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By Benny Lee,
1997 :
• Started trading the futures market in 1997.
• Was against the trend, Lost heavily
1997 – 1999 :
• Worked in a Recruitment Agency (Need to pay back debts!).
• Started to study about trading. Discovered and learned mistakes
• Developed trading strategies and traded lightly. Benny Lee
• Learned about Automated Trading Strategies
1999
• Started trading privately. Stocks and Futures, Malaysia and Singapore.
• Started learning TradeStation and Omnitrader.
• Training Consultant to a Software Company. (This was when my training experience started)
Copyright © 2008 by Benny Lee, NextView
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2 SOURCES OF INCOME:
• Additional source of income from dividend.
Averagely 5% dividend of $ 100,000 (Par Value = RM 1.00) is RM5,000 additional
income a year.
1. Value investors
2. Growth investors
3. Traders
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Value Investors:
Buy fundamentally sound stocks that are selling below
intrinsic value and hold them for years.
Growth Investors:
Buy stocks with a good business model, and high sales and
earnings growth.
Traders:
More likely to be short-term speculators.
E.g. Day traders, position traders, scalpers etc.
Trading
vs
Investing
Which is better?
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2. COMMITMENT
THE INVESTOR FALLS IN LOVE WITH A COMPANY
The investor decides to last the relationship for a long period of time, despite knowing that
they have its ups and downs
4. COST
THE INVESTOR HAS HIGH COST MAINTAINING THE RELATIONSHIP
The investor needs to have holding power a.k.a. lots of money to hold a long term position.
Furthermore, dividends are taxable
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Trading Investing
Expected Returns High Lower
Expected Risk Low Higher
Cost (Commission) Relatively Lower Relatively Higher
Tax Not Taxable Dividends Taxable
Uncertainty Risk Low High
Opportunity Cost/Liquidity Low High
Capital needed Low High
More Workload/knowledge Yes No
TRADING VS INVESTING
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HOW?
YOU SUCCESS
THE ACTION
Capital TRADING GOAL
PLAN
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Trading Risks
i) Information/Analytical Risk
How much information did you get for this trade? Are your analysis
good (Technical/fundamental? Do you have enough experience? What
is the hit rate of your mechanical system?...etc
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$7.10
Loss of RM
2.10 (29%) in
3 months
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$4.18
Loss of RM 0.88
(21%) in 6 days
$9.20
Loss of RM 1.40
(15%) in 2 weeks
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I) FINANCIAL PERFORMANCE
A good company has good financial performance. Performance based on the
revenue, profitability, cashflow, gearing, assets etc. It is the blood of the company
II) MANAGEMENT
A good company has a good management team. The management team’s experience,
contacts, exposure, leadership abililty, vision, mission etc. It’s the body of the
company.
A study of price (and volume) actions in the past to determine future price actions.
The study of price against time is done on a chart
A technical indicator, as its name suggests, indicates a price action and they can
be in the form of chart patterns (that repeat frequently) and statistical indicators
(like moving average).
It does not take a long time to understand how to analyze a chart. Price
information is cheap and easily available. I will provide you with a solid
foundation on how to use technical analysis today.
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Indicator 1: Indicator 3:
Eyes - Look Finger - Touch
Indicator 2: Indicator 4:
Nose - Smell Chemical –
Chemical
content
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• Price/Book:
– As low as possible
– Less than 1
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• Intermarket analysis
– Development in an industry may affect stock prices in a sector. For example, rising Crude Palm oil
prices benefits companies related to this commodity and therefore is expected to rise.
Technical Analysis
Trend indicators Indicators are indicating a
strong up trend
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You can set alerts and get portfolio management tool in NextVIEW Advisor
Professional.
What is a Portfolio?
• A portfolio is a collection of stocks, bonds, and other assets owned by an
investor or organization.
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4.20
3.40
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THANK YOU!
I wish you all success in
your trading
benny@thenextview.com
www.tradinglobby.com
Copyright © 2008 by Benny Lee, NextView
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