The recent collapse of Silicon Valley Bank (SVB) triggered mass panic in which the contagion effect have unfurled ramifications across the traditional finance industries. One of the main reasons in the SVB post-mortem is the lack of advanced cutting edge technologies for risk and regulations in the fintech sector.

In light of SVB and the FTX collapse, people started flocking to DeFi (Decentralised Finance) platforms. the recent collapse of FTX and bank runs actually underscores the need for a more decentralized financial system. When centralized institutions fail, there is no safety net to protect investors. DeFi distributes the risk across a network of users and smart contracts, making it less vulnerable to individual failures. traditional banks started to feel the pressure.

They realized that they needed to adapt or risk becoming obsolete. They started to explore the use of blockchain technology and DeFi, incorporating these systems into their existing infrastructure.

In other words, the collapse of FTX and the subsequent bank runs marked a turning point for the banking industry. It showed that traditional banks were no longer the only option for financial services. DeFi offered an alternative that was transparent, secure, and accessible to everyone. And as more people embrace this new system, the future of banking looks brighter than ever.

Smart Investor recently interviewed Terrence Hooi, CEO and Co-Founder, Singular Technologies to find our more about this topic. But before that, let’s begin by understanding more about non-custodial DeFi.

Non-Custodial DeFi

Non-custodial DeFi does not require regulatory controls because it is designed to be trustless and decentralized. Unlike centralized financial systems, where a central authority controls the flow of funds and is responsible for ensuring compliance with regulations, non-custodial DeFi operates on a peer-to-peer basis without intermediaries.

In non-custodial DeFi, users have complete control over their funds and can transact directly with each other using smart contracts. These contracts are self-executing and enforceable, meaning that transactions are executed automatically without the need for human intervention.

Since there is no central authority or intermediary involved, there is no need for regulatory controls to ensure compliance. Instead, the rules of the system are built into the code of the smart contracts, which are transparent and auditable by anyone. But again, Singular wants to actively work with regulators like DFSA and MAS Singapore.

Additionally, non-custodial DeFi is designed to be permissionless, meaning that anyone can participate in the system without needing permission from a central authority. This makes it more accessible to a wider range of users and reduces the potential for discriminatory practices or exclusionary policies.

Overall, non-custodial DeFi’s trustless and decentralized design makes it less vulnerable to fraud, hacking, or other forms of malfeasance that regulatory controls are designed to prevent. Instead, its transparent and auditable nature allows the system to self-regulate and enforce compliance with its own rules.

Singular Technologies recently launched a new institutional grade atomic settlement platform  – aptly called “Singular” – that is built on decentralized finance (DeFi) infrastructure. Atomic settlement is a technology that allows for simultaneous execution of multiple transactions or exchanges, reducing the risk of failed transactions or malicious attacks.

Singular’s DeFi platform has been recognized with numerous awards, including the Bold Awards 20’ Europe, Top 10 Fintech Startup, APAC, StartupWorldcup Regional Top Winner 22’, Alibaba Cloud Innovation Awards 22’, and ORIGIN Web 3 Top Disruptor 22’.

Smart Investor: What is the outlook on Stablecoins with looming recessionary and geopolitical pressures?

Terrence Hooi: With regards to the outlook on stablecoins in the face of looming recessionary and geopolitical pressures, there are a few different factors to consider:

1.  Potential for increased demand: During times of economic uncertainty, people may turn to stablecoins as a safe haven asset. This could lead to increased demand for stablecoins, which in turn could drive up their value.

2.  Potential regulatory challenges: Stablecoins are still a relatively new and unregulated asset class, and regulators may become more concerned about their potential to destabilize financial systems during times of crisis. This could lead to increased scrutiny and regulation, which could impact the growth of the stablecoin market.

3.  Impact of inflation: If the recessionary pressures lead to high inflation, stablecoins could become more attractive to investors as a hedge against inflation. However, if stablecoins are not properly backed by assets, they could lose their peg and become vulnerable to inflation.

4.  Geopolitical risks: Geopolitical risks can have an impact on the value of stablecoins. For example, if a country decides to ban the use of stablecoins or restrict their circulation, this could lead to a decrease in demand and value.

SI: Why did you and your co-founders decide to launch this product? What are 3 pain points or areas that Singular Technologies’ product addresses which other digital banking solutions or cryptocurrencies do not? How are you unique?

TH: The current state of DeFi Apps are notoriously complex to use and it is not a skill everyone can master. One of the main challenges facing DeFi today is the accessibility and scalability with subpar UX.

The very wealthy have always been able to afford to pay expensive money managers to manage and invest in Crypto, but financial APIs and DeFi in the late ‘Tens’ let Singular extend a similar service to people with a ~$10k net worth instead of ~$5M using Distributed Ledger Technology for the unbankable in emerging markets.

The current financial system is slow and expensive. For example, if you look at global remittances today using ACH or SWIFT, it is often slow and expensive ~2–3days. Compare that to stablecoins like USDC, which maintains a peg to the US dollar, it takes ~3 minutes without relying on any intermediaries.

Singular (SD) is an all-in-one banking and financial services platform for cryptocurrency users. Singular aims to outperform banks using the best elements of DeFi.

SI: Which markets are you currently active in? Any new entries planned in the near term? How has MRANTI assisted you in growth and expansion plans?

TH: US, Singapore & Japan. Japan have always been a hub for innovation, and we are excited to be a part of this thriving community with the help of MRANTI & MaTrade. Our new office will allow us to provide even better support and services to our Japanese users, as well as to collaborate with local partners and experts in the DeFi space.

The Founding team has expertise in building institutional-grade Crypto Exchanges capable of processing 2 million orders per second and building decentralized finance platforms for institutions.

SI: How is your new product purpose-built to promote financial inclusiveness ie banking of the unbankable?

TH: One of the key features of our platform is that it allows users to easily convert between traditional fiat currencies and cryptocurrencies. This makes it easy for users to participate in the global financial system and take advantage of the benefits of decentralized finance.

Our platform is different from traditional financial institutions in that we do not require users to have a traditional bank account or credit history. Instead, our platform is designed to be user-friendly and accessible to anyone with a smartphone and an internet connection. This is particularly important for the unbankable, who may not have access to traditional financial services due to a lack of documentation or credit history.

SI: So how does a person “buy” a stablecoin / Singular Token? What’s the minimum sum / volume or amount?

TH: Min can be as little as RM 100  and can it be traded, exchanged, borrowed, lent to only those w “stablecoins” or is it open to participate in any other crypto exchange?

We’re currently working with an internationally compliant fiat-gateway Xanpool, to allow users from Indonesia, Malaysia, Singapore , Hong Kong, Thailand, Vietnam, south Korea, India, Phillipines to easily use a bank account or CC to purchase Stablecoins like USDC or major cryptos like BTC and ETH.

SI: How do you ensure that your stablecoin remains stable and maintains its peg to the underlying asset, especially during periods of market volatility?

TH: The potential benefits of Stablecoins like USDC or Tether, which are now available on the Singular App. One of the key advantages of Stablecoins is their ability to maintain their peg to the underlying asset, even during periods of volatility. Assets backed USDC for instance is registered with FinCEN and regulated by 46 regulators.

This is particularly important in the context of decentralized finance (DeFi), where users are increasingly turning to Stablecoins as a way to mitigate the risk of market fluctuations. By providing users with access to Stablecoins, platforms like Singular App are helping to make DeFi more accessible and user-friendly for a wider range of users.

Stablecoins like USDC or Tether are designed to maintain their value through a number of mechanisms, such as backing the coin with a reserve of the underlying asset or using algorithms to adjust the coin’s supply in response to changes in market conditions. This ensures that the value of the Stablecoin remains stable, even in the face of market volatility.

In addition, Stablecoins can be used for a wide range of purposes, such as trading on decentralized exchanges, paying for goods and services, or as a store of value. This versatility has made them increasingly popular among users who are looking for a reliable and stable alternative to traditional cryptocurrencies.

Overall, the availability of Stablecoins like USDC or Tether on the Singular App represents a significant step forward for the DeFi industry. By providing users with access to Stablecoins, platforms like Singular App are helping to make DeFi more accessible and user-friendly for a wider range of users.

SI: Can you explain the process of creating and redeeming the stablecoin, and how do you ensure that the collateral backing your stablecoin is secure?

TH: The process of creating and redeeming Stablecoins on the Singular App is relatively straightforward. To create Stablecoins, users can deposit the underlying asset (such as USD) into a collateral pool on the Singular App. The app then mints an equivalent amount of Stablecoins, which can be used for trading or other purposes within the platform. To redeem the Stablecoins, users can simply exchange them back for the underlying asset in the collateral pool.

To ensure the security of the collateral backing of the Singular token, the platform uses a number of mechanisms. One of these is a smart contract that is designed to automatically liquidate collateral in the event that its value falls below a certain threshold. This helps to ensure that the value of the collateral backing the Singular token remains stable and secure.

In addition, the platform uses a combination of on-chain and off-chain mechanisms to monitor the value of the collateral pool in real-time. This helps to ensure that the collateral backing the Singular token is always sufficient to maintain the value of the token.

As Singular continues to develop its platform, it plans to roll out its own native token that is privacy-based. This token will be backed by a collateral pool, similar to the Stablecoins, and will provide users with even more flexibility and functionality within the decentralized finance ecosystem.

Overall, the use of Stablecoins on the Singular App represents a significant step forward for the decentralized finance industry. By providing users with a stable and reliable means of transacting, Singular is helping to make DeFi more accessible and user-friendly for a wider range of users.

SI: How do you plan to scale your decentralized finance solution to accommodate a growing user base, and what challenges do you anticipate in the process?

TH: Singular Milestones 2023

i.Smart Contract based Privacy Token.The Singular Token will be implemented with a smart contract that is ERC-20 compatible as well as privacy-preserving features such as zero knowledge proofs.

ii. To ensure The Singular Token on the Singular DeFi platform are private, the privacy token will utilize zero-knowledge proofs. Allowing two parties to prove the validly of transaction without revealing any information about the transaction while maintaining the integrity of the blockchain.

iii. To facilitate the trading of Singular Token, a KYC based decentralized exchange (DEX) will be built on Singular’s DeFi platform. Holders of Singular Token will be able to use Singular Token for  zero fee global transfers, high-yield staking, and access to professionally managed decentralized assets. The platform will have robust security and compliance measures to ensure users funds are safe and secure and that the platform is compliant with regulators.

iv. Lending and Borrowing. To enable landing and borrowing of Singular Token, users can lend and borrow the privacy token, with interest rates determined by supply and demand. The protocol will be implemented as a smart contact on the Ethereum blockchain , ensuring the transactions are completely private while operating in a completely decentralized manner.

SI: How do you plan to handle regulatory challenges related to decentralized finance, and what steps have you taken to ensure compliance with relevant laws and regulations?

TH: Singular aims to submit a regulatory sandbox application with the Monetary Authority of Singapore (MAS) and the Dubai Financial Services Agency. A regulatory sandbox is a testing environment that allows companies to experiment with new technologies and business models while still being subject to regulatory oversight.

By participating in regulatory sandboxes, Singular can work with regulators to ensure that its platform meets all regulatory requirements and is safe and secure for users. It also provides an opportunity for Singular to demonstrate the value of DeFi to regulators and policymakers, potentially paving the way for broader adoption of DeFi in the future.

SI: How do you address concerns around transparency and auditability in your stablecoin decentralized finance solution, and what measures do you take to ensure the integrity of your platform?

TH: Every year, more money is lost in DeFi without the hackers being held accountable, resulting in a diminished sense of security with users. Currently, the largest drivers of crypto adoption are centralized exchanges (CEX) like Coinbase who integrate KYC processes. These regulatory measures issue accountability that lead to consumer confidence which DeFi currently lacks.

The Singular DeFi platform facilitates proper regulatory compliance while maintaining privacy by adhering to critical aspects of the users identity. Singular aims to solve these two major barriers that could led to large scale crypto adoption:

• Lack of accountability and security in Web 3
• Preserving investor privacy while interacting across DeFi protocols

SI: How do you plan to incentivize liquidity providers to participate in your stablecoin decentralized finance solution, and what benefits do they stand to gain?

TH: Firstly, as a liquidity provider, holders of Singular Dollar will be able to earn a share of the transaction fees generated by the network. This means that the more assets you contribute to the liquidity pool, the more fees you will earn. Our platform also offers additional rewards for early adopters and long-term holders, so you can earn even more as you continue participating in the network.

SI: What future developments do you have in mind for Singular, and how do you see the industry evolving in the next few years?

TH: 2023-2024 Singular DeFi platform that supports DeFi applications, including lending and borrowing protocols, automated market makers (AMMs) and decentralized exchange. The smart contracts will be written in a high-level programming language, such as Solidity, and replied on the blockchain network.

The DeFi platform will earn revenue through fees charged on professionally managed DeFi funds programmed on a smart contract. The platform will charge a management fee for the funds under management, typically ranging from 0.5% to 2% per annum. In addition, the platform may also charge a performance fee of 10% to 20% of profits generated by the fund. The revenue will be used to cover operational costs, pay the management team, and generate profits for the platform.

SI: What advice would you give to someone looking to enter the stablecoin decentralized finance space, and what key factors should they consider before getting started?

TH: Before investing in any stablecoin or DeFi project, it’s important to research the market and understand the risks and potential rewards. This includes looking at the track record of the stablecoin, the team behind the project, and the market demand for stablecoins.

DeFi is a relatively new and complex technology, and it’s important to have a solid understanding of how it works before investing. This includes understanding the basics of blockchain technology, smart contracts, and decentralized exchanges.

As with any investment, it’s important to carefully consider the risks and potential rewards before making a decision.

SI: Some transparency in terms of your reserves – how much is cash, how much is treasury?

TH: Singular Dollar privacy token is not yet launched.

Technical analysis is an important tool that traders use to identify potential buying and selling opportunities in the stock market. Support and resistance levels and trendlines are two key concepts in technical analysis that can help traders make informed decisions about when to buy or sell stocks.

In this article, we will explore what support and resistance levels and trendlines are, how they are plotted on a chart, and how they can be used to identify potential trading opportunities.

But is that true by mastering support, resistance & trendline you can make money from the stocks market? Technically yes, if you are using technical analysis to trade a stock and if you are looking to trade in short term.

For longer term, you are advisable to use fundamental analysis as well to study on the company financial health.

Read: 4 Different Types Of Traders: Which One Are You?

What Is Support?

Support is a price level where a downtrend is expected to pause due to demand or buying interest. As the price drops, demand for the shares increases and thus forming a support at that area.

It can be seen as an area or zone that is strong enough to stop the stock from falling any further. Therefore, traders and investors use support as part of their decision-making tool.

Buy At Support

Some investors buy shares at support level as they expecting the share price will bounce back upward if the price does not break the support level

Sell When Price Break The Support Level

Investors also use support level as a cut loss point if the price keep falling and break the support

Read: Create Your Stock Watchlist With These Simple Steps

What Is Resistance?

Resistance is opposite to support. Resistance is a price level an uptrend is expected to pause due to selling pressure. As the price increasing, early buyer starts to sell the shares to take profit and thus forming a resistance at that area.

It is an area or zone that is strong enough to stop the stock from getting higher. If the resistance level is very strong, the price may reverse and drop lower.

But what if the price breaks the resistance? When the price breaks the resistance level, this is called as breakout.

A quality breakout is when the price breaks the resistance with high volume. This indicates high demand in the stock as more buyer attracted to the stock and willing to pay higher price.

Sometimes breakout happens when there is positive catalyst related to the company such as increase in earnings, strong quarter / annual result, good news and etc.

What Is Trendline?

Sometimes trendline can be considered as trendline support and resistance levels. Trendline can be upward sloping or downward sloping. Since the stocks market move in trend, trendlines are often used to identify uptrend and downtrend.

Trendlines connect significant highs together or significant lows together. For a trendline to form we need to see at least three touches.

Why It Is Important To Identify Trendline?

The answer is to help determine the current direction of market prices. Have you heard from technical analysts saying trend is your friend until it bends? Identifying uptrend stocks is the first step to perform a good trade. Look for an uptrend stocks, hold the stocks and exit when the trend starts to bend.

Conclusion

Support, resistance levels and trendlines are powerful tools in a trader’s arsenal that can help them identify potential buying and selling opportunities in the stock market. By understanding these concepts and how they can be used, traders can make more informed decisions about when to buy or sell stocks.

As with any trading strategy, it is important to conduct thorough research and analysis before making any trading decisions based on support and resistance levels and trendlines. With practice and experience, traders can become more proficient in using these tools to navigate the complex and ever-changing landscape of the stock market.

Read: Fundamental Analysis vs Technical Analysis

The world of stocks may be thrilling and terrifying for an investor or trader. However, it is crucial to understand what a stock is and how it functions before diving into the 3 types of stocks.

A unit of ownership in a firm is represented by a stock, also called a share. Purchasing a stock makes you a shareholder, giving you a stake in the company’s success or failure.

The stock price will typically increase if the business does well, allowing you to sell your shares for a profit. If the business performs poorly, the stock price could drop, and you could lose money.

Now you know what a stock is, let’s examine the 3 types of stocks and who they might be good for.

Read: 4 Different Types Of Traders: Which One Are You?

3 Types Of Stocks

1. Speculative Stock

Investments in speculative stocks have a high risk/high reward ratio. These stocks are typically linked to tiny or fledgling businesses with great growth potential but entail many risks.

Investing in speculative stocks can include risk due to the fact that they are frequently unproven and don’t have a successful track record. However, there is a sizable chance for profit if the business succeeds.

Generally, speculative stocks are best suited for aggressive investors who don’t mind taking on more risk. This kind of investor is prepared to take the risk of substantial gains in exchange for the possibility of sizable losses.

Penny stock less than RM1 per unit, or even valued at just a few cents (hence the name penny), is more prone to speculation. Even though the fundamental of the company is not good, even though the company is making losses, these kinds of penny stocks can be manipulated and make huge returns in hours or days.

Read: 5 Reasons Why We Lose Money In The Stock Market

2. Defensive Stock

The next stock in the list of 3 types of stocks are called defensive stock. Compared to speculative stock, defensive stocks are more stable and less risky. These kinds of stocks are frequently found in sectors of the economy that offer goods or services that consumers will continue to utilise even when circumstances are hard.

Healthcare, utility, and consumer goods companies are a few examples of defensive stocks.

Typically, conservative investors who want to protect their wealth and produce stable, dependable income should stick with defensive stocks. These investors tend to be less risk-tolerant and are prepared to accept lesser returns in exchange for more security.

Read: As An Investor, Here Are 3 Things To Look For In Financial Statements

3. Cyclical Stock

Cyclical stocks tend to perform well during periods of economic boom but poorly during periods of economic contraction since they are correlated with the performance of the general economy.

Construction, automobile, and travel-related businesses are a few examples of cyclical stocks.

Investors who have a solid grasp of the general economic cycle and are able to predict when certain industries are likely to perform well or poorly are the greatest candidates for cyclical stocks. These kinds of investors are prepared to assume some risk in exchange for the chance of greater profits.

In conclusion, a key component of becoming a good investor or trader is understanding the 3 types of stocks and who they are best suited for. You may allocate your resources wisely and create a well-diversified portfolio by understanding the risks and benefits of each type of stock.

Whether you favour defensive, cyclical, or speculative stocks, you must do your homework and make wise choices based on your unique investment objectives and risk tolerance.

Now that you know the 3 types of stocks, you can make a more informed decision.

Read: Create Your Stock Watchlist With These Simple Steps

Investing in the stock market can be a great way to grow your wealth over time. However, the process of buying stocks can seem daunting to many beginners. Fortunately, trading platforms have made it easier than ever to invest in the stock market from the comfort of your own home.

In this article, we will look at how to deposit money and buy stock on the trading platform. Whether you are a complete beginner or an experienced investor looking to switch to a new trading platform, it will provide you with the information you need to get started.

But before that, do you have a shares trading account? If you have yet to have an account, you are invited to open an account with one of the brokers available in Malaysia.

Click this link to open an account with CGS-CIMB: https://www.cgs-cimb.com.my/en/Account-opening-Tr.jsp

Don’t forget to key in PR1M495 in the Remisier Reference section. A designated Dealer’s Representative will attend and assist you with your account opening.

Now, let’s assume that your account has been created. Next of course you would like to know how to deposit money and buy stock on the trading platform.

Read: How To Open A CDS And Share Trading Account?

Steps To Deposit Money

After successfully logging into your account:

1. Select ‘Settlement’ and click ‘eDeposit(New)’.

2. Next, select your account and click ‘Online Cash Deposit’.

3. Select which bank you would like to transfer your money from, key in the amount and click ‘Confirm’.

4. Key in your Trading Pin and click ‘Submit’.

The money will be updated in your trust account on the following day. Please contact your Dealer/Remisier if you wish to buy stocks as soon as possible. Let’s move on to the next step on how to deposit money and buy stock on the trading platform.

Steps to Buy Stock in CGS-CIMB iTrade Platform

1. Key in the stock code or stock symbol to search for the stock.

2. Right-click on the stock name and click ‘Buy’.

3. Ensure the stock that you intend to buy is correct. Next, follow the steps below:

• Insert quantity (in lot)
• Insert price
• Choose validity
• Insert trading pin
• Click buy

4. Under ‘Order Book’, select ‘Order Status’ to check on the order made.

5. If your order status shows ‘filled’, it means the order that you placed has been matched. The shares purchased will be showed in ‘Equities Portfolio’ under ‘Portfolio’.

Conclusion

Investing in the stock market can be a rewarding experience, but it requires knowledge, patience, and discipline. Through this article, we hope to have provided you with a comprehensive guide on how to deposit money and buy stock on the trading platform. Different trading platforms may have different layouts and user experiences.

An interactive trading platform may give a better user experience to the users.

Read : Create Your Stock Watchlist With These Simple Steps

Remember to always do your research, diversify your portfolio, and stay informed about market trends and news. By following these principles, you can make informed decisions and build a successful investment strategy.

With the right approach, investing in the stock market can help you achieve your financial goals and secure your future. But it all starts with the first step, which is how to deposit money and buy stock on the trading platform.

Read: Using The CANSLIM Formula To Choose Good Stocks

For an investor to start investing in Bursa Malaysia, they must open a CDS and share trading account. These two accounts serve different functions. Normally, when you open an account with any broker, these two accounts will be created together.

The whole application process can be done by completing physical offline forms or some brokers will provide online applications. With this online application process, opening a share trading account will be hassle-free.

But before we look at how to open a CDS and share trading account, read below for a deeper understanding of what is a CDS account and a trading account.

What Is A CDS Account?

Central Depository System (“CDS”) is a system that is fully owned and operated by Bursa Malaysia Depository Sdn Bhd (“Bursa Depository”), which provides central bookkeeping of securities and facilitates the settlement of securities transactions in a scriptless manner.

Putting it simply, a CDS account acts like a wallet where you keep the shares that you purchased.

Investors who wish to trade in securities listed on Bursa Malaysia Securities Berhad must open accounts on CDS. Securities bought or sold will be credited or debited into the CDS accounts of depositors accordingly.

There are a few ways you can open a CDS account such as walking into any investment bank/broker, registering online via a website and you can also open a CDS account via the Bursa Anywhere mobile app.

Source: Bursa Marketplace

Read: Guide To Registration of Bursa Anywhere Account

What Is A Trading Account?

A share trading account is where you deposit money and use that account to buy/sell stocks via a broker’s trading platform.

Refer to Bursa Malaysia’s website for the list of brokers in Malaysia: List of Participating Organisations

For those who are wondering, an individual investor is allowed to open only one CDS account with each broker. It means that you can have 1 CDS account with different brokers such as Maybank, CGS-CIMB, Malacca Securities, RHB, and many more.

However, a corporate investor may open multiple accounts with the same broker.

It is very easy to open a CDS and share trading account. You have to ensure you have the necessary documents, so the process can be smooth.

Required Documents

There are a few documents that you have to prepare in order to open a CDS and share trading account for an individual. You are required to provide:

1. Photocopies of NRIC/Passport
2. Latest 3 months’ bank statements
3. A copy of the latest 3 months’ payslip

Do you have a trading account? If not, you are invited to open an account with one of the brokers available in Malaysia.

Click this link to open an account with CGS-CIMB: https://www.cgs-cimb.com.my/en/Account-opening-Tr.jsp

Don’t forget to key in PR1M495 in the Remisier Reference section. A designated Dealer’s Representative will attend and assist you with your account opening. All the best in your investment journey!

Now you know how to open a CDS and share trading account? It is very easy, let’s get started today.

Read more:

• Create Your Stock Watchlist With These Simple Steps
• Using The CANSLIM Formula To Choose Good Stocks
• Guide To Apply For IPO In Malaysia (Via Maybank2u And CIMB Clicks)
• Investing VS Trading, Which One Is Suitable For Me?

There are different types of traders, as you are aware, if you have ever traded stocks. You could belong to one of several groups of traders, depending on your risk tolerance level and financial objectives.

Before we begin looking at the different types of traders, let’s start by defining a trader and discussing how they differ from investors.

Read: Investing VS Trading, Which One Is Suitable For Me?

Difference Between A Trader And An Investor

Someone who buys and sells stocks with the intention of making a quick profit is a trader. They achieve this by predicting how quickly stocks, currencies, and other financial assets will change in price.

In contrast, investors purchase securities to hold them for a long time and earn returns via dividends, interest, and capital growth.

Investors and traders are distinct in a number of ways. Their risk profiles are one of the key variations. Since they are attempting to capitalise on volatile short-term price movements, traders typically assume greater risk than investors.

On the other hand, investors have the financial resources to adopt a longer time horizon and is more tolerant to market swings.

Read: Fundamental Analysis vs Technical Analysis

The time horizon is another difference. Securities are often held by traders for far less time than by investors. Investors may keep onto a stock for years or even decades, whereas traders may just hold onto it for a few minutes or hours.

Finally, the kinds of stocks that traders and investors invest in vary. Since buying and selling quickly is simpler when a stock is highly liquid and has a high trading volume, traders frequently concentrate on these stocks.

Conversely, investors might be more drawn to stocks with solid fundamentals and the potential for long-term growth.

After knowing the difference between traders and investors, let’s look at the different types of traders.

1. Scalper

Traders that try to make tiny profits on many deals are known as scalpers. They often only keep stocks for a short period of time(a few seconds or minutes), and they frequently trade (dozens or even hundreds of times) in a single day.

Scalpers rely on minute price changes and utilise technical analysis to spot transient patterns.

2. BTST Trader

A “Buy Today Sell Tomorrow” (BTST) trader purchases equities today and sells them the following day. They use this to avoid having to take ownership of the shares, which would necessitate full payment.

BTST traders frequently focus on stocks with significant trading volume and solid momentum.

3. Swing Trader

Swing traders try to profit from swift market changes by holding onto securities for a few days or weeks. They employ fundamental and technical analysis to find equities that are likely to experience quick increases.

More risk is typically assumed by swing traders, as compared to scalpers and BTST traders.

Read: 5 Reasons Why We Lose Money In The Stock Market

4. Position Trader

In order to achieve long-term gains, position traders keep onto securities for weeks or even months. They frequently concentrate on stocks with solid fundamentals and prospects for long-term growth.

Position traders are more interested in the company’s overall health than they are in short-term price fluctuations.

4 Different Types Of Traders

In conclusion, there are many different types of traders, each with a distinctive strategy for the market. Regardless of whether you are a scalper, swing trader, position trader, or BTST trader, it’s crucial to know your risk tolerance and investment objectives before you begin.

By doing this, you can create a trading strategy that suits your needs and contributes to your market success.

Read: Create Your Stock Watchlist With These Simple Steps

Making investment decisions as an investor requires having a solid understanding of a company’s financial statements. A company’s financial health is captured in its financial statements, giving important information on its profitability, liquidity, and overall financial performance.

As an investor, here are the three things to look for in financial statements, so you know how to use them to make wise investment decisions.

1. Income Statement/Statement Of Profit Or Loss

One of the first things to look for in financial statements, is to look at income statement. It is the one of the most important things to look for in financial statements.

The income statement provides an overview of a company’s revenues and expenses for a given time period. The financial statement details the company’s revenue and operational costs, taxes, and interest payments. Net income, a gauge of a company’s profitability, is the difference between sales and expenses.

Investors should pay particular attention to the income statement’s revenue and net income data. A company’s revenue should be consistently rising as this shows that its goods and services are in high demand. A higher net income is also encouraging because it shows the business is making more money.

Investors should, however, consider the margins, which reflect how much profit the company makes in relation to its revenue, such as the gross profit margin and net profit margin. A business with poor margins can have trouble controlling costs or face fierce competition.

Read: Using The CANSLIM Formula To Choose Good Stocks

2. Balance Sheet/ Statement OF Financial Position

The second in the number of things to look for in financial statements is the balance sheet. The balance sheet is the second financial statement that investors ought to study.

A company’s assets, liabilities, and equity are shown on the balance sheet at a particular time. The financial statement reveals the firm’s assets and liabilities and the percentage of equity shareholders own in the business.

The balance sheet’s sections for assets and liabilities should catch investors’ attention. The assets section lists the company’s possessions, including real estate, machinery, and cash. Along with their valuation, investors should consider the asset’s composition. For instance, a business with a lot of cash and liquid assets might be more financially stable than one with a lot of fixed assets that might be challenging to sell fast.

The company’s debts are listed under the liabilities section, including loans, accounts payable, and taxes. Investors should take note of the liabilities’ makeup as well as their maturities. For instance, a business with a lot of short-term debt can be more susceptible to cash flow issues than one with long-term debt that can be repaid over time.

Read: 3 Steps To Kickstart Your Stock Market Investment Journey

3. Statement Of Cash Flow

The third on the list of things to look for in financial statements is the cash flow statement. The cash flow statement details how much money the business has made and spent during a given time period. Operating, investing, and financing operations are the three areas into which the cash flows are divided in the statement.

Investors should concentrate their attention on the statement of cash flows’ operating operations section. The amount of cash the company has made from its core business operations is displayed in this section. A company’s operations produce cash when there is a positive cash flow from operating activities, which is a good sign. A corporation may burn cash to fund its operations if its cash flow is negative.

The statement of cash flows’ sections on investing and financing operations deserve special attention from investors. The amount of money the company has spent on investments and capital expenses, such as buying property and equipment, is displayed under investing activities.

The amount of money the company has acquired or paid back through debt and equity financing is displayed in the financing activities section. Investors should consider whether these actions align with the company’s overall strategy and financial objectives.

In conclusion, it is critical to comprehend a company’s financial statements before making investing choices. In particular, those are the three things to look for in financial statements: Income Statement, Balance Sheet and Cash Flow Statement.

It offers important information about a company’s profitability, liquidity, and overall financial performance. Investors should concentrate on the company’s revenue, net income, margins, assets, and liabilities.

Make sure you also read:

• Investing VS Trading, Which One Is Suitable For Me?
• Create Your Stock Watchlist With These Simple Steps
• Increase Your Chances Of Getting IPO Via MITI Application

The US dollar is the world’s most widely used currency, accounting for about 60% of global trade transactions. However, the dollar has been losing ground against other major currencies such as the euro, the yuan and the ruble in recent months. This has raised some concerns among investors who hold dollar-denominated assets or trade with dollar-based partners.

So you are wondering how to invest in a volatile dollar market? In this article, I will explain why the dollar has been weakening, how it affects different asset classes such as gold and stocks, and what strategies you can use to protect your portfolio and take advantage of the opportunities in a volatile dollar market.

Invest In A Volatile Dollar Market: Why Is The Dollar Weakening?

Before we look at how to invest in a volatile dollar market, we should look at what causes the dollar to weaken. The dollar’s weakness can be attributed to several factors, including:

• The Federal Reserve’s accommodative monetary policy, which has kept interest rates near zero and expanded its balance sheet through quantitative easing. This has increased the supply of dollars and reduced their value relative to other currencies.

• The fiscal stimulus measures enacted by the US government to support the economy during the COVID-19 pandemic, which have increased the budget deficit and the public debt. This has raised doubts about the long-term sustainability of the US fiscal position and its creditworthiness.

• The recovery of the global economy from the pandemic-induced recession, which has boosted the demand for riskier assets such as emerging market currencies and commodities. This has reduced the demand for safe-haven assets such as the dollar.

• The geopolitical tensions between the US and its rivals such as China and Russia, which have undermined the confidence in the US leadership and its role as the global reserve currency.

Read: Lessons From Silicon Valley Bank (SVB) and Lehman Brothers: How Islamic Financial Principles Offer More Robust Risk Management In Investments

Invest In A Volatile Dollar Market: How Does A Weak Dollar Affect Different Asset Classes?

A weak dollar has different implications for different asset classes, depending on their exposure to currency fluctuations and their sensitivity to inflation. Here are some examples:

Gold

Gold is traditionally seen as a hedge against inflation and currency devaluation, as it retains its purchasing power over time. Therefore, gold tends to benefit from a weak dollar, as it becomes cheaper for foreign buyers and more attractive as an alternative store of value. However, gold is also influenced by other factors such as supply and demand dynamics, investor sentiment and opportunity cost.

For instance, gold underperformed the dollar in 2022, despite high inflation, due to lower demand from central banks and investors who preferred higher-yielding assets. Gold performed slightly worse than the US Dollar in 2022, with a return of -0.22%, while the US Dollar outperformed Gold by +7.87%. However, YTD performance has been impressive for Gold, as it gained +9.06% while the US Dollar lost -1.88%.

Stocks

Stocks are generally positively correlated with a weak dollar, as it boosts the earnings and competitiveness of US companies that derive a large portion of their revenues from overseas markets. It also makes US stocks more attractive for foreign investors who can buy them at a lower price. However, not all stocks benefit equally from a weak dollar.

For instance, companies that rely heavily on imported inputs or face strong competition from foreign rivals may suffer from higher costs and lower margins. Moreover, stocks are also affected by other factors such as earnings growth, valuation and market sentiment.

Bonds

Bonds are generally negatively correlated with a weak dollar, as it erodes the real value of their fixed income streams and makes them less appealing for foreign investors who face currency risk. It also increases the likelihood of higher inflation and interest rates, which reduce the present value of future cash flows and lower bond prices. However, not all bonds react similarly to a weak dollar.

For instance, short-term bonds are less sensitive to interest rate changes than long-term bonds. Moreover, bonds are also influenced by other factors such as credit quality, duration and liquidity.

Read: SPY vs SPUS: A 2023 Comparison of S&P 500 ETFs

What Strategies Can You Use To Invest In A Volatile Dollar Market?

Given the uncertainty and volatility in the currency market, it is important to adopt a diversified and flexible approach to investing. Here are some strategies on how to invest in a volatile dollar market, so that you can use to protect your portfolio and take advantage of the opportunities:

Diversify your currency exposure

One of the ways to invest in a volatile dollar market, is by holding assets denominated in different currencies or investing in currency-hedged funds or ETFs. This lets you reduce your exposure to currency risk and benefit from diversification benefits. You can also use currency derivatives such as futures or options to hedge your existing positions or speculate on currency movements.

The US Dollar has been weak this year, with a year-to-date (YTD) performance of -1.88% as of April 2023. This contrasts with the same period last year (Jan – Apr 2022), when the US Dollar appreciated by +6.03%. The overall performance of the US Dollar in 2022 was strong, as it gained +7.87% in value.

Adjust your asset allocation

Next on how to invest in a volatile dollar market, is by adjusting your allocation among different asset classes or sectors based on their relative performance and outlook in a weak or strong dollar environment, which lets you enhance your returns and reduce your risk. For instance, you may want to increase your exposure to gold or commodities if you expect further dollar weakness or inflationary pressures. Conversely, you may want to reduce your exposure to bonds or emerging markets if you expect a stronger dollar or higher interest rates.

The weakness of the US Dollar has benefited other major currency pairs, such as the EUR/USD, which rose by +2.94% (YTD) as of April 2023. This is a reversal from the same period last year (Jan – Apr 2022), when the EUR/USD fell by -5.78%. The overall performance of the EUR/USD in 2022 was poor, as it declined by -5.86% due to inflationary pressures on the Euro.

Seek professional advice

Final tip on how to invest in a volatile dollar market, is by consulting with a qualified financial advisor or planner who can assess your risk profile, investment objectives and time horizon. All this so you can get personalized recommendations on how to invest wisely in a volatile dollar market. You can also benefit from their expertise and access to various tools.

Smart investor should diversify their portfolio and allocate their assets according to their risk appetite and profit potential with such traditional assets.
Financial literacy is essential for an investor to grow their wealth.

Read: Investing With Recession Fears Looming, Are We Nearing Market Bottom?

About the Author

Mukhriz Mangsor, ACSI, MSTA, CFTe is currently the Head Global Market Strategist at Quantdynamic Research Company. His expertise includes financial education, financial institutions, and property trading with clients, including Brunei, Canada, Malaysia, Singapore, and the United States firms.

Initial Public Offering (IPO) is the process of selling shares of a private company to the public for the first time. Companies usually go public to raise funds for their expansion or to provide an exit opportunity for their early investors.

IPOs are highly sought after by investors because they can offer significant returns, especially if the company is successful. However, getting an allocation in an IPO can be a challenging task, but you can increase your chances of getting an IPO via MITI.

But What Is MITI?

The Malaysian government, through the Ministry of International Trade and Industry (MITI), provides a special avenue for Bumiputera investors to apply for IPOs. This special avenue is called the MITI Application, and it is only available to Bumiputera investors.

Source: Oppstar Prospectus

Bumiputera investors who apply for IPOs through MITI have a higher chance of getting the IPO via MITI application than through the normal public application process. The allocation of shares for Bumiputera investors through MITI is usually around 12% of the total shares allocated for all investors.

In contrast, the allocation for public applications is typically around 2.5% to 5%.

Read: Create Your Stock Watchlist With These Simple Steps

Benefit Of Applying IPO Via MITI Application

When applying for IPOs through MITI, Bumiputera investors can enjoy several benefits. Firstly, they can apply for IPOs first and pay later. This is because MITI allows investors to secure their allocation before making any payments, which is particularly advantageous if they do not have enough funds available at the time of application.

Secondly, Bumiputera investors only compete among themselves, which reduces the level of competition for the shares. This increases their chances of getting an allocation, particularly for popular IPOs that tend to be oversubscribed.

Thirdly, they can apply for IPOs earlier than through the normal application process, which means that they have a higher chance of securing shares at a lower price. Lastly, the higher allocation of shares for Bumiputera investors through MITI increases their chances of getting an allocation compared to applying through the public application process.

Read: Using The CANSLIM Formula To Choose Good Stocks

Disadvantages Of Applying IPO Via MITI Application

However, there are also some disadvantages to applying for IPO via MITI application. Firstly, investors cannot read the final prospectus of the company before applying. This can be a disadvantage because the prospectus contains important information about the company’s financials, business strategy, and risks, which can be useful for making informed investment decisions. Investors may have to rely on the preliminary prospectus, which may not contain all the relevant information.

Secondly, some IPO prices may not be available when applying for IPO via MITI application. This means that investors may not know the final price of the IPO until after they have applied. This can be a disadvantage if the final price significantly differs from the initial price range, affecting the investor’s investment decision.

Thirdly, the waiting time for the IPO shares to be allocated is usually longer than the normal application process, which can be a disadvantage if the investor needs the funds for other purposes or if the market conditions change significantly during the waiting period.

Lastly, investors who do not proceed with their application after being allocated shares may be subject to penalties, which can affect their creditworthiness and investment reputation.

Read: 7 Signs Of Bad IPO, Avoid Them If You See These Red Flags

Conclusion

In conclusion, the IPO via MITI application is a special avenue for Bumiputera investors to apply for IPOs in Malaysia. Applying through MITI can increase their chances of getting an allocation compared to the normal public application process. However, there are some disadvantages to applying through MITI, such as not being able to read the company’s final prospectus before applying and longer waiting times for the IPO shares to be allocated.

Investors should weigh the benefits and disadvantages before deciding to apply for IPO via MITI application or through the normal public application process.

Read: Guide To Apply For IPO In Malaysia (Via Maybank2u And CIMB Clicks)

A wonderful option to invest your money and increase your wealth is through the stock market. Success is not always simple to achieve, though. Despite their best efforts, many investors continue to lose money.

Here’s five reasons why we lose money in the stock market.

1. A Lack Of Study

The primary reason why we lose money in the stock market, is because we don’t conduct enough research before making an investment. Without thorough study, it’s possible that we won’t fully comprehend the business in which we are investing in, the sector in which it works, or the risks associated with it.

The more information you have about the business, the more prepared you will be to make wise investment choices.

Spend time studying the companies and their financials before investing in any stocks. To determine how financially stable it is, look at its balance sheet, income statement, and cash flow statement. Get a sense of the company’s overall performance and prospects for the future by reading news articles, analyst reports, and industry publications.

Read: Create Your Stock Watchlist With These Simple Steps

2. Emotions And Snap Judgements

The next reason why we lose money in the stock market is because we tend to make rash decisions and allow emotions to control them. It’s simple to get sucked into the hoopla around a hot stock or to freak out when the market declines.

But making investment decisions based on feelings rather than logic can be disastrous. Instead, make conclusions based on study and analysis while maintaining composure. Create a long-term investing plan and adhere to it, even when the market is declining.

Keep in mind that stock market investment is a marathon, not a sprint.

3. A Lack Of Diversity

Investing all of one’s capital in one or a small number of stocks is a common error made by novice investors. This technique has huge risks as well as high potential returns. You run the risk of suffering a substantial financial loss if the stock(s) you buy perform poorly.

Reducing stock market risk requires diversification. Invest in a variety of stocks from various sectors and companies, as well as in other asset classes such as bonds and real estate. This way, you have backup investments in case one doesn’t do well.

Read: Using The CANSLIM Formula To Choose Good Stocks

4. Market Timing

Another typical error that can contribute to why we lose money in the stock market, is by attempting to time the market. Investors may attempt to purchase low and sell high, but doing so is very challenging, if not impossible.

Focus on the long term rather than trying to time the market. Invest in businesses you are confident in and that have a proven track record of expansion. If you’ve made investments in strong companies with sound fundamentals, they’re likely to recover over the long run even if the market declines temporarily.

5. High Brokerage Fee

The final reason why we lose money in the stock market, is due to the exorbitant fees that might reduce our investment returns and cause losses. For trading, account maintenance, and other services, some brokers and investing platforms charge a certain fees.

Research costs are charged by various platforms and brokers before you invest. Look for inexpensive choices that lets you make investments with few costs but provide excellent services.

Some brokers have different products with different fee structures, so make sure you choose the right product that is suitable to your trading strategies and style. Not all cheap brokerages are good and not all expensive brokerages are useful to you.

In conclusion, investing in stocks can greatly increase your wealth, but you should proceed carefully and adopt a long-term perspective. To reap the rewards, do your homework, don’t make snap decisions, diversify your investments, keep an eye on the long term, and hunt for affordable options. You may improve your chances of making money and preventing losses in the stock market by paying attention to these suggestions.

Now you know why we lose money in the stock market, let’s do our best to avoid it.

Read: 7 Signs Of Bad IPO, Avoid Them If You See These Red Flags