Charts of the Week: 12 Mar 2018

Apple (AAPL) Daily Candlesticks & Ichimoku Chart: Apple posts an all-time high daily close (but still below the intraday highs achieved this year). Will this be the first stock with a trillion-dollar market capital?

 

CHFJPY Daily Candlesticks & Ichimoku Chart: Chart looking increasingly bearish…

 

Vee, our Founder/CIO highlights patterns/formations on two charts every week which may have the potential to turn into trading opportunities. These charts are part of our weekly subscription product – “CIO’s Week Ahead Update”Click here to get access to more professional market analyses and insights!

20 Things Every Profitable Forex Trader Should Know

forex trader in singapore

Becoming enthusiastic about forex trading in Singapore is easy. Because of its extreme liquidity with many currency pairs to choose from, forex trading has seen booming popularity in Singapore over the last few years. Singapore happens to be the largest forex trading centre in the Asia Pacific in terms of volume, and the third largest forex trading centre in the world.

Several brokers in Singapore cater to the needs of retail investors. The better known ones are LSE-listed IG and CMC Markets, and Canada-based OANDA, all of whom are regulated by the Monetary Authority of Singapore (MAS). Many other brokers outside of Singapore are likewise on hand to serve local forex traders, but investors need to be vigilant on who they use as many may not be subject to the rules that MAS enforces to protect the average retail investor.

You can trade round the clock here on any day except Saturday, Sunday, Christmas and New Year. And best of all, profits from forex trading in Singapore are tax-exempt, if you engage in it to supplement your income, and not as your main source of revenue.

With the many advantages that trading in Singapore can offer, it is not a surprise that many traders cannot wait to get started in forex trading. However, while diving headlong into the forex markets with this gung-ho enthusiasm is understandable, it’s hardly advisable. Seasoned forex traders will tell you that one stands to lose far more than he can gain in forex quicker than one can say “George Soros”.

In this article, we’ll take a look at four sets of “Forex Trading Top 5’s” that new forex traders can use as guides or for gaining trading knowledge.

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Top 5 Forex Trading Principles You Need to Master

  1. Master the basic forex concepts. Bear in mind that yield drives return when it comes to forex, because you are basically buying one currency and selling another at the same time.

    Because all currencies come with the interest imposed on them by each of their respective central banks, you’ll have to pay the interest on every currency you sell. This also means, however, that you get to earn interest on every currency you buy.

  2. Master the use of leverage.Remember that while many trading platforms will give you access to leverage, or borrowed capital that increases potential returns, it does not mean that you should use the maximum amount of leverage that you have access to. Yes, leverage can either lead to huge gains but it can also lead to huge losses. Therefore, you should always use manageable amounts of leverage relative to your capital and the volatility of the market. Leverage should be able to give you a fairly decent return on a regular basis if used correctly and conservatively.
  3. Master the basic forex trading strategies. These strategies include the 2% stop-loss, which involves never risking more than 2% on a trade and is a relatively easy way to ensure safe and profitable trades. Not trading against the market is another strategy that is recommended to new traders who lack the necessary experience for taking advantage of short-term market fluctuations.

    The carry trade involves profiting from the interest rate differential between two currencies, and waiting for the value of both currencies to appreciate. With this strategy, you’ll have to pair a currency with a high interest rate with a currency with a low interest rate, and take a view on the direction of the spread.

  4. Master yourself. If there’s one recurring piece of advice in forex or any other form of trading, it is to master your emotions. Reason should prevail over all your trades, even when those trades turn out to be successful. Indeed, one key forex trading principle is to be extra cautious in the face of early successes, or the first few hundred dollars of profit that you manage to make.

    Mastering yourself also involves knowing your limits, or how much you can afford to lose at any given time, as well as learning from your trading mistakes. This is why it’s important to keep careful track of your own historical trading data with well-organised records.

  5. Master plan. To know yourself means only you know the forex trading plan that will work best for you. In planning your forex trading strategy, have good reasons for getting into trading in the first place, and be sure to set realistic goals. Find advice for drawing up an effective trading plan in our previous post here.

If you are a new trader, you’ll want to limit your risk (by watching leverage, for example), and start slow: try starting with our own currency (the SGD), and with one currency pair at a time.

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Top 5 Forex Trader Traits You Must Possess to Become Successful

  1. Learned. As a successful forex trader, you not only know your stuff, but continually verify and update what you already know. You have access to timely information, which means you know what you need, when you need it. You’re also able to learn from experience, taking careful note of what works and what doesn’t, and leveraging that knowledge in making your future trades.
  2. Systematic. As rule, you never undertake anything major without preparation and forex trading is no different. You are organised with a well-laid trading plan that sets the time frame and techniques to be used. Rather than focusing on short-term results, you place more emphasis on how those results were obtained, and are confident knowing that the plan will help you to achieve your objectives in the long run.
  3. Patient. You are disciplined enough to stick to your plan, and far be it from you to let emotions sway your trading decisions. You know how to bide your time until the price point you want has been reached, and to enter or exit at the right time. You are also realistic and prudent when it comes to setting your trading goals, and know how to manage the risks involved.
  4. Objective. While you may be said to possess a certain element of audacity for getting into the risk-laden world of forex trading, it can never be said that you lack self-control. You thrive in high-pressure situations, exhibiting the self-control you are known for. This is not to say that you feel nothing during a trade, but the way you handle the tension that comes with trading is truly admirable.
  5. Determined.  Even after a series of losses, which is inevitable in forex or any other trading type, you have the panache to pick up where you left off and trade again. You well know that forex trading success doesn’t happen overnight, and that it takes time and perseverance to develop your trading skills. Even so, you are persistent in your efforts to master forex trading and remained undeterred by the difficulties involved.

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Top 5 Benefits of Forex Trading

  1. Ease of Trading. Forex trading is highly accessible to everyone with its low capital requirement, low transaction costs, and low barriers to entering the markets. There are no commissions to be paid, and no single person can corner the forex markets or discourage you from entering. And as long as a market is open somewhere in the world, you can trade 24 hours a day.
  2. High Liquidity. It’s easy to convert your assets to cash in no time and with no price discount—however large the amount in question, no matter the currency, and with little price movement. This is because liquidity remains almost constant in forex markets, which almost always guarantees that there will be someone out there willing to trade with you.
  3. Widely Available Trading Technology. Forex trading platforms are some of the newest in the world compared to those for trading futures, stocks and options. There are also several helpful forex trading extensions from third-party software providers. Thanks to technology, you can even practise trading on a free online demo account, using real-time, real-world trading conditions without risking real money.
  4. Leverage. Leverage, one of the important forex trading concepts you need to master, is what allows you to trade up to 50 times more money than you actually have. This means that even without substantial capital, you stand to earn substantial profits while risking a minimal amount. However, this also means that you can lose much more than you can afford to if used wrongly. Just because some platforms allow you to have so much leverage does not mean that you should use such a high amount of leverage. Leverage must be used with caution as it is a double-edged sword. If you are unfamiliar with it, start with a low leverage factor!
  5. Flexibility. The profit potential of forex trading that comes from price fluctuations allows you to buy or go long, or sell or go short on currency pairs without any restrictions. You can trade when with the view that markets are going higher or lower, enabling you to profit from both upward and downward trends. There is also no fixed lot size, meaning the size of your position is up to you.

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Top 5 Forex Trading Words of Wisdom for Young Traders

  1. Study. Looking back, many seasoned forex traders will tell you they wished they’d studied more—money management, market fundamentals, even forex trading basics, instead of making (costly) mistakes first, and then studying afterwards. Studying is also an ongoing process when it comes to considering factors affecting price action and market reactions.
  2. Stick to your stop-losses. There are also forex veterans who wish they hadn’t put tight stop-losses when they were first starting out because they were afraid of locking in their losses. This is completely wrong. Paper losses are losses too! Using a stop-loss the right way, however, gives you greater control of your risk. So it is imperative to always use them. Make sure your stop-losses are at a reasonable distance from your entry price (relative to market volatility), and are aligned with your exit plan.
  3. So little beats so many. This piece of advice that some experienced forex traders might have wanted to give their younger selves applies to frequency as well as quantity. Frequent trading tends to encourage emotional rather than rational trading decisions, and so increases the risk of making mistakes. You’d also be better off trading smaller amounts instead of risking your entire trading account for one, big windfall.
  4. Seek out your fellow traders. Some forex old-timers wish they had reached out more to other traders when they were novices, as they now appreciate the value of suggestions, feedback or the perspective of traders with experience. Joining an online group or community, or writing a blog are great ways to engage particularly if you are an introverted beginner.
  5. Sidestep the hearsay. Other experienced traders gained their experience the hard way—they allowed themselves to be led astray by the promise of a supposedly infallible forex robot or fool-proof method. They might also have given way too much weight to the doings and sayings of other traders. Just remember is that there is no such thing as an “only strategy you’ll ever need” that will succeed all the time.

 

 

 

Sources:

https://blog.moneysmart.sg/invest/forex-trading-pros-and-cons/
https://www.valuepenguin.sg/basic-guide-forex-trading
https://dollarsandsense.sg/5-things-you-must-know-before-opening-a-forex-trading-account/
https://dollarsandsense.sg/forex-trading-101-need-know-start-trading-forex/
https://www.drwealth.com/forex-trading-singapore/
http://www.whizforex.com/general-forex-information/344/advantages-of-trading-forex-in-singapore
https://www.dailyforex.com/forex-articles/2017/05/forex-trading-in-singapore/80134
http://www.theindependentabecedarian.com/2015/05/are-profits-from-forex-trading-taxable-in-singapore/
http://www.theindependentabecedarian.com/2017/07/six-insider-traits-you-did-not-know-about-forex-traders/
https://www.investopedia.com/articles/forex/09/5-important-forex-attributes.asp
https://www.forexfraud.com/forex-articles/forex-trading-tips.html
https://www.investopedia.com/articles/forex/08/forex-concepts.asp
http://www.forexforambitiousbeginners.com/blog/82-articles/93-the-6-simple-secrets-of-successful-forex-trading
https://lewismocker.com/course/10-principles/
http://www.streetdirectory.com/etoday/basic-principles-of-forex-trading-ujuaeu.html
https://www.portexmarkets.com/blog-post/6-basic-principles-successful-forex-trading/
https://justforex.com/education/forex-articles/trading-principles
https://www.thebalance.com/the-benefits-of-forex-trading-1344927
https://admiralmarkets.com/education/articles/forex-basics/main-advantages-and-benefits-of-forex-trading
https://www.babypips.com/learn/forex/advantages-of-forex
https://www.financeorigin.com/top-advantages-and-benefits-of-forex-trading/
http://www.forexforambitiousbeginners.com/blog/82-articles/88-5-forex-beginner-tips-that-will-save-you-money
http://www.learntotradethemarket.com/forex-articles/top-10-forex-trading-tips-for-beginners
http://www.newtraderu.com/2017/11/20/top-10-forex-trading-tips-beginners/
http://www.newtraderu.com/2017/11/21/10-forex-trading-tips-beginners/

Charts of the Week: 26 Feb 2018

EUR/GBP closing firmly below the Ichimoku cloud on the weekly chart. The downtrend has begun…

 

CHF/JPY breaks decisively below the Ichimoku cloud on the daily chart. Rallies will be sold…

 

Vee, our Founder/CIO highlights patterns/formations on two charts every week which may have the potential to turn into trading opportunities. These charts are part of our weekly subscription product – “CIO’s Week Ahead Update”Click here to get access to more analyses and insights!

Charts of the Week: 5 Feb 2018

5 FEB 2018

UPDATED! – 6 FEB 2018

Vee, our Founder/CIO highlights patterns/formations on two charts every week which may have the potential to turn into trading opportunities. These charts are part of our weekly subscription product – “CIO’s Week Ahead Update”. Click here to get access to more analyses and insights!

Charts of the Week: 29 Jan 2018

Vee, our Founder/CIO highlights patterns/formations on two charts every week which may have the potential to turn into trading opportunities.

Has the tapering already begun?

 

These charts are part of our weekly subscription product – “CIO’s Week Ahead Update”. Click here to get access to more analyses and insights!

Start the Year Right with an Effective Trading Plan

Success rarely comes by accident, if at all. Any successful undertaking is a planned undertaking. Traders of all skill levels, especially beginners learning to invest, need to remember that planning is the only way you can make sure that you have everything you need for success, and that conditions are as ideal as possible.

While there will always be factors outside your control, a well-laid plan maximises your chances of achieving the desired outcome. It also makes it easier for you to make adjustments, as necessary, as the plan is put into action, whether you engage in online trading in Singapore or any other form of investment trading.

As the start of a new year is an ideal time for planning, here are some pointers for preparing your trading plan.

  1. Be honest with yourself. If you are new to trading—someone who has just taken up forex trading for beginners, perhaps—ask yourself whether you have sufficiently mastered the trading skills you need, and have the confidence to trade. Regardless if you are risk averse, or are willing to take chances and accept the consequences,  you have to plan to accommodate your risk appetite.
  1. Know your goals. Set feasible trading objectives for yourself to reach every week, month and by the end of the year. Express these objectives in terms of profit targets and risk/reward ratios either as percentages or dollar-amounts. Your plan should include a schedule for regular assessments of these goals.
  1. Write your own plan. You have your own individuality as a trader with your own trading style, and only you know what you want to achieve as an investment trader. Following a pre-made plan by someone who doesn’t know you or your preferences lessens the chances of achieving your personal trading goals.

Details in your plan may include:

  • Tools
  • Concept
  • Objective
  • Rationale
  • Chosen markets
  • Time frame
  • Monitoring frequency
  • Potential problems
  1. Determine suitable market conditions. Define ideal market situations that would suit your chosen forex trading strategies or trading approach. Know how you’ll identify trends and ranges, as well as where the transition points are.  Also decide on the best time of day for you to trade: ideally it should be a period of time during the day when you can be free of interference and interruptions.
  1. Study the market. Look for indicators that suggest that the market is likely to be on the up and up, or on its way down. You’ll be better able to prepare once you’ve identified potential trends, and be assured of trading based on research and data rather than gut-feel.
  1. Know when to quit. Include rules in your plan for knowing when to exit, which seasoned traders say is more important than knowing when to enter. Determine your stop loss and your profit target and resolve to stick to them, making sure you don’t go beyond the percentage of your portfolio that you planned to risk.
  1. Decide when you want to enter. Set conditions that will make it easy for you to trade at a moment’s notice, but make sure they are conditions that aren’t purely subjective, and that there aren’t too many of them. Set too many conditions to be met and you may end up never trading at all.
  1. Determine your evaluation parameters. Know how you’re going to assess your trading performance before you actually start trading by knowing how many trades you’re going to base your performance on. This can be more effective than assessing after a certain period of time because the number of trades placed within a time frame can vary between traders.

As a plan is only as good as its execution, here are some pointers for carrying out your trading plan in the coming year.

  1. Stick to the plan. A plan is there precisely to keep you from making knee-jerk reactions to the inevitable changes in the market. But while this plan should be conscientiously followed, you should be able to evaluate its effectiveness after the market closes.
  1. Clear your mind for every trading day. As you go about executing your plan, ask yourself whether you are mentally and emotionally prepared to make sound trading decisions. Trading while distracted, under pressure or during periods of extreme emotional stress is likely to cause you to make costly mistakes.
  1. Follow a daily, pre-trading routine. Some traders make it a habit to never place the day’s first trade without performing certain activities such as reviewing their trading plans, determining their support and resistance zones, or checking out major news updates. You should also follow up on orders that have been executed or what took place during overnight sessions.
  1. Keep an eye on the main markets. As you manage your open trades, make sure you monitor prices and any developments around major markets such as Singapore, Hong Kong, Japan, the US, Europe, the UK and Australia.
  1. Keep your records straight. Make sure you keep a record of all your trades, both the winners and losers. This way, you can keep track of the why’s and how’s and study them later on, allowing you to re-apply winning strategies and to avoid making the same mistakes.

Details in your records may include:

  • Targets
  • Entry and exit prices
  • Profit or loss
  • Position size
  • Time of trade and trade duration
  • Stop loss and take profit levels
  • Reasons for making the trade
  • Emotions while making the trade
  1. Keep a daily journal. On top of taking note of the day’s gains and losses, take a moment at the end of every trading day to record what led to each loss or gain. These notes will be invaluable references when the time comes for you to plan again. For those engaged in fx trading in Singapore, you might also tweak your watchlist of currency pairs, for example, to prepare for the next day’s trades.

Both new and experienced traders stand to benefit from expert guidance when preparing and executing their trading plans. TrackRecord Asia has successfully guided junior and retail traders, hedge fund and investment bank professionals, non-finance professionals and other traders of every skill level, showing them how trading with a structured framework can lead to more profitable and consistent trading.

Leverage the expertise of professional traders who have a proven track record in investment banking and hedge fund management when you prepare your trading plan and get the trading edge you need for the year ahead.

Want to dramatically improve your trading results? TrackRecord regularly runs trading courses and workshops for all levels of traders. Submit your contact details to be informed of our next event!

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Sources:

https://www.investopedia.com/articles/trading/04/042104.asp

https://www.thinkmarkets.com/en/learn-to-trade/intermediate/how-to-create-a-trading-plan/

https://pepperstone.com/en/client-resources/how-to-develop-a-trading-plan

https://www.dbs.com.sg/treasures/investments/online-trading/online-equity-trading

https://tradingsim.com/blog/trading-plan/