The Systematic Trader | Trading Courses https://www.collinseow.com Learn a proven back-tested trading strategy and make money full or part-time Fri, 17 Sep 2021 07:44:55 +0000 en-US hourly 1 25400563 Systematic Trading (Sep 2021): TSLA & BABA (9988) https://www.collinseow.com/systematic-trading-tsla-baba/ https://www.collinseow.com/systematic-trading-tsla-baba/#respond Fri, 17 Sep 2021 07:44:55 +0000 https://www.collinseow.com/?p=13948 This article is for education purposes only, and not to be taken as advice to buy/sell. Please do your own due diligence before committing to any trade/investment. “All the math you need in the stock market you get in the fourth grade.” – Peter Lynch Before all else, let’s set the context once again. This […]

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This article is for education purposes only, and not to be taken as advice to buy/sell. Please do your own due diligence before committing to any trade/investment.

“All the math you need in the stock market you get in the fourth grade.”

– Peter Lynch

Before all else, let’s set the context once again.

This series, just like all the other articles on this platform, is meant for educational purposes.

Which means, please do:

  • Your own due diligence
  • Adopt adequate risk management
  • Take responsibility for your trades

This series that we’re starting today is on Systematic Trading.

It probably comes as no surprise to you, since that is at the heart of what our community is about.

However, for those who have not heard of this term, or have had little to no exposure as to what our community does… Let’s just say it can get a little overwhelming (just like how most things are in the beginning).

 

systematic trading

What is Systematic Trading?

According to Wikipedia, systematic trading is defined as such:

“Systematic trading (also known as mechanical trading) is a way of defining trade goals, risk controls and rules that can make investment and trading decisions in a methodical way. Systematic trading includes both manual trading of systems, and full or partial automation using computers.”

In other words, systematic trading has rules, which result in you having precise clarity on your trade plans.

It’s not about feeling a certain way about the stock price and then acting upon those feelings.

It’s rooted in technical indicators which provide set-ups for entry and exit.

And there are rules on money management, including position-sizing.

So here’s the deal. Rather than trying to explain it in just paragraphs, we will look at different stocks and see how systematic trading can be applied on them.

In this case, we would get the help of the TradersGPS system to provide entry and exit signals. Since the system has both position and swing trading, I will take a look at the stock’s chart for both scenarios. The trading timeframe would be position daily and swing weekly, as these are longer-term trades that are suitable for beginner traders.

In terms of stock selection, each article will showcase 1 stock listed in the US (NASDAQ/NYSE), and 1 stock in another market (SGX/KLSE/HKSE/SZSE/SSE/BSE/NSE/JSX/SET). While there are rules as to how to select the strong stocks via TradersGPS, I will touch on that in a subsequent article.

If you’re ready for it, let’s kickstart this series with 2 well-known counters.

 

TSLA systematic trading

Tesla, Inc. (NASDAQ: TSLA)

1. About the company

“Tesla’s mission is to accelerate the world’s transition to sustainable energy.

Tesla was founded in 2003 by a group of engineers who wanted to prove that people didn’t need to compromise to drive electric – that electric vehicles can be better, quicker and more fun to drive than gasoline cars. Today, Tesla builds not only all-electric vehicles but also infinitely scalable clean energy generation and storage products. Tesla believes the faster the world stops relying on fossil fuels and moves towards a zero-emission future, the better.”

Source: Tesla’s corporate website

 

2. Position trading (daily)

TSLA position daily 15sep

Following the recent “reset” where the candlesticks turned from red to blue, came the first entry signal for long position on 22nd June. The trigger for that trade would be a breaking the high of $657.204. Subsequently, further entry signals were given on 2nd August, and most recently again on 31st August.

As for position-sizing, this would have been scaled-in according to a 50%, 30% and 20% allocation across these 3 trades.

The basis for these entry signals is the combination of the green arrows and the dark green bars on the Trend Impulse Factor (TIF), which indicates the strength of the trend.

Until a red candle appears, traders who have entered positions according to the above should continue to hold on to their long positions.

As for more aggressive traders, there is also the option to enter on a 20% allocation across 5 trades. This means that they would still be keeping a watch on TSLA for further entry signals.

 

3. Swing trading (weekly)

TSLA swing weekly 15sep

The last valid swing set-up which appeared for TSLA would be in early May. Set-up conditions include having the CCI crossing below -100, and the moving averages still sloping upwards. This is to indicate oversold conditions with the upward trend persisting.

Due to the entry trigger requiring a break of the high, this set-up would only be fulfilled 3 candles later (continue to mark the new high in the meantime).

Here, it is important to note that a stop-loss should be set according to the TradersGPS dynamic stop loss indicator, or below the low of the previous candle. In this case, the stop-loss would be around $540/share. This trade would have been a success as the stop-loss was not triggered since the stock continued moving upwards.

 

4. To trade position daily or swing weekly?

In both examples for position and swing trading, these would have been successful trades to carry out. If I had to choose a trade between the 2, I would prefer the swing trade as the entry price was already near the support level, thereby giving a good risk-to-reward ratio. Although I would be concerned about the slope of the moving averages, this is where it is important to have the stop-loss in place if the trade does go against me.

 

BABA systematic trading

Alibaba Group Holding Ltd (HKSE: 9988)

1. About the company

ALIBABA GROUP’S MISSION IS TO MAKE IT EASY TO DO BUSINESS ANYWHERE.

We enable businesses to transform the way they market, sell and operate and improve their efficiencies. We provide the technology infrastructure and marketing reach to help merchants, brands, retailers and other businesses to leverage the power of new technology to engage with their users and customers and operate in a more efficient way.

Our businesses are comprised of commerce, cloud computing, digital media and entertainment, and innovation initiatives. In addition, Ant Group, an unconsolidated related party, provides digital payment services and offers digital financial services to consumers and merchants and other businesses on our platforms. An ecosystem has developed around our platforms and businesses that consists of consumers, merchants, brands, retailers, third-party service providers, strategic alliance partners and other businesses.”

Source: Alibaba Group’s corporate website

 

2. Position trading (daily)

BABA position daily 15sep

Looking at BABA (9988)’s chart for the past year, it seems that the downtrend has persisted since then, with the stock making lower highs and lower lows.

Although it last attempted a breakout on 25th June, and the order would have been triggered after breaking the high on 28th June above $215/share, the candles turned red once more on 7th July, with a short signal appearing on 8th July.

This would lead to shorting trades being triggered on the 9th below $197/share. More short signals followed subsequently, which would lead traders to a profit at the stock’s current price around $154/share.

 

3. Swing trading (weekly)

BABA swing weekly 15sep

This would be a swing sell set-up that we are looking for – which is basically a reversal of the set-up for swing buy. First, identifying the set-up includes having moving averages sloping downwards and CCI above 100. These indicate overbought conditions amid a downtrend.

The recent candle which fulfills this criteria would be in late June, where the high price crossed beyond 20-week moving average, while still closing beneath the 40-week moving average. This trade would have been triggered in the following week, as prices broke below the low of $209.

Once again, in this case, the stop-loss would not have been triggered in this trade. Regardless of whether set according to the TradersGPS dynamic stop-loss indicator, or marking the high of $225, the stock has continued its downward move to date.

 

4. To trade position daily or swing weekly?

Similar to TSLA, both the position and swing trades would have been successful for BABA (9988). Between the 2, I would have preferred to go with the position trade. Given the sustained bearish momentum, the short signal would likely have been an indication of more room to the downside.

 

Conclusion

Hopefully this quick introduction of systematic trading on TSLA and BABA (9988) provides you with an understanding of how it works.

If it still seems confusing, that is completely understandable. The one takeaway that I would like you to have is that amongst other things, systematic trading provides clear rules for entry and exit.

I’m sure we can agree that having clarity in your trade plan allows you to take decisive action on your trades. Thereby also reducing anxiety and stress over indecisions, fears and regrets.

Anyway, this is just part 1 of this series. As we explore various stock charts, we should start to see patterns more clearly, and get a better sense of how this works.

After all, it’s focusing on the process which will eventually lead to results.

 

Swayed by emotions? Unsure when to take action? While discretionary trading is not bad, perhaps systematic trading is what works for you. Discover the intricacies of it as we journey along this series.

If you’d like to learn more about systematic trading to better time your trade entries, click the banner below:

Systematic Trading

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13th September 2021 – Prior Position Signal Long: UPST,… https://www.collinseow.com/20th-april-weekly-webinar-sneak-peak-position-trading-long-new-gild-prior-position-signal-long-ctxs-6-apr-5-2-mrna-6-apr-47-regn-2-mar-22-zm-17-feb-65-weekly-swing-short-new-ptr-bch-wee-3-2-2-2-2-2-28/ https://www.collinseow.com/20th-april-weekly-webinar-sneak-peak-position-trading-long-new-gild-prior-position-signal-long-ctxs-6-apr-5-2-mrna-6-apr-47-regn-2-mar-22-zm-17-feb-65-weekly-swing-short-new-ptr-bch-wee-3-2-2-2-2-2-28/#respond Mon, 13 Sep 2021 05:56:14 +0000 https://www.collinseow.com/?p=13945 Hello everyone! This week Collin shares a list of scan results for today (13 September 2021): Position Trading Long (3-9 months) NIL Prior Position Signal Long UPST 30 Aug PPC 30 Aug CRWD 30 Aug OLN 30 Aug SO 23 Aug MRVI 15 Aug PEP 26 Jul SNAP 26 Jul YUM 26 Jul ADBE 21 […]

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Hello everyone!

This week Collin shares a list of scan results for today (13 September 2021):

Position Trading Long (3-9 months)
NIL
Prior Position Signal Long
UPST 30 Aug
PPC 30 Aug
CRWD 30 Aug
OLN 30 Aug
SO 23 Aug
MRVI 15 Aug
PEP 26 Jul
SNAP 26 Jul
YUM 26 Jul
ADBE 21 Jun
DKS 22 Mar
Prior Position Signal Short
NIL
Weekly Swing Long
Prior Weekly Swing Long ( Take Profit Progressive)
EL 30 Aug
V 30 Aug
Prior Weekly Swing Short (Take Profit Progressive)
NIL
Long Term (1-2 Years buy more when drop, DCA)
STI Apr 2020
H78 Jul 2020
0045.HK Jul 2020
700.HK Jul 2020
ETH Jul 2020
FEYE Jan 2021
PSLV Jan 2021
SILJ Feb 2021
———————–
S&P500 PD Blue, PW blue
Hedge 40%

———————–

Click the picture below to watch the video and find out more.

Enjoy the video!

If you’d like to learn more about systematic trading, click the banner below.

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5 Small-Cap US Stocks with 10 Years of Consecutive Earnings Growth https://www.collinseow.com/small-cap-us-2021/ https://www.collinseow.com/small-cap-us-2021/#respond Fri, 10 Sep 2021 06:43:59 +0000 https://www.collinseow.com/?p=13924 This article is for education purposes only, and not to be taken as advice to buy/sell. Please do your own due diligence before committing to any trade/investment. Small-cap US stocks flying under the radar There are many US companies with an illustrious track record of growing their dividend payment every year. The crème of the […]

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This article is for education purposes only, and not to be taken as advice to buy/sell. Please do your own due diligence before committing to any trade/investment.

Small-cap US stocks flying under the radar

There are many US companies with an illustrious track record of growing their dividend payment every year. The crème of the crop are those companies termed as “Dividend Kings”. These companies have grown their dividend payments for 50 consecutive years. There are currently 32 Dividend Kings and one can access the full list through the suredividend site.

While there are probably hundreds of US companies that have demonstrated the ability to grow their dividend payments for 10 consecutive years, it is probably a more uncommon feat to generate 10 years of consecutive earnings growth.

14 S&P 500 companies have successfully grown their earnings consecutively for 10 years. This will likely be an article for another day. Instead, what I will like to highlight in this article are 5 small-cap US stocks you have never heard of before that have achieved this accolade of growing their earnings for 10 consecutive years.

These companies have a market capitalization of less than US$10bn and if they can mimic their past earnings performances, their share price runway will likely be a long one. Do note, however, that due to their small market cap nature, these stocks tend to exhibit greater volatility vs. their blue-chip counterparts.

This article is not meant to be a recommendation to BUY into these counters but a reference point for further stock investigation/evaluation.

Without further ado, let’s reveal the 5 small-cap US stocks with an impeccable earnings growth record over the past decade.

stock trends higher

#1: Otter Tail (OTTR)

The first small-cap US stock in this list, in no particular order, is a company called Otter Tail. Otter Tail is a US energy company that primarily operates in the electric (produces and sells electricity), manufacturing (fabricates metal components), and plastic segments (pipes for water uses).

The company primarily conducts its operations and acquires the majority of its revenue in the U.S. in the states of Minnesota, South Dakota, and North Dakota, but also generates some revenue from its operations in Mexico, Canada, and Panama.

The majority of the company’s revenue is derived from the Electric segment and commercial customers, although it generates revenue from residential and industrial customers, as well.

Being in the utility sector, OTTR can be considered a defensive counter and this is pretty evident from its earnings track record. The company was marginally loss-making in 2012 but since then, it has managed to turn the corner and generated earnings growth every year thereafter.

Small-cap us stocks (OTTR)

Being a utility company, it is not surprising that the company is also a regular dividend payer, with its dividend per share increasing every year since 2013 and currently yields 2.8%.

One key risk to take note of for the counter. OTTR has generated negative free cash flow for the past 2 years and this trend is expected to continue in 2021 as CAPEX remains elevated. That has also resulted in a rising net debt trend.

OTTR has appreciated by c.30+% in YTD 2021 and is currently at an all-time high level. Investors who believe that its rising net debt level and negative free cash flow situation is not a major cause for concern might wish to ride on the bandwagon of this utilities counter in 2H21.

OTTR 8 sep

Looking at the chart on TradersGPS, recent re-entry signals appeared from mid-July at $50/share. While typically it would not be wise to “chase” the stock, aggressive traders who are bullish on OTTR may still keep a lookout for entry opportunities given the strength of the trend.

#2: UFP Industries (UFPI)

The second small-cap US stock in this list is UFP Industries (UFPI) that operates in the Basic Materials sector and the Lumber industry to be specific. UFPI has a current market cap of US$4.6bn.

The company produces and sells lumber and treated wood products in three main customer categories: retail, industrial, and construction.

The retail category, which generates the most revenue, sells lumber products to retailers, including big-box home improvement retailers. The industrial category sells wood pallets, boxes, packaging crates, and other containers used for industrial shipping. The construction category sells manufactured housing and building materials to the construction industry.

The vast majority of the company’s revenue is generated in the United States.

Small-cap us stocks (UFPI)

UFPI has been affected by the volatility seen in lumber prices of late. Nonetheless, the counter is still up an impressive 35% YTD2021 and over the past 10 years, have generated a return of 840%, crushing the S&P 500’s 10-year return of 371%.

During this period, UFPI grew its earnings consistently every year from $5m in 2011 to $247m in 2020. The street expects UFPI’s earnings to be at a record level in 2021 as a result of surging lumber prices in 1H21 but that earnings momentum will likely taper off in 2022.

Besides growing its earnings consistently over the past 10 years, UFPI has also been growing its dividend payment, from $0.13/share in 2011 to $0.50/share in 2020, with an impressive dividend growth CAGR of 39% over the past decade.

UFPI is an interesting candidate to play the current US housing boom. Although lumber prices can exhibit significant volatility, UFPI has been able to maintain its impeccable earnings growth over the last 10-years which is no easy feat.

UFPI 8sep

UFPI seems to be trending sideways at the moment, with the support level at $72.50. Traders and investors who are bullish on UFPI could take the recent pullback as an entry opportunity. Otherwise, following the system, this would be a time to have exited positions and stay clear of the stock.

#3: Grand Canyon Education (LOPE)

The third small-cap US stock in this list is Grand Canyon Education (LOPE). This company is an American for-profit education company that operates a private university in Phoenix, Arizona, as well as online educational programs.

The company offers undergraduate and postgraduate degree programs, including business, education, nursing and health, and liberal arts.

Grand Canyon Education’s on-campus program enrolls approximately 15,000 students, while its online program enrolls over 50,000 students. The university’s undergraduate programs enroll approximately 60% of its overall student base and are the largest revenue driver for the company.

The education industry is largely seen as a defensive business. The exception is if your education business is based in China.

Small-cap us stocks (LOPE EPS trend)

Consequently, LOPE has been able to grow its earnings from $51m in 2011 to $257m in 2020. The street expects LOPE to maintain that earnings growth momentum heading into 2021 and 2022, with the company’s EPS forecasted at $6.10 and $6.80 respectively.

Small-cap us stocks (LOPE FCF trend)

Unlike OTTR, LOPE has been able to generate a ton of free cash flow over the past 3-4 years as a result of tapering Capex requirements. Consequently, the company can fund its growth through organic means without the need to raise equity nor debt substantially.

While the company has underperformed the market substantially in YTD2021, this is a counter that has caught my attention and is worthy of further investigation.

LOPE 8sep

Similar to UFPI, LOPE appears to be trending sideways as well. Noting here that the current mode is bearish, traders could also keep a lookout for shorting opportunities should further signals appear.

 

#4: First Finl Bankshares (FFIN)

The fourth small-cap US stock in this list is First Finl Bankshares (FFIN) which is a financial and bank holding company.

The company conducts a full-service commercial banking business with operations primarily located in Texas. Although the company operates under one bank charter, it manages operations in a decentralized manner through local staff and advisory boards.

The company primarily serves small and midsize nonmetropolitan markets and has grown organically, through de novo branch openings, and acquisitions.

A majority of its loan portfolio is in real estate.

As can be seen from the chart below, FFIN has been very impressive in growing both its top and bottom-line over the past decade. Net income grew from $68m to $202m in 2020, with the street expecting that momentum to continue into 2021.

Small-cap us stocks (FFIN Net income trend)

Beyond just growing its net income, FFIN is also a consistent free cash flow generator, with its free cash flow hitting $194m in 2020 (similar to net income level).

Small-cap us stocks (FFIN DPS trend)

Consequently, the company has been able to also grow its dividends per share from $0.24/share in 2011 to $0.51/share in 2020 and currently sports a dividend yield of 1.3%.

FFIN 8sep

While FFIN was initially trending sideways, the support around $47/share has just recently been broken. In fact, the TradersGPS system gave a shorting signal just last week at slightly below $47/share. The downward move has continued to the current share price at $44.83, and it remains to be seen if this would persist.

 

#5: LCI Indus (LCII)

The last small-cap US stock in this list is LCI Indus (LCII) which operates in the recreational vehicles industry. The company supplies domestic and international components for the original equipment manufacturers of recreational vehicles and adjacent industries including buses; trailers used to haul boats, livestock, equipment, and other cargo.

It has two reportable segments – the original equipment manufacturers (OEM) segment and the aftermarket segment.

The OEM Segment manufactures or distributes components for the OEMs of RVs and adjacent industries, including buses; trailers used to haul boats, livestock, equipment and other cargo; trucks; pontoon boats; trains; manufactured homes; and modular housing.

Its products are sold primarily to major manufacturers of RVs such as Thor Industries, Forest River, Winnebago and other RV OEMs, and to manufacturers in adjacent industries.

 (LCII EPS trend)

Despite a slight dip in net income generated in 2019 from $149m to $147m, LCII was able to grow its EPS marginally from $5.83 to $5.84 as a result of its share buyback policy. This is made possible because the company is consistently generating free cash flow.

This is a small-cap stock that the street loves, with an average target price given by the street at $169/share, 20% higher than the current level. The street expects LCII EPS growth momentum to continue in 2021 and 2022, achieving a forecasted record EPS of $11.60 in 2022.

 (LCII historical PER multiple trend)

If that EPS can be achieved, the counter will be trading at a forward 2022 PER of 12x vs. its historical average PER multiple of c.20x. This gives plenty of re-rating opportunity for this small-cap US stock with an impeccable earnings growth track record.

LCII 8sep

LCII has been trending sideways over the medium term, and downwards on the short term. According to TradersGPS, a shorting signal has just appeared as well. If the current low of $134.2/share gets broken, that would be the trigger to enter a short trade. Seeing the longer-term support level around $126.20, the risk to reward ratio could be justifiable as well.

 

Conclusion

Small-cap stocks can be extremely volatile. However, the rewards can be tremendous as well when you select the right counter to stay vested for the long term.

The 5 small-cap US stocks highlighted in this list all have a solid track record of earnings growth over the past decade. While no one can be certain that their consecutive earnings growth trend can be maintained over the coming decade, it might be worth your attention to investigate these counters in more detail as they could very well turn out to become multi-baggers stocks.

Among the 5 small-cap stocks, I do intend to study LOPE, FFIN and LCII a little more in-depth as these 3 stocks have the greatest potential to maintain their earnings growth in the next 3-4 years, in my view.

Once again, this list of stocks is for your reading pleasure and reference and not an inducement for purchase. Please do your necessary due diligence, particularly considering that these stocks could exhibit greater volatility vs. your typical blue-chip counters.

 

If you enjoyed reading this article and various other investment + personal finance articles, do visit New Academy of Finance. Royston has more than 10 years of buy and sell side experience as a financial analyst. He constantly posts interesting, valuable and actionable articles.

If you’d like to learn more about systematic trading to better time your trade entries, click the banner below:

Systematic Trading

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5 Movements & Cycles of the Stock Market https://www.collinseow.com/beginner-guide-movements-cycles/ https://www.collinseow.com/beginner-guide-movements-cycles/#respond Fri, 03 Sep 2021 08:10:42 +0000 https://www.collinseow.com/?p=13912 At times, the stock market seems to have a life of its own. We liken it to a roller coaster ride, soaring to the moon and plummeting parabolically on extremes. Yet at times the stock’s ascent feels excruciatingly slow to watch, and at other times we simply wonder where it’s trying to go. While it […]

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At times, the stock market seems to have a life of its own. We liken it to a roller coaster ride, soaring to the moon and plummeting parabolically on extremes. Yet at times the stock’s ascent feels excruciatingly slow to watch, and at other times we simply wonder where it’s trying to go.

While it is impossible to predict the exact movements of the market, there are certain movements and cycles which aid us in this journey of trading and investing.

So in this article, we take a look at what these movements and cycles are in a bid to help us understand this seemingly manic-depressive behaviour.

By the way, if you’ve yet to check out earlier parts of this Beginner’s Guide series, deciding on your brokerage platform will help you put thoughts into actions. Or perhaps, if you have no clue what to trade, this guide on your choice of instrument would be helpful.

And now, onto the first thing that you would need to know about the movements and cycles of the stock market.

 

direction of movements and cycles

1. Market vs economy

First and foremost is the macro understanding that the stock market does not move in accordance to the economy. The stock market is actually a leading indicator – of approximately 3 to 6 months – of the economy.

For instance, when it is a full recession in the economy, the stock market is in a bull market as it is ahead of the economy. The reverse holds true – when the economy is in full recovery, the stock market would be in a bear market.

Market Vs. Economic Cycles And Sector Rotation | Seeking Alpha

Image source: Seeking Alpha

What about now? Where are we in the economic/market cycle?

Well, the market continues to be bullish, and the economy is still recovering from last year’s COVID crash. However, note that the market does not move continuously in a straight line as in the illustration above. As you will realize, there are smaller movements and cycles ongoing within the broader market direction.

To better understand how it moves, we continue on to the subsequent points on the tide, wave and ripple.

 

2. Tide, wave & ripple

“The trend is your friend” is the golden rule when it comes to trading.

However, there are actually 3 trends at any point in time – the primary, secondary/intermediate, and minor trend. According to the Dow Theory, these are also called the tide, wave and ripple.

The distinction between the 3 lies with the timeframe.

Dow Theory

Image source: Tradingstrategyguides.com

The tide, or primary trend, is the big picture of where the stock is headed. When viewing this trend, the timeframe would minimally be a year, and viewed either on the daily or weekly charts.

The wave, or secondary trend, includes counter-trend movements against the tide. These typically last between 3 weeks to 3 months. Such counter-trend movements are also known as a correction, retracement, or pullback. Seen from the bigger picture, these are healthy movements as the stock does not move in a straight line upwards/downwards.

Lastly, the ripple, or minor trend, can be seen in a similar relationship to the wave, as what the wave is to the tide. These are the even smaller movements which last between 3 days to 3 weeks. Ripples are also thought of as the day-to-day fluctuations in the stock prices.

ripple movements and cycles

Application when trading

To know whether you are following the trend, you would first need to identify your trading timeframe. If you are trading on a longer term such as for more than a year, then you should be less concerned about the ripples which occur. In fact, trading on a timeframe as short as the ripples has been noted to be erratic and difficult to achieve with consistency.

In the case of an uptrend, the waves should be making higher highs and higher lows. When viewed on a longer timeframe, the tide will therefore continue to slope upwards. The reverse is true in a downtrend as well, with the waves making lower highs and lower lows.

A simple way to identify the trend is by looking at the slope of the simple moving average (MA). While there are countless options of technical indicators, the MA is easy and powerful to utilize.

Common choices are the 50-day MA to identify waves for the mid-term trend, and the 200-day MA to identify the long-term tide. When the 50-day MA crosses over the 200-day MA, this signifies that the stock is moving into an uptrend. Similarly, when the 50-day MA crosses below the 200-day MA, this signifies that a downtrend has arrived.

 

floor ceiling support resistance

3. Support & resistance

Besides trending upwards (making higher highs and higher lows) and downwards (making lower highs and lower lows), stocks also spend their time trending sideways. This is also known as a consolidation, accumulation/distribution, or trading in a range.

In such situations, we can identify the upper range as the resistance, and the lower range as the support. They can be thought of as the ceiling and floor respectively.

While it is possible to trade the range, there are also no guarantees that the stock wouldn’t break above the ceiling or break beneath the floor. When prices are closer to these support and resistance levels, it is also when the bulls and bears are fighting with their backs against the wall to maintain the price levels.

Nonetheless, support and resistance levels are also healthy phases in a stock’s trajectory. This is because this is likely the time where institutions are accumulating shares. The longer this period holds, the stronger these support and resistance levels are.

 

pie chart sectors

4. Sector rotations

If you noticed in the earlier illustration on the market cycle, there are sectors listed at the top of each of the different phases. This is because at different points of the cycle, the funds actually flow to these sectors in anticipation of the next stage of the economic cycle. These sectors tend to perform best in that next cycle.

For instance, in the early recovery phase, the economy is picking up and consumer expectations begin to rise. Industrial production grows, and interest rates have bottomed out.

Where possible, it is wise to follow the flow of the money rather than trying to go against it. While this doesn’t mean that you should liquidate all your positions, it pays to keep an eye on where the funds are flowing and to follow it.

After all, the trend is your friend.

Do note that the above illustration does not include all 11 key sectors. If you’re interested to find out more about this subject, do check out this recent article on 8 of the best sector stocks that we’ve identified for 2021.

 

planting season seasonality

5. Seasonality

Sayings like “sell in May and go away” or being more cautious due to the “September Effect” have their roots in the concept of seasonality.

Seasonality looks at the data over year-long periods, and identifies predictable changes or regular patterns that recur on an annual basis. While there are no guarantees that this year would be the same as previous years, it is also possible to gather clues from the stock’s history.

How seasonality affects stock prices could be due to calendar seasons like summer or winter, or commercial periods such as the holidays. For instance, retail sales would likely perform better during the gifting seasons or when mass sales periods are conducted such as Amazon Prime Day or Alibaba’s 11.11 Singles’ Day.

One of the places you could check out a stock’s seasonality chart would be StockCharts. Simply key in the stock’s ticker symbol in the seasonality field to see how it has performed.

 

Conclusion

Now that we have established some of the movements and cycles of the market, let’s put this knowledge into application. Taking a look at Apple’s daily chart over a 1-year period, what do you see?

movements & cycles apple stock chart

  • What is the tide, wave and ripple?
  • When was the period of consolidation? What were the support and resistance levels?
  • What sector is Apple in? When does it normally do well in relation to the economic cycle?
  • Seasonally, when does Apple perform the best?

I hope this exercise has been useful for you. As you scan for the most ideal stocks, these are some of the factors to consider before executing the trade.

While it may seem overwhelming in the beginning, repeating this exercise will train your perception of the stock’s price actions, ultimately enabling you to make better trading decisions.

In fact, we’re just getting started here. There are more interesting topics lined up, which aim to provide you insights into this valuable life skill.

Till the next part of this series, do get yourself familiarized with these movements and cycles in the meantime.

 

Can anybody start trading and investing on their own? If you’ve read up to this point, the answer is a resounding yes. Stay tuned to the next parts of the series as we adopt a systematic approach in generating a step-by-step beginner’s guide.

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30th August 2021 – Position Trading Long: UPST, PPC, … https://www.collinseow.com/20th-april-weekly-webinar-sneak-peak-position-trading-long-new-gild-prior-position-signal-long-ctxs-6-apr-5-2-mrna-6-apr-47-regn-2-mar-22-zm-17-feb-65-weekly-swing-short-new-ptr-bch-wee-3-2-2-2-2-2-27/ https://www.collinseow.com/20th-april-weekly-webinar-sneak-peak-position-trading-long-new-gild-prior-position-signal-long-ctxs-6-apr-5-2-mrna-6-apr-47-regn-2-mar-22-zm-17-feb-65-weekly-swing-short-new-ptr-bch-wee-3-2-2-2-2-2-27/#respond Mon, 30 Aug 2021 06:03:50 +0000 https://www.collinseow.com/?p=13908 Hello everyone! This week Collin shares a list of scan results for today (30 August 2021): Position Trading Long UPST PPC CRWD OLN Prior Position Signal Long SO 23 Aug MRVI 15 Aug AN 2 Aug PEP 26 Jul SNAP 26 Jul YUM 26 Jul MDLZ 19 Jul NKE 28 Jun ADBE 21 Jun NVDA […]

The post 30th August 2021 – Position Trading Long: UPST, PPC, … appeared first on The Systematic Trader | Trading Courses.

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Hello everyone!

This week Collin shares a list of scan results for today (30 August 2021):

Position Trading Long
UPST
PPC
CRWD
OLN
Prior Position Signal Long
SO 23 Aug
MRVI 15 Aug
AN 2 Aug
PEP 26 Jul
SNAP 26 Jul
YUM 26 Jul
MDLZ 19 Jul
NKE 28 Jun
ADBE 21 Jun
NVDA 14 Jun
DKS 22 Mar
Prior Position Signal Short
NIL
Weekly Swing Long
NIL
Prior Weekly Swing Long (Take Profit Progressive)
EL 30 Aug
V 30 Aug
DJI 21 Jun
Prior Weekly Swing Short (Take Profit Progressive)
NIL
Long Term (1-2 Years buy more when drop, DCA)
STI Apr 2020
H78 Jul 2020
0045.HK Jul 2020
700.HK Jul 2020
ETH Jul 2020
FEYE Jan 2021
PSLV Jan 2021
SILJ Feb 2021
———————–
S&P500 PD Blue, PW blue
Hedge 40%

———————–

Click the picture below to watch the video and find out more.

Enjoy the video!

If you’d like to learn more about systematic trading, click the banner below.

The post 30th August 2021 – Position Trading Long: UPST, PPC, … appeared first on The Systematic Trader | Trading Courses.

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The Next Amazon? 5 Small-Cap Compounder Stocks on Radar https://www.collinseow.com/compounder-stocks-2021/ https://www.collinseow.com/compounder-stocks-2021/#respond Fri, 27 Aug 2021 07:36:15 +0000 https://www.collinseow.com/?p=13891 This article is for education purposes only, and not to be taken as advice to buy/sell. Please do your own due diligence before committing to any trade/investment. Compounder Stocks that could be the next Amazon? Companies such as Amazon that can generate double-digit compound growth in both revenue and earnings, year after year are rarities. […]

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This article is for education purposes only, and not to be taken as advice to buy/sell. Please do your own due diligence before committing to any trade/investment.

Compounder Stocks that could be the next Amazon?

Companies such as Amazon that can generate double-digit compound growth in both revenue and earnings, year after year are rarities. Growth investors looking for the next Amazon seek to identify companies capable of generating double-digit compound growth, ideally in both revenue and earnings for years to come.

I ran a quick scanner using Stock Rover to find out which are the companies that have consistently generated both revenue and earnings growth over the past 5 years. This scan included 2020, a watershed year that saw companies’ earnings being decimated by COVID-19. To be able to generate both revenue and earnings growth in 2020 is no small feat.

Additional criteria also included earnings growth required for 2021 and 2022.

The 5 largest market cap companies which met these criteria are 1) Amazon, 2) PayPal, 3) ASML Holdings, 4) Adobe and 5) Netflix.

All 5 companies are likely household names that the man in the street is probably familiar with. Perhaps the exception would be ASML, the only non-consumer focus stock in the list. For those who are not familiar with ASML, the company is a leading manufacturer of photolithography systems used in the manufacturing of semiconductors and a key beneficiary of the current semiconductor chip shortage scenario, with demand for its EUV lithography tools sky-rocketing.

However, in this article, I am NOT looking to focus on well-known stocks such as those 5 highlighted above which are already mega-cap stocks. What I will like to find are possibly 5 consumer-related stocks with a market cap below USD$13bn that fit the below criteria:

  1. Revenue growth for each of the past 5 years
  2. EPS growth for each of the past 5 years
  3. Double-digit revenue CAGR over the past 5 years
  4. Double-digit EPS CAGR over the past 5 years
  5. Forecasted EPS growth rate in 2021 > 10%
  6. Forecasted EPS growth rate in 2022 > 10%

The above screening criteria will eliminate many growth stocks which are currently loss-making or just turn profitable.

I will be focusing only on consumer-related stocks. Many of the names highlighted in the list are probably alien to most, considering that their market cap is currently < USD$13bn. However, these stocks have demonstrated that they are capable of generating compound growth in both revenue and earnings over the past 5-years, with the street equally confident that that growth can be sustained at least over the next 2 years.

Buying into these small-cap revenue and earnings compounder stocks could potentially reap strong returns over the coming years. This is by no means a recommendation to buy these stocks. Readers should always conduct their due diligence, particularly when purchasing non-blue-chip, small-cap stocks like those highlighted in the list.

Without further ado, here are the 5 revenue and earnings compounder stocks that could be the next Amazon.

finding the next Amazon

 

#1: Baozun (BZUN)

  • Sales 5-year Average (%): 27.3%
  • EPS 5-year Average: 67.9%
  • EPS growth 2020 estimate: 26.4%
  • EPS growth 2021 estimate: 41.4%

Running a very similar business to Amazon, Baozun Inc is an e-commerce service partner that helps brands execute their e-commerce strategies in China by selling their goods directly to customers online or by providing services to assist with their e-commerce operations.

Its integrated end-to-end brand e-commerce capabilities encompass all aspects of the e-commerce value chain, covering IT solutions, store operations, digital marketing, customer services, warehousing and fulfillment. It delivers omnichannel solutions to create a shopping experience across various touchpoints online and offline.

Baozun is often seen as a smaller version of JD.com, which is one of the market leaders in the e-commerce arena after Alibaba.

BZUN share price 25aug

Like many of the China stocks listed in the US, Baozun saw its share price crumbled of late, with its price down 36% on a YTD basis. This could be seen as an opportunity to nibble into this fast-growing earnings compounder, one where its EPS grew by an average annual rate of 68% over the past 5 years.

Looking ahead, the street remains pretty optimistic of Baozun’s growth trajectory and expects the company to continue delivering double-digit EPS growth over the next 2-years.

BZUN TGPS chart 25aug

With the latest two candles closing higher, it remains to be seen whether BZUN is beginning anew its upward climb. A bullish strategy I would deploy here is to sell put options to collect premiums, since volatility tends to be higher with its recent move in share price as well. If it gets triggered at my strike price, I wouldn’t mind holding on to a small portion of this counter considering its growth trajectory.

 

#2: M/I Homes (MHO)

  • Sales 5-year Average (%): 17.8%
  • EPS 5-year Average: 46.1%
  • EPS growth 2020 estimate: 33.8%
  • EPS growth 2021 estimate: 10.1%

M/I Homes Inc is an American construction company that focuses on residential construction.

It consists of two distinct operations: homebuilding and financial services.

The homebuilding operations are spread into the Midwest, Mid-Atlantic and Southern regions and the financial services operations support homebuilding operations by providing mortgage loans and title services to the customers of homebuilding operations.

The homebuilding operations comprise the most significant portion of the revenue. The company builds homes and communities that target entry-level, move-up, and luxury homebuyers.

Next Amazon compounder stocks (MHO outperformance)

M/I Homes was listed in 1993 and over the past 10-years, this company has been a major price outperformer vs. the S&P 500, generating returns of 486% above the key US index.

MHO TGPS chart 25aug

TradersGPS has identified a positive buy signal on this counter two weeks back. However, the stock appears to be trending sideways of late. From a trading perspective, unless trading the range, I would give this counter a miss for now.

 

#3: Medifast (MED)

  • Sales 5-year Average (%): 36.2%
  • EPS 5-year Average: 54.9%
  • EPS growth 2020 estimate: 57.9%
  • EPS growth 2021 estimate: 21.1%

Medifast Inc is a US-based company that produces, distributes and sells products concerning weight loss, weight management, and healthy living.

The company generates its revenue from point-of-sale transactions executed over an e-commerce platform for weight loss, weight management, and other consumable health and nutritional products.

In addition to being a consistent revenue and earnings compounder, the company has also been steadily growing its free cash flow, with its free cash flow CAGR at close to 29% over the past 10-years.

Being a multi-level marketing company, there might be a “stigma” associated with such companies as being “scams”, one where the company is not product-focus but sales-focus. Nonetheless, this is a company that was ranked as 2021 3rd best mid-size companies in America by Forbes, with the first 2 being YETI Holdings and Quidel.

Next Amazon compounder stocks (Top 10 best mid-cap American companies)

Source: Forbes

MED TGPS 25aug

According to TradersGPS, the sell-off of MED this month has been strong. The share price has broken through its support level – traders looking for shorting opportunities could potentially consider this counter.

 

#4: Innovative Industrial (IIPR)

  • Sales 3-year Average (%): 154.1%
  • EPS 3-year Average: 107.7%
  • EPS growth 2020 estimate: 43.6%
  • EPS growth 2021 estimate: 37.4%

Innovative Industrial Properties Inc is a real estate investment trust engaged in the acquisition, ownership, and management of specialized industrial properties leased to state-licensed operators for their regulated medical-use cannabis facilities.

It conducts its business through a traditional umbrella partnership real estate investment trust, or UPREIT structure, in which properties are owned by Operating Partnership, directly or through subsidiaries.

Next Amazon compounder stocks (IIPR outperformance vs S&P500)

IIPR is the only stock in this list with less than 5-years of operating track record, with its IPO in late 2016. Nonetheless, this is one stock that has generated a return of 1300% since its listing, crushing the S&P 500 returns of 123% over the same horizon.

For investors looking at a “safer” alternative to gain exposure in the fast-growing cannabis market in the US, this counter might just be the right one for you.

IIPR TGPS 25aug

IIPR has broken out of its consolidation last month. Following the system’s entry signal around $200/share would give you about 19% gains at its current share price.

 

#5: Trex (TREX)

  • Sales 5-year Average (%): 17.1%
  • EPS 5-year Average: 28.1%
  • EPS growth 2020 estimate: 34.9%
  • EPS growth 2021 estimate: 18%

Trex Co Inc is a manufacturer of wooden alternative-decking products.

The company offers outdoor products in the decking, railing, porch, fencing, trim, steel deck framing, and outdoor lighting categories. Its products are sold under the Trex brand and manufactured in the United States.

Further, the company licenses its Trex brand to third parties to manufacture and sell products under the Trex trademark. The distribution is focused on wholesale distributors and retail lumber dealers, which in turn sell Trex products to homeowners and contractors, with an emphasis on professional contractors, remodelers, and homebuilders.

TREX is also one of the companies identified by Forbes as American’s best mid-sized companies to own, ranked 12th in the list.

Next Amazon compounder stocks (TREX historical and forecasted revenue and EPS growth)

TREX is likely a beneficiary of the current housing boom in the US, which has helped the company to grow its EPS by 22% in 2020, a year where many companies saw substantial earnings decline as a result of COVID-19. The street expects another strong EPS growth (> 20%) performance by the company in 2021.

TREX TGPS 25aug

TREX currently seems to be testing its resistance levels. While it does not appear to possess the necessary strength to break through at the moment, we shall see if it is the case in the coming days.

 

Conclusion

If one has a crystal ball and bought into these 5 stocks since the start of 2017, one would have generated a return of 648% over this period vs. the S&P 500 return of 117%.

Nonetheless, these 5 stocks, which are all trading at less than $13bn market cap, can continue to witness stronger share price appreciation over the coming years if they can maintain their revenue and earnings compounding performance.

Except for Baozun (impacted by China negative sentiments), the remaining 4 small-cap compounder stocks in this list have managed to outperform the S&P 500 on a YTD basis, with MHO generating an outperformance of 26% vs. the S&P 500.

Traders looking for opportunities among these counters might note that these stocks are all exhibiting different behaviours. While they might have the label “compounder stocks” attached to them, whether or not they are suitable for trading depends on your timeframe and conviction surrounding them.

 

If you enjoyed reading this article and various other investment + personal finance articles, do visit New Academy of Finance. Royston has more than 10 years of buy and sell side experience as a financial analyst. He constantly posts interesting, valuable and actionable articles.

If you’d like to get a FREE e-course and learn how to better time your trade entries, click the banner below:

e-course

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Book Review (III): Trading for a Living (1993) https://www.collinseow.com/book-review-trading-for-living-3/ https://www.collinseow.com/book-review-trading-for-living-3/#respond Fri, 20 Aug 2021 07:05:41 +0000 https://www.collinseow.com/?p=13872 As the saying goes, save the best for last. And if the best was measured by sheer volume, then this substantial portion is without a doubt the highlight of the book. It spans approximately two-thirds of the book in terms of pages, so you can expect A LOT of charts, tables and examples. This is […]

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As the saying goes, save the best for last.

And if the best was measured by sheer volume, then this substantial portion is without a doubt the highlight of the book.

It spans approximately two-thirds of the book in terms of pages, so you can expect A LOT of charts, tables and examples. This is on top of the written explanation of how these charts and indicators work. There really is much to take in.

Before you start thinking that this is what it takes to be able to trade for a living, hold up.

This is but 1 of 3 pillars – trading psychology and risk management, as the other 2 pillars, are absolutely necessary. Without which, the technical knowledge would not serve you well enough.

While it can be exciting to test the various indicators, trading systems and features of Technical Analysis…

Do ensure that you have a grasp of the earlier 2 pillars.

If you’re ready for it, here are the 5 pointers for this final pillar of the book review:

Book Review: Trading for a Living (1993) by Dr. Alexander Elder

Trading for a Living technical analysis

Image source: Goodreads.com

1. <300-word Summary

7 chapters make up this second pillar on market analysis and trading systems. To break it down, they are:

  1. Classical Chart Analysis (charting, chart patterns, trendlines, etc.)
  2. Computerized Technical Analysis (moving averages, Relative Strength Index, Stochastic, etc.)
  3. The Neglected Essentials (volume, time, open interest, etc.)
  4. Stock Market Indicators
  5. Psychological Indicators
  6. New Indicators
  7. Trading Systems

The earlier 6 chapters in some way culminate in the chapter on trading systems. Though not entirely so, a number of the earlier-mentioned indicators and analyses are thrown into the mix.

In addition, Dr. Elder already includes sub-sections on “Crowd/Mass/Market/Trader Psychology” or “Trading Rules” with respect to the individual indicator or analysis. This is not without an accompanying chart to illustrate how it works, and what kind of action is taken at the respective points in the price chart.

As you read along, you may also start to notice patterns.

When to go long, how to identify a reversal, and start selling. Or in the opposite, when to go short, identify a reversal, and start covering.

It boils down to what the topic is about, what it means, and how you can apply it for yourself.

So while there is a lot of information to absorb, the key is to find what makes sense to you, and how application leads to results.

 

memories pain regret trading

2. 3 Key Takeaways

i. [Support and Resistance] Memories, Pain, and Regret (pp.76-77)

“Support and resistance exist because people have memories.” (p.76)

When it comes to looking at stock charts, one of the primary things to learn is to look at the support and resistance levels. While these are not difficult to spot, it does take more skill to understand what these levels mean.

Essentially, these support and resistance levels come to be because traders have memories of these price levels.

And, along with these memories, accompanying feelings of pain and regret.

In the context of an uptrend, bulls regret not buying more, and do so at support levels. Bears, on the other hand, feel pain from shorting the market, and are looking for a chance to get out.

The reverse holds true for downtrends. Bulls feel pain and look for a chance to get out in a rally. Bears regret not shorting more, and do so at resistance levels.

Both parties are looking for second chances in the market. This comes either from the regret of a missed opportunity, or the pain of a losing position.

While this is a takeaway from the next sub-section, it is also noteworthy that the strength of the support and resistance area is dependent on 3 factors. Namely the (1) length, (2) height, and (3) volume of trading.

Suffice to say, a support and resistance zone is stronger when the:

  1. Length of time/number of “hits” is longer;
  2. Zone is taller;
  3. Volume is greater.

 

book review volume-based trading indicators

ii. [Volume-based Indicators] On-Balance Volume (pp.172-175)

Together with (1) volume, (2) open interest, (3) Herrick Payoff Index and (4) time, volume-based indicators make up the 5 “neglected essentials” in trading.

As with all indicators, it is how you make meaning of the data which provides you with an edge in the markets. For On-Balance Volume (OBV), it is one of several technical indicators which enable one to analyze volume in the markets.

Why volume matters, is that it represents the intensity of emotions of market participants.

When there is a new high in the OBV, bulls are in power, and bears are in pain. In this case, prices would likely rise. The reverse holds true – when there is a new low, bears are in power, and bulls are in pain. In this case, prices would likely fall.

Recall that prices represent the consensus of value (p.173). Volume, on the other hand, is the steam which powers the move.

Which means, that the OBV serves as a leading indicator. It often rises or falls ahead of the price action.

The psychology behind this is that a crowd is more likely to follow emotions than logic – the heart over the mind. That is the reason why volume often precedes changes in prices (p.173).

On that note, when there is a divergence in the OBV from prices, that is also the time in which the indicator gives off its strongest buy and sell signals. Like the point above on support and resistance, divergences which develop over a longer time provide stronger signals than those that only last a couple of days.

 

book review channel trading systems

iii. Channel Trading Systems (pp.247-253)

There are 4 main ways to construct a channel:

  1. A channel line parallel to a trendline
  2. 2 lines parallel to a moving average
  3. Also 2 lines parallel to a moving average, except that the distance in-between depends on market volatility (Bollinger bands)
  4. 2 moving averages – 1 of the highs and 1 of the lows

Each type of channel has its own utility, especially in relation to one’s trading timeframe.

Nonetheless, regardless of the channel(s) in use, the psychology (meaning) is applicable to all.

The analogy here, is that the market is like a manic-depressive person (p.249). At the height of mania, he gets ready to calm down. Similarly, at the bottom of depression, his mood is ready to improve. The channel, therefore, identifies the potential limits of mass optimism and pessimism.

To bring back the bulls and bears in the picture, each animal fights harder closer to home. At the upper line of the channel is where bears are backed against the wall, fighting off the bulls. The reverse holds true at the lower channel line, where bulls are backed against the wall, fighting off the bears.

In the event that a rally fails to reach the upper channel line, it means that the bulls are losing steam. However, if the bulls break through the channel line, this is a bullish indication.

On that note, most breakouts are said to be false – exhaustion moves which are quickly aborted (p.250). Reversals typically follow as professionals trade against deviations.

It is also noteworthy that the best signals are given by a combination of channels and technical indicators which show signs of divergence.

 

book review trading read

3. How do I see myself applying what I’ve learnt

This pillar of the book is saturated with information. Rather than trying to understand and attempt all the patterns, indicators and systems…

Perhaps you can tell that I often find the psychology more interesting. (It doesn’t help that I’m not particularly sensitive with mathematical formulas.) It provides me an added lens to view the price actions. In turn, it helps me to understand what I should be doing in the markets. Plus, how I can develop my strategies to become a better trader.

As much as possible, I like to keep things simple. And if the method doesn’t work, then it calls for a review and fine-tuning.

Though here, I never quite thought about this process as a trading system.

I’ve highlighted a portion of the Channel Trading Systems because, well, I do use trendlines and indicators. So it only dawned on me recently that what I was doing was actually my own kind of trading system.

Ultimately, when there is a systematic way to enable decisions, that takes away the emotional sway of greed and fear.

Where volume-based indicators help, is to potentially identify divergence. While we often look at the price chart, volume may become overlooked and truly, a neglected essential.

As for support and resistance, what struck me was the emotions behind it. And that the longer the time/height/volume, the stronger those levels become as a result of emotional commitment.

 

4. TLDR; 1-liner to sum up this review

Whether it is classical chart analysis like support and resistance, neglected essentials such as volume-based indicators, or various other technical analysis and indicators, they culminate into trading systems which, with an understanding of the kinds of emotions involved, give reliable signals to enable informed trading decisions.

 

book review improve trading strategies

5. Who should read this book section

This is not the kind of book that a complete beginner at trading can pick up and comprehend. I would go as far to say that if you do not have vested interest in the markets, this might even be a pretty dry read.

However, it is excellent for those who are serious about learning how to trade better.

Especially if the goal is to trade for a living, then chapters like the neglected essentials are all the more crucial for your understanding.

At the same time, it is also suitable for anyone who is looking to improve their trading strategies. I am confident that you will be able to gain new insights. What I have shared here is merely the tip of the iceberg.

To sum up this series on Dr. Alexander Elder’s book “Trading for a Living”, I am reminded of the saying that nothing worthwhile is ever easy. Even so, we are blessed that others have already walked the path before us.

To some extent, the road has already been paved.

It is not just showing us that it is achievable. Expending herculean effort to develop a resource like this book takes untold dedication.

“Losers bring money into the markets, which is necessary for the prosperity of the trading industry.” (p.6)

While the odds are against you, surely you have ways to access resources such as this one to elevate your chances of winning.

As we always say, focus on the process, and the result will take care of itself.

 

“A book is a gift you can open again and again.” – Garrison Keillor. But… So many books, so little time! Since our time on earth is finite, may this book review (series) also serve as a sneak preview to help enable your decision. Will this book be the gift that you open again and again?

If you’d like to learn more about systematic trading to better time your trade entries, click the banner below:

Systematic Trading

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15th August 2021 – Position Trading Long: MRVI, … https://www.collinseow.com/20th-april-weekly-webinar-sneak-peak-position-trading-long-new-gild-prior-position-signal-long-ctxs-6-apr-5-2-mrna-6-apr-47-regn-2-mar-22-zm-17-feb-65-weekly-swing-short-new-ptr-bch-wee-3-2-2-2-2-2-26/ https://www.collinseow.com/20th-april-weekly-webinar-sneak-peak-position-trading-long-new-gild-prior-position-signal-long-ctxs-6-apr-5-2-mrna-6-apr-47-regn-2-mar-22-zm-17-feb-65-weekly-swing-short-new-ptr-bch-wee-3-2-2-2-2-2-26/#respond Mon, 16 Aug 2021 05:43:21 +0000 https://www.collinseow.com/?p=13879 Hello everyone! This week Collin shares a list of scan results for today (15 August 2021): Position Trading Long MRVI Prior Position Signal Long AN 2 Aug PEP 26 Jul SNAP 26 Jul YUM 26 Jul MDLZ 19 Jul NKE 28 Jun ADBE 21 Jun NVDA 14 Jun DKS 22 Mar Prior Position Signal Short […]

The post 15th August 2021 – Position Trading Long: MRVI, … appeared first on The Systematic Trader | Trading Courses.

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Hello everyone!

This week Collin shares a list of scan results for today (15 August 2021):

Position Trading Long
MRVI
Prior Position Signal Long
AN 2 Aug
PEP 26 Jul
SNAP 26 Jul
YUM 26 Jul
MDLZ 19 Jul
NKE 28 Jun
ADBE 21 Jun
NVDA 14 Jun
DKS 22 Mar
Prior Position Signal Short
NIL
Weekly Swing Long
Prior Weekly Swing Long ( Take Profit Progressive)
DJI 21 JUN
Prior Weekly Swing Short (Take Profit Progressive)
NIL
Long Term (1-2 Years buy more when drop, DCA)
STI Apr 2020
H78 Jul 2020
0045.HK Jul 2020
700.HK Jul 2020
ETH Jul 2020
FEYE Jan 2021
PSLV Jan 2021
SILJ Feb 2021
———————–
S&P500 PD Blue, PW blue
Hedge 30%
Market turning more bullish. We are still in mid recovery.

———————–

Click the picture below to watch the video and find out more.

Enjoy the video!

If you’d like to learn more about systematic trading, click the banner below.

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8 Best US Sector Stocks in 2021 https://www.collinseow.com/sector-stocks-2021/ https://www.collinseow.com/sector-stocks-2021/#comments Fri, 13 Aug 2021 06:58:33 +0000 https://www.collinseow.com/?p=13848 This article is for education purposes only, and not to be taken as advice to buy/sell. Please do your own due diligence before committing to any trade/investment. 8 Best US Sector Stocks in 2021 2021 has been the year where investors have been introduced to unique investment themes, notably special-purpose acquisition companies or SPACs for […]

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This article is for education purposes only, and not to be taken as advice to buy/sell. Please do your own due diligence before committing to any trade/investment.

8 Best US Sector Stocks in 2021

2021 has been the year where investors have been introduced to unique investment themes, notably special-purpose acquisition companies or SPACs for short and Cryptocurrencies, being the two key investment asset classes that have garnered the most attention, particularly at the beginning of 2021.

Both SPACs and Cryptos have since lost some steam (and interest) with their prices correcting substantially from their peak in 1Q21.

It is alright in my opinion to have a small portion of one’s portfolio being allocated to such “high-risk, high returns” investment assets but ideally, an investor should build a diversified portfolio with exposure across a wide variety of sectors.

While there will always be the next fad and hot trade, it is important to hold a core portfolio of stocks that can withstand all sorts of economic conditions. Typically, one can divide up the market into 11 key sectors:

  1. Communication Services,
  2. Consumer Discretionary,
  3. Consumer Staples,
  4. Energy,
  5. Financials,
  6. Health Care,
  7. Industrials,
  8. Information Tech,
  9. Materials,
  10. Real Estate, and
  11. Utilities

pie chart sectors

Which are some of the best stocks to buy in each of these sectors? We look to screen for these blue-chip stocks (in the S&P 500) using the Stock Rover screener where these stocks are ranked in the Top 2 Decile (out of 10) of their respective sectors based on the following criteria:

  1. Profitability: Companies with the highest Return on Assets and Return on Equity values
  2. Growth: Companies with excellent growth prospects, based on their 5-year history and also the forward estimates for EBITDA, Sales, and EPS growth
  3. Quality: High-quality companies by comparing profitability and balance sheet metrics. The computation includes ROIC, net margin, gross margin, interest coverage, and debt/equity ratio values
  4. Sentiment: Companies that the market favors by comparing short interest ratios, returns over several periods within the last year, Price vs. 52-week high, days since 52-week high, and MACD signals

I further screen for these stocks to ensure that they are consistent outperformers vs. the S&P 500, where every single one of them has outperformed the S&P 500 over the past decade (YTD, 1-year, 3-year, 5-year, 10-year). Do note that despite these stocks’ historical track record of outperformance, it is never representative of their future price behavior.

Here are the best stocks to buy in the 8 different sectors. The EnergyReal Estate, and Utilities sectors have been excluded as there are no viable candidates that met the stringent screening criteria set out above.

 

1. Communication Services: Alphabet

Alphabet’s Google is a stock that needs no further introduction and this blue-chip behemoth has generated excess returns of 34% YTD vs. the S&P 500 which is huge considering its mega-cap size and most pundits are betting that this stock will be the 3rd 2-trillion dollar market cap stock after Apple and Microsoft.

Google Search is the world’s most popular search engine, Google Chrome is the world’s most popular browser and YouTube is the third-most profitable streaming service, behind Disney and Netflix. Alphabet’s market-leading position in these areas has enabled the company to collect troves of consumer data, propelling Google to the forefront of the digital ad industry, another hyper-growth industry of the coming decade.

Alphabet has also been actively investing in the Artificial Intelligence industry through its stake in DeepMind and Waymo. While neither of the business is currently profitable, if they achieve success in the future, that could dramatically transform Alphabet’s business over the coming decade.

Best sector stocks (Alphabet)

Now looking at the TradersGPS chart, this is pretty much a supermodel stock. If you had re-entered the stock on the signal in the beginning of April around $2246/share, you would be up by approximately $500/share.

alphabet google best US sector stocks

 

2. Consumer Discretionary: Pool

Pool is a consumer discretionary stock that I have previously highlighted as one of the best blue-chip growth stocks that have 10 years of earnings growth track record and consistently outperform the S&P 500.

Pool distributes swimming pool supplies and related products. A very simple business model that sells national-brand and private-label products to approx. 120,000 customers. The products include non-discretionary pool maintenance products like chemicals and replacement parts as well as pool equipment like packaged pools (kits to build swimming pools), cleaners, filters, heaters, pumps, and lights.

The company’s main target consumers are pool builders and remodelers, independent retail stores, and pool repair and service companies.

COVID-19 has been a boon for the company as stay-at-home measures and social distancing have encouraged a boom in discretionary spending on the home and garden segment. Naturally, investors are concerned that the strong growth seen in 2020 will fade away in 2021 as reopening takes shape.

However, the company reported a torrid 57% YoY revenue growth in 1Q21 even as the pandemic recedes in the US, which management believes that the trend of work-from-home is here to stay. This is one “work-from-home” company that is likely under-mentioned by the street.

Best sector stocks (POOL)

After a period of consolidation, POOL has been on a strong uptrend the last 6 months. With entry signals as recent as late June and early July, catching the entry around $441/share is not too bad with the current price at $485/share.

POOL US stock sectors consumer discretionary

 

3. Consumer Staples: Estee Lauder

Estee Lauder is the world leader in the global prestige beauty market, participating across skincare (52% of 2020 sales), makeup (33%), fragrance (11%), and haircare (4%) categories, with popular brands such as Estee Lauder, Clinique, MAC, La Mer, Jo Malone, Aveda, Bobbi Brown, Too Faced, and Origins.

The firm operates in 150 countries, with 26% of revenue stemming from the Americas, 44% from Europe, the Middle East, and Africa, and 30% from Asia-Pacific.

The company sells its products through department stores, travel retail, multi-brand specialty beauty stores, brand-dedicated freestanding stores, e-commerce, salons/spas, and perfumeries.

While COVID-19 has resulted in its earnings performance taking a hit in 2020, the company’s earnings have rebounded strongly in 2021, with growth driven by consumer spending in Asia as well as its online foray. The company is expanding virtual try-ons and live streams of tutorials led by make-up artists and brand ambassadors. Such strategies are leading to greater consumer engagement and conversion.

Another innovation driving online sales is EL’s introduction of ingredient glossaries for some of its popular brands such as Aveda.com which increase product awareness and consequently translating to consumers spending 3x longer on Aveda.com than on average.

This is one consumer staples stock that will be a survivor even if the COVID-19 situation takes a turn for the worst (hopefully not). Which ladies don’t like to look good?

Best sector stocks (Estee lauder)

EL has no doubt been trending up over the past year. It appears that from early July, this counter has been gaining momentum once more. Interestingly, there could be another opportunity to scale-in a position into EL.

EL US stocks consumer staples

4. Financials: T-Rowe

T-Rowe is a company that provides asset management services for individual and institutional investors. It offers a broad range of no-load US and international stock, hybrid, bond, and money market funds. At the end of 2020, the firm had close to $1.5trn in managed assets, composed of predominantly equity (61%), balanced (28%) and fixed-income (11%) offerings.

Approx 2/3 of the company’s managed assets are held in retirement-based accounts which provides T- Rowe Price with a somewhat stickier client base than most of its peers.

The asset manager has a few key competitive advantages that investors should know about:

T. Rowe Price is an active manager, although back in Aug 2020, the Group ventured into the ETF space by launching 4 new ETFs: the Blue Chip Growth, Dividend Growth, Equity Income, and Growth Stock ETFs.

As an active manager, the Group also has a fantastic track record of beating both its peers as well as the indexes. Its active management prowess should lead to more inflows and revenue in 2021. Already, its 1Q21 revenue is up a solid 25% on a YoY basis and that should set it on course to yet another record-breaking year in terms of top-line performance.

The Group has a pristine balance sheet, with almost no long-term debt and has $2.8bn in cash and cash equivalents as of 1Q21. Its great balance sheet has enabled the company to maintain its status as a Dividend Aristocrat, with 35 years of consecutive dividend increase.

Best sector stocks (T-Rowe)

Do you see the similarity with TROW’s TradersGPS chart and GOOG? Indeed, this is also another supermodel stock, showing no signs of letting up at all.

TROW US sectors stock financials

 

5. Healthcare: Idexx Laboratories

IDEXX laboratories primarily develop, manufacture, and distribute diagnostic products, equipment, and services for pets and livestock. Its key product lines include single-use canine and feline test kits that veterinarians can employ in the office, benchtop chemistry and hematology analyzers for test-panel analysis on-site, reference lab services, and tests to detect and manage disease in livestock.

Essentially, IDEXX offers an all-in-one suite of products that handle everything from workflow management to blood and chemistry analyzers, even offering outside reference labs for smaller practices that wish to get accurate and timely results in 2 days or less.

IDEXX makes money when pet owners visit their veterinarians and run diagnostic tests. COVID-19 initially hurt its business, where the onset of the pandemic had people running scared to bring their pets in for treatment. But initiatives taken subsequently such as curbside pet drop-off made the visits safer.

IDEXX is also one of the 8 outperforming stocks I highlighted back in May 2020 which investors should consider getting into.

This is one pet stock that is treating its shareholders well and should continue to maintain its outperformance vs. the market in the coming decade.

Best sector stocks (IDEXX)

According to TradersGPS, entry signals re-appeared from late May after a momentary break of support. Continuing its upward trend, entry signals have come up in June and July as well. Now, to see what August brings.

IDXX healthcare sector

 

6. Industrial: Generac Holdings

Generac Holdings is a name that most would likely not be familiar with, despite the company sporting a market cap of c.$28bn.

Generac Holdings Inc designs and manufactures power generation equipment and other engines- powered products serving residential, commercial, oil, gas, and other industrial markets. It offers standby generators and portable and mobile generators for a variety of applications. In addition, the company offers lighting, heating, pumps, and outdoor power equipment.

Generac reports sales in multiple divisions: residential, commercial and industrial, and others. The company can produce a wide range of engine products from certain stationary generator solutions to much larger multimegawatt systems. Sales generated in the United States currently account for the majority of total sales.

This company is seen as a long-term play on the rise of renewable energy such as solar energy. The energy transition from traditional fuel to renewable creates demand for energy storage as the variable nature of renewable energy means backup generators which Generac Holdings provide, have a crucial role to play.

While the counter is undoubtedly “richly” valued currently, this is one stock that scores well in all areas of growth, profitability, quality, and investors’ sentiments.

Best sector stocks (Generac)

Although GNRC has a bullish trend on the long-term, it appears to be undergoing a correction recently. This potentially provides entry opportunities for this counter, making a spot on the watchlist.

GNRC industrial stock US

 

7. IT: Intuit

Intuit is a provider of small-business accounting software (QuickBooks), personal tax solutions (TurboTax), and professional tax offerings (Lacerte). Founded in the mid-1980s, Intuit controls the majority of the U.S. market share for small-business accounting and DIY tax-filing software.

The stock has outperformed the market by > 20% YTD, likely the result of a solid earnings report in late May driven by one of its core products TurboTax. Intuit is also showing encouraging progress at selling complementary services such as its “premier” brand that is targeted at investors.

The company’s recent acquisition of Credit Karma has shareholders excited about a brand new revenue stream in the niche software services sector.

One of the key value propositions of Intuit is its high cash balance. The company is a cash cow, gushing out consistently higher operating cash and building up its cash hoard to the tune of over $4bn. This also enabled the company to continue growing its dividend payment which has been rising consistently over the past 10-years.

Considering that extra income and the fact that the company could be driving sales higher by 30% in the coming fiscal quarter, this is a consistent price outperformer that will likely maintain its solid track record for the rest of 2021.

Best sector stocks (Intuit)

INTU’s bullish momentum appears to have strengthened after breaking out of its consolidation towards the end of May. No signs of letting up, for now. Catching this breakout trade at $443/share would mean an approximate 20% gain at the current price of $535/share.

INTU IT stock US

 

8. Materials: Sherwin-Williams

When people think of materials, they tend to think of mining. That’s a tough game in terms of profitability. With an iron or gold miner, there’s usually a boom and bust cycle that doesn’t always turn out well for investors.

Nonetheless, miners are slowly gaining favor among investors as these corporates start focusing on returning excess cash to shareholders in the form of dividend payments vs. Capex spending.

Sherwin-Williams gives investors exposure to materials without the nasty volatility. Paint may not be a sexy trade to be in, but it sure is profitable. Sherwin-Williams has built a great business model as well. It has a huge network of retail locations, and it pairs that with strong partnerships with local painting contractors.

Sherwin-Williams can charge attractive prices for its paint because its professional customers know they’ll get a reliable product and excellent customer service. Business is currently on an upswing, thanks to the surging housing market and this trend seems likely to continue in the foreseeable future.

Regardless, Sherwin-Williams’ stock has gone up tenfold over the past decade, as its business tends to prosper in all weather. This might also be because the company has been a strong dividend grower over the past decade. The company grew its dividends from $0.49 in 2011 to $1.79 in 2020 (after accounting for stock split). This payment is expected to further increase to $2.20 in 2021.

I have also highlighted SHW as one of the 6 dividend growth stocks to invest in that can help one achieve millionaire status over 20 years.

(SHW) stock chart

After a recent pull-back, SHW is making all-time highs with its share price. Following which, the first entry signal has just appeared last week. Traders could keep a lookout for this counter for opportunities to scale-in their positions into SHW.

SHW materials US stocks

 

Conclusion

These are some of the best stocks to buy in their respective sectors that are ranked favorably by the Stock Rover screener and have also demonstrated consistent outperformance vs. the S&P 500.

All of these stocks are large-cap blue-chip names that have continued rewarding shareholders over the past decade. Investors who are interested to diversify their portfolio across different sectors could consider these names as potential investment candidates.

This is by no means an inducement to buy or sell the stocks highlighted in this article and I will also like to highlight once again that past performance is by no means representative of their future performance.

 

If you enjoyed reading this article and various other investment + personal finance articles, do visit New Academy of Finance. Royston has more than 10 years of buy and sell side experience as a financial analyst. He constantly posts interesting, valuable and actionable articles.

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5 Things to Consider When Choosing Your Brokerage Account https://www.collinseow.com/beginner-guide-brokerage-account/ https://www.collinseow.com/beginner-guide-brokerage-account/#respond Thu, 05 Aug 2021 08:56:23 +0000 https://www.collinseow.com/?p=13826 Or perhaps, I should rename this article “5 Things You Wish You Knew When You Chose Your Brokerage Account”. Is it just me, or do you also hear such questions/comments? “How come your commissions are so cheap?! Mine is $X per trade!” “Do you know what this means (referring to Y function/ Z figure in […]

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Or perhaps, I should rename this article “5 Things You Wish You Knew When You Chose Your Brokerage Account”.

Is it just me, or do you also hear such questions/comments?

  • “How come your commissions are so cheap?! Mine is $X per trade!”
  • “Do you know what this means (referring to Y function/ Z figure in their trading app)”?
  • “Wait you mean I can’t trade A market / B vehicle on my account?”

Based on my social circles, I have also observed that the first comment tends to come from an older age group, and the second from a younger group.

In the first case, I would attribute this to a lack of access. Either to information, or to opening the desired brokerage account at the time.

In the latter case, all research concerning fees have been done but alas… They jump into the brokerage account, only to find questionable functions and numbers. Which give a nagging feeling that one should understand how these work before unwittingly causing any trouble.

Let’s face it: Brokerage accounts are not made equal.

It’s not a matter of choosing any one because they are all similar. Certainly, each has got their own pros and cons.

The more important point is, it has got to serve your needs.

In part 1 of this Beginner’s Guide series, we established that our financial journeys are personal and unique to us. Simply put, your friend’s choice of brokerage account may not suit your goals and your style.

If you’ve already got an idea of what you want in a brokerage account, head on to this Seedly article for a comprehensive comparison. It should help you arrive at a decision quickly.

But if you don’t have a clear picture yet, this article is exactly for you.

 

brokerage account trading markets

1. Which market(s) do you plan to trade / invest in?

As I was saying, brokerage accounts are not equal.

No doubt that fees are often at the top of any trader/investor’s mind. However, knowing which market it is that you wish to partake in should, in my opinion, be of foremost consideration.

The typical choices would be the US, Hong Kong, as well as the local market (Singapore).

Not all brokerage accounts will provide you access to all 3 markets.

Of course, if you decide that you are only going to partake in, say, the US market, then that is already 1 filter in your search for the ideal brokerage account.

On the other hand, if your plan is to invest and collect dividend payouts from Singapore stocks, then you would be looking for a different kind of brokerage account from someone who is looking to trade the US market.

It could also be the case that you’re planning to partake in all 3 markets. Or perhaps, looking for opportunities in other overseas markets as well. Then, you need to ensure that your prospective brokerage account will be able to give you that access.

 

brokerage account leverage tools

2. Does it have the vehicles that I want to utilize?

I’ve covered an overview of the vehicles available earlier in part 2 of this series, but that is by no means the full list.

Here, I would like to bring your attention to 2 additional vehicles that are commonly utilized by traders – Options, and Contract for Differences (CFDs).

Essentially, both are derivatives. In the context of trading the stock market, the underlying asset would be the individual stock/ETF. In trading either options or CFDs, you do not actually hold the stock. Instead, you trade the contracts (that are based on the underlying stock/ETF) to generate returns.

Both are also leverage tools which, if well-utilized, could significantly boost your returns. However, as with all financial instruments, do understand the risks involved. Money management becomes even more crucial as you need to know how to protect your downside. Unbeknownst to many, utilizing options could actually aid you with reducing your risks compared to trading stocks.

So when it comes to your choice of brokerage account, while stocks would naturally be available… Not all brokerage accounts allow you to trade options or CFDs.

If you are looking to potentially accelerate your trading game, I highly encourage you to learn how to utilize such leverage tools. While it can get confusing and overwhelming at the beginning, nothing worthwhile is ever easy, right?

 

brokerage account commission fees charges

3. What are the fees like?

Commission ($ or %), wiring fees, holding fees, minimum funding, conversion rate…

The list goes on.

Again, depending on the brokerage account, there is typically a combination of fees involved.

Thankfully for us, nowadays there are ready comparisons done up just like this one by MoneySmart.

Some points of consideration when thinking about fees, would be the frequency of your orders. For instance – are you looking to invest or trade? Would you be looking to execute orders on a daily / weekly / monthly basis?

If the commission is charged based on a percentage instead of a dollar value, for comparison sakes, it would help for you to do up rough calculations as well. Having a sense of how often you would place orders would allow you to make more informed decisions on the best fees for your style of trading/investing.

Don’t forget as well – if you are looking to trade options or CFDs, make sure that you are comparing the rates for those, and not just for stocks.

 

brokerage account navigating interface

4. Am I able to navigate the platform interface?

The truth is, when it came to opening my own brokerage account, I had proudly done my research on the above 3 points. I had filled in the account application, downloaded the app and was raring to go… Until I finally stumbled at this part.

I wasn’t able to navigate the platform’s interface.

Despite watching numerous YouTube tutorials and attempting trades in the paper money mode (I had not funded the account yet), it was ultimately the lack of confidence to execute my desired options trade which crushed me.

Ease of navigation of the platform interface matters. Besides that, you could also consider these 2 additional factors: (1) technical indicators, and (2) mobile app interface.

If you would like to have technical indicators in your brokerage platform to help time your entries, it would help to check that the indicators which you have in mind are indeed available. And that you’re able to navigate the way to add them into your stock chart.

Trading via mobile apps seems increasingly commonplace as well. If this convenience suits you, it might be worth checking out if the mobile app’s interface is your cup of tea.

 

customer service support

5. How long does it take for my account opening application to be processed?

Last but not least, bear it mind that it might take some time for your application to be processed.

The longest time that I have heard for a popular brokerage firm to process an account opening application, is 3-4 months.

On the other hand, I have also heard of some which are able to open almost immediately.

Alternatively, there is another combination which some of my friends undertake. While awaiting updates on the application status for the popular firm, they start trading with another account with quicker opening in the meantime. This could also work for you, especially if there are different markets/vehicles involved anyway.

On that note, the support from the customer service team would also matter. Whether it is to check in on your application status, or some queries regarding the platform interface, or more crucial questions regarding your monies, it is important to receive a timely response.

In fact, an earlier advice that I had received in deciding on my brokerage account, was to ensure that there was a local office here in Singapore. Supposedly “in case of anything”, we could rely on physical access to a local office to have our issues resolved, or have the authorities step in if it came to that.

Thus far email correspondence had worked for me, so I never had to think about other methods. But I guess, it doesn’t hurt to have an extra safety net of sorts.

 

goals trading investing

Conclusion

As you apply these considerations and start to narrow down your options, you should arrive at a good selection of brokerage account providers.

Nowadays, there are some deal sweeteners as well. These come in the form of promotions, which gift you with shares of popular stocks when you open and fund your account with the brokerage firm. The terms and conditions vary from promotion to promotion, but this could be the incentive you need to start.

Speaking of promotions – if it sounds too good to be true, it probably is.

Please stay vigilant to not fall prey to shams and scams!

Conduct your due diligence and ensure that these are legitimate providers with a history behind them. Ask around if you’re in doubt – if you could use a community’s support, come join us here.

After all, the last thing you want when beginning your trading or investing journey, is to lose your funds even before you could attempt to grow it.

Remember that ultimately, your choice of brokerage account should suit your needs. If you’re still unsure and yet to have it figured out, go with the one you feel most confident about, and work it out from there.

In case you’re up for more research, I’ll leave you with 2 in-depth reviews on Investopedia and StockBrokers, and another including local options on SingSaver.

A little more research doesn’t hurt, and getting into the habit of doing your own due diligence is nothing short of good practice.

 

Can anybody start trading and investing on their own? If you’ve read up to this point, the answer is a resounding yes. Stay tuned to the next parts of the series as we adopt a systematic approach in generating a step-by-step beginner’s guide.

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