At the SGX Academy’s Practical Insights to Technical Trading talk earlier this year, our specialist trainers in Trading shared their best tips for technical analysis.
Missed it? No problem. We summarise the top 3 tips from the session:
1. Trade in harmony with the markets
It is important to understand how the market is performing in a specified timeframe. Traders should first seek to understand the general market sentiment. Is it a "fear", "greed" or "hope" phase? This will give traders a good idea of where the market is going.
Markets are either trending up, trending down, or are in sideways or range bound congestion. Instead of trading against the market, trade in harmony with the direction it is moving.
2. Use stock charts for longer trades
Technical analysis is not just for day traders. Fundamental analysis can lag behind technical analysis because it is driven by factors like financial reports, which are released on a quarterly basis. Stocks with a "buy" call may reflect fundamental information known at a particular point in time (eg. prices trading on an uptrend) but circumstances may have changed by the time the call is issued.
Stock charts are more dynamic as they reflect the latest stock price, which takes into account all factors, including fundamental factors. Investors and traders with a longer time frame should make use of charts to aid their buy and sell decisions.
3. Use new technologies for analysis
Technology gives short-term traders an edge. For example, notable Singaporean trader Robin Ho uses programmes that filter and extract key information on price action and volume to achieve consistently profitable trades, while trader Yong Chin Hiong, using a self-developed systematic trading method called the Low Risk Matrix Model, analyses how minimum price movements in indexes trigger incremental changes in the price of structured warrants that track the index.
Wish you were there in person? Our upcoming courses for the SGX Academy can be found here.
About the Authors
The six experts for this SGX event are AB Maximus trainers specialising in the topic of Trading.
Jeffery Tie has over 30 years of experience in trading stocks and futures. He has worked for Refco Singapore and CMC markets.
Philip Teo works as a professional technical analyst in a Singapore bank-based stockbroking firm.
Yong Chin Hiong specialises in trading index warrants through his own trading desk. He previously worked for PhillipCapital.
Brandon Leu, CMT, CFTe, lectures on trading and technical analysis for the SGX, Bloomberg, SMU and NUSS. He has worked for HSBC and UOB KayHian.
Wong Kon How conducts workshops in securities and derivatives for investment banks, institutions, brokers and regulators. He has over 20 years of trading experience.
Robin Ho is a top trader in PhillipCapital. He teaches remisiers and professional traders about investment. He has worked for Kim Eng Securities.