FIN348 Trading PLAN PDF

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Summary

1. Type of Traders i. What type of trader we are going to be? Swing traders, who are not only interested in trading but also have a passion for it, are the kind of traders we might be. Swing traders are able to trade on a regular basis and do not just buy or sell when the price is falling. They are ...

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1. Type of Traders i.

What type of trader we are going to be?

Swing traders, who are not only interested in trading but also have a passion for it, are the kind of traders we might be. Swing traders are able to trade on a regular basis and do not just buy or sell when the price is falling. They are generally really good at establishing long-term relationships. Swing traders are also known for being excellent at selling their stocks, allowing them to make a lot of money. Observing stock market charts is the perfect way to learn about swing trading. You can keep an eye on these charts to see how many stocks are rising and falling each day. If you want to become a swing trader, you must first grasp the current market conditions. You should have a fundamental understanding of how markets work. You should be able to trade with your own money as well. In this place, swing traders are not always good. You will have to learn how to gain from the stock market. Observing the charts of other people's trades is the perfect way to think about the stock market. More information on the stock market can be found here. Go for it if you want to become a swing trader. Swing trading is a common way to get started in the stock market. It is easy to do and takes far less time than purchasing stocks. At any time of day or night, you can purchase shares. Swing trading is an ideal choice if you have a clear understanding of the stock market.

ii.

What type of tools or analysis will help us achieve our goals in this game? We will use technical analysis, fundamentals, and expert tools to analyse a stock's performance, market conditions, and other factors that influence its price. These tools may be used in a number of ways. We can use charts to see how the market is going and how long it will take us to make a profit, for sure. This method will also assist you in determining whether there is a pattern or path that could result in a loss or benefit.

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1. Our goals in this trade plan Our trading plan's targets can trade on the market with confidence, without fear of losing money, and to benefit more than half of the time from our trading. We need to gain more profit in the transaction from the investment, at the same time we need to avoid losing our money. We will take advantage of this opportunity to learn how to plan our trading account more efficiently. Furthermore, we want to make a good profit per transaction, but we also want to make sure that we will gain more profit and rose our money to get the highest grade possible on our assignment.

Technology,

oil

and

gas,

manufacturing,

consumer

products,

and

finally

telecommunications and media are examples of counters that are more likely to perform well. We will be having several meetings to discuss the counter had been selected, in order to ensure we achieve our objectives. We believe that if we are not properly plan our trading with our best strategy, we will lose the money. We will try to learn how to make more profit and counterpart our losses, it will give us experienced either is good or bad in our trading game, as well as our group members' strengths and weaknesses.

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2. Section A: Risk Parameter Risk parameter functions are crucial to know while trading as it controls and keeps traders checking how not to lose their money too fast or too much. Below is the display of each company and its buying price, target price 1, target price 2, target price 3, stop-loss, number of lots, capital, and the total amount predicted to be used by one member in this group. Note that these prices will be changing when we will start buying shares of the counter, beginning on Monday 5th April 2021. the calculations below are based on the closing price of bursa Malaysia at the end of Friday last week, which is on 2nd April 2021. Any changes will be recorded and calculated again.

a. List of company that will be handled by each member (on the first week): Member’s name

First company

Second company

Third company

Nur Aisyah Alya

ADVCON

DNEX

QES

Aisyah Izzati

DAYANG

PUNCAK

VS

Hanie Nabilah

AEMULUS

DUFU

MYNEWS

Puteri Aina Natasha

INIX

TM

VELESTO

Nurqistina Aqilah

AWANTEC

ITRONIC

SUNCON

b. List of capital that is predicted to be uses by each member (under RM100 000): Member’s name

Capital used overall

Nur Aisyah Alya

RM 99 860

Aisyah Izzati

RM 99 150

Hanie Nabilah

RM 99 750

Puteri Aina Natasha

RM 99 980

Nurqistina Aqilah

RM 99 910

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c. List of company with its trading plan including risk parameter •

NUR AISYAH ALYA i.

ADVCON

ENTRY PRICE

0.385

TARGET PRICE 1 (10%)

0.424

TARGET PRICE 2 (10%)

0.466

TARGET PRICE 3 (10%)

0.512

STOP-LOSS (3%)

0.878

LOT

500

TOTAL (RM)

ii.

19,250.00

DNEX

ENTRY PRICE

0.905

TARGET PRICE 1 (10%)

0.996

TARGET PRICE 2 (10%)

1.09

TARGET PRICE 3 (10%)

1.205

STOP-LOSS (3%)

0.878

LOT

500

TOTAL (RM)

iii.

45,250.00

QES

ENTRY PRICE

0.520

TARGET PRICE 1 (10%)

0.572

TARGET PRICE 2 (10%)

0.629

TARGET PRICE 3 (10%)

0.692

STOP-LOSS (3%)

0.504

LOT TOTAL (RM)

680 35,360.00

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•

AISYAH IZZATI •

DAYANG ENTRY PRICE TARGET PRICE 1 (10%)

1.65

TARGET PRICE 2 (10%)

1.815

TARGET PRICE 3 (10%)

1.997

STOP-LOSS (3%)

1.455

LOT TOTAL (RM)

•

290 43,500.00

PUNCAK ENTRY PRICE

0.540

TARGET PRICE 1 (10%)

0.594

TARGET PRICE 2 (10%)

0.653

TARGET PRICE 3 (10%)

0.719

STOP-LOSS (3%)

0.524

LOT TOTAL (RM)

•

1.500

200 10,800.00

VS ENTRY PRICE

2.990

TARGET PRICE 1 (10%)

3.289

TARGET PRICE 2 (10%)

3.618

TARGET PRICE 3 (10%)

3.980

STOP-LOSS (3%)

2.900

LOT TOTAL (RM)

150 44,850.00

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•

HANIE NABILAH i.

AEMULUS ENTRY PRICE

0.850

TARGET PRICE 1 (10%)

0.935

TARGET PRICE 2 (10%)

1.029

TARGET PRICE 3 (10%)

1.131

STOP-LOSS (3%)

0.825

LOT TOTAL (RM)

ii.

41 650.00

DUFU ENTRY PRICE

3.980

TARGET PRICE 1 (10%)

4.378

TARGET PRICE 2 (10%)

4.816

TARGET PRICE 3 (10%)

5.297

STOP-LOSS (3%)

3.861

LOT TOTAL (RM)

iii.

490

80 31 840.00

MYNEWS ENTRY PRICE

1.010

TARGET PRICE 1 (10%)

1.111

TARGET PRICE 2 (10%)

1.222

TARGET PRICE 3 (10%)

1.344

STOP-LOSS (3%)

0.980

LOT TOTAL (RM)

260 26 260.00

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•

PUTERI AINA NATASHA i.

INIX

ENTRY PRICE

0.170

TARGET PRICE 1 (10%)

0.187

TARGET PRICE 2 (10%)

0.206

TARGET PRICE 3 (10%)

0.226

STOP-LOSS (3%)

0.165

LOT

980

TOTAL (RM)

ii.

16 660.00

TM

ENTRY PRICE

6.060

TARGET PRICE 1 (10%)

6.666

TARGET PRICE 2 (10%)

7.333

TARGET PRICE 3 (10%)

8.066

STOP-LOSS (3%)

5.878

LOT TOTAL (RM)

iii.

110 66 660.00

VELESTO

ENTRY PRICE

0.170

TARGET PRICE 1 (10%)

0.187

TARGET PRICE 2 (10%)

0.206

TARGET PRICE 3 (10%)

0.226

STOP-LOSS (3%)

0.165

LOT TOTAL (RM)

980 16 660.00

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NURQISTINA AQILAH

• i.

AWANTEC ENTRY PRICE

1.110

TARGET PRICE 1 (10%)

1.221

TARGET PRICE 2 (10%)

1.343

TARGET PRICE 3 (10%)

1.477

STOP-LOSS (3%)

1.077

LOT TOTAL (RM)

ii.

33 300.00

ITRONIC ENTRY PRICE

0.445

TARGET PRICE 1 (10%)

0.490

TARGET PRICE 2 (10%)

0.538

TARGET PRICE 3 (10%)

0.592

STOP-LOSS (3%)

0.432

LOT

480

TOTAL (RM)

iii.

300

21 360.00

SUNCON ENTRY PRICE

1.810

TARGET PRICE 1 (10%)

1.991

TARGET PRICE 2 (10%)

2.190

TARGET PRICE 3 (10%)

2.409

STOP-LOSS (3%)

1.756

LOT TOTAL (RM)

250 45 250.00

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3. Section B: Trading Decisions Input As a group of five investors who is trying to dive into the investment world, every one of us should be able to identify the best method to use in the trading plan. There are two methods that used to analyze market securities, there are including of Fundamental Analysis and Technical Analysis. Fundamental Analysis is analyzing the characteristics of a company in order to obtain its value in the market. Unlike Fundamental Analysis, Technical Analysis is not profoundly dependent on the financial report. It is mainly forecasting the prices movement based on the past event primarily focusing on the price and volume. Those who had been in the investment industry for a long time would prefer to use either one or a combination of both analyses. In my opinion, it is best to apply both analysis since we just started to make an investment. This way, we would be able to discover our own style of technique in analyzing the market over the time being. Do you prefer to watch the news and read the financial reports of a company? If it is a yes, then you are using fundamental analysis before you trade. There are plenty of websites that distribute current news of the stock market, such as The Edge Market, Investopedia, Malaysiastock.biz and etcetera. Besides, locally owned websites like Bursa Marketplace, Bursa Malaysia, and iSaham offered information about a company in the most convenient way for the investor to browse through. The advantage of reading news is a significant positive event of the company will most likely impact the company share price in a good way and it is going to be the other way around if it is an atrocious news. One of the ways to start off your fundamental analysis is to look at the quarterly report of a company. It is a financial report that consists of revenue, net tangible asset, earning per share, price per earnings ratio, and others which cover every three months. Analyzing quarterly reports is vital as it can secure our trust and faith in our targeted company. Firstly, net tangible asset also known as NTA is calculated as total assets of a company minus the intangible asset and minus the total liabilities. It can be used as the benchmark of the current share price. If NTA is greater than the current share price, then it is overvalued stocks, and if NTA is smaller than the current share price, it is undervalued stocks. Secondly, earning per share, which is known as EPS, is the net profit per outstanding share of common stock. A higher and positive EPS defines a good company, and it is the opposite way if the EPS is negative. Thirdly, price per earnings ratio, also known as PE Ratio, is calculated as share price divided by earnings per share. Normally, the lower the PE Ratio, the better the performance of the company but there are a few sectors that will have a high PE Ratio and is also a decent company. A range of less than 10 PE Ratio is considered a company that has a great potential. Page | 9

For example, Sunway Construction Sdn. Bhd.’s quarterly report shows that the company is thriving in the past 3 months. To support this statement, here are the financial information along with the quarterly report that have gathered from Malaysiastock.biz.

Do you prefer analyzing the price movement in the market using chart analysis and indicators? If it is a yes, then you are making an investment based on technical analysis. Chart analysis is available on a website for free such as iSaham and software like Chart nexus. There are three trends in the technical analysis which are bullish trend, bearish trend, and sideways trend. Bullish trend shows an upward movement in the prices of a company share price while bearish trend is the opposite. Sideways trend on the other hand is the horizontal price movement that only occurs when there is equally strong demand and supply. The advantages of using technical analysis are the investor would focus more on the price movement, chart pattern is easy to recognize and the trader would be able to know when to enter and exit the market. Page | 10

The basic knowledge of the candlestick chart should be acquired by every investor to make it easier for us to analyze the price movement. Common candlestick patterns such as Bearish and Bullish Engulfing, Marubozu, Spinning Tops and variations of Doji are easy to remember. There is a substantial amount of chart patterns that have been recognized by the investors out there such as Double Top, MACD, Stochastic, Head and Shoulder, Shark pattern, and many more. At the end of the day, no matter which analysis that you used, we have the same goal to achieve which is to live a life without having a financial crisis.

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4. Section C: Market Trends Swing traders are the main trading styles that we used and focusing on for this trading plan. In trading activities where we are entering the market days or weeks, we need to predict the market trend either it is a bull trend, bear trend and or sideways trend. Moreover, some market trends can be reversal trends, such as bull-to-bear or bear-tobull. The reversal trend also attributed to technical analysis. Technical analysis will help traders with giving an idea of what has happened in the past or historical trends to give an idea about what will happen in the future. Market trend analysis is very helpful where we can look at the moving trends that will lead to a profit or loss. A bull or bullish trend is an upward trend where all the price in the market is rise in. It indicates an active market in which most traders and investors enter the market to make a buying decision. The uptrend will indicate recovery of an economy. The bear or bearish pattern, on the other hand, indicates a downtrend in which all prices in the market are decreasing. Bearish trends are about the declining market prices scenario. The market price level is no longer enticing for traders and investors to purchase the stock at a much higher price since it could be sold at an overvalued price. Market prices that decrease by 20% will be identified as a bearish trend. Lastly, the sideways trend is a horizontal price movement where there is a price movement with a little variation or not much change. A horizontal trend usually happens between support and resistance. Traders and investors will look at the hint of breakout or breakdown by using technical indicators or chart patterns either it can make a profit or loss. To illustrate my points here, I am using Tradingview.com, and let us look at the line charts below: i.

UPTREND/ BULL

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The chart above it represents information about DUFU TECHNOLOGY CORP. BHD. over time. It shows a bull trend or an uptrend and steep upward. Meaning that this company remain steady and constant from January 2020 until April 2021.

ii.

DOWN TREND/BEARRISH

The line chart depicts the market trend for VELESTO ENERGY BERHAD, which shows a downward trend from 2020 to 2021. Even though there is a bullish candle whereby it still making a profit but the chart is decreasing significantly starting 2 December 2019.

iii.

SIDEWAYS TREND

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This chart shows that it does not have much change compared to the bull and bear trend. The candlestick from 2020 to 2021 moves minimally and slightly. In this case, the price of security trades within a stable range without forming any distinct trends over a year.

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5. Section D: Use Stops Recognizing when to stop is critical and essential as much as knowing how and when to start trading in a counter. Some traders will be blinded by money and denying the need to stop before the price gets worse, or in some situations, that trader tends to still wait for the graph to maybe change to the way they want even though it has been going downwards for the past few days. Our group will be using three main ways to identify when the right time is to stop the trade. The first way is when the graph is showing a breakdown from the support line. One will always want to wait for the chart to rebound, but unfortunately, in most cases, after the graph breakdown, the loss will be higher and waiting for it to rebound is going to take some time. So, use this as a guide to stop and sell your shares. Another trick is to stop when the rewards point has been reached and not to get greedy with your target. Only maintain in the counter to go for higher rewards if there is terrific news of the counter will be giving higher prizes. But if not, it is a signal to leave. The last part is it is advised to stop when nothing is going on in the counter, or the price of shares is not moving or moving very slow. Some people that decide to trade daily and trade in that specific counter that has shown no progress is may be a waste of time. Instead, we can seek another counter that has a higher chance of giving back profit to us. In the end, it is important to research and gain the full knowledge from everywhere before deciding on the next step as that will change the future.

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6. Section E: Segments The trading strategy is important for every trader before they start to trade. It will assist their trading plan to maintain consistency and discipline in stock trading, and it also helps the trader to remain calm and avoid any unexpected decisions making. We had been selected five different sectors to analyse the fundamentals and technical analysis of each industry. Thus, we decided to list out these top five potential sectors before we penetrate the market. We searched out and collected all the information through news such as The edge market, The star, and Bursa marketpl...