Spencer Li

What Is Bitcoin Mining? How It Works, in Plain Numbers

How bitcoin mining works - crypto

Last updated: 5 October 2026 · By Spencer Li, CFTe

Bitcoin mining is how new transactions get added to the Bitcoin blockchain, and how new bitcoins are created. Computers around the world race to solve a guessing puzzle. The first one to find a valid answer adds the next block of transactions, and collects a reward in bitcoin. The puzzle is hard on purpose, because the cost of solving it is what makes the record expensive to fake.

Bitcoin.org puts it in one line. Mining is “the process of spending computing power to process transactions, secure the network, and keep everyone in the system synchronized together.”

In this post, I’m going to walk through how the puzzle works, what a miner earns today, why the reward keeps halving, and why mining at home no longer makes sense for almost anyone. Every number below was read from a live source on the date shown.

Miners are paid to make cheating expensive. Summary card for the post: What Is Bitcoin Mining? How It Works, in Plain Numbers.

How does Bitcoin mining actually work?

Think of it as a lottery where every ticket costs electricity.

Every few minutes, thousands of new Bitcoin transactions are waiting to be confirmed. Each miner bundles a set of them into a candidate block. To get that block accepted, the miner has to find a number that, combined with the block’s contents and run through a scrambling function, produces a result below a target. There is no shortcut. The only way is to guess, check, and guess again, trillions of times a second.

The first miner to find a winning guess broadcasts the block. Every other computer on the network checks it in a fraction of a second, which is the clever part. A winning answer is very hard to find but very easy to verify. Once accepted, the block is chained to the one before it, and the race starts again on the next one.

This system is called proof of work, and proof of work versus proof of stake compares it with the method Ethereum uses today.

Why is it always about 10 minutes?

Because the puzzle adjusts itself. Bitcoin.org explains that the difficulty is set so that “the average time to find a block remains equal to 10 minutes.” In the Bitcoin Core source code, the target is written as nPowTargetSpacing = 10 * 60, which is 600 seconds.

If more miners join and blocks start coming faster, the puzzle gets harder. If miners leave, it gets easier. That is why adding more machines to the network does not create bitcoin any faster. It only raises the cost of each block.

How much do miners earn?

A miner who wins a block earns 2 things: newly created bitcoin, called the block subsidy, and the fees attached to the transactions inside the block.

Here are the live numbers, read on 16 October 2026:

MeasureValueSource
Latest block height971,620mempool.space
New bitcoin per block3.125 BTCblockchain.info
Blocks per day, on targetabout 14424 hours × 6 per hour
New bitcoin per dayabout 450 BTC144 × 3.125
Bitcoin in existenceabout 20.10 millionblockchain.info
Total network computing powerroughly 1,000 EH/smempool.space and blockchain.info

An EH/s is an exahash per second, a billion billion guesses every second. That last row is the one that matters for anyone thinking of mining at home.

If you want a daily routine for trading what you already understand, the free 15-Minute Swing Trader’s Checklist is at the end of this post.

What is the Bitcoin halving?

The halving is the built-in cut to the block subsidy. In the Bitcoin Core code it is set by nSubsidyHalvingInterval = 210000, so every 210,000 blocks, the new bitcoin per block falls by half. At 10 minutes a block, that works out to roughly every 4 years.

Bars showing the new bitcoin per block halving step by step, from 50 BTC at the start to 3.125 BTC today, with later halvings smaller still
Every 210,000 blocks, the new bitcoin paid for each block is cut in half.

The subsidy started at 50 BTC per block in 2009. It is 3.125 BTC today. The next halving lands at block 1,050,000, which is 78,380 blocks after the 16 October reading. At the 10-minute pace, that is about 544 days away, or around April 2028. Treat that date as an estimate, because blocks rarely arrive exactly on time.

Bitcoin.org describes where this ends: the reward is “halved over time until bitcoin issuance halts completely with a total of 21 million bitcoins”. After that, miners will be paid by transaction fees alone. Nobody knows yet whether fees will be enough to keep the same level of security, and that is one of the open questions in Bitcoin’s design.

Can you still mine Bitcoin at home?

In practice, no. Bitcoin.org says that “the only cost-effective method of mining today is using specialized hardware.” Those machines are built for one job, and an ordinary computer has no chance against them.

Let me put numbers on it. Take a hypothetical machine doing 200 TH/s, a terahash being a thousand billion guesses a second. Against a network of roughly 1,000 EH/s, that machine’s share of all the guessing is about 0.0000194%.

Here is the arithmetic:

  • 200 TH/s ÷ about 1,033,000,000 TH/s = a share of about 0.000000194
  • 144 blocks a day × 0.000000194 = about 0.000028 blocks a day
  • 1 ÷ 0.000028 = about 36,000 days between wins, or roughly 98 years

So on its own, that machine would expect to win a block about once a century. This is why almost everyone who still mines joins a pool. The pool combines thousands of machines, wins blocks regularly, and splits the reward by how much work each member contributed. The pool does not change the average payout. It only smooths it, so you get small, steady payments instead of waiting for a lottery win.

Then there is the bill. Your small share of the reward has to beat your electricity, cooling, the machine’s cost, and the pool’s fee. Run that sum on your own electricity tariff before buying anything. And remember that every new machine on the network shrinks the share of every machine already there.

Is Bitcoin mining bad for the environment?

This is the most argued question in the whole topic, so here are both sides.

The critics’ case is simple. Mining turns electricity into guesses, and the network now does a billion billion guesses a second. That uses a lot of power, and some of it comes from fossil fuels.

The defenders’ case is that the cost is the point. Rewriting Bitcoin’s history would mean redoing all that work faster than the rest of the network, which is what a 51% attack tries to do. They also argue that miners chase the cheapest power, which is often surplus or renewable energy that would otherwise go unused.

Both points can be true at the same time. How much weight you give each one depends on whether you think the network is worth securing in the first place.

What should you take away from this?

Personally, I find mining easiest to understand as a security budget. The network pays miners, in new coins and fees, to make cheating more expensive than playing fair. The halving cuts that budget on a fixed schedule, and that schedule is written into the code for anyone to read.

If you came here wondering whether mining is a way into crypto, the honest answer for most people in Singapore is that it is not. The hardware is specialised, the competition is global, and the electricity bill is local. For the bigger picture of what you would be holding, what is Bitcoin covers the basics, and the blockchain and cryptocurrencies guide maps the rest.

So which side of the energy debate do you lean towards? And does knowing the halving schedule change how you read the next round of headlines about it?

FAQ

What is Bitcoin mining in simple terms?

Computers compete to solve a guessing puzzle. The winner adds the next block of transactions to the blockchain and earns newly created bitcoin plus fees.

How long does it take to mine 1 Bitcoin?

The whole network creates about 450 BTC a day at today’s 3.125 BTC per block. For a single machine, it depends on its share of the network’s computing power, which for a home setup is tiny.

What happens when all 21 million bitcoins are mined?

New issuance stops, and miners are paid only by transaction fees. Under the current schedule, that is expected to take more than a century.

Is Bitcoin mining legal in Singapore?

This post does not cover the legal position, and the rules can change. Check the current position with the relevant authority before buying any mining equipment.

Go deeper

The free 15-Minute Swing Trader’s Checklist has the daily routine, the questions to ask before every trade, and the five rules that keep you in the game.

About the author. Spencer Li is The 15-Minute Trader and the founder of Synapse Trading. He is a Certified Financial Technician (CFTe) with 15+ years of trading, run from 70+ countries. He holds a B.Acc and B.BM from SMU. Every trade he takes is public, dated, losses left in. He teaches rules-based swing trading in 15 minutes a day, one system for any market.

Educational content only, not personalised financial advice. Trading carries risk, including loss of capital. Past performance is not indicative of future results. Synapse Trading is not licensed or regulated by MAS.

by
Spencer Li

Market Structure in Trading: Higher Highs, Higher Lows and the Break That Ends a Trend

Reading market structure - price action

Last updated: 9 October 2026 · By Spencer Li, CFTe

Market structure is the pattern of swing highs and swing lows a price chart prints as it moves. An uptrend makes higher highs and higher lows. A downtrend makes lower highs and lower lows. A range makes highs and lows at roughly the same levels, again and again.

The trend stays intact until its structure breaks. In an uptrend, the break that matters is a close below the most recent higher low. That close is a warning, and the trend only flips once a lower high and then a lower low follow it.

That is the whole idea, and it fits in 2 paragraphs. The skill is in marking the right swings, so in this post I’ll walk through how to mark them, which break counts, and a worked example in round hypothetical numbers.

Watch the last higher low in an uptrend. Summary card for the post: Market Structure in Trading: Higher Highs, Higher Lows and the Break That Ends a Trend.

Why does market structure come first?

Picture a staircase. A market going up rarely climbs in a straight line. It steps up, rests, slips back a little, then steps up again, and each step leaves 2 marks on the chart: a peak where buyers paused, and a trough where they stepped back in.

Read those marks and you know who is in control without loading a single indicator. This is Layer 1 of our price action trading guide, the question you answer before any pattern gets a vote: what kind of market is this?

It comes first because every setup behaves differently depending on the answer. A breakout inside a strong uptrend tends to follow through. The same breakout in a sideways range tends to fail and trap the people who chased it. The pattern looked identical both times, and the only thing that changed was the structure around it.

What is a swing high and a swing low?

A swing high is a peak with lower highs on both sides of it. A swing low is a trough with higher lows on both sides. That is all.

The question everyone asks next is how many candles need to sit on each side. There is no official number, and different traders use 2, 3 or 5. What matters more is that you pick one rule and keep it, so your chart today is marked the same way as your chart last month.

Do note 2 habits that make the marking cleaner:

  1. Mark the swings the market obviously reacted to. If you have to squint to see a swing, it is probably noise. On a daily chart, a meaningful swing usually took several days to form.
  2. Mark one timeframe at a time. A daily chart and a 15-minute chart of the same market can show opposite structures on the same afternoon. The higher timeframe sets the direction, which is why our post on choosing the correct timeframe starts there.

How do higher highs and higher lows define a trend?

Once the swings are marked, the structure reads itself. Here are the 3 shapes a chart can take, and the setup type that fits each one.

StructureSwing highsSwing lowsWhat it saysSetup type that fits
UptrendEach one higherEach one higherBuyers keep paying more, and step in earlier on every dipSwing, joining the trend
DowntrendEach one lowerEach one lowerSellers keep accepting less, and sell earlier on every bounceSwing, joining the trend
RangeAbout the same levelAbout the same levelNeither side is winningBreak and Bounce

The last column uses the 4 setup types from our post on the 4 main types of trading strategies. Turn, the fourth, lives at the moment one structure gives way to another, which is exactly the moment the next section is about.

The site’s older lesson on identifying market trends adds a second test, the slope of a moving average. It is a useful cross-check. But the swings come first, because the average is computed from them and arrives later.

Which low matters most in an uptrend?

The most recent higher low. I call it the last-higher-low line, and it is the most useful single price on a trending chart.

Here is why. A higher low is the last place buyers stepped in with enough conviction to start a new leg up. As long as price stays above it, the buyers’ last defence is still standing. Once price closes below it, the most recent group of buyers is underwater, and the pattern of higher lows is broken.

Let me show you with round hypothetical numbers. Suppose a stock climbs from 100 to a swing high at 112. It pulls back to 105, which is a higher low, then runs to a new high at 118. It pulls back again, this time to 110. That is the next higher low.

Now the last-higher-low line sits at 110. Each new higher low moves the line up, like a ratchet. In a downtrend everything flips, and the line to watch is the last lower high.

Does one break end the trend?

No. One close below the last higher low is a warning. A reversal is a sequence, and it usually takes 3 steps.

  1. The first break. Price closes below the last higher low, at 110 in our example. The uptrend’s pattern has a crack in it.
  2. The failed rally. Price bounces, but stalls below 118, the last swing high. Say it tops out at 115. That is the first lower high.
  3. The second break. Price then closes below the low it made in step 1. That is the first lower low, and now the chart has both halves of a downtrend.

Plenty of uptrends do step 1 and then recover. Price closes below the line, panics a few people out, then climbs back and makes a new high. So step 1 is a reason to pay closer attention, and step 3 is the evidence.

An uptrend from 100 with a last higher low at 110; price closes below 110 as a warning, makes a lower high, then a lower low
One close below the last higher low is a warning, not yet a reversal.

You will meet 2 popular labels for these moments online. In the “smart money concepts” vocabulary, a break of structure is a break in the direction of the trend, such as a new higher high, and a change of character is the first break against it, our step 1. Even the people who use those labels describe the change of character as an early warning, not a confirmed reversal, and they admit the vocabulary is not standardised. The names vary between schools. The sequence underneath them does not.

If you want a routine for reading structure in 15 minutes after the close, the free checklist is at the end of this post.

What are the most common market structure mistakes?

  1. Marking every wiggle. A chart with 30 swing points has no structure, only noise. Keep the swings the market clearly reacted to.
  2. Judging on wicks during the session. A candle that dips below the last higher low at lunchtime and closes above it has not broken anything. This is why we decide on the closing candle.
  3. Calling a reversal on step 1. One break is a crack. Wait for the lower high and the lower low before you treat the trend as over.
  4. Forcing a trend onto a range. Markets spend long stretches going nowhere. If the highs and lows are overlapping, the honest answer is “range”, and our post on trend versus range transitions covers how one turns into the other. When it gets messy, read how to trade a choppy market.
  5. Mixing timeframes mid-trade. Reading the trend on the daily chart, then panicking at a lower low on the hourly chart, is how good positions get closed for no reason.

What do you do with the structure once you have it?

You use it to decide which trades you will even consider. In a clean uptrend, short ideas are off the table and you look for pauses to join the trend, which is what trend following does. In a range, you look at the edges. And when a level breaks, the old ceiling often becomes the new floor, which is the subject of role reversal.

Structure also tells you where a trade idea is proven wrong. The last-higher-low line is a natural reference point for that, although where exactly you place a stop is a separate decision, covered in where to put your stop loss and take profit.

Personally, I think structure is the most underrated skill in technical analysis, because it looks too simple to matter. Every trader can see a staircase. Fewer stop to check which step they are standing on before they buy.

Do note what structure cannot do. It describes the market so far, and it does not predict the next swing. A perfect uptrend can break tomorrow on news nobody saw coming. What structure gives you is a clear line between “the trend is intact” and “something has changed”, drawn before the money is at risk.

Go back to the staircase. Every step up leaves a floor behind it, and the most recent floor is the one that tells you whether the climb is still on.

FAQ

What is market structure in trading?

It is the pattern of swing highs and swing lows on a chart. Higher highs and higher lows mean an uptrend, lower highs and lower lows mean a downtrend, and highs and lows at the same levels mean a range.

How do you identify market structure?

Mark the swing highs and swing lows the market clearly reacted to, on one timeframe, using the same rule each time. Then compare each swing with the one before it.

What is a break of structure?

In the smart money vocabulary, it is a break in the direction of the trend, such as a new higher high in an uptrend. Many traders use the phrase loosely for any break of a key swing, so check which meaning a source uses.

What is the difference between a break of structure and a change of character?

A break of structure continues the trend. A change of character is the first break against it, such as a close below the last higher low in an uptrend, and it is a warning rather than a confirmed reversal.

When is an uptrend over?

When the chart has made both a lower high and a lower low. A single close below the last higher low is the first warning, and many uptrends recover from it.

Go deeper

The free 15-Minute Swing Trader’s Checklist has the daily routine, the questions to ask before every trade, and the five rules that keep you in the game.

About the author. Spencer Li is The 15-Minute Trader and the founder of Synapse Trading. He is a Certified Financial Technician (CFTe) with 15+ years of trading, run from 70+ countries. He holds a B.Acc and B.BM from SMU. Every trade he takes is public, dated, losses left in. He teaches rules-based swing trading in 15 minutes a day, one system for any market.

Educational content only, not personalised financial advice. Trading carries risk, including loss of capital. Past performance is not indicative of future results. Synapse Trading is not licensed or regulated by MAS.

by
Spencer Li

Status Quo Bias: Why Doing Nothing Is Still a Decision

Status quo bias - behavioural finance

Last updated: 1 October 2026 · By Spencer Li, CFTe

Status quo bias is the tendency to prefer things the way they already are. We stick with the current situation, or the default option, even when a change would serve us better, because changing feels like a decision and staying put does not. The term comes from a 1988 paper by economists William Samuelson and Richard Zeckhauser, who found that people “disproportionately stick with the status quo”.

In investing and trading, it looks like this. You hold a position long after the reason you bought it has gone. You leave a portfolio drifting instead of rebalancing it. You keep using a strategy that stopped working because reviewing it feels like admitting something.

The fix starts with one idea: doing nothing is still a decision. Below is why the bias is so strong, how it shows up in a trading account, and 3 ways to flip the default.

Doing nothing is still a decision. Summary card for the post: Status Quo Bias: Why Doing Nothing Is Still a Decision.

What did the research on status quo bias find?

Samuelson and Zeckhauser ran a series of decision experiments and then looked at real choices. In their words, data on the health plans and retirement programmes picked by university staff showed that “the status quo bias is substantial in important real decisions.” People did not re-choose each year. They kept what they had.

Defaults are even more powerful. Rolf Dobelli, in The Art of Thinking Clearly, describes an experiment by Eric Johnson and Dan Goldstein on organ donation. When people had to opt in, about 40% agreed. When donation was the default and they had to opt out, take-up rose to more than 80%. The question was the same. Only the starting point changed.

Two bars: about 40% agreed to be organ donors when they had to opt in, more than 80% when they had to opt out
The same question gets very different answers depending on which option is the default.

Dobelli adds the line that matters most for traders. Even when nobody sets a default for us, “we make our past the default setting, thereby prolonging and sanctifying the status quo.”

Why do we stick with the status quo?

The deepest reason is loss aversion. Daniel Kahneman, in Thinking, Fast and Slow, calls it “a powerful conservative force that favors minimal changes from the status quo in the lives of both institutions and individuals.” A change means giving something up, and the pain of what we give up looms larger than the pleasure of what we might gain.

There are 2 more forces at work. One is regret. If you change something and it goes wrong, it feels like your fault. If you leave it and it goes wrong, it feels like bad luck. The other is effort. Reviewing a position or a plan takes energy, and doing nothing takes none.

What it feels likeWhat is really happening
“I’m just being patient.”holding because selling would mean admitting a loss
“Nothing has changed.”the reason for the trade has changed, but the position has not
“I’ll deal with it later.”the default is being left to make the decision
“It’s always worked before.”the past has become the default setting

These overlap with a few close cousins: loss aversion, the endowment effect, which makes what we own feel more valuable, and regret aversion. Status quo bias is where they meet: the pull to leave everything as it is.

How does status quo bias show up in trading?

Here is the most expensive example I know, because it is mine.

In June 2026 I was up about 7.5% for the year, with a book concentrated in one theme. A hot jobs report on a Friday gapped the whole thing, and within 2 sessions the year’s gain was nearly back to flat, at about +0.5%. My trading plan had a rule to trim exactly that kind of concentration. I knew the rule. I did not fire it.

In my journal that night I called it a discipline lapse, not a strategy failure. But the lapse had a shape. Trimming was an action, so it felt like a decision. Holding felt like nothing at all. Doing nothing was the default, and the default won.

Then it got worse. About 10 days later, I built the same concentration straight back up. That is status quo bias in its purest form. Failing to change is one thing. Drifting back to the old setting once the pain fades is worse.

Imagine your own version. Say a position you bought on a clear reason is now down, and that reason no longer holds. You know you would never buy it today. Yet selling feels like a choice with consequences, while holding feels like waiting. Most traders who freeze in that moment are not being stubborn. They are being human, and the default is doing their thinking for them.

If you want a daily routine that forces the review instead of leaving it to the default, the free 15-Minute Swing Trader’s Checklist is at the end of this post.

How do you overcome status quo bias?

You do not overcome it by trying harder. Willpower fails at exactly the moment you need it, because that is when the loss is fresh and the fear is loudest. What works is changing which option is the default. Here are 3 ways to flip the default.

  1. The blank-slate test. For each position, ask: if I had this money in cash today, would I buy this, at this price, for this reason? If the answer is no, holding is a fresh decision to buy it again, and it deserves the same scrutiny as any new trade.
  2. Make rules objects, not intentions. On the same day that my trim rule failed, I drank a protein shake I had made the night before without a second thought. The difference was form. The shake was a physical object in the fridge, and the rule was a sentence in a document. So the fix is to turn rules into things that act on their own, such as a standing order on the position or a calendar block that says “cut exposure”.
  3. Set a review date. A position, a portfolio or a strategy with no scheduled review will be reviewed only when something goes wrong. A date in the calendar makes the review the default, and doing nothing becomes the option you have to choose on purpose.

A trading plan and a trading journal are where these live. The plan holds the rules, and the journal shows you when you skipped them.

Is sticking with the status quo ever the right call?

Yes, often. Most of good trading is waiting, and a trader who changes the plan after every losing week is making the opposite mistake. Holding a position because the reason for it still stands is a decision, and a good one.

The bias is not holding. The bias is holding without deciding. The blank-slate test catches the difference: a position you would happily buy again today is one you are holding on purpose.

Personally, I think the most useful thing I ever learnt about defaults happened before I traded at all. During an accounting internship at a Big Four firm, I saw the path everyone expected me to take, felt in my gut that it was not mine, and walked away from it towards markets. Leaving a default is hard because it is a decision. Staying in one is easy because it never feels like one.

That Friday in June did not cost me because I lacked a rule. It cost me because the rule needed me to act, and doing nothing was easier. For more on the biases that sit beside this one, see conservatism bias, herd mentality in trading, the narrative fallacy, and the full trading psychology guide.

FAQ

What is status quo bias?

It is the tendency to prefer the current situation or the default option, even when a change would be better. The term comes from a 1988 paper by William Samuelson and Richard Zeckhauser.

What is an example of status quo bias in investing?

Holding a stock after the reason you bought it has gone, simply because selling feels like a decision and holding does not. Leaving a portfolio unbalanced for years is another.

What causes status quo bias?

Mainly loss aversion, the fact that losses feel bigger than equal gains. Fear of regret and the effort of reviewing a decision add to it.

How is status quo bias different from the endowment effect?

The endowment effect makes things we own feel more valuable. Status quo bias is a wider pull towards leaving any situation as it is, whether or not we own anything.

How can traders overcome status quo bias?

Change the default instead of relying on willpower. Ask whether you would buy each position today, turn rules into standing orders or calendar blocks, and schedule regular reviews.

Go deeper

The free 15-Minute Swing Trader’s Checklist has the daily routine, the questions to ask before every trade, and the five rules that keep you in the game.

About the author. Spencer Li is The 15-Minute Trader and the founder of Synapse Trading. He is a Certified Financial Technician (CFTe) with 15+ years of trading, run from 70+ countries. He holds a B.Acc and B.BM from SMU. Every trade he takes is public, dated, losses left in. He teaches rules-based swing trading in 15 minutes a day, one system for any market.

Educational content only, not personalised financial advice. Trading carries risk, including loss of capital. Past performance is not indicative of future results. Synapse Trading is not licensed or regulated by MAS.

by
Spencer Li

CFD Margin Call: How It Happens, With a Worked Example, and How to Avoid One

How a margin call happens - cfds

Last updated: 23 September 2026 · By Spencer Li, CFTe

A CFD margin call happens when the money in your account falls below the margin your open positions need. Your broker then asks you to add cash or cut the positions. If you do neither, it starts closing them for you.

The way to avoid one is to know your margin buffer before you place the trade. That is how far the price can move against you before the call comes. With most of your account sitting idle as cash, the buffer is wide. With your account fully used at the maximum leverage, there is no buffer at all, and the first tick against you triggers the call.

Know your margin buffer before you trade. Summary card for the post: CFD Margin Call: How It Happens, With a Worked Example, and How to Avoid One.

What is margin on a CFD?

It is the deposit your broker holds while the trade is open. A CFD lets you trade the price move of a share, index or currency without owning it, and you only put up a fraction of the position’s value, which is called the margin rate.

In Singapore, MAS sets minimum margin rates for CFDs traded by retail investors. The table below is from the Securities and Futures (Financial and Margin Requirements) Regulations, Fourth Schedule, Table 18.

CFD onMinimum margin, retailMaximum leverage that implies
Stocks in an index10%10 to 1
Stocks not in an index20%5 to 1
A stock index5%20 to 1
A currency pair5%20 to 1
Anything else20%5 to 1

For currencies, MAS explained its reasoning when it set the 5% floor: “While capping the leverage does not necessarily prevent losses, it mitigates the risk of retail investors taking on excessive positions and provides a buffer for unexpected losses.” It added that the cap was “in line with practices in other jurisdictions in the region such as Hong Kong (5%) and Japan (4%).”

These rates are for CFDs with no stop-loss attached. The same table lets a broker ask for less on a position that carries one, based on how much you could lose before the stop closes it. Either way, they are floors. Your broker can ask for more, and often does on volatile stocks.

When does a margin call happen?

When your equity falls below the margin your positions require. Equity is your cash plus or minus the open profit or loss on every position, and each day, often each minute, the broker compares that number with the margin it needs.

MAS’s 2014 response on retail derivatives spells out the timing. Dealers “should make margin calls within the day or as soon as practicable” once the account falls short. Then “the additional margins have to be met within two business days from the time the margin call is issued to the customer.” If you cannot pay, the dealer is expected to protect itself, “for example, by accepting only transactions which reduce the customer’s exposure to market risk.”

In practice, brokers also set their own close-out levels in their terms, and they can close positions before the 2 days are up. Read that part of your agreement before you trade, because it decides what happens on a fast day.

What does a margin call look like with real numbers?

Here is a worked example, all hypothetical. You have SGD 10,000 in your account. You open a CFD on a stock that sits in a major index, so the minimum margin is 10%. Here is what happens at 4 different position sizes.

Position sizeMargin held at 10%Effective leverageFall that triggers a margin callLoss on a 10% fall, % of account
SGD 20,000SGD 2,0002 to 1about 44%20%
SGD 50,000SGD 5,0005 to 1about 11%50%
SGD 80,000SGD 8,0008 to 1about 2.8%80%
SGD 100,000SGD 10,00010 to 1any fall at all100%

The margin rate is the same in every row. The only thing that changes is how much of the account you use, and that alone moves the margin call from a 44% fall to the next tick.

Bars showing the fall that triggers a margin call at 2 to 1, 5 to 1, 8 to 1 and 10 to 1 leverage: from 44% down to no buffer at all
The more of your account you use, the smaller the fall that triggers a margin call.

The bottom row is the one to fear. At the maximum leverage MAS allows on an index stock with no stop-loss, a 10% fall wipes out the whole account. A single stock can gap 10% on a results day, and a stop-loss cannot fill until the market trades.

If you want a daily routine that sizes every trade before you place it, the free 15-Minute Swing Trader’s Checklist is at the end of this post.

What is the margin buffer?

It is the distance between your equity and your required margin, measured as a price move. I call it the margin buffer. In the table above, it is the column that says what fall triggers the call.

You can estimate it before every trade. Take the cash you would have left over after the margin, and divide it by the full position size. In the SGD 50,000 row, SGD 5,000 spare on a SGD 50,000 position gives a buffer of about 10%, close to the exact 11%. If that number is smaller than the move the stock makes on a bad day, you are one bad day from a call.

How do you avoid a margin call?

4 habits keep you well clear of one.

  1. Use far less than the maximum leverage. The cap is the most the rules allow, never a target. Keep your total exposure small enough that the buffer is wider than a normal bad week. How much leverage you should use goes deeper on choosing the number.
  2. Put the stop well inside the buffer. Your stop-loss should close the trade long before the margin call can. If the stop is 5% away and the buffer is 11%, the stop does the work. Where to place it is in where to put your stop-loss and take-profit.
  3. Size by the risk you accept. Decide how much of the account you are willing to lose if the stop is hit, say 1%. Divide that by the stop distance to get the position size. The margin the broker asks for is a separate check, and it should never be what sets your size.
  4. Count every open position. The buffer is shared. 3 positions that each look small can use the whole account together, and a market-wide drop hits them all at once.

What happens if you short a CFD?

The same rules, with one difference. A short CFD loses when the price rises, and a price can rise without limit. So the margin buffer on a short shrinks as the stock rallies, and a sharp squeeze can trigger a call fast. How shorting works, and its extra costs, is in short selling explained.

What really prevents a margin call?

The buffer you leave on purpose. A margin call is never a surprise when you have done the sum first. It only feels like one when the position was sized from the margin the broker allowed in place of the loss you could take. If you can say, before you click, how far the price can move before the call comes, you already know whether the trade is too big.

How CFDs compare with owning the shares outright is in what CFDs are and how they work and the ultimate guide to stocks and CFDs trading.

FAQ

What is a CFD margin call?

A request from your broker to add money or reduce positions, because your account equity has fallen below the margin your open CFDs require. If you do neither, the broker can close positions.

How long do you have to meet a margin call in Singapore?

MAS said in 2014 that additional margin must be met within 2 business days of the call. Brokers can still close positions sooner under their own terms, so check your agreement.

What is the maximum CFD leverage in Singapore?

For retail investors, the minimum margins are 10% on index stocks, 20% on other stocks, and 5% on stock indices and currency pairs. That works out to 10 to 1, 5 to 1 and 20 to 1.

Can you lose more than your deposit on a CFD?

A gap can move the price past your stop before it fills, so a loss can exceed what you planned. How your broker handles a negative balance is set in its own terms.

How do I avoid a margin call on CFDs?

Use much less than the maximum leverage, place your stop well inside the margin buffer, size each trade from the risk you accept, and count all open positions together.

Go deeper

The free 15-Minute Swing Trader’s Checklist has the daily routine, the questions to ask before every trade, and the five rules that keep you in the game.

About the author. Spencer Li is The 15-Minute Trader and the founder of Synapse Trading. He is a Certified Financial Technician (CFTe) with 15+ years of trading, run from 70+ countries. He holds a B.Acc and B.BM from SMU. Every trade he takes is public, dated, losses left in. He teaches rules-based swing trading in 15 minutes a day, one system for any market.

Educational content only, not personalised financial advice. Trading carries risk, including loss of capital. Past performance is not indicative of future results. Synapse Trading is not licensed or regulated by MAS.

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Spencer Li

Atomic Habits Summary: James Clear’s Four Laws, Applied to Trading

Atomic Habits for traders - book summary

Tiny habits, repeated, beat big goals. Here is how the book’s 4 laws turn into a trading routine you will actually keep

Published: 18 August 2026 · By Spencer Li, CFTe

What is Atomic Habits about? James Clear’s book argues that real change comes from small habits repeated every day, far more than from big goals or bursts of motivation. A 1% improvement looks like nothing on the day. Compounded over a year, it adds up to a different person.

His most quoted line sums up the approach: “You do not rise to the level of your goals. You fall to the level of your systems.” The book then gives 4 laws for building a good habit: make it obvious, make it attractive, make it easy, and make it satisfying. Turn each one around, and you have 4 ways to break a bad habit.

For traders, the book is unusually practical. Trading results come from the same few actions done well, day after day: a routine, a checklist, a journal entry, a stop that stays where it was placed.

Tiny habits, repeated, beat big goals. Summary card for the post: Atomic Habits Summary: James Clear's Four Laws, Applied to Trading.

What is the big idea of Atomic Habits?

Clear opens with the British cycling team. For decades it had almost nothing to show. Then a new performance director set out to improve every small thing by 1%: seats, tyres, recovery, even how riders washed their hands. Within a few years, the team was winning Olympic gold medals and Tour de France titles.

The arithmetic behind it is simple. Getting 1% better every day for a year leaves you about 37 times better. Getting 1% worse every day leaves you close to zero. In Clear’s words: “Habits are the compound interest of self-improvement.”

He adds a warning that every trader will recognise. Progress is invisible for a long time. His image is an ice cube in a cold room. The room warms from 25 degrees to 26, 27, 28, and nothing happens. Then at 32 degrees the ice starts to melt. “All the action happens at thirty-two degrees.”

That is the trader’s experience too. A new routine shows nothing for weeks, because a few trades tell you almost nothing about a method. It takes 100 to 200 trades before results say much, which our post on the law of large numbers in trading explains.

Why does Clear say systems beat goals?

Because winners and losers have the same goals. Every trader wants to be profitable. So the goal cannot be what separates them. The system can.

Clear does not say goals are useless. He says: “Goals are good for setting a direction, but systems are best for making progress.” His issue is with where the effort goes.

For a trader, a goal is “make 20% this year.” A system is the routine that produces the trades: when you scan, how you check a setup, where the stop goes, how you record the result. You cannot control the first. You can control the second every single day.

He also ties habits to identity. “Every action you take is a vote for the type of person you wish to become.” Each time you honour a stop, you cast a vote for being a disciplined trader. Each time you move it, you cast a vote for the other kind.

What are the 4 laws of behaviour change?

Here are Clear’s 4 laws, each with its inversion for breaking a bad habit, and a trading example of both.

LawTo build a good habitTrading exampleTo break a bad habitTrading example
1stMake it obviousChecklist printed and placed beside the screenMake it invisibleTrading app moved off the phone’s home screen
2ndMake it attractiveJournal entry paired with the morning coffeeMake it unattractiveA written note of what the last revenge trade cost, in R
3rdMake it easyWatchlist saved, so the scan starts in 1 clickMake it difficult1-minute charts removed from the default layout
4thMake it satisfyingA tick on the calendar for every day the rules were followedMake it unsatisfyingA trading partner who sees every rule break

Two tools from the book do most of the work.

Implementation intentions. Clear’s formula is one sentence that names the behaviour, the time and the place you will do it. He cites a 2001 study of 248 people in Britain. Among those who wrote down when and where they would exercise, 91% exercised at least once a week. In the other groups it was 35% to 38%. A plan with a time and place works far better than good intentions.

Habit stacking. You tie the new habit to one you already do, in the form “after this, I will do that.” For example: after I pour my first coffee, I will open the trading checklist.

If you want a ready-made routine to stack your trading habits onto, our free 15-Minute Swing Trader’s Checklist lays one out. Get the free checklist →

What is the Two-Minute Rule?

“When you start a new habit, it should take less than two minutes to do.” The point is to master the habit of showing up before you worry about doing it well.

Clear also says habits form “based on frequency, not time.” The number of days matters less than how often you repeat the action.

Here is a small example from my own week. One Monday in June 2026, I was tired and short on time, with tennis that evening. The full workout was not going to happen. So instead of skipping it, I did 2 of the roughly 5 exercises I had planned, logged them, and left.

That smaller session kept the habit alive. Trading works the same way. On a day when you are not at your best, run the short version of the routine: the scan, the checklist, one line in the journal. The 80% version beats the zero version.

Why should you never miss twice?

This is the part of the book traders need most. A trader posted this year: “I keep repeating the same trading psychology mistake.” Clear’s answer: “Missing once is an accident. Missing twice is the start of a new habit.”

Everyone breaks a rule sometimes. The damage comes from the second and third break, when one bad trade turns into a bad week. So after a rule break, the only job is to make the very next trade by the book.

Two weeks of habit ticks: one lone missed day is an accident, but two missed days in a row start a new habit
Missing once is an accident; missing twice is the start of a new habit.

Clear even uses a trader’s arithmetic to make the point. Start with 100. A 50% gain takes you to 150. But a loss of only 33% takes you back to 100. So avoiding a 33% loss is worth as much as making a 50% gain. In trading, that is why the small losses you keep small matter as much as the winners.

He adds one warning about tracking: Goodhart’s Law, “When a measure becomes a target, it ceases to be a good measure.” For a trader, daily P&L is a poor habit to track. Whether you followed your rules is a better one.

How do you put Atomic Habits to work as a trader?

The book’s tools fit into 3 plain steps.

Shrink the habit. Make it so small it is hard to skip. One line in the journal after every trade. One look at the checklist before every order.

Give it a time and a place. Write down when and where. Stack it onto something you already do, like the first coffee or the market open.

Never miss twice. When you miss, make the next one count. A broken rule is one data point. Two in a row is a new habit forming.

One more example from my own weeks fits here. A demanding early workout one morning in May 2026 did more than tick off the exercise for me. The rest of the day went better too: what I ate, how well I focused. One fixed habit early in the day raised the floor on everything after it. For traders, a short routine before the market opens does the same job for every decision that follows.

For 5 more habits aimed at the mental traps of trading, see our post on habits to improve trading psychology. And for building trust in your own process, read how to build confidence in trading.

Concluding thoughts

Atomic Habits is easy to read and easy to underestimate. Its tools are small on purpose. For a trader, the book’s value is that it moves your attention from the result you want to the routine you can run today.

For the wider mindset side of trading, see our guide to trading psychology. And more books worth your time are in our list of the best investing and trading books.

So which trading habit would you shrink to 2 minutes, starting tomorrow?

FAQ

What is the main idea of Atomic Habits?

Small habits, repeated consistently, compound into large results over time. Clear argues that systems matter more than goals, and gives 4 laws for building good habits and breaking bad ones.

What are the 4 laws of Atomic Habits?

Make it obvious, make it attractive, make it easy, and make it satisfying. To break a bad habit, invert them: make it invisible, unattractive, difficult and unsatisfying.

What does “never miss twice” mean?

Missing a habit once is normal. Missing it twice in a row is how a new, unwanted habit starts. So after a slip, the priority is getting back on track the very next time.

How can traders use Atomic Habits?

By turning the trading routine into small, fixed habits: a checklist before each order, a journal line after each trade, and a scan at the same time each day. And by tracking rule-following rather than daily profit.

Is Atomic Habits worth reading?

For most people, yes. It is practical, short on theory and full of tools you can use the same day. Traders get extra value from its ideas on systems, identity and never missing twice.

Go deeper

Good trading habits need a routine to hang on. The free 15-Minute Swing Trader’s Checklist has the daily routine, the questions to ask before every trade, and the five rules that protect your account.

About the author. Spencer Li is The 15-Minute Trader and the founder of Synapse Trading. He is a Certified Financial Technician (CFTe) with 15+ years of trading, run from 70+ countries. He holds a B.Acc and B.BM from SMU. Every trade he takes is public, dated, losses left in. He teaches rules-based swing trading in 15 minutes a day, one system for any market.

Educational content only, not personalised financial advice. Trading carries risk, including loss of capital. Past performance is not indicative of future results. Synapse Trading is not licensed or regulated by MAS.

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