When newly acquired information conflicts with preexisting understandings, people often experience mental discomfort – a psychological phenomenon known as cognitive dissonance. Cognitions, in psychology, represents attitudes, emotions, beliefs, or values; and cognitive dissonance is a state of imbalance that occurs when contradictory cognitions intersect.     This term encompasses the response that arises as people […]

One aspect of market analysis is statistical analysis, which is using statistics to find correlations and patterns, where opportunities of skewed probabilities may lurk, giving you an edge over the market in the long run. For investors, this lets you know the best month to start building your portfolio, or to rebalance/adjust your portfolio allocation. Seasonality […]

There is a general misconception that chart-reading and technical analysis are only for short-term traders, but this is not true. Investors who learn to read charts and adopt long-term trend-following techniques can achieve superior returns to a pure buy-and-hold investor with the added benefit of taking on less risk.     Why the traditional buy-and-hold […]

Looking at the STI, it has certainly started off April strongly (refer to the last post), without even pausing to take a breath from the long run-up. Unfortunately, contrary to what I thought, there was no good pullback for entry. In fact, last Friday closed on renewed strength. There are 2 possible resistance zones ahead […]

It is easy to see why retail traders find indicators appealing because of their ease of use and clear-cut signals. In fact, many new traders think they know all about trading because they have learnt a few basic indicators that generate simplistic buy/sell signals. This kind of thinking is dangerous because it shuts them off […]

The Dow Jones has found support at the bottom of the channel, and this could mark the end of its decline and the resumption of its slow creeping journey upwards. The Dow heading upwards could improve global sentiment and give a boost to all indices worldwide. After the steep drop from the earthquake disaster, the […]