Spot-on market analysis and insights from the trading desk

Why I am Planning to Liquidate my Full Portfolio of Singapore Stocks

Announcement: I will be taking a long break to focus on my trading and coaching of existing students (as well as several new exciting projects), but before that I will be conducting one last session of the “Trading Foundation workshop” on 18 May 2017 and the last run this quarter of the “Trading Mastery Program” on 27 & 28 May 2017.


It has been a while since my last update on the Singapore markets (as well as my SG portfolio holdings), largely because the market doesn’t move much, so I only check on them once in a while.

Interestingly, I noticed that the STI has had an impressive run, coming off a low of 25xx to break past the 3000 level in the past few months. However, is this move sustainable?

Taking a closer look at this weekly chart which shows the historical prices over the last 20 years or so, one thing which stands out is that the market has been in a 7 YEAR sideways stagnation.

If we look back at the whole history of the index, this is somewhat unprecedented.

Which could explain why popularity in this market (as well as trading volumes) has been waning. In short, it does seem like a dying market.

Not to mention that during this same time period, the US stock markets have been steadily creeping up.

If we look at the most recent red shaded circle, that is where the current price is, and it seems to be running into massive headwinds. This means that the potential upside could be quite limited.

If we observe the large sideways range that prices have been moving in, the price is now at the top of the range. And we know that the best strategy in a range is to “buy low, sell high”, which means that the odds do not favour much more upside, unless there is some new strong positive price catalyst.

However, a cursory glance at recent news headlines seems to be painting a rather gloomy picture, with muted growth forecasts and ominous employment statistics. This tell me that downside catalysts are more likely that upside ones. In other words, there is more chance of a negative shock rather than a positive shock for prices.

In light of all these factors, I am planning to cash out most or all of my profits, and wait for more favourable odds to redeploy my capital. As a trader and investor, timing is always key.

Good luck, and trade wisely! 😀

P.S. I will be taking a long break to focus on my trading and coaching of existing students (as well as several new exciting projects), but before that I will be conducting one last session of the “Trading Foundation workshop” on 18 May 2017 and the last run this quarter of the “Trading Mastery Program” on 27 & 28 May 2017.

Here’s How I Would Trade the Upcoming French Elections

Announcement: On the next 2 Thursdays (11 & 18 May 2017), I will be conducting the last and final run of the “Trading Foundation Workshop”, after which I will be taking a break from training to work on a new big and exciting project. Don’t miss this last chance to catch me live!


The French election has been a hot topic among financial news outlets, but the hype around it doesn’t yet compare to that of Donald Trump last year.

It was a historic event that saw a roller-coaster in the markets during the exciting vote tallying nail-biter.

Here was how the USDJPY currency pair reacted as the votes were being counted. In the first 5 hours, Hillary was ahead in vote count and the USDJPY fell drastically. But as time went by, the USDJPY rose almost non-stop for 1 month.

 


The USDJPY currency pair 5 hours, 17 hours, and 3 days after the election outcome in the U.S.

In spite of the hype surrounding this event, it is unlikely to be as epic as Trump vs Clinton. France is indeed heading into the most unpredictable presidential election in decades; it is going to affect the EU’s second largest economy, but possibly also the direction of the EU itself. All eyes will be on the Euro currency and it is likely to be heavily traded during the announcement itself.

 

Here’s What You Need to Know

The First Stage of Voting: A candidate can theoretically win through primary contests, known as the first round of voting. He can actually win an election by securing 50% of the votes in this round, where mayors and other officials will vote, but this has not happened since the 1960s.

Two Weeks After the First Ballot: The first round vote took place on 23rd April, leaving two remaining candidates, while the second round will take play on 7th May. After 7th May, French voters will again vote on 11th June and 18th June to elect members of the National Assembly.

Young centrist Macron and populist right-wing Marine Le Pen.
Image Source: trbimg.com

No-Show: More than 22% of voters abstained from voting, the highest since 2002, which is worrying because Macron won 24% while Le Pen won 21.3% of the vote. The progress of the election has been said to mirror that of America last year.

Macron – Frexit-Advocate with Leftist Undertones

Macron recently warned the EU that it must change, or a Frexit, just like Brexit, would be soon to follow. However, he has carefully treaded between being a social support advocate and being market-friendly, a promise that is probably very challenging to deliver.

  • Working Hours: Re-evaluating the 35-hour work week, retirement ages
  • EU Policy: Suggesting that stronger nations within the eurozone engage in financial equalization (this is probably going to be done through budget transfers)

He also promises to “transform and not reform” France, and he has also promised to help a million jobless people find jobs. Among his other promises include removing the huge difference in public and private sector pensions.

The French are not happy with the current president, François Hollande, who chose to not run for reelection. Hollande belongs to the Socialists party, but the nominee of his party only garnered less than 7% of votes in a five-party race. At this point, the polls overwhelmingly show preference for Macron, but given the surprising situation in Brexit and the recent U.S election, uncertainty is likely to plague the minds of citizens and fund managers around the world.

 

Marine Le Pen – The Trump of France?

Recent polls project that Marine Le Pen isn’t expected to become president. However, she seems to represent the wave of populism sweeping across Europe, and a Le Pen victory

Polls show that the poor prefer Le Pen.
Image Source: Telegraph.co.uk

While there are many articles discussing Le Pen’s policies and how they will affect the nation of France, we can view Le Pen’s proposals as being nationalist and protectionist.

  • Stimulating Economic Growth: Government-led improvements in national industries
  • Reduce Bureaucracy: Reduce the size of government and wasteful welfare spending
  • Border Control: France to retake control of its borders
  • Currency Control: Reintroduce the French franc, to be used in circulation alongside the Euro

This resonates strongly with working class voters (I almost seem to be writing about the U.S election), for France has been plagued by high taxes and unemployment for years. She looks like the change that the average citizen is looking for.

 

The Uncertainty Ahead – What Traders Can Do

It is sad that the streets of Paris saw several clashes, and police officers were called to the scene. Three police officers were injured by petrol bombs thrown by rioters, and the police was forced to use tear gas on the demonstrators. It is strangely similar to the violence that surrounded Trump’s victory, but no one can conclude that this is definitely going to happen.

What’s certain is that volatility surrounding the election is going to be high, and several brokers have raised trading margin requirements ahead of the election. In any case, it would be wise to close out your trades and look to re-enter after the volatility. If you have longer-term positions, holding on to them may be a good idea because the market is unlikely to be as volatile as that of the U.S last year, and you are likely to remain unscathed.

  • Close out short-term positions, and look to re-enter after the volatility has ended.
  • Experienced traders can trade small and look for trend-following entries during the event, as forex markets might have prolonged directional bias. Watch closely how price behaves after any initial knee-jerk reaction.
  • Beginning traders are advised to stay away from trading during the election results announcement time.

 

P.S. On the next 2 Thursdays (11 & 18 May 2017), I will be conducting the last and final run of the “Trading Foundation Workshop”, after which I will be taking a break from training to work on a new big and exciting project. Don’t miss this last chance to catch me live!

Research Sources

france24.com/en/20170501-french-political-climate-mirrors-similar-USA-trump-election-surprise
dw.com/en/macron-promises-to-transform-not-reform-france/a-37778318
nationalreview.com/corner/447259/why-everyone-so-certain-about-weekends-french-election
thesun.co.uk/news/3453851/french-election-2017-emmanuel-macron-eu-france-frexit/
theatlantic.com/international/archive/2017/05/french-elections-2017-who-will-win/524775/
fxcm.com/insights/will-french-presidential-election-april-2017-affect-euro/

3 Crucial Lessons From Jesse Livermore – The Greatest Stock Trader of All Time

Jesse Livermore is known to be the most prolific stock trader. Several books have been written about him and his trading track record is legendary. His profits were so great that he was reported to have owned mansions in various places around the world, each fully staffed, complete with limousines and steel-hulled yacht for his holidays.

Some of you might have read that Livermore was worth $100 million after shorting the 1929 great market crash.

Above: Some of the books about Jesse Livermore, available in major bookstores.

What Guidelines Did Jesse Livermore Follow As A Trader?

Among the many quips he had about trading and investing, I’ve picked out some of the key ones that could make or break your trading account.

While many complain about the difficulties in trading forex, stocks, or commodities, there is a good minority that makes consistent profits in the markets.

What sets Jesse Livermore apart from his peers?

 

  1. Buy rising stocks and sell falling stocks.

The above seems obvious, but many people fail to adhere to this rule. Many people like to ‘pick tops’ and ‘pick bottoms’. Now, professional traders do occasionally try to pick tops and bottoms, but they do so with very strict risk management, and always have a contingency plan for when the trade doesn’t work out.

Beginners often makes the mistake of trying to trade against the trend. While this can be profitable for some, talk to anyone in the trading industry and they will tell you that trend-following is the major money-making strategy that every trader uses. It’s simple, easy to add positions on, and it’s stress free. The problems come when beginners make a buck from trading with the trend, and start to explore ‘new ways’ to trade and invest.

 

2. Keep trades that show a profit, end trades that show a loss.

Jesse Livermore is famous for his humongous profits, but behind every profitable trader is the admirable ability to deal with a string of losses. It’s one thing to know that you need to cut losses, but it’s another to actually cut your losses when you are wrong. George Soros famously quips that it is not how many times you win or lose, it’s how much you make when you win, and how much you lose when you are wrong.

Cutting losses is a psychologically hard thing to do in modern society. We’re ingrained to be always correct, and never admit that you messed up, because it reflects badly on you as a person. However, with investing, no one is marking you for the number of losses; the profit that you make is the final report card that matters, and that’s where we want to be focusing on.

 

3. Never average losses by buying more when your stock has fallen.

Too many people refuse to be wrong on their investments or trades.

I have heard of people say this statement: “Even if the stock drops a lot, I’ll just keep it because I’m buying for ownership and dividend cashflow, not just for capital gains.” Sure, but what happens if the stock you hold drops by 70%? 80%? You’ll buy more?

Buying more when the stock has fallen is a sure-way to get your trading account to zero. It’s taking more risk when the odds are against you.

 

Think About This: Which of These 3 Guidelines Have Brought You Losses in the Past?

Many traders soon realize early in their career, that their trading accounts could have been profitable if not for silly mistakes. Avoiding these silly mistakes requires experience, maturity, the correct knowledge, and of course, proper mentoring.

I was lucky to be mentored by veteran traders early on in my trading career. Their advice, based upon thousands of hours of market experience, contributed greatly to who I am today, and I never fail to mention, during trading seminars or public events, that by tapping on their experience, I was able to quickly attain a level of success that kept me profitable.

If you’re currently struggling as a trader, ask yourself this question: “Which mistakes have I been making?”

Acknowledging trading mistakes is a continuous process of learning and growing.

 

Ever Wondered What Trading Methodology Jesse Livermore Used?

The next step for every aspiring trader is to actually take action. Making more trades is the key to success, and consistency can only be bred by constant and directed effort towards your goals.

If you would like to learn the trading method which Jesse Livermore (as well as many other legendary traders used), do drop by for our next workshop where we will share the strategies which professionals have been using for over 200+ years to gain consistent returns.

Click here to register: http://bit.ly/2oXJYIL

Wishing you all the best in your trading journey! 😀

Trading Mastery Program (TMP) – Batch Q1 2017 is Ready to Tackle the Big Boys!

Last month, we concluded another exciting run of our “Trading Mastery Program”, where we imparted our powerful “insider” fund trading strategies to empower another batch of traders to gain an unfair advantage in the market.

Reservations for our next intake are open, and you can start reserving your seats before they run out!
Find out more: http://wp.me/P1riws-31L

 

Training Feedback from Attendees:

“This course helped me identify weakness of my trading strategy and being able to time it to make it much better.” – Dominic

“If you are looking to gain strong fundamentals in technical and price action, attend this course! Spencer’s methods are well-calculated and systematic. Comprehensive course material and really liked live Q&A on google sheets. Food was great too!” – Ian

“The course started slow and went into climactic with all the swing, turn, break, & bounce. While overwhelmed with the new information, I believe there will always be support from this team!” – Tan Wei Peng

“The course note is very organized. The post-program schedule is useful. Spencer is able to clearly explain the fundamentals and setups well. Making the course easy to comprehend and execute.” – Tan Jiansen

“The training was comprehensive in covering the setups.” – Quek Boon Kiat

“The course provided very good foundation on price action trading strategy and Spencer displayed professionalism and knowledge in conducting the course. The emphasis on the right psychology and trading plan was very useful.” – Tong Kai Meng

“A very informative workshop for beginners. Chart reading is simplified, so are the steps for trading. It gives people realistic expectations of trading and also confidence to enter trading.”

“The course is structured and easy to understand. Gives me the knowledge necessary to do trading with increased confidence.” – Alan

“This is a great course for beginner or experienced traders. Is clear, simple and easy to understand.” – Francis

Fantastic program, simply the best. Professional. The quiz is superb!” – Syed, Rolls-Royce

“It breaks things down & simplifies information for you to use.” – John Goh

“This mastery program definitely enhanced my knowledge on forex.” – Terrance Tan

“An excellent course for beginner and advance traders. It brings you back to the fundamentals of a good trader and at the same time provide insights for advanced traders.”

“Appreciate that the materials are concise, simple to understand, and actionable. The resources are also made available to us after for reference. More importantly, there is a community to reach out to.” – Li Seng

“Overall, very structured. This course filtered out all the noise regarding trading and made taking the first step much easier! Structured and with actionable follow-up plan, this course is highly recommended!” – Twain, Ferocity

 

Register Early to Avoid Disappointment!

Reservations for our next intake are open, and you can start reserving your seats before they run out! Find out more: http://wp.me/P1riws-31L

Good luck to all the new “future millionaires”, and see you all at the top! 😀

The World’s 7 Greatest Currency Trades Ever Made – Key Lessons & Insights

Have you ever wondered, what are some of the most epic forex trades that went down in history? And more importantly, what crucial insights and lessons can we learn from these legendary traders?

1) ANDY KRIEGER – $300 MILLION PROFIT

Andy Krieger is a somewhat unknown trader who made his name at Bankers Trust. He was watching currencies in 1987 after the Black Monday crash, and he saw an opportunity for arbitrage in some overvalued currencies. He became famous because he shorted a few hundred million dollars worth of Kiwi (New Zealand’s currency), and he shorted so much that his position was said to exceed the money supply of New Zealand as a nation.

Andy shorted so much currency that there was not enough currency in circulation to support the short.

The kiwi fell tremendously while he was shorting it and made $300 million for Bankers Trust. Legend has it that a worried New Zealand government official called up Krieger’s bosses and made threats to him. Krieger later left the firm to work for George Soros in his quantum fund.

 

2) STANLEY DRUCKENMILLER – $2 BILLION TRADE

Stanley Druckenmiller made this historic trade as a trader working for George Soros’ Quantum Fund. He went long on the German mark because of the fall of the Berlin Wall, and the undervaluation that was going on during the reunification between East and West Germany. Legend has it that Stanley initially bet a few hundred million dollars, until Soros told him to raise the bet to $2 billion. That year, the Quantum fund brought in 60% returns.

Stanley is a rather unknown person, but the fact that George Soros hired him is worth noting.

Another trade that Stanley made was in the 1990s. He was buying German bonds, because he expected investors to move from British bonds to German bonds. It was also during the period where Soros broke the Bank of England.

3) GEORGE SOROS – $1 BILLION PROFIT IN THE POUND

George Soros became famous because he shorted the pound aggressively, in fact, so aggressively that he borrowed heavily and make $1 billion in the process.

At that time, Britain wanted to keep the value of the pound above 2.7 German marks, a key feature of the fixed exchange rate mechanism. Many speculators began to take up short positions in the expectation that this fixed exchange rate would not hold.

This was the famous ‘broke the British bank’ trade that shot George Soros to stardom.

Britain even raised its interest rates to double digits to try to attract investors and prop up the buying in its currency, however, the British government soon realized that it would lose lots and lots of money trying to keep the value of the pound. Soros made $1 billion for his fund on this trade.

 

4) PAUL TUDOR JONES – $100 MILLION PROFIT SHORTING BLACK MONDAY

The U.S stock market experienced its largest 1-day percentage decline ever on Black Monday of 1987. This was the most shocking fall the world had seen at that point, and even up to today, no 1-day decline has ever matched Black Monday.

Betting on a black swan event netted Paul Tudor Jones $100 million in profits.

1The 22.6% drop in the Dow in 1987 has not been rivaled even up to 2017.
Source: stock-market-crash.net

Paul Tudor Jones shorted the stock market, tripling his money, and making US$100 million on that trade while the Dow Jones plummeted 22%.

 

 

5) ANDREW HALL – $100 MILLION PROFIT BETTING ON OIL

While working for Citigroup, Andrew Hall predicted a 5-year bull-run in oil from 2003-2008, and made the appropriate trades. Oil went from $30 to $100, and Hall brought with him $100 million as part of his compensation plan.

Andrew Hall made it big on oil in his career at Citigroup.

jAndrew Hall at a conference in September 2016.
Source: Forbes

Aside from this brilliance, he reportedly bought 1 million barrels of physical oil in 2009, and stored it, hoping that oil would rise greatly. It did, and from 2009-2011, oil went from $50 to $100. However, his oil fund hasn’t been doing well in the past 5-6 years, and he has had to repeatedly explain the lack of profits to investors.

 

6) DAVID TEPPER – $4 BILLION PROFITS BUYING BANK STOCKS

David Tepper’s strategy was simple; buy low, sell high. In early 2009, he scooped up big banks like Citigroup and Bank of America, and saw them quadruple and triple in value from their bottoms in 2009.

Nothing spectacular; buy low, sell high.

These trades earned $7 billion for Tepper’s hedge fund. His personal compensation was $4 billion.

 

7) LOUIS BACON – 86% RETURNS BETTING SADDAM HUSSEIN WOULD INVADE KUWAIT

Louis Bacon went long on oil, short on stocks in the 1990s because of this geopolitical situation. Later, he also correctly bet that the U.S. would quickly defeat Iraq and the oil market would recover.

Bacon’s event-based bets rewarded him handsomely.

1Louis Bacon explaining what he knows best; geopolitical event trading.
Source: Quotesgram

His hedge fund returned 86% that year because of these trades. Although his strategy is somewhat unconventional, he has excelled in it and carved a niche for himself.

 

AFTER READING THIS, WHAT’S NEXT?

Many of these traders had decades of trading experience under their belts. Although they all seem like they had a great stroke of luck or a brief moment of brilliance, the preparation and practice that they went through was thorough and gruelling.

I hope that these stories of real traders would motivate you to continue at your game, brush up your skills, engage the financial markets, and stay up-to-date with what’s going on.

P.S. If you are keen to learn the strategies that professional traders are using and experience some practical live trading, I would like to invite you to join us for this:

In our previous workshop, during the live trading segment, one new trader made US$200+ from following our USD/SGD short trade, while Spencer made US$454 on the same trade and over US$1,200 of profits in total during the workshop.

Come join us for our next hand-on workshop, where you will learn 4 easy strategies to tackle any market (stocks, forex, CFDs, etc), and how you can apply them with as little as 15 minutes a day to make 20-40% annual returns consistently.

In addition, this workshop also includes training notes and slides, case studies, a customised trading plan, and an additional 120 mins of exclusive training videos you can keep.

Check availability and register here: http://bit.ly/2oXJYIL
(Each workshop is limited to 30 pax)

 

RESEARCH SOURCES & REFERENCES

investopedia.com/articles/forex/08/greatest-currency-trades.asp
commodityhq.com/education/5-legendary-commodity-investors/
businessinsider.com/greatest-trades-in-wall-street-history-2013-2
ibtimes.com/top-10-greatest-trades-all-time-253039
cabotwealth.com/daily/options-trading/the-greatest-options-trade-i-ever-saw/