Swing Trading vs. Intraday Trading: Which is Better?

When it comes to trading, most people think that trading is stressful and boring because it involves staring at a screen the whole day and watching prices move, and then having to execute trades at lightning speeds to make any profits.

That is quite often what is shown in the movies, and very much dramatized.

In reality, there are many different kinds of trading, and here is a simple infographic depicting the main categories.

Source: Forex Useful

 

Generally, what you see in the movies tend to depict scalpers and day traders, which is the most stressful kind of trading. I myself tried it for a couple of years, but it started to take a toll on my health, which I decided was not worth the money, even though it was pretty good.

Position trading is more useful in timing the market to build your long-term portfolio, as I mentioned in my previous blog post: http://synapsetrading.com/2018/05/how-to-build-a-1m-dollar-portfolio-by-30-the-practical-stuff/

Hence, I find that the most useful kind of trading for anyone who is doing it part-time, or does not want to get too stressed out, is to use a swing trading approach. This means taking tactical positions to capture the medium to long-term trends.

With just 15 minutes a day, it is more than enough for me to place and manage my swing trades, which leaves me more free time to focus on the things that matter in life.

Of course, there are some drawbacks to swing trading as well, for example your income will be more lumpy as compared to intraday trading, and you will need a ton of patience in waiting to enter the perfect trades, and also waiting for trades to play out.

In summary, the type of trading style really depends on each individual personality and amount of free time, but personally I prefer to use the swing trading approach because it gives me the best returns for my time and effort.

Do you know what is your preferred style, and does it play to your strengths? 😀

 

How to Build a $1M Dollar Portfolio by 30 (The Practical Stuff)

This is the dream of many millennials, to build a million-dollar portfolio as soon as possible, so that they can live off the passive income, and focus on pursuing their dreams, interests or hobbies, without having to worry about money any more.

When I was in my 20s, that was my dream as well, which was why I read hundreds of books ranging from investing, trading, psychology, motivation, philosophy, biographies, businesses, digital marketing, finance, accounting, etc. And that was when I realised that most of wealth creation boiled down to 3 simple core principles.

1) Multiple sources of Cashflow

The first thing you need to get started is a solid base capital, so at the start if you do not have much capital, almost all your time and resources should be focused on generating as much cashflow as possible to build up your ammunition.

If you have a well paying job, then you can start saving aggressively, but to speed up the process, most people will seek to generate multiple sources of income or cashflow. Some examples include working a side job, starting an online business, etc.

For me, I decided to use forex trading, because it did not require much capital to start, and also because I did not have much spare time, and could only afford to spend 15-30 minutes a day. Now, it provides me a steady monthly cashflow, which allowed me to move on to step 2.

2) Timing your portfolio purchases

Once you have sufficient capital and consistent cashflow, the next step is to start building your long-term portfolio. Start by having a rough idea oh what your ideal portfolio is, and what kind of risk/return profile you are looking for. Look out for assets that have a good chance of capital appreciation, as well as passive returns in the form of dividends or rental yield. Over time, I tend to favour having more “passive income” type of investments.

Do not be in a hurry to buy everything at once. Watch and study the market cycles, and aim to buy stuff only when they are cheap or “undervalued”. This can be done easily by looking at the charts of any product over the past 50-100 years of history. There is no need to spend hours reading financial reports or analyst reports. Remember, our goal is to get the most out of our limited time.

3) Re-invest the passive income

As your portfolio grows, and you continue to add to it via your monthly cashflow contributions, the real kicker is when the effect of compounding kicks in.

The best way to do this is to also re-invest the passive income which you get from the portfolio itself, creating a snowball effect which will literally grow your portfolio exponentially.

Once you have assembled your ideal portfolio, all you need to do is to check on it once every 3 months or so, and do some rebalancing. In the meantime, you can pretty much enjoy the fruits of your labour, and focus on living your life instead of having to worry about money.

For me, this means travelling around the world (50+ countries to date!), and sharing my knowledge to inspire and help others do the same.

Now, are you ready to start building your own portfolio?

Recent Travel Highlights: Philippines – Photos Are Finally Out!

Last month, I went for a short trip to the Philippines, firstly to Manila as an invited guest speaker at the Traders Fair Expo, before making my way down to Pico De Loro for some sun and beach. 😀

Currently, I am on a 1-month road trip in the US, and I will be sharing more insights and photos once I am back!

Along the way, I will be sharing some nuggets of wisdom on trading and investing on FB live: https://www.facebook.com/synapsetrading/

For those who love adventure and real-time updates, do follow me on Instagram and Facebook as well.
My personal FB: https://www.facebook.com/iamrecneps
My Instagram: https://www.instagram.com/iamrecneps/

 

Here are some photos from my last trip:

Here is the full photo album for this trip: https://www.facebook.com/iamrecneps/media_set?set=a.10156319709623430.1073741850.530303429&type=3

Good luck, and something really exciting is brewing! 😀

Will the Stock Market Crash or Continue Going Up for Another 10 Years?

Since the crash of 2008, and the recovery which started in 2009, the stock markets (especially the US markets), have been on a steady uptrend.

Chart: S&P 500 index (weekly chart)

Many of us have heard about the 10 year cycle, where the market is supposed to crash once every 10 years, for example the Asian markets during the 1997 currency crisis, and the global markets in 2007 during the subprime crisis.

However, in 2017, we did not see any significant crash or correction, which have led many analysts to rethink the theory.

Now, it is 2018, so should we be expecting a delayed crash, or are we experiencing a structural change in the markets?

If we observe the supercycles of major human technological innovations, we see that each major wave of progress is driven by a major technological innovation, such as the steam engine in the 1700’s or the internet and IT advancements in the 1900’s.

And based on the cycles, we could be in the early stages of the 6th wave, which is going to be driven by the upcoming huge advancements in applications of big data, artificial intelligence, virtual reality, augmented reality, internet of things, and blockchain technology.

Source: The Market Oracle

This means that we could be on the cusp of a super bull market, if these technological advancements are able to create a quantum leap in productivity for businesses and a huge jump in the standards of living across the globe. All these would translate into stronger stock prices, which instead of crashing the market, would propel it to new heights.

However, there are also major concerns:

  • Unequal gains across companies: the major tech companies may soon dominate all industries via the application of new technologies.
  • High unemployment: If machines take all the jobs, what are humans going to do?
  • High debt and leverage of US and European economies
  • Political risks: clash of superpowers (US and China)

In summary, many retail investors are wary of entering the stock market now because it is at all time highs and has already “gone up a lot” since 2009, hence they are waiting for a “big crash” before going in. However, this big crash may not come if successful widespread application of new technologies and innovation are able to drive a quantum leap in productivity.

P.S. I talked about this during my previous FB live session here, and there are many new exciting topics that we discuss every week!
Official FB page: https://www.facebook.com/synapsetrading/

P.P.S. Next week, I will be heading to Silicon Valley to explore the latest technologies and innovation at some of the biggest tech companies, join me for live updates here:
My personal FB: https://www.facebook.com/iamrecneps
My Instagram: https://www.instagram.com/iamrecneps/

Cheers! 😀

Thank You For the Invitation to Speak in Philippines!

Last week, I was invited for another overseas speaking engagement to share about my “15 minute trading strategies”, and this time it was in Manila, Philippines.

After speaking at the Traders Fair, I was also invited to join the Gala Dinner at night, and since I was in Manila, I decided to take a couple of days off to tour the place, and also visit a beach resort.

I will be writing more about my trading & travelling adventures in the next blog post. 😀

 

Checking in before the main event! #tradersfair #manila

A post shared by Spencer Li 🇸🇬 Synapse Trading (@iamrecneps) on

Feeling high 🥂🍾😆 #manila #tradersfair #finexpo

A post shared by Spencer Li 🇸🇬 Synapse Trading (@iamrecneps) on

 

Click here for full photo album: https://www.facebook.com/pg/synapsetrading/photos/?tab=album&album_id=10155768976657933

Once again, a big thanks to the organisers! 😀