to shareholders over the years and many more.

This post was originally posted here. The writer, Jun Yuan Lim is a veteran community member and blogger on InvestingNote, with username known as ljunyuan and has 797 followers.

 UOB launches high street branch model at Faber House targeting ...

Why Did I Add UOB (SGX:U11) to My Long-Term Investment Portfolio

With my investment in UOB (SGX:U11) on 06 March 2020 at my intended entry price of S$23.26 (based on this entry price, and a dividend payout of S$1.30/share in FY2019, my dividend yield is 5.6%), I now have all 3 Singapore banks, plus another financial institution in Hong Leong Finance (SGX:S41) in my long-term investment portfolio.

In my post today, I would like to share with you reasons why I’ve invested in the bank…

 

Brief Introduction to United Overseas Bank

Before I talk about the bank’s historical financial performance, along with its dividend payouts to shareholders over the years, let me first a quick introduction about the bank.

Besides Singapore, UOB has more than 500 branches and offices in 19 countries (Australia, Brunei, Canada, China, France, Hong Kong, India, Indonesia, Japan, Malaysia, Myanmar, Philippines, Singapore, South Korea, Taiwan, Thailand, United Kingdom, United States of America, and Vietnam.)

 

Historical Financial Performance of UOB over the Past 10 Years

Before I put my hard-earned money into any company, I will need to make sure the company fulfils some criteria – one of which is an improving set of financial results reported by the company over the years.

In this section, I will be sharing some of the key financial statistics reported by UOB over a period of 10 years (between FY2010 and FY2019):

Net Interest Income, Net Fee & Commission Income, and Other Non-Interest Income:

UOB’s “Total Income” comprises of 3 business components – (i) Net Interest Income, (ii) Net Fee & Commission Income, and (iii) Other Non-Interest Income.

Let us now take a look at the performances of these 3 business components between FY2010 and FY2019:

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Koufu Limited (SGX:VL6) – My Analysis of the F&B Company (Guest Post)

Koufu Limited (SGX:VL6) – My Analysis of the F&B Company (Guest Post)

Some insights for Koufu business, its financial results between FY2018 and FY2019, dividend payout history, catalysts and threats which I feel may positively or negatively affect the company’s growth ahead, and finally, its current vs. historical valuations.

This post was originally posted here. The writer, Jun Yuan Lim is a veteran community member and blogger on InvestingNote, with username known as ljunyuan and has 797 followers.

Photos for Cookhouse by Koufu - Yelp

I have received a number of requests from fellow community members in InvestingNote over the past couple of months asking me to do a company analysis of Koufu Limited (SGX:VL6).

In my writeup about the F&B company today, you’ll learn more about the companies businesses, its financial results between FY2018 and FY2019, dividend payout history, catalysts and threats which I feel may positively or negatively affect the company’s growth ahead, and finally, its current vs. historical valuations to find out whether or not at its current share price, Koufu is considered cheap or expensive.

Let’s get started…

A Brief Introduction to Koufu Limited

Koufu is a brand familiar to Singaporeans – the company operates foodcourts/coffeeshops under its namesake brand. At the time of writing, there are a total of 37 Koufu foodcourts in Singapore.

Apart from its namesake foodcourts, the company also operates foodcourts/coffeeshops under the following brand names (with the number of outlets at the time of writing in brackets):

  • Cookhouse by Koufu (5 outlets)
  • Rasapura Masters (1 outlet)
  • Fork & Spoon (2 outlets)
  • Happy Hawkers (18 outlets)
  • Gourmet Paradise (2 outlets)

The company has also businesses in the following:

F&B Kiosks & Stalls:

  • R&B Tea (27 outlets)
  • 1983 – A Taste of Nanyang (3 outlets)
  • Supertea (1 outlet)

Cafes & Restaurants:

  • 1983 – Coffee & Toast (3 outlets)
  • elemen 元素 (4 outlets)
  • Grove 元素 (1 outlet)

Shopping Mall:

  • Punggol Plaza – a 4-storey development comprising about 50 retail outlets. The mall is managed by Abundance Development Pte Ltd, a subsidiary of Koufu Pte Ltd

Overseas:

Besides Singapore, Koufu also have business operations in Malaysia and Macau, where they operate under the following brand names (with the number of outlets at the time of writing in brackets):

  • 1983 – A Taste of Nanyang (2 outlets in Macau)
  • Koufu (2 outlets in Macau)
  • R&B Tea (1 outlet in Malaysia, 1 outlet in Macau)

 

Financial Performance of Koufu Ltd between FY2018 and FY2019

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A Look into the Possible Share Price Movements of Singapore’s Blue Chip Companies in the Week Ahead (30 Mar – 03 Apr 2020) [Guest Post]

A Look into the Possible Share Price Movements of Singapore’s Blue Chip Companies in the Week Ahead (30 Mar – 03 Apr 2020) [Guest Post]

During the course of last week, the STI fell to a low of 2,208 points, before rebounding up strongly to finish the week at 2,528 points. In my opinion, in order for the trend to be considered as reversed (i.e. from a downtrend to an uptrend), it must close above 2,560 points when trading for the week closes this Friday (i.e. 03 April.) Otherwise, in my opinion, the overall trend is still a downward one.

This post was originally posted here. The writer, Jun Yuan Lim is a veteran community member and blogger on InvestingNote, with username known as ljunyuan and has 772 followers.

The share prices of quite a number of blue chip companies rebounded last week – but in my opinion, the trend is still a bearish one.

Before I proceed to analyse the share price movements of each of the 30 blue chip companies last week, and possible movements in the week ahead (for the trading week between 30 March and 03 April 2020) based on a weekly timeframe, here’s the share price movement of the STI on a weekly timeframe:
STI’s Movements on a Weekly Timeframe

During the course of last week, the STI fell to a low of 2,208 points, before rebounding up strongly to finish the week at 2,528 points. In my opinion, in order for the trend to be considered as reversed (i.e. from a downtrend to an uptrend), it must close above 2,560 points when trading for the week closes this Friday (i.e. 03 April.) Otherwise, in my opinion, the overall trend is still a downward one.

Now, let us take a look at how each of the 30 blue chip companies performed last week, and how they are likely to perform in the week ahead:

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