Author: Dr Wealth

Applying Sun Tzu’s Art of War to Trading

Sun Tzu’s Art of War is a classic piece of work that is widely read and applied to many fields, due to it’s fundamental nature that is highly adaptable to many areas of our lives. In this post, I extracted parts of the work and applied to trading and in doing so, hope to introduce the important trading concepts to you. I have also group and categorize them for easy understanding. To put it in the context of trading, I have rationalised the following terms: – General = You, the trader – Battle = Trading the market/making a trade –...

Read More

Capital is key to Profitable Trading

Today, I finally took action and made a step out of my comfort zone. I think it started from my trading goals (guess by now some of you know about my trading goals for 2010). And this is why we must set goals. At first, we may not have a clue on how to achieve our goals. But along the way, we tend to see possibilities that we previously failed to recognise and begin to make adjustments. If you asked me, I did not know how to achieve my trading goals but I want to attain them. Recently, T3B...

Read More

Fading Breakout with Trendlines for FOREX

It was said that amateurs like to trade breakouts (buy when price breaks resistance and sell when price breaks support) and the professionals like to do the oppposite. In fact, false breakouts are more frequent than real ones, hence, it may be profitable to trade with the pros. I read about this method from Grace Chang’s book, “7 Winning Strategies for Trading Forex“. There are many ways to fade breakouts but she recommends using a trendline. Note that this method is for FOREX and may not be proven in stocks or other markets. Rules: 1) Use a time frame...

Read More

My STI ETF Survived the Sub-prime Crisis

I have mentioned that I have been putting aside $400 every month into STI ETF, through POEMS Sharebuilder plan. I started the investment about 2-3 years ago and only contributed $200 per month. It was only about mid-2009 that I increased the contribution to $400. We all know that due to the US Sub-prime crisis, the market took a beating and plunged. My STI ETF sank too. But I held on to the Sharebuilder plan, believing that dollar cost averaging will work better for me in a down market. Dollar cost averaging (DCA) is to use a fixed sum of money to...

Read More

Trading Report Card – Dec 09 and Year 2009

Coming to the end of 2009, I have decided to do a roundup on how I fared in trading for the entire year and not forgetting the regular monthly trading report for the month of Dec. Let’s begin to take a look at the Dec results: I have 3 realised losses but have 7 other stocks in positive region now, which I have brought over to the new year. IndoAgri is still my biggest winner in 2009 and right now I am still holding on to it. In fact I capitalize further by adding my position with another lot....

Read More

Trading Goals for 2010

We are nearing the end of 2009 and it is a time to set goals again. I remember I read somewhere that by setting goals, you put yourself in the top 10% among people. And by taking action towards your goals, you are in the top 1%. I used to think setting goals is futile and not helpful at all. If you do not find it helpful too, it is likely that the goals are not inspiring to you. To me, goals are sources of inspirations and are are supposed to give you the drive to work towards them....

Read More

Property Run in 2010?

It seems like the property market has cooled a little in Singapore. However, based on the figures on the Residential Property Price Index, the 3rd Quarter prices are still higher than the previous 2 quarters. We are halfway from the 08 peak and even further away from 97 peak. Will 2010 continue to see property prices rising? If you have read my previous post, I have mentioned that property stocks tend to lead the property market from 3 to 6 months. Read...

Read More

SMRT – Fundamental Analysis

This is the first time I am trying to apply Fundamental Analysis on a stock. I am using Adam Khoo’s method, which has 8 criteria for screening for a Value stock. He covered the method in both his books, “Profit From the Panic” and “Secrets of Millionaire Investors“. Criteria 1: History of Consistent Earnings and Cash Flow Growth Here is the chart of the Net Income (Profits after Tax) of SMRT over the years. It shows a consistent growth in earnings. Criteria 2: Durable Competitive Advantage SMRT is a major transport service operator in Singapore. Operating the Mass Rapid...

Read More

Enjoy Cash Flow and Capital Gain from Property

After pondering on what Robert Kiyosaki emphasized on investing for cash flow, I have been thinking what would be the best income generating asset to own. Besides property, I really have no idea what else. In this post, I shall make the justifications for property investment. Cash flow in the form of rent The cash flow from property comes in the form of rent. The advantage is that the rental charges collected can be used to offset your mortgage monthly installment. In fact, the rent should more than cover your mortgage payment in order to make profits. If you can...

Read More

Trading Report Card – Nov 09

Since the market hasn’t been moving much, I decided to take the back seat to watch the market movement. I became more strict with entries and hence, very few trades have been made this month. In fact, 3 trades were made only during the last week of the month and they are mainly commodities related. All entries were due to low k-line, rising volume and breaking of resistance. Results SATsvcs was a trade carried forward from previous month. It broke support and was closed with a -S$200 loss. Epure was exited on 30/11/09, which was expected as SGX open...

Read More

Investing for Cash Flow

Something struck me while reading Robert Kiyosaki’s latest book, “The Conspiracy of the Rich“. As usual, his new books always have resemblance in terms of content to his previous books. But I did not remember coming across this concept while reading “Rich Dad Poor Dad” or “Cash Flow Quadrant”. Maybe this is what people mean by learning new things from revisiting books that you have read. The concept that I am talking about is ”investing for cash flow” rather than the commonly accepted “investing for capital gains”. Investing for cash flow means that you are investing in assets that will generate a...

Read More

Recording your trades

Like many successful traders, Dr Alexander Elder advocates all to keep a record of the executed trades. As the saying goes, “what gets measured, gets improved”. Hence, a proper record enables a trader to review and learn from the mistakes. In “Come Into My Trading Room”, he recommends the following information to be captured for each trade: 1) Entry date 2) Long or Short 3) Ticker (stock symbol or the name of the contract) 4) Contract size 5) Entry price 6) Commission Read...

Read More

Protect Yourself Against Irrecoverable Loss

Previously, I have written a post on how to minimize losses in trading through position sizing and stop loss limit. There is something that needs to be addressed further to ensure you can survive the unforgiving market. Stop loss limit is to prevent you from losing too much on a single trade and position sizing protects you from risking too much capital. The issue to be addressed is, “what if you have a string of losses?” The most effective answer to the question is to stop trading. Yes, stop trading. It is harder to stop when you are losing....

Read More

Trading Report Card – Oct 09

The market has been consolidating for a long time. The last good trend was in Aug 09. Even the STI was able to break the 2700 barrier, it could not propel itself to greater heights. This just goes to show the weakness of the bull. It was a month where I was very stringent with the rules. I only went in those trades that have the best signals. Unfortunately, I have to accept what the market decides to do. Compared to the past few months, I only opened 2 counters. The first 2 counters in the table were carried...

Read More

United FTSE/Xinhua China A50 ETF – Getting access to A Shares

UOB Asset Management is launching an A-shares ETF on SGX Mainboard. Buying and owning A-shares is limited to Chinese Nationals and selected foreign institutions. With this ETF, it realises the wish of many people to own China’s A-shares. The current China ETFs listed in SGX are db x-trackers FTSE/Xinhua China 25 and Lyxor ETF China Enterprise. The former consists of H-shares and red-chips while the later only contain H-shares. Hence, this new ETF is currently the only chance of retail investor to access China A-shares in Singapore. If you are still confuse among A-shares, B-shares, etc, you can read...

Read More

Like us on Facebook

Follow us on Twitter