For those who have read my blog over a period of time, you would have learned some tips on how to trade in the Singapore market. For the benefit of those who have, I would like to collate and summarise those pointers in this post. The main reason why I am doing this is that many traders are probably looking for a more stable market following the rout in the crypto and more volatile markets. Additionally, there will also be traders who are still puzzled about why would people trade in such a slow market hence some clarification might be helpful as well.
Slow and Steady = more predictable
Many traders think that faster markets help them to enter and exit faster and that results in faster profits. That is true only to a small extent as every trader is looking out for better prices to buy or sell in such markets. As such, traders in these markets might not be able to consistently buy and sell over time. Being a trader, consistent results not only helps with generating profit but also cultivate habit over time. This will in turn allow traders to be more sensitive towards the counters that they trade and secure themselves a list of price points that they can use confidently.
Look out for dividend announcements
Holding stocks for dividend is no longer a sustainable way to invest in the long run. Judging by the profitability, growth and the potential for growth of a company, you can actually predict if the company’s stock price will hold steady or even rebound right after it cuts dividends. This is not the case for companies that are paying off dividends even when their business is still struggling or pales in comparison to its competitors in the market. In such cases, you would have realised that selling before the ex-dividend date and buying back after the market dips will almost certainly be more profitable for traders.
Dont look back if the price has surpassed your last exit
Being trader in the Singapore market, you have the benefit of dealing with a market that is more conservative than others. Although it will not go up or down a huge amount regularly, you can trade within a comfortable range that still makes sense (cents) over time. For example, if the stock has hovered around $0.60 to $0.75, then you can trade the stock up and down the trend lines with almost zero need to predict when it hits. All you need to do is to keep your entry and/or exit orders active and get ready for the market to hit the right price and fill your order. However, when the price can exceeded your range or last exit, then you should consider transfering your capital to another counter that might require more capital in the meantime.
Closing Thoughts
To sum up, trading in the Singapore market is a lot less stressful but yet it is still profitable if you maintain your discipline and practice proper capital management. A slower market will benefit those who are consistently participating and waiting for a realistic and expectable strike price. Compare to faster markets with irregular price movements, you can hone your trading skills without too much reliance on luck and that is one of the greated benefits of trading in a slower market.
