How do I interpret volume?

Low volume is a sign of caution. Price movement associated with low volume may be noise. High volume is a sign of things to come or a confirmatory sign of trend.

High volume with large price movement may indicate continuation of trend. High volume with low price movement may indicate reversal of trend.

How likely is suspension?

I once checked that the suspension rate in SGX is about 3%. This is the possibility that a stock will get suspended in its lifetime. The chance that I will encounter suspension while holding a stock should be much lower as I don't hold it for a lifetime. One way I can avoid getting hit by suspension is to shun small caps.

Should I short?

Shorting incurs additional cost like borrowing cost. Unless there is serious bad news, the gain from shorting is going to be limited.

Is year-end rally and sell in May valid?

I observe that, provided there is no major bad news, year-end rally usually happens. A sell-off in May is also bound to happen. So, the Market seems to have a seasonal mood.

When do I cash in for my mid-term trade?

I would like to cash in after other mid-term traders have cashed in as I know mid-term traders are less likely to cash out easily. Frankly, it is not easy to tell when the mid-term traders have cashed in.

One way is to look for a single-day volume spike. But, sometimes, mid-terms traders do not rush in in a single day, resulting in no volume spike. In that case, I will have to look for crossing of some mid-term trend line.

When do I sell off my investment?

I will choose to sell when the yearly yield drops and I can find another stock with high yield.

Why I don't invest in foreign Market

When I invest, I look primarily for yield to make holding worth. The beholding tax of 30% in foreign Market will eat into my yield. Though insignificant, there is an additional custodian fee of $2 per month which adds up to $240 in 10 years.

How does the Market behave?

The Market likes to react to macro news. This is in line with Dow theory that stock prices quickly incorporate new information as soon as it becomes available.

When will I invest?

I will invest when I see a yearly yield of 8%, price below NAV and gearing less than 35%. If the price falls after I have bought, I will buy more at a substantially lower price.

What is my bet size?

The deeper the dip, the bigger will be my bet size.

When is the best time to buy?

A rising tide will lift all boats. The best time to buy is when the bull overwhelms after a dip. For mid-term trading, the chance comes about once or twice a year. For investment, the chance comes about once in a few years.

Why I don't buy during the maintained phase

During this phase, the bulls and bears are in a stable state. Neither side is stronger. At this point of time, the mid-term traders are either cashed out or haven't cashed in. Only the swingers and scalpers are cashing in and out.

It's not certain which way the Market is likely to go after this phase. But, I can predict with fair accuracy that the Market will go down if I can see that the mid-term traders have cashed out. Likewise, the Market is likely to go up if I can see that the mid-term traders have cashed in.

Why I choose not to pay for courses

There is plenty of material on the internet which I can get for free. Shouldn't I save my hard-earned ammunition for actual trading and investment?

Why I choose not to be a swinger or scalper

As a swinger, I am just picking pennies in front of the bulldozer. The success rate is low and the risk is high. It is highly dangerous and the reward is scanty.

Worse still, scalping requires even more monitoring and concentration to the extent of near-zero distraction. It is best done in full isolation. And, it's a highly skillful game.

Types of players in the Market

There are intra-day, short-term, mid-term and long-term traders in the Market. The intra-day traders can be called scalpers. The short-term ones are also known as swingers. The mid-term traders can be called position traders. The long-term ones are also known as investors.

I believe these 4 types of players contribute to the 3 types of price movement trends depicted in Dow theory, with scalpers and swingers contributing to 1 type of price movement.

Phases of the Market

The Market is perpetually in the bullish, maintained and bearish phases. I shall buy in the bullish phase. And, I shall sell in the maintained phase or start of the bearish phase.