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Trading is a new age methodology and means to generate income which most of the investors prefer to undertake. While many investors undertake this path but it is important to understand that one must not fail to plan because the absence of a trading plan may trigger a plan to fail.

One of the major differences between having a trading plan and not having a trading plan is either you are making money or losing it. Having a trading plan is very important as it gives an organized approach to execute forex trading. The following article is a complete guide that will help every investor to create a sound forex trading plan.

What are the benefits of Forex Trading plan?

Forex market is a very unpredictable market so having an organized approach by way of proper forex trading plan will help in maximizing the profits from investments and also help in mitigating the risks associated with the forex markets. Following are the benefits of having a forex trading plan:

  • Trading becomes easy and simple when you have a proper plan as compared to not having one
  • A trading plan helps to keep stress levels at bay
  • A forex trading plan gives you the ability to gauge the performance of your investments, understand problem areas and helps you in taking rectified actions.
  • A comprehensive forex trading plan helps you to avoid psychological confusions as it helps in making wise and informed decisions.
  • A plan gives an organized approach to carry out forex trading thereby reducing the count of bad trades
  • A trading plan channelizes your energy and helps you in avoiding bad decisions in times of market downturn
  • A forex trading plan helps in inculcating a disciplined investment routine in your trading adventures as the only difference that differentiates trading from gambling is the presence of a full-proof forex trading plan
  • A forex trading plan is your “Google Map” that will help you in navigating to your financial goal and devoid you from taking wrong turns

Thus, above are the most important benefits of having a forex trading plan. Kindly note, having a forex trading plan is a work in progress as the forex market environment is ever changing and dynamic so you always will have to re-work on your trading plan as per the changes in the market. So it is best to re-assess your trading plan periodically to be in sync with the current forex market conditions.

What are the key components of a forex trading plan?

Benefits of having a trading plan amply describe the importance of having a forex trading plan but not many of the investors know what are the key ingredients or focus points while creating a forex trading plan. Don’t worry as we are here to enlighten you in understanding the key components of a forex trading plan:

  • Defining financial goals
  • Developing a trading plan structure
  • Carrying out Research and educating oneself regarding the forex market, its environment and ways of trading
  • Analyzing the market situation and Creating a strategy with the help of various technical tools
  • Creating a backup plan for mitigating the risk associated with forex trading
  • Understanding the importance of ‘timing’ in forex trading i.e. you must know WHENs and HOWs of buying, holding and selling of assets
  • Testing and re-testing the forex trading plan
  • Documenting the cause and effect of every action and decision to create a database that will help in taking a wise financial decision in the future.

The above key components must be used to create a forex trading plan. Using the above components the first and foremost thing that every investor must do is to write down the plan. Let us understand how to build a forex trading plan.

  • Set a financial goal: the first and biggest step for building a forex trading plan is setting up financial goals. Having a pre-defined financial goal will help you in formulating a very comprehensive and focused forex trading plan which will help in achieving the targets in the stipulated time-frame. While setting a financial target you must also set the time-frame for achieving the same as both these factors will help in building a successful forex trading plan.
  • Write down forex trading plan: the biggest step in a forex trading plan is creating an actual written plan for the forex trade. Many traders have a trading plan in mind but putting it on paper and having a record of it is the most essential element of forex trading. Putting a trading plan in writing will help in being disciplined and avoid indecisive actions.
  • Define the instruments to be used: once you have set your financial goals and have written down your forex trading plan then the next important step is to pen-down the pair of currencies that you wish to trade in the forex market. The best step is to write down pairs of currencies, test your trading strategy on them and then record the results. Another important aspect is to trade one pair of currency at one time because not all of your trading strategies work well on all the currency pairs. So start with one pair, test your strategy and then record the result. This process will help you understand which currency pairs are safe for you to trade with your trading strategy and which currency pairs you should avoid.
  • Define the indicators to be used: While doing forex trading traders usually use various indicators to gauge the market and currency movement. So be sure to record the results of indicators that are used while doing forex trading as you will know which indicator is working best with a particular currency pair and which isn’t.
  • Define a ragtime for your trading plan: Forex market has a stipulated working time but the forex trading environment is very dynamic as it changes every minute. To cope with such dynamic and unpredictable market condition it is best to test the trading result of your forex instrument across a various timeframe. Testing the behavior of your instrument at different times is very important as you are investing your hard-earned money. So avoid trusting your money to hearsay rather test every time period and do not forget to record the results. Recording results will help to create a database of behavioral statistics of your forex instrument.
  • Set ENTRY point: one of the biggest roadblocks while doing forex trading is to know when to enter the forex trade. Setting up an ENTRY point for forex trading is very complex as the market is very dynamic but the following are few pointers that will help you in establishing an entry point for your trade:
    • Understanding and recording the exact market conditions
    • External conditions like world economic conditions, news, events, etc
    • Time of the day when you should or shouldn’t enter a trade
    • Understanding whether to hold long or short your forex instrument

The above pointer shall help in mapping out an ENTRY point for your trade and help in boosting your forex trading plan.

  • Set STOP LOSS point: One of the important aspects of forex trading is defining a point called ‘stop loss’ that helps you in limiting the loss in a trade when the underlying asset reaches a particular pre-defined price point. A stop-loss point is designed to safeguard the investor from the loss that might occur in forex trading so make sure you set STOP-LOSS point and use it in your forex trading plan.
  • Define ‘percentage risk per trade’: Defining and setting percentage risk per trade is a very crucial aspect of forex trade plan and risk management system. Risk is inevitable in forex trading but defining percentage risk per trade is a wise method to mitigate the possibility of huge losses in trading. The best way to set a percentage is by setting it at the lowest and then testing it to seek the best outcome to achieve your financial goals.
  • Set timeline to take away partial profit: Forex trading will include facing losses as well as profits. So when the market is moving your way then it becomes imperative to know whether to hold the amount through the entire trade or to take away partial profit. So it is always better to have a plan of action ready not only at the time of crises but even in times of profit.
  • Re-define any changes: forex trading plan is subject to continuous changes. Every trader must be always willing to re-define and incorporate changes in the existing forex trade plan. The possible changes that can be considered in the forex trade plan are: move stop loss point or to add a position or re-enter forex trading in case of stopped out. Re-defining and testing the changes in these pointers shall turn out beneficial in your favor. So it is always better to re-define the changes, test them for results and record the outcomes for future reference.
  • Set EXIT signal: Exit signal defines what you want to take away from the entire trade. Understanding and setting an EXIT signal is very important as it will establish a clear understanding of when to end a forex trade. So every trader must clearly define their own specific EXIT signals rather than leaving it to ‘gut feeling’.
  • Other Factors: while building up your forex trading plan it is important to oversee the other important aspects ruling the forex market. These factors include world economic conditions, war, news, geopolitical factors, etc. as these factors affect the performance of the underlying assets. Writing down pre-trading routines of forex market should help you in understanding the market performance of the underlying asset.
  • Testing the trading plan: Now that you have successfully written your kick-ass forex trading plan it is best to test it out before going live. Testing the trading plan will help to understand the expected result and if there are areas of improvements then doing possible improvements in the forex trading plan to create a full-proof trading plan.
  • Reworking the trading plan if required: upon going live i.e. after using your test trading plan live in the forex market it might happen that the testing trade plan might not work well in real time trading. So at this point, you might think about reworking on your plan in order to make it suitable for the live forex trading market.
  • Tracking the results: The last and most crucial step in forex trading plan is to constantly track the outcomes of the forex trading. Maintain a journal to track the outcomes is beneficial to record the results. Constant tracking and documenting the changes, outcomes of a forex trading plan shall help you in improving your trading system and maximize your trading profits.

Conclusion

Before we wrap up, here is quick summary of how to create a sound forex trading plan. while creating a forex trading plan apart from above – listed pointers, there might be other additional points to consider, but above pointers are sufficient for you to get started.  

The only important thing that you should not forget before doing live trading is to test and re-test your trading plan. Also, do not forget to record the outcomes of your trading plan as it will help you to create a database for future reference.

Remember, before creating the forex trading plan ask tough questions first like:

  • Why do I want to do forex trading?
  • What is my financial goal?
  • What is my investment appetite?
  • What is the minimum amount I need to invest to achieve my financial goal?

These tough questions will give clarity on your financial goals and help you in making a better version of a forex trading plan. Forex trading success depends on a good trading plan, continued research and good knowledge of the market as these weapons shall exponentially increase the chances of your success.

The post Forex Trading Plan Guide For Forex Investors appeared first on Multi Management & Future Solutions.

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Retirement is the biggest milestone of one’s life as it changes the way of living of an individual. Retirement is the second innings of an individual’s life. Retirement termed as the golden phase of life as one has ample free time and money to cherish their desires yet most of the individual’s do not plan their finances effectively for enjoying a comfortable life. The investment market offers various investment instruments that offer means and ways to generate retirement income and one such way is Dividend Stocks.

Following is a complete guide of Dividend Stocks that will help you in understanding the investment instruments and ways in which you can generate retirement income and enjoy regular retirement income flow in the golden phase of your life.

What is Dividend Stock?


You must all be very well-versed with the term ‘Dividend’- it is the proportion of the reward paid to the shareholders from the profits earned by the company and dividend stocks refer to investing the money in dividend-paying stocks of companies in order to enjoy the steady income from dividends. Thus, a dividend is paid to the shareholders from the company’s profit earnings mostly in two ways:

  • Cash Payments: Under this method, the company opts to pay the dividend in the form of cash to the shareholders. The company announces the dividend payout which is usually paid quarterly. The dividend payout is announced on the “per share” basis i.e. the amount of the dividend shall be calculated on the number of shares any individual shareholder holds.
  • Shares of Stocks: under this method the company can opt to retain the earnings for further growth of the business. Alternatively, the company can also opt to offer additional shares to the shareholders by this method the shareholders can enjoy a higher share in the company and rise in the value of shares.
What is the frequency of dividend payment?


The frequency of dividend payment is usually decided by the company however it is observed that usually the payout is done on a quarterly basis. There are certain important dates related to dividend payment that every investor must know before investing in dividend stocks for example: to be eligible to receive a dividend on your stocks it is important for every investor to hold the dividend-paying stocks on the ex-dividend date.

Following is the detailed information related to all the important dates related to dividend payments.

  • Declaration date: Declaration date is the date on which the company declares the payment of the next dividend and the details of its payment.
  • Ex-Dividend Date: Ex-Dividend Date is the date set by the stock exchange. To be entitled to receive the dividend on the stocks it is important for the investor to hold the dividend stocks on or before the ex-dividend date.
  • Payable Date: as the name suggests the payable date is the date on which the dividend shall be paid.

Kindly note, in cases where an investor is holding a SIP or mutual fund of dividend-paying stocks, the mutual fund company shall be liable to collect dividend from the company and pay them to the investors as per the pre-decided frequency, usually quarterly or monthly.

How is the payment of dividend made?


Now that we know the frequency of dividend payment let us now understand how the dividend is paid to the investor.

Following are various ways in which the payment of the dividend is made:

  • A cheque is sent to the investor stating the dividend amount, the investor has to deposit the cheque and get the dividend amount credited to the bank account
  • Investors can also directly submit their account details to the company so that a direct credit is received by the investors in their bank account
  • Investors can opt for re-investment option where the amount of dividend is utilized to purchase more shares of stocks
  • In case of the mutual fund, the dividend can be paid to the investor in cash or cheque or direct credit or alternatively, the investor can opt for re-investment option where the dividend amount is reinvested to buy more shares of the mutual fund.
What are the benefits of investing in Dividend Stocks Singapore?


Dividend is one of the most secure ways and means of gaining returns on the investments. Investing in dividend stocks Singapore can help investors to diversify their portfolio and shift the focus of the portfolio to an income-driven investment.

Following are the most important benefits of investing in dividend stocks:

  • Regular cash inflows: Dividend payout promises regular cash payouts in the form of dividend which acts as an additional income for the salaried and retired individuals helping them to meet their financial needs.
  • Safety Cushion: investing in stocks of companies that pay regular dividends ensures peace of mind to investors during tough economic times. A company paying regular dividends is considered to be resilient and strong companies who can withstand economic turbulence so investing in dividend stocks of good companies can ensure safety cushion against economic uncertainties.
  • Tax Exemption: One of the biggest benefits of investing in dividend stocks is that the dividend received from equity holdings is exempted from the taxation net.

Thus looking at the above benefits it is easy to understand the benefits of investing in dividend stocks Singapore. Let us understand why investing in dividend stocks is a good way to generate retirement income. The post-retirement phase is a crucial phase of life as the regular flow of income cease. So it is very important to create avenues for regular income inflow to maintain a healthy and sustainable lifestyle. 

Earning dividend income by investing in stocks is one of the best ways to generate retirement income for the following reasons:

  • It ensures regular (monthly or quarterly) cash inflow thus ensuring retirees’ opportunity to sustain their current lifestyle and create a corpus to cover medical or financial contingencies.
  • They offer high value for money by creating a corpus to tackle financial uncertainty
  • Dividend received on dividend stock offers a significant amount of capital appreciation for the money invested thus making it one of the most effective way to generate retirement income
  • Many dividend-paying stocks have low risk associated with them thus making it an ideal investment tool for retirees who wish to have a steady income post-retirement.

Thus investors should consider investing in dividend stock for building their retirement corpus as earning dividend income is convenient and easy.

The post Dividend Stocks – Way to Generate Retirement Income appeared first on Multi Management & Future Solutions.

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Singapore Stock Exchange (SGX) is one of the leading and preferred stock exchange by investors that offers to trade various stocks, shares, ETFs etc. But this is not all as there is a whole lot of information that new investors probably do not know of SGX. This article will offer a complete guideline about how to become an investor in Singapore Stock Exchange to all the new investors.

What is the Singapore Stock Exchange?

Singapore Stock Exchange aka SGX is a stock market place for investors and traders to buy or sell stocks, shares, commodities, ETFs etc. The Singapore Stock Exchange apart from trading stocks offers services related to equities, derivatives, Exchange Traded Funds, Foreign Currency and commodities. There are 2 main reasons behind the gaining popularity of Singapore Stock Exchange namely Risk Management capabilities and Clearing capabilities.

How does the Singapore Stock Exchange Operate?

The Singapore Stock Exchange is a well categorized stock exchange as it has various divisions formed that are responsible to handle specific businesses. Every division is established to handle a particular set of business as under:

  • SGX ETS: ETS stands for Electronic Trading System. This division of SGX is responsible for providing investors around the globe access to SGX market.
  • SGX DT: DT stands for derivatives trading. This division offers services to investors for ease of derivatives trading.
  • SGX ST: ST stands for securities trading. This division offers services to simplify transactions related to securities trading.
  • SGX DC: DC stands for Derivatives Clearing. This unit of SGX is responsible for overlooking and handling clearing and settlement of derivaties trading.
  • SGX Asia Clear: This unit of Singapore Stock Exchange is responsible to handle and offer services related to trading of over the counter oil swaps and forward freight agreements.
  • SGX Reach: This unit of SGX offers services related to the online trading platform offered to investors for trading.
  • Central Depository Pte Ltd: As the name suggests this division of the Singapore stock exchange is responsible for offering services related to securities clearing, settlement of securities and depository services.
  • Asian Gateway Investments Pte Ltd: this unit is a wholly owned subsidiary by the Singapore Stock Exchange responsible for offering high security payment gateway platform for online security trading.
  • Singapore Exchange IT Solutions Pte Ltd: This division is responsible for providing hardware and software maintenance services.

Thus above are the major divisions of the Singapore stock Exchange. Let us get a complete working understanding of the SGX market in detail.

As we know the Singapore Exchange offers a platform to investors and trader to trade securities. Apart from providing trading services the exchange also offers aligned services like custody, clearance and settlement of securities. The SGX is one of the biggest south Asian stock market that has a share of 40% listed companies and 75% of listed bonds that are originating outside of Singapore. All the companies that are listed on the SGX belong to either SGX Main board or SGX Catalyst. SGX has 640 companies listed as Main board listings and 134 companies as catalyst listings. There is a difference between both the listings and in order to be listed on main board companies have to fulfill a minimum any one of the following quantitative requirement stated as under:

  • A consolidated minimum pre-taxation profit of $30 mn for the latest financial year and an operating track record of minimum 3 years; or
  • Consolidated profit in the latest financial year, operating track record of minimum 3 years and a market capitalization of not less than $150 mn by way of IPO i.e. Initial Public Offering; or
  • Successful in generating operating revenue in the latest financial year and a market capitalization of not less than $300 mn by way of IPO i.e. Initial Public offering.

Thus by successful fulfilling of any one of the above condition companies can enroll themselves on the SGX main board listing. Alternatively, there is no such need for companies to fulfill any such quantitative requirements for listing themselves as catalyst, apart from appointing and maintain a sponsor. Sponsor is the one who is responsible for assessing the suitability of the companies to list as catalyst and will help and guide the company through the listing process.

What are the major listings on the Singapore Stock Exchange?

Singapore is one of the largest stock trading markets in Asia so there are many premier listings on the Singapore Exchange. The SGX market is dominated by stocks of real estate companies, banks, shipping companies and oil & gas companies. In terms of market capitalization companies like Jardine Group Members, Development Bank of Singapore, Singtel, OCBC Bank, Global Logistics and Hong Kong Land have a huge share.

What type of instruments can be traded on Singapore Exchange?

Following is the list of instruments that can be traded on the SGX market:

  • Stocks: Stocks of companies i.e. the ownership certificates of the companies are traded
  • American Depository Receipts: Commonly known as ADRs these are the stocks of companies that are traded in the United States of America but represent a certain number of shares in the foreign company.
  • Company warrants: this instrument allows the investors to purchase the stock of a company at a fixed price and on a pre-specified date.
  • REITs: REITs stand for Real Estate Investment Trusts. Investing REITs will generate income by investing in the stocks of real estate companies.
  • Business Trust: This instrument invests the money of investors in stocks of companies or businesses that are run and operated by trusts.
  • Exchange Traded Funds: Commonly known as ETFs. It is one of the most common and traded investment instruments over the stock market.
  • Daily Leverage Certificates (DLC): this investment instrument is a type of structured financial instrument issued by banks. This instrument offers investors a 3 to 7 times of fixed leverage on the daily performance of the underlying traded asset.
  • Leveraged and inverse Product: This is a type of derivative product that aims to offer a certain daily return on the investment that is equal to a multiple of underlying index return.
  • Structured warrants: type of structured investment offered by third-party financial institutions.
  • Bonds: Bonds are categorized as government bonds and corporate bonds. This instrument is a debt instrument representing the loan taken by the company from the investor.

Category

Market Capitalization

Particulars

Large Cap or Blue Chip Stocks

The large cap stocks are of companies that have a market capitalization is over and above $1.5 billion while a blue chip stock is a subcategory of the large cap. These are the stock of companies that have a profitable track record and consistently performed well even in adverse market conditions

The characteristics of the large cap or blue chip stocks are:

  • These stocks yield higher returns
  • Low risk is associated with these stocks as compared to stocks of the mid cap or small cap companies

Mid Cap Stock

The mid cap stocks are of companies having a market capitalization between $1 billion and $1.5 billion

The peculiar characteristics of mid cap stock are as under:

  • The mid cap companies offer higher growth potential as compared to large cap companies
  • The stocks are less risky as compared to small cap stocks
  • The mid cap stocks offer more growth potential as compared to stocks of large cap companies and they are less risk prone as compared to stocks of small cap companies

Small Cap Stock

The market capitalization of these companies is below $1 billion

The characteristics of small cap companies are as under:

  • The stocks of small cap companies offer higher growth potential as compared to stocks of large cap and mid cap companies
  • The stocks of small cap companies are more risk prone as compared to stocks of large cap and mid cap companies

Penny Stocks

Penny stocks are the stocks that are valued at less than one dollar. the penny stocks are usually observed to be priced below $0.20

The peculiar characteristics of penny stocks are as under:

  • Low price
  • High investment risk
  • High volatility
  • Low liquidity
  • Wide bid-ask spread


Following table represents the fees charged by the brokerage firms on the CDP Accounts.

Brokerage Firm

Minimum Fees

Particulars of trading fees charged based on the contract amount

Contract amount less than $50k

Contract amount more than $50k and less than $100k

Contract amount more than $100k

DBS Vickers

$25 (DBS Vickers offers 15% rebate on each trade)

0.28%

0.22%

0.18%

Lim and Tan

$25

0.28%

0.22%

0.18%

CGS-CIMB Securities

$25

0.275%

0.22%

0.18%

RHB Securities

$25

0.275%

0.22%

0.18%

Maybank Kim Eng

$25

0.275%

0.22%

0.18%

Citibank

$25

0.25%

0.20%

0.18%

Philip Securities

$25

0.28%

0.22%

0.18%

OCBC Securities

$25

0.275%

0.22%

0.18%

UOB Kayhian

$25

0.275%

0.22%

0.20%

KGI Securities

$25

0.275%

0.22%

0.18%

Thus above are the types of securities traded on the Singapore Stock Market. The above securities are categorized as under:

If you are an investor and wish to start trading on the SGX market then fulfill the following basic steps and you are good to start trading on the SGX market.

Thus above is a complete list of securities that are traded on the Singapore stock exchange, there sub-categories and peculiar characteristics of these securities. Let us understand how to start trading on the Singapore Exchange.

  • Open a trading account: the first step for starting trade in Singapore Stock exchange is to open a brokerage account. The opening of trading or a brokerage account will help investors to buy and sell securities on the SGX market. Singapore has a wide range of stock broking firms so investors can choose the stock broking firm as per their personal financial choices.
  • Open a CDP account: the next step is to open a CDP account. CDP stands for central depository account. The CDP account acts like a security vault where investors can deposit and store their stocks and securities. Kindly note, only ONE direct personal CDP account can be held by each individual investor.
  • Selecting a broker: selecting a broker is an important milestone before starting off trading on the SGX market because it is important to know how much brokerage is paid for every transaction.

    Following is a detailed list of popular brokerage firms in Singapore and the brokerage fees they charge. Following list represent the brokerage firm fees charged on custodian Accounts.
     

    Brokerage Firm

    Minimum Fees

    Particulars of trading fees charged based on the contract amount

    Contract amount less than $50k

    Contract amount more than $50k and less than $100k

    Contract amount more than $100k

    City Index

    $10

    0.08%

    0.08%

    0.08%

    FSMOne

    $10

    0.12%

    0.12%

    0.12%

    Standard Chartered

    $10

    0.20%

    0.20%

    0.20%

    SAXO Capital Markets

    $10

    0.12%

    0.12%

    0.12%

What are the eligibility criteria for opening a stock account?

Before starting trading at the SGX market an investor has to open a stock account. Following are the eligibility criteria for opening a stock account:

  • The investor must have completed 18 years of age and above
  • The investor must not be a un-discharged bankrupt
  • The investor must have a bank account in any one of the following leading banks in Singapore namely: Citibank, DBS/POSB, HSBC, Maybank, OCBC, Standard Chartered and UOB
What is Securities Borrowing Lending Program?

Securities Borrowing Lending Program is the most innovative system that is operated in the Singapore Exchange. The Securities Borrowing Lending Program as the name suggests offers an opportunity to the investors and traders to borrow shares and stocks.

Securities Borrowing Lending Program (SBL) is a system that is generated to offer an opportunity to traders, investors, firms or corporate to borrow shares and securities that they do not own. Also, under the SBL program it is possible for the traders, investors, firm etc to even lend their shares, stocks and securities which they own but do not wish to sell in the near future.

The CDP offers more than 600 companies listed on the Singapore Exchange eligible for securities for a loan under the SBL Program.

Thus above is a complete guideline that will offer a complete understanding of the Singapore stock exchange to SGX Investor and will help a new investor to understand the complete overview of investing in SGX before taking a plunge in stock trading.

The post How to Become an Investor in Singapore Stock Exchange? appeared first on Multi Management & Future Solutions.

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Trading in the stock market is one of the most sought income generation method adopted for leading a good lifestyle. Stock market trading is very lucrative but at the same time it involves higher amounts of risks.

The nature of the stock market trading is unpredictable in terms of the risks involved and benefits earned. No trader can ever be 100% sure that the trade is risk free. Nonetheless, if there is full-proof risk management strategy ready and if you adhere to it with utmost discipline, then it is possible to manage the risks associated with stock trading in SGX market.

What is Risk Management?


As the name suggests risk management is a way of not keeping all your eggs in one basket. In simple words risk management in stock trading refers to the way of managing risks associated or involved while trading stocks in SGX market. Stock trading is a high-risk high-return game. Every trader who is involved in stock trading needs to adopt a well-framed risk management strategy while carrying out trade in SGX market.

Having a risk management strategy is important because in its absence one can make mistakes that would cost losses to their trading accounts.

The following article will point out 5 most important risk management strategies that will help the investors and traders in mitigating the risk associated with stock trading in SGX market.

1. No “Stop-loss” order

For many new investors and traders not putting a “stop-loss” order on their trade account is one of the biggest mistakes that cost them losses on their trading account. Stop-loss is a type of order that restricts the investment by automatically stopping the trading in SGX market by closing the trading position once the account trade hits preset loss level set by the investor or trader. Thus the stop-loss order prevents the loss but often it is observed that traders and investors forget to set the stop-loss order.

Stop-Loss Order Feature What it Does
Stop-Loss This is the most primary type of order where the trading stops when the market fluctuates against your trade.
Guaranteed Stop Under this type of order there will be a guaranteed stop of trading in the account at the pre-determined price specified by the investor.
Trailing Stop Under the trailing stop feature of stop loss the investor has to set the trailing stop price. This price shall move in sync with the profits earned in the trade and if the market movement turns negative against the trade then the trade shall stop at the new trailing stop. This feature of stop-loss is beneficial as it does not require constant monitoring.


2. Limit the trade risk

The basic golden rule of risk management while trading in SGX market is to limit your risks up to 1%. The 1% golden rule implies more specifically to a single trade. Trade experts suggest never to risk too much capital in a single trade as trading is a gamble and no one can be 100% sure about the market movement.

The implementation of 1% golden rule will help in mitigating the losses occurred in rouge trade. However, this is not a fixed rule as few traders and investors who have a higher risk appetite usually risk more capital in a trade.

Thus this rule can be used to understand the underlying principal that investing a huge amount of capital in a single trade can cost losses in the event of negative market fluctuation.

3. Trading is a skill, master it

Trading is an engaging activity and many traders and investors tend to lose the focus of trading. While most of the traders believe that trading is a way of making money but in reality a successful trade is the result of trading well with proper research and strategies.

In fact, it is always recommended that while trading focus towards mastering the skill of trading rather than making money. Thus if traders focus and master the skill of trading then they can expect higher returns and profits on their investments.

4. Define Goals

Every trader and investor has a different personality i.e. few have a low risk appetite while few have a considerably higher risk appetite, moreover every trader has different financial goals as few concentrate on fulfilling short-term financial goal while other have a longer time horizon.

Apart from financial goals and time-frame horizon every trader must also define the type of asset or instrument they wish to trade.

Thus, while trading it is very important for every investor and trader to understand one’s personality, financial goals, type of instrument to trade etc. as defining these parameters will help them in formulating better trading strategies.

5. Stay Updated

Trading is about staying ahead in the game and believe it or not being updated about the relevant NEWS is the best way ahead. The relevant news update helps to track down the movements of the market and the underlying asset. For example, demand and supply of particular underlying asset will have a huge impact on the price of the commodity and the movement of the market.

Thus it is important for every trader and investor to be in touch with the latest trends and relevant news about the market as it will help in understanding the impact on the prices and performance of the underlying assets.

The latest piece of news shall help in creating better trading strategies and in making informed and wise decisions.

The best and simplest way to stay updated and knowing the trending news across the globe is by reading newspapers, following market trends, the financial/market analysis provided by leading brokers, carrying out research based on historical data etc. These means and ways shall surely help in becoming a successful trader.

Lastly, creating a risk management strategy is a good habit and having one will surely help a long way in carrying out successful trade activities. A good amalgamation of risk management habits and trading strategies is a sure shot formula for a successful trading career in SGX market.

The post 5 Risk Management Ways to Trade in SGX Market appeared first on Multi Management & Future Solutions.

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Trading is a new age methodology and means to generate income which most of the investors prefer to undertake. While many investors undertake this path but it is important to understand that one must not fail to plan because the absence of a trading plan may trigger a plan to fail.

One of the major differences between having a trading plan and not having a trading plan is either you are making money or losing it. Having a trading plan is very important as it gives an organized approach to execute forex trading. The following article is a complete guide that will help every investor to create a sound forex trading plan.

What are the benefits of Forex Trading plan?

Forex market is a very unpredictable market so having an organized approach by way of proper forex trading plan will help in maximizing the profits from investments and also help in mitigating the risks associated with the forex markets. Following are the benefits of having a forex trading plan:

  • Trading becomes easy and simple when you have a proper plan as compared to not having one
  • A trading plan helps to keep stress levels at bay
  • A forex trading plan gives you the ability to gauge the performance of your investments, understand problem areas and helps you in taking rectified actions.
  • A comprehensive forex trading plan helps you to avoid psychological confusions as it helps in making wise and informed decisions.
  • A plan gives an organized approach to carry out forex trading thereby reducing the count of bad trades
  • A trading plan channelizes your energy and helps you in avoiding bad decisions in times of market downturn
  • A forex trading plan helps in inculcating a disciplined investment routine in your trading adventures as the only difference that differentiates trading from gambling is the presence of a full-proof forex trading plan
  • A forex trading plan is your “Google Map” that will help you in navigating to your financial goal and devoid you from taking wrong turns

Thus, above are the most important benefits of having a forex trading plan. Kindly note, having a forex trading plan is a work in progress as the forex market environment is ever changing and dynamic so you always will have to re-work on your trading plan as per the changes in the market. So it is best to re-assess your trading plan periodically to be in sync with the current forex market conditions.

What are the key components of a forex trading plan?

Benefits of having a trading plan amply describe the importance of having a forex trading plan but not many of the investors know what are the key ingredients or focus points while creating a forex trading plan. Don’t worry as we are here to enlighten you in understanding the key components of a forex trading plan:

  • Defining financial goals
  • Developing a trading plan structure
  • Carrying out Research and educating oneself regarding the forex market, its environment and ways of trading
  • Analyzing the market situation and Creating a strategy with the help of various technical tools
  • Creating a backup plan for mitigating the risk associated with forex trading
  • Understanding the importance of ‘timing’ in forex trading i.e. you must know WHENs and HOWs of buying, holding and selling of assets
  • Testing and re-testing the forex trading plan
  • Documenting the cause and effect of every action and decision to create a database that will help in taking a wise financial decision in the future.

The above key components must be used to create a forex trading plan. Using the above components the first and foremost thing that every investor must do is to write down the plan. Let us understand how to build a forex trading plan.

  • Set a financial goal: the first and biggest step for building a forex trading plan is setting up financial goals. Having a pre-defined financial goal will help you in formulating a very comprehensive and focused forex trading plan which will help in achieving the targets in the stipulated time-frame. While setting a financial target you must also set the time-frame for achieving the same as both these factors will help in building a successful forex trading plan.
  • Write down forex trading plan: the biggest step in a forex trading plan is creating an actual written plan for the forex trade. Many traders have a trading plan in mind but putting it on paper and having a record of it is the most essential element of forex trading. Putting a trading plan in writing will help in being disciplined and avoid indecisive actions.
  • Define the instruments to be used: once you have set your financial goals and have written down your forex trading plan then the next important step is to pen-down the pair of currencies that you wish to trade in the forex market. The best step is to write down pairs of currencies, test your trading strategy on them and then record the results. Another important aspect is to trade one pair of currency at one time because not all of your trading strategies work well on all the currency pairs. So start with one pair, test your strategy and then record the result. This process will help you understand which currency pairs are safe for you to trade with your trading strategy and which currency pairs you should avoid.
  • Define the indicators to be used: While doing forex trading traders usually use various indicators to gauge the market and currency movement. So be sure to record the results of indicators that are used while doing forex trading as you will know which indicator is working best with a particular currency pair and which isn’t.
  • Define a ragtime for your trading plan: Forex market has a stipulated working time but the forex trading environment is very dynamic as it changes every minute. To cope with such dynamic and unpredictable market condition it is best to test the trading result of your forex instrument across a various timeframe. Testing the behavior of your instrument at different times is very important as you are investing your hard-earned money. So avoid trusting your money to hearsay rather test every time period and do not forget to record the results. Recording results will help to create a database of behavioral statistics of your forex instrument.
  • Set ENTRY point: one of the biggest roadblocks while doing forex trading is to know when to enter the forex trade. Setting up an ENTRY point for forex trading is very complex as the market is very dynamic but the following are few pointers that will help you in establishing an entry point for your trade:
    • Understanding and recording the exact market conditions
    • External conditions like world economic conditions, news, events, etc
    • Time of the day when you should or shouldn’t enter a trade
    • Understanding whether to hold long or short your forex instrument

The above pointer shall help in mapping out an ENTRY point for your trade and help in boosting your forex trading plan.

  • Set STOP LOSS point: One of the important aspects of forex trading is defining a point called ‘stop loss’ that helps you in limiting the loss in a trade when the underlying asset reaches a particular pre-defined price point. A stop-loss point is designed to safeguard the investor from the loss that might occur in forex trading so make sure you set STOP-LOSS point and use it in your forex trading plan.
  • Define ‘percentage risk per trade’: Defining and setting percentage risk per trade is a very crucial aspect of forex trade plan and risk management system. Risk is inevitable in forex trading but defining percentage risk per trade is a wise method to mitigate the possibility of huge losses in trading. The best way to set a percentage is by setting it at the lowest and then testing it to seek the best outcome to achieve your financial goals.
  • Set timeline to take away partial profit: Forex trading will include facing losses as well as profits. So when the market is moving your way then it becomes imperative to know whether to hold the amount through the entire trade or to take away partial profit. So it is always better to have a plan of action ready not only at the time of crises but even in times of profit.
  • Re-define any changes: forex trading plan is subject to continuous changes. Every trader must be always willing to re-define and incorporate changes in the existing forex trade plan. The possible changes that can be considered in the forex trade plan are: move stop loss point or to add a position or re-enter forex trading in case of stopped out. Re-defining and testing the changes in these pointers shall turn out beneficial in your favor. So it is always better to re-define the changes, test them for results and record the outcomes for future reference.
  • Set EXIT signal: Exit signal defines what you want to take away from the entire trade. Understanding and setting an EXIT signal is very important as it will establish a clear understanding of when to end a forex trade. So every trader must clearly define their own specific EXIT signals rather than leaving it to ‘gut feeling’.
  • Other Factors: while building up your forex trading plan it is important to oversee the other important aspects ruling the forex market. These factors include world economic conditions, war, news, geopolitical factors, etc. as these factors affect the performance of the underlying assets. Writing down pre-trading routines of forex market should help you in understanding the market performance of the underlying asset.
  • Testing the trading plan: Now that you have successfully written your kick-ass forex trading plan it is best to test it out before going live. Testing the trading plan will help to understand the expected result and if there are areas of improvements then doing possible improvements in the forex trading plan to create a full-proof trading plan.
  • Reworking the trading plan if required: upon going live i.e. after using your test trading plan live in the forex market it might happen that the testing trade plan might not work well in real time trading. So at this point, you might think about reworking on your plan in order to make it suitable for the live forex trading market.
  • Tracking the results: The last and most crucial step in forex trading plan is to constantly track the outcomes of the forex trading. Maintain a journal to track the outcomes is beneficial to record the results. Constant tracking and documenting the changes, outcomes of a forex trading plan shall help you in improving your trading system and maximize your trading profits.

Conclusion

Before we wrap up, here is quick summary of how to create a sound forex trading plan. while creating a forex trading plan apart from above – listed pointers, there might be other additional points to consider, but above pointers are sufficient for you to get started.  

The only important thing that you should not forget before doing live trading is to test and re-test your trading plan. Also, do not forget to record the outcomes of your trading plan as it will help you to create a database for future reference.

Remember, before creating the forex trading plan ask tough questions first like:

  • Why do I want to do forex trading?
  • What is my financial goal?
  • What is my investment appetite?
  • What is the minimum amount I need to invest to achieve my financial goal?

These tough questions will give clarity on your financial goals and help you in making a better version of a forex trading plan. Forex trading success depends on a good trading plan, continued research and good knowledge of the market as these weapons shall exponentially increase the chances of your success.

The post Forex Trading Plan Guide For Forex Investors appeared first on Multi Management & Future Solutions.

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Retirement is the biggest milestone of one’s life as it changes the way of living of an individual. Retirement is the second innings of an individual’s life. Retirement termed as the golden phase of life as one has ample free time and money to cherish their desires yet most of the individual’s do not plan their finances effectively for enjoying a comfortable life. The investment market offers various investment instruments that offer means and ways to generate retirement income and one such way is Dividend Stocks.

Following is a complete guide of Dividend Stocks that will help you in understanding the investment instruments and ways in which you can generate retirement income and enjoy regular retirement income flow in the golden phase of your life.

What is Dividend Stock?


You must all be very well-versed with the term ‘Dividend’- it is the proportion of the reward paid to the shareholders from the profits earned by the company and dividend stocks refer to investing the money in dividend-paying stocks of companies in order to enjoy the steady income from dividends. Thus, a dividend is paid to the shareholders from the company’s profit earnings mostly in two ways:

  • Cash Payments: Under this method, the company opts to pay the dividend in the form of cash to the shareholders. The company announces the dividend payout which is usually paid quarterly. The dividend payout is announced on the “per share” basis i.e. the amount of the dividend shall be calculated on the number of shares any individual shareholder holds.
  • Shares of Stocks: under this method the company can opt to retain the earnings for further growth of the business. Alternatively, the company can also opt to offer additional shares to the shareholders by this method the shareholders can enjoy a higher share in the company and rise in the value of shares.
What is the frequency of dividend payment?


The frequency of dividend payment is usually decided by the company however it is observed that usually the payout is done on a quarterly basis. There are certain important dates related to dividend payment that every investor must know before investing in dividend stocks for example: to be eligible to receive a dividend on your stocks it is important for every investor to hold the dividend-paying stocks on the ex-dividend date.

Following is the detailed information related to all the important dates related to dividend payments.

  • Declaration date: Declaration date is the date on which the company declares the payment of the next dividend and the details of its payment.
  • Ex-Dividend Date: Ex-Dividend Date is the date set by the stock exchange. To be entitled to receive the dividend on the stocks it is important for the investor to hold the dividend stocks on or before the ex-dividend date.
  • Payable Date: as the name suggests the payable date is the date on which the dividend shall be paid.

Kindly note, in cases where an investor is holding a SIP or mutual fund of dividend-paying stocks, the mutual fund company shall be liable to collect dividend from the company and pay them to the investors as per the pre-decided frequency, usually quarterly or monthly.

How is the payment of dividend made?


Now that we know the frequency of dividend payment let us now understand how the dividend is paid to the investor.

Following are various ways in which the payment of the dividend is made:

  • A cheque is sent to the investor stating the dividend amount, the investor has to deposit the cheque and get the dividend amount credited to the bank account
  • Investors can also directly submit their account details to the company so that a direct credit is received by the investors in their bank account
  • Investors can opt for re-investment option where the amount of dividend is utilized to purchase more shares of stocks
  • In case of the mutual fund, the dividend can be paid to the investor in cash or cheque or direct credit or alternatively, the investor can opt for re-investment option where the dividend amount is reinvested to buy more shares of the mutual fund.
What are the benefits of investing in Dividend Stocks Singapore?


Dividend is one of the most secure ways and means of gaining returns on the investments. Investing in dividend stocks Singapore can help investors to diversify their portfolio and shift the focus of the portfolio to an income-driven investment.

Following are the most important benefits of investing in dividend stocks:

  • Regular cash inflows: Dividend payout promises regular cash payouts in the form of dividend which acts as an additional income for the salaried and retired individuals helping them to meet their financial needs.
  • Safety Cushion: investing in stocks of companies that pay regular dividends ensures peace of mind to investors during tough economic times. A company paying regular dividends is considered to be resilient and strong companies who can withstand economic turbulence so investing in dividend stocks of good companies can ensure safety cushion against economic uncertainties.
  • Tax Exemption: One of the biggest benefits of investing in dividend stocks is that the dividend received from equity holdings is exempted from the taxation net.

Thus looking at the above benefits it is easy to understand the benefits of investing in dividend stocks Singapore. Let us understand why investing in dividend stocks is a good way to generate retirement income. The post-retirement phase is a crucial phase of life as the regular flow of income cease. So it is very important to create avenues for regular income inflow to maintain a healthy and sustainable lifestyle. 

Earning dividend income by investing in stocks is one of the best ways to generate retirement income for the following reasons:

  • It ensures regular (monthly or quarterly) cash inflow thus ensuring retirees’ opportunity to sustain their current lifestyle and create a corpus to cover medical or financial contingencies.
  • They offer high value for money by creating a corpus to tackle financial uncertainty
  • Dividend received on dividend stock offers a significant amount of capital appreciation for the money invested thus making it one of the most effective way to generate retirement income
  • Many dividend-paying stocks have low risk associated with them thus making it an ideal investment tool for retirees who wish to have a steady income post-retirement.

Thus investors should consider investing in dividend stock for building their retirement corpus as earning dividend income is convenient and easy.

The post Dividend Stocks – Way to Generate Retirement Income appeared first on Multi Management & Future Solutions.

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Singapore Stock Exchange (SGX) is one of the leading and preferred stock exchange by investors that offers to trade various stocks, shares, ETFs etc. But this is not all as there is a whole lot of information that new investors probably do not know of SGX. This article will offer a complete guideline about how to become an investor in Singapore Stock Exchange to all the new investors.

What is the Singapore Stock Exchange?

Singapore Stock Exchange aka SGX is a stock market place for investors and traders to buy or sell stocks, shares, commodities, ETFs etc. The Singapore Stock Exchange apart from trading stocks offers services related to equities, derivatives, Exchange Traded Funds, Foreign Currency and commodities. There are 2 main reasons behind the gaining popularity of Singapore Stock Exchange namely Risk Management capabilities and Clearing capabilities.

How does the Singapore Stock Exchange Operate?

The Singapore Stock Exchange is a well categorized stock exchange as it has various divisions formed that are responsible to handle specific businesses. Every division is established to handle a particular set of business as under:

  • SGX ETS: ETS stands for Electronic Trading System. This division of SGX is responsible for providing investors around the globe access to SGX market.
  • SGX DT: DT stands for derivatives trading. This division offers services to investors for ease of derivatives trading.
  • SGX ST: ST stands for securities trading. This division offers services to simplify transactions related to securities trading.
  • SGX DC: DC stands for Derivatives Clearing. This unit of SGX is responsible for overlooking and handling clearing and settlement of derivaties trading.
  • SGX Asia Clear: This unit of Singapore Stock Exchange is responsible to handle and offer services related to trading of over the counter oil swaps and forward freight agreements.
  • SGX Reach: This unit of SGX offers services related to the online trading platform offered to investors for trading.
  • Central Depository Pte Ltd: As the name suggests this division of the Singapore stock exchange is responsible for offering services related to securities clearing, settlement of securities and depository services.
  • Asian Gateway Investments Pte Ltd: this unit is a wholly owned subsidiary by the Singapore Stock Exchange responsible for offering high security payment gateway platform for online security trading.
  • Singapore Exchange IT Solutions Pte Ltd: This division is responsible for providing hardware and software maintenance services.

Thus above are the major divisions of the Singapore stock Exchange. Let us get a complete working understanding of the SGX market in detail.

As we know the Singapore Exchange offers a platform to investors and trader to trade securities. Apart from providing trading services the exchange also offers aligned services like custody, clearance and settlement of securities. The SGX is one of the biggest south Asian stock market that has a share of 40% listed companies and 75% of listed bonds that are originating outside of Singapore. All the companies that are listed on the SGX belong to either SGX Main board or SGX Catalyst. SGX has 640 companies listed as Main board listings and 134 companies as catalyst listings. There is a difference between both the listings and in order to be listed on main board companies have to fulfill a minimum any one of the following quantitative requirement stated as under:

  • A consolidated minimum pre-taxation profit of $30 mn for the latest financial year and an operating track record of minimum 3 years; or
  • Consolidated profit in the latest financial year, operating track record of minimum 3 years and a market capitalization of not less than $150 mn by way of IPO i.e. Initial Public Offering; or
  • Successful in generating operating revenue in the latest financial year and a market capitalization of not less than $300 mn by way of IPO i.e. Initial Public offering.

Thus by successful fulfilling of any one of the above condition companies can enroll themselves on the SGX main board listing. Alternatively, there is no such need for companies to fulfill any such quantitative requirements for listing themselves as catalyst, apart from appointing and maintain a sponsor. Sponsor is the one who is responsible for assessing the suitability of the companies to list as catalyst and will help and guide the company through the listing process.

What are the major listings on the Singapore Stock Exchange?

Singapore is one of the largest stock trading markets in Asia so there are many premier listings on the Singapore Exchange. The SGX market is dominated by stocks of real estate companies, banks, shipping companies and oil & gas companies. In terms of market capitalization companies like Jardine Group Members, Development Bank of Singapore, Singtel, OCBC Bank, Global Logistics and Hong Kong Land have a huge share.

What type of instruments can be traded on Singapore Exchange?

Following is the list of instruments that can be traded on the SGX market:

  • Stocks: Stocks of companies i.e. the ownership certificates of the companies are traded
  • American Depository Receipts: Commonly known as ADRs these are the stocks of companies that are traded in the United States of America but represent a certain number of shares in the foreign company.
  • Company warrants: this instrument allows the investors to purchase the stock of a company at a fixed price and on a pre-specified date.
  • REITs: REITs stand for Real Estate Investment Trusts. Investing REITs will generate income by investing in the stocks of real estate companies.
  • Business Trust: This instrument invests the money of investors in stocks of companies or businesses that are run and operated by trusts.
  • Exchange Traded Funds: Commonly known as ETFs. It is one of the most common and traded investment instruments over the stock market.
  • Daily Leverage Certificates (DLC): this investment instrument is a type of structured financial instrument issued by banks. This instrument offers investors a 3 to 7 times of fixed leverage on the daily performance of the underlying traded asset.
  • Leveraged and inverse Product: This is a type of derivative product that aims to offer a certain daily return on the investment that is equal to a multiple of underlying index return.
  • Structured warrants: type of structured investment offered by third-party financial institutions.
  • Bonds: Bonds are categorized as government bonds and corporate bonds. This instrument is a debt instrument representing the loan taken by the company from the investor.

Category

Market Capitalization

Particulars

Large Cap or Blue Chip Stocks

The large cap stocks are of companies that have a market capitalization is over and above $1.5 billion while a blue chip stock is a subcategory of the large cap. These are the stock of companies that have a profitable track record and consistently performed well even in adverse market conditions

The characteristics of the large cap or blue chip stocks are:

  • These stocks yield higher returns
  • Low risk is associated with these stocks as compared to stocks of the mid cap or small cap companies

Mid Cap Stock

The mid cap stocks are of companies having a market capitalization between $1 billion and $1.5 billion

The peculiar characteristics of mid cap stock are as under:

  • The mid cap companies offer higher growth potential as compared to large cap companies
  • The stocks are less risky as compared to small cap stocks
  • The mid cap stocks offer more growth potential as compared to stocks of large cap companies and they are less risk prone as compared to stocks of small cap companies

Small Cap Stock

The market capitalization of these companies is below $1 billion

The characteristics of small cap companies are as under:

  • The stocks of small cap companies offer higher growth potential as compared to stocks of large cap and mid cap companies
  • The stocks of small cap companies are more risk prone as compared to stocks of large cap and mid cap companies

Penny Stocks

Penny stocks are the stocks that are valued at less than one dollar. the penny stocks are usually observed to be priced below $0.20

The peculiar characteristics of penny stocks are as under:

  • Low price
  • High investment risk
  • High volatility
  • Low liquidity
  • Wide bid-ask spread


Following table represents the fees charged by the brokerage firms on the CDP Accounts.

Brokerage Firm

Minimum Fees

Particulars of trading fees charged based on the contract amount

Contract amount less than $50k

Contract amount more than $50k and less than $100k

Contract amount more than $100k

DBS Vickers

$25 (DBS Vickers offers 15% rebate on each trade)

0.28%

0.22%

0.18%

Lim and Tan

$25

0.28%

0.22%

0.18%

CGS-CIMB Securities

$25

0.275%

0.22%

0.18%

RHB Securities

$25

0.275%

0.22%

0.18%

Maybank Kim Eng

$25

0.275%

0.22%

0.18%

Citibank

$25

0.25%

0.20%

0.18%

Philip Securities

$25

0.28%

0.22%

0.18%

OCBC Securities

$25

0.275%

0.22%

0.18%

UOB Kayhian

$25

0.275%

0.22%

0.20%

KGI Securities

$25

0.275%

0.22%

0.18%

Thus above are the types of securities traded on the Singapore Stock Market. The above securities are categorized as under:

If you are an investor and wish to start trading on the SGX market then fulfill the following basic steps and you are good to start trading on the SGX market.

Thus above is a complete list of securities that are traded on the Singapore stock exchange, there sub-categories and peculiar characteristics of these securities. Let us understand how to start trading on the Singapore Exchange.

  • Open a trading account: the first step for starting trade in Singapore Stock exchange is to open a brokerage account. The opening of trading or a brokerage account will help investors to buy and sell securities on the SGX market. Singapore has a wide range of stock broking firms so investors can choose the stock broking firm as per their personal financial choices.
  • Open a CDP account: the next step is to open a CDP account. CDP stands for central depository account. The CDP account acts like a security vault where investors can deposit and store their stocks and securities. Kindly note, only ONE direct personal CDP account can be held by each individual investor.
  • Selecting a broker: selecting a broker is an important milestone before starting off trading on the SGX market because it is important to know how much brokerage is paid for every transaction.

    Following is a detailed list of popular brokerage firms in Singapore and the brokerage fees they charge. Following list represent the brokerage firm fees charged on custodian Accounts.
     

    Brokerage Firm

    Minimum Fees

    Particulars of trading fees charged based on the contract amount

    Contract amount less than $50k

    Contract amount more than $50k and less than $100k

    Contract amount more than $100k

    City Index

    $10

    0.08%

    0.08%

    0.08%

    FSMOne

    $10

    0.12%

    0.12%

    0.12%

    Standard Chartered

    $10

    0.20%

    0.20%

    0.20%

    SAXO Capital Markets

    $10

    0.12%

    0.12%

    0.12%

What are the eligibility criteria for opening a stock account?

Before starting trading at the SGX market an investor has to open a stock account. Following are the eligibility criteria for opening a stock account:

  • The investor must have completed 18 years of age and above
  • The investor must not be a un-discharged bankrupt
  • The investor must have a bank account in any one of the following leading banks in Singapore namely: Citibank, DBS/POSB, HSBC, Maybank, OCBC, Standard Chartered and UOB
What is Securities Borrowing Lending Program?

Securities Borrowing Lending Program is the most innovative system that is operated in the Singapore Exchange. The Securities Borrowing Lending Program as the name suggests offers an opportunity to the investors and traders to borrow shares and stocks.

Securities Borrowing Lending Program (SBL) is a system that is generated to offer an opportunity to traders, investors, firms or corporate to borrow shares and securities that they do not own. Also, under the SBL program it is possible for the traders, investors, firm etc to even lend their shares, stocks and securities which they own but do not wish to sell in the near future.

The CDP offers more than 600 companies listed on the Singapore Exchange eligible for securities for a loan under the SBL Program.

Thus above is a complete guideline that will offer a complete understanding of the Singapore stock exchange to SGX Investor and will help a new investor to understand the complete overview of investing in SGX before taking a plunge in stock trading.

The post How to Become an Investor in Singapore Stock Exchange? appeared first on Multi Management & Future Solutions.

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Trading in the stock market is one of the most sought income generation method adopted for leading a good lifestyle. Stock market trading is very lucrative but at the same time it involves higher amounts of risks.

The nature of the stock market trading is unpredictable in terms of the risks involved and benefits earned. No trader can ever be 100% sure that the trade is risk free. Nonetheless, if there is full-proof risk management strategy ready and if you adhere to it with utmost discipline, then it is possible to manage the risks associated with stock trading in SGX market.

What is Risk Management?


As the name suggests risk management is a way of not keeping all your eggs in one basket. In simple words risk management in stock trading refers to the way of managing risks associated or involved while trading stocks in SGX market. Stock trading is a high-risk high-return game. Every trader who is involved in stock trading needs to adopt a well-framed risk management strategy while carrying out trade in SGX market.

Having a risk management strategy is important because in its absence one can make mistakes that would cost losses to their trading accounts.

The following article will point out 5 most important risk management strategies that will help the investors and traders in mitigating the risk associated with stock trading in SGX market.

1. No “Stop-loss” order

For many new investors and traders not putting a “stop-loss” order on their trade account is one of the biggest mistakes that cost them losses on their trading account. Stop-loss is a type of order that restricts the investment by automatically stopping the trading in SGX market by closing the trading position once the account trade hits preset loss level set by the investor or trader. Thus the stop-loss order prevents the loss but often it is observed that traders and investors forget to set the stop-loss order.

Stop-Loss Order Feature What it Does
Stop-Loss This is the most primary type of order where the trading stops when the market fluctuates against your trade.
Guaranteed Stop Under this type of order there will be a guaranteed stop of trading in the account at the pre-determined price specified by the investor.
Trailing Stop Under the trailing stop feature of stop loss the investor has to set the trailing stop price. This price shall move in sync with the profits earned in the trade and if the market movement turns negative against the trade then the trade shall stop at the new trailing stop. This feature of stop-loss is beneficial as it does not require constant monitoring.


2. Limit the trade risk

The basic golden rule of risk management while trading in SGX market is to limit your risks up to 1%. The 1% golden rule implies more specifically to a single trade. Trade experts suggest never to risk too much capital in a single trade as trading is a gamble and no one can be 100% sure about the market movement.

The implementation of 1% golden rule will help in mitigating the losses occurred in rouge trade. However, this is not a fixed rule as few traders and investors who have a higher risk appetite usually risk more capital in a trade.

Thus this rule can be used to understand the underlying principal that investing a huge amount of capital in a single trade can cost losses in the event of negative market fluctuation.

3. Trading is a skill, master it

Trading is an engaging activity and many traders and investors tend to lose the focus of trading. While most of the traders believe that trading is a way of making money but in reality a successful trade is the result of trading well with proper research and strategies.

In fact, it is always recommended that while trading focus towards mastering the skill of trading rather than making money. Thus if traders focus and master the skill of trading then they can expect higher returns and profits on their investments.

4. Define Goals

Every trader and investor has a different personality i.e. few have a low risk appetite while few have a considerably higher risk appetite, moreover every trader has different financial goals as few concentrate on fulfilling short-term financial goal while other have a longer time horizon.

Apart from financial goals and time-frame horizon every trader must also define the type of asset or instrument they wish to trade.

Thus, while trading it is very important for every investor and trader to understand one’s personality, financial goals, type of instrument to trade etc. as defining these parameters will help them in formulating better trading strategies.

5. Stay Updated

Trading is about staying ahead in the game and believe it or not being updated about the relevant NEWS is the best way ahead. The relevant news update helps to track down the movements of the market and the underlying asset. For example, demand and supply of particular underlying asset will have a huge impact on the price of the commodity and the movement of the market.

Thus it is important for every trader and investor to be in touch with the latest trends and relevant news about the market as it will help in understanding the impact on the prices and performance of the underlying assets.

The latest piece of news shall help in creating better trading strategies and in making informed and wise decisions.

The best and simplest way to stay updated and knowing the trending news across the globe is by reading newspapers, following market trends, the financial/market analysis provided by leading brokers, carrying out research based on historical data etc. These means and ways shall surely help in becoming a successful trader.

Lastly, creating a risk management strategy is a good habit and having one will surely help a long way in carrying out successful trade activities. A good amalgamation of risk management habits and trading strategies is a sure shot formula for a successful trading career in SGX market.

The post 5 Risk Management Ways to Trade in SGX Market appeared first on Multi Management & Future Solutions.

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Gold trading and Forex trading are two most sought trading markets by the investor. Investors and trade enthusiast are always tracking every movement of both these markets to multiply their investments. The movement tracking of the two markets is essential as there is a very close relationship between the two.

Why to track market movement?


Gold market and Forex market both offer immense investment opportunities to the investors and traders but the nature of these markets is unpredictable both in terms of benefits and risks. Thus to make the most of your investments in gold and forex trading market it is best to track the movement of these markets.

How to track movement of these markets?


The most effective and efficient way to track movement of these markets is by:

  • Understanding the gold and forex correlation between the two markets.
  • The correlation shall help you in hunting out more profitable investment opportunities and help you in making the best out of them.

The correlation between the gold and forex trading market can be easily understood and noticed because:

  • Both the markets i.e. gold trading market and forex trading market are hugely affected by similar factors namely socio – political scenarios, economic stability, demand and supply etc. In the event of unrest or war or change in political scenario investors will witness fluctuation in the commodity market and forex market.
  • Commodities namely Gold and Crude Oil have a huge correlation with the forex market more specifically because the economic growth of a nation is tightly connected to the exports of domestic commodities in the international market. So it is natural and obvious for currencies in the forex market to have a huge correlation with commodity prices.

Why gold is an important trade commodity?


An important thing that every investor must keep in mind is that gold is of profound importance. The reason for the rising importance of gold in the trade community is because:

  • Since ages gold has a huge impact on the value of various currencies across the globe.
  • Even today gold as a commodity has an ability to act as a substitute for currencies so without any doubt gold will continue to hold an important position while dealing in the forex market and
  • It is an effective tool that is used to control inflation.

Therefore, gold is an important commodity that traders need to keep a close eye on. One of the basic things that traders and investors need to focus and understand is how commodities like gold correlate with forex i.e. various currencies across the globe.

What is gold and forex correlation?


For ease of trading worldwide the prices of gold are determined by currencies. Every currency has a different correlation and impact on commodity gold. It is usually observed that a fluctuation or change in the rate of currencies will impact positively or negatively on gold trading prices. As said above let us see how different currencies react to the gold trading market. Following is the study of the correlation between gold and various currencies. This study shall help you in understanding how forex and gold trading correlates.

  • US Dollar and Gold Correlation: There is an inverse correlation between the US dollar and the Gold market. The gold trading strategies can be based by overlooking the movement of the US dollar in the forex market. As per the historical statistics of the gold and forex correlation especially dollar and gold trading in recent years, it is observed there is an 80% negative correlation between the US dollar and Gold market i.e. the price of gold rose when the dollar rate fell and vis-a-viz. the main reason behind this inverse correlation is that investors tend to show more trust in gold investment when the dollar performance is lowering in situations like high inflation and economic trouble.
  • Swiss Franc and Gold Correlation: There is a direct positive correlation between the Swiss Franc and the Gold market. The market shows a positive trend in forex and gold correlation when the currency traded is Swiss Franc. There are 2 main reasons for this positive correlation namely the Swiss Franc is considered as safe haven for investment purpose by the investors and the Swiss currency reserves are backed by gold. Thus investors consider Swiss franc the safest investment currency while deciding their gold trading strategies.
  • Australian Dollar and Gold Correlation: The Australian dollar and gold trading have a direct correlation because it is a known fact worldwide that Australia is one of the top 5 exporters of gold. So any change or fluctuation in gold price will directly impact the rate of the Australian dollar.

Let us understand the forex and gold correlation with an example. As stated above we now know that Australia is one of the top 5 exporters of gold and so the Australian dollar has a direct correlation with the gold and gold prices. Thus while interpreting the forex and gold correlation it is safe to say that the best gold trading strategy is to focus on the Australian dollar and its movements. Alternatively, the gold trading and movements can be focused while trading in the forex market i.e. Australian Dollar dominated assets.

How to use forex and gold correlation trading strategies while trading?


Now we have understood how the correlation between gold and forex trading is affecting the movement of the underlying commodities in both the markets. This correlation can be utilized by traders and investors to make wise investment decisions.

Following are certain ways in which the forex and gold correlation trading strategies can be used to make profitable investment decisions.

  • For traders and investors who have a higher appetite for profits can trade in both forex and gold market simultaneously. Trading in both markets increases the chances of higher returns.
  • The nature of simultaneous trading i.e. forex and gold trading depends on the financial goals and risk appetite of the trader or investor. For traders who wish to minimize the risk exposure can do it by trading two inversely influencing instruments simultaneously. Alternatively, for traders who wish to double the profits can do it by trading in two directly influencing instruments.

Therefore it can be said evidently that the best and yet simplest strategy for gold and forex trading are:

  • That the investor must first understand the forex and gold correlation
  • Next, understand how various factors affect and control the market movement and
  • Lastly, understand how currencies and commodities react to each other in event of market movement.

And, the best way for understanding gold trading tip or gold trading strategy is by:

  • Getting a complete understanding of currency and commodity correlation through analysis of past trends and
  • Understanding the nature of the underlying asset.

To sum it up it can be stated as a sound knowledge of the correlation between currency and commodity can help traders and investors in:

  • Predicting the market movements and invest wisely.
  • The study of past trend analysis of forex market and performance of the underlying commodity will help in understanding the movement of gold prices and currency rates in the gold and forex markets respectively and
  • Give a holistic view of the economic condition of various countries.

Bottom line

Thus the above article has shed some important light on the importance of understanding the forex and gold correlation and how traders can benefit by predicting market movement. This forex and commodity correlation proves beneficial in formulating gold trading strategies as it helps traders and investors to understand the impact of movement and fluctuation of underlying commodity i.e. gold or crude oil and its impact on the forex currency market.

Thus in this manner, investors can effectively plan their gold trading strategies or forex trading strategies and make the best of their investments.

The post Gold Correlation Trading Strategy – How Gold Correlation With Forex Pair Works appeared first on Multi Management & Future Solutions.

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Forex Trading is not easy, here is a guide of common pitfalls that you must dodge to become a successful forex trader.

Many of us in order to earn profits and money we usually set out on a pursuit of conquering trade market as many are of the opinion that trading is a quick money making the instrument. But not many know that if forex traders do not know how to trade then the entire trade along with money might go south. The main reason why most of the forex traders fail is that forex trading is the game of chess – to win you have to think and foresee a few steps ahead. So if you want to be a successful forex trader you need to be in sync with the market movements and understand the forex signals. The forex market trends are one of the biggest tools that help you in understanding the forex market.

Many traders think that trading is perfection but the truth is that trading is never about perfection as no trader can ever predict the trends or movement of prices. Rather, it is more about forecasting the trends based on market movement, experience, and intuition. But the fact still remains that around 95% of traders fail in trading.

So if you want to successfully adopt the smart strategy and unique approach towards forex trading, you should avoid these 10 common mistakes in forex trading.

Forex Trading  Mistakes That Make Most Traders Commit:
Losing Self Control

Forex trading is about maintaining strict trading discipline but one of the biggest mistakes that trader’s commit is that they let their emotions take control of their trading decisions. For becoming a successful forex trader you will face some losses that can take an emotional toll on your confidence and patience.

This emotional turmoil can force you to jump from one trading method to others. This jumping or trial is done in order to find a big win in forex trading but it usually ends up in disappointment. The main reason for forex traders’ failure is that they make hasty decisions due to loss of emotional self-control. So try making informed and wise decisions by making a disciplined forex trading.

Not Sticking To A Particular Plan

For avoiding forex trading failures it is important to stick to a particular plan of action. A well-constructed plan or trading system is very important as forex markets are usually confusing and chaotic. So if you do not have a predefined plan then chances are you will lose your money. But if you stick to a particular methodology or forex trading system then you can usually anticipate the forex signals.

Over-Running On Emotions

Humans are emotional beings and they tend to make decisions that are ruled by emotions. But letting emotions take decisions of an uncertain environment like the forex trade can turn out to be catastrophic. Emotions are bound to dominate your trading decisions but dealing with them smartly will decide whether you are winning or losing in forex trading.

Inappropriate Trade Size

Account sizing is a very important aspect of successful forex trading. If a trader does account sizing on guesswork then it is bound to fail. Following disciplined account and trade sizing rules will result in your successful innings in trading.

Overtrading

Trading for the sake of investing is overtrading. Overtrading can be hazardous as they fail to see the genuine winning opportunities in forex trading. Overtrading can make you run for your money if you fail to be patient for things to get the line up for you. The golden rule to avoid failing in trading is – be patient and take action when things line up in your favor. Forex trading is beneficial only when traders see genuine opportunities and favorable forex signals.

Not Doing Trading Sincerely

Trading is neither a game nor it is to be treated as a hobby. Forex trading is not easy, it takes time to learn all the intricacies of trading and even more time to make it perform positively. Trading is a business or a way of making money so any shortcuts or un-experienced methods will not work in the long-run. It needs years of learning and experience to become a successful forex trader. So approach forex trading with a learning attitude and not as a moneymaking venture.

Not Adapting To Market Movement

Trading is all about understanding forex signals. Understanding these signals help you in making good decisions and succeed at trading. Overlooking the forex signals might cost you your money. A successful forex trader must never overlook the market conditions and forex signals as they play a huge role in building successful trading strategies. A lot of time forex traders overlook these signals, the market movement yet is able to find a winning strategy but such strategies last for a limited time as change is the only constant thing in forex trading. Most of the forex traders fail because they do not change their strategies as per the market conditions. Thus it is important to understand market movement and learn to adopt new forex trading strategies according to market movement.

Not Balancing risk- To – Reward Ratio

Trading is about knowing exactly how to much to invest and how to deal with risk. Traders must focus on leveraging their risk management skills to mitigate the risk associated with forex trading and develop strategies for capital preservation. The most important thing that forex traders fail to incorporate in their strategy is the diversification of their trading portfolio. Thus it is important to look into risk – to – reward ratio to maintain a winning strike in forex trading.

Unrealistic Expectations

Setting unrealistic expectations can make you lose your money. Forex trading is not a moneymaking instrument or venture rather it is a game, and to ace this game it is important to put in recurrent efforts in order to master all the forex trading Expecting that a certain forex trade will give you exceptional returns is wrong as such trade involves a lot of risks. Indulging in such trades might result in risking your capital in order to achieve unrealistic gains. So avoid setting up unrealistic expectations rather focus on capital preservation strategies to prevent the occurrence of uncalled events.

Trial And Error

Carrying out Forex Trading successfully is not easy as it requires a well-formulated plan. Learning all the tricks associated with market movement all by oneself with trial and error can cost you your money and can turn out to be the most expensive way of learning forex trading. The most effective way of learning forex trade is by learning it from a successful mentor and coupling it with hours of practice.

To sum it up forex trading is a game of intuition. You have to let your experience and wisdom take lead while taking forex trading decisions. You can take your first step towards starting your journey towards successful forex trading by avoiding the above-mentioned pitfalls. We at Multi Management & Future Solutions are here to help you learn perquisites required for building a solid foundation in forex trading carrier.

The post Forex Trading- Most Common Reasons Why Most Forex Traders Fail appeared first on Multi Management & Future Solutions.

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