Week 9 here it comes

No no no... i don't want school to start. Please give me just a bit more time before the nightmare begins....The questions in the sample Econs paper are so unorthodox, i have absolutely no confidence in the upcoming test. I really need tons of luck to get through this crazy 40% midterm this coming saturday man...

We are finally going japan this MAY!!!!!!!!!!!!!!!!!!!

ii desu ne!! :)

Colbie Caillat's alluring music always never fails to brighten up my mood.

Day 4 of break

Chiong finish the fundmanager report. Dunnoe can qualify for semi-finals or not. Must really give in my best shot for my MC and Econs mid-term next week.

I must mug and stop being distracted. Urgh.

Exponential Moving Average-EMA

EMA is similar to the SMA except that more weight is given to the latest data. They are used to create indicators like the moving average convergence divergence (MACD). The EMA assigns more weight to the more recent price data and assigns less importance to the older price data. The best thing is that the weighting can be varied.

Because of this, EMA reacts quicker to price changes as compared to a SMA. On average, the EMA is 3/8 of a point closer to the price than SMA. The EMA calculation is a bit more complex and i won't attempt to go into details here. A simple google search will allow you to find out how it is calculated.

The kind of MA to use depends on your trading preferences. SMA lags behind EMA, but it is better at identifying long term trend changes. EMA is preferred to some traders because it captures price changes quicker. Because EMA is more sensitive, it often gives more signals. Although this can be good, more signals will invariably increase the chance of going into a market via a false signal. SMA gives less signals and is more reliable, but it also means that it will be late in giving out bullish signals.

If one is using chart nexus, one can simply change your SMA to a EMA by ticking on the box "exponential".

Simple Moving Averages

The midterm break is here!!:D Not that it is a break anyway, there are still the dreading midterms that are coming right up...but all is good and wonderful for now. Looking forward to the gatherings that i shall have!!

Simple Moving Averages (SMA)

One of the most important tool that technical analysts look out for is the moving averages. In fact, it is so important that it almost always guarantee profits if used wisely. Moving averages serve to smoothen the data set and sieve out all the white noises. There are three moving averages and the focus will be on SMA for now.

1. Simple Moving Average
2. Exponential Moving Average
3. Weighted Moving Average

A simple moving average is the average price of a security over a number of periods. Closed prices are used to chart the lines. For example, a 10-day moving average is calculated by summing the closing prices of the last 10 days divided by 10. The common periods used are 200-day SMA, 50-day SMA and 25-day SMA. SMAs always lag behind price movements and the longer the moving average, the more it lags behind. Hence, SMAs are good at predicting trends of the stocks. SMAs are effective when there is a trend forming with little fluctuations.

Generally, a buy signal is generated when the stock price goes above the MA and a sell signal is generated when the stock price drops below the MA. Also, when a shorter period MA crosses over a longer period MA, it is a buy signal. Similarly, when a longer period MA crosses under a shorter period MA, a sell signal is established. Below is an example that i drew using Chartnexus. I chose the STI index and plot its 25, 50 and 200- day MA. Not really good at it..still learning. Quite happy because i can now run chartnexus with my Mac using VMware Fusion, that means that i can run Mac and chart instead of running bootcamp all the time. =)

NTU CRASH

Did my biz law test in the morning and i would say that it was manageable, even though i had no way of knowing how well i would do. Only thing left to do was to pray. Out of boredom, i crashed NTU after the test to find some of my buddies. It seems that all my best friends study in NTU. Managed to see like 7 of them in total. =) Their halls are really spacious and serene, except for some who are unfortunate enough to stay in the old halls. =x Let's just say the difference between the old and new halls are really drastic.

Best of all, i learnt how to play CASHFLOW today. Awesome and simple game. The most important takeaway is probably the values that the game aims to teach. Having learnt Dividends, Zeroes to Heroes and Cashflow, the last board game that seeks to promote financial literacy gonna be Acquire. Gonna learn it at the next Strategica session.

We all need constant reminders on the dangers faced on the route to financial freedom.

Here is one lesson.

http://wealthbuch.blogspot.com/2010/02/student-on-winning-stock-market-streak.html#more

Morals of the story: Never dabbles in contra trading and never compare trading simulation with real world trading. =)

Contra Trading

In Singapore, when you buy a stock, there is no requirement to put up a form of deposit with the brokerage firm. In fact, from the date of the transaction, you are given a grace period of 3 days, known as the contra period, in order to transfer the money to the brokerage firm. It is because of this contra period, that a loophole is formed. It was found that if you sold the stock that you bought before the contra period is up, the brokerage firm would offset the trades, and the net effect was that you will be paid any profits or losses you obtained from that 2 trades.

Source: Kampungtalk.net

Death by biz Law

Biz law midterm this wednesday. :(

But good music brightens me up!

珍惜来临的一年

2010农历新年终于来了， 希望虎年能带来新的收获！＝）

这是一首1988年的怀念金曲，跟其它新年歌比起来还蛮好听的 ＝）

“有人说岁月太匆匆 转眼又一年在手掌中溜走 是不是没有做什么 就这样让时光留不住 年轻的世界也许不曾感觉 生命是如此短促 如果你期待有收获 不要犹豫 不要蹉跎 过去的岁月已不会再回头 未来的路仍然要走 在新的一年来临的时候 请你接受这一份祝福”

This feeling of worthlessness

I haven't cried like this for such a long time. It dawned on me that i shouldn't be living in my own fantasy world, trying hard to be someone that is not really me and creating a string of artificialness all over the place. I am disgusted with myself. I have great friends, and i would love to infect them with my vibrant energy which i think i am capable of. Yet, my mere presence just make them sulkier. Pessimism is associated with me.

I am morosely gloomy, and i dare not even acknowledge it. I better wake up my idea and stop putting the fake smile that will only serve to denigrate myself further. :(

Strive on kh!

Market News (Indofood and Yanlord look like good long position if they rebound; credits to E.Y.E)

Stress

I have just lived thru a weekend of hell. Spent my bloody sat and half of sunday reading up on a TWC case study and doing a report. The torment will just get worse as the mid-terms approach. I still have tons of stuff like fund manager proposal and CT journal to look forward to. OMG!

Jiayou!

Finance Info

Here are two ratios that are used widely to assess the profitability of mutual funds.

Sharpe Ratio

Sharpe Ratio = (Portfolio return - risk free rate)/ volatility

Risk Return Ratio

Source: Fundsupermart

The higher the sharpe ratio and risk return, the greater the prospects of the unit trusts.

It is possible to have a positive risk return ratio and a negative sharpe ratio, this means that the unit trusts have underperformed the market risk free interest rate; you would be better off buying bonds or putting your cash in fixed deposits. I think it's really hard to find funds that outperform STI so your next safer bet should be index funds like STI ETF.

Talking about STI, for those who short it, congrats to you. For those on long term position, let's hope CNY does some wonders and pray for a rally.

SGX Counter

Tip from a good friend. Resistance turned support. Look how nice it was. Look for a pullback confirmation before entering.