Dow Jones Industrial Average Prices Trading vs Investing Opportunities
• Oct 16, 1987 = 2,246 • Oct 19, 1987 = 1,738 (-508 points or -22%) • Oct 19, 1988 = 2,137 (+399 points or +23%) • In-between Movements = 6,586 points or 15X
FKLI Trading vs Investing Opportunities
• High = 1,600 • Low = 800
• Range = 800 • In-between Movements = 12,661 points or 16X
CBOT - Wheat Prices Trading vs Investing Opportunities
• High = 1,300 • Low = 400
• Range = 900 • In-between Movements = 15,891 points or 17X
CBOT - Corn Prices Trading vs Investing Opportunities
• High = • Low = 800 300
• Range = 500 • In-between Movements = 9,739 points or 19X
CBOT – Soybean Prices Trading vs Investing Opportunities
• High = • Low = 1,650 650
• Range = 1,000 • In-between Movements = 18,261 points or 18X
CBOT – Soybean Oil Prices Trading vs Investing Opportunities
• High = • Low = • Range = 70 29 41
• In-between Movements = 665 points or 16X
FCPO – Crude Palm Oil Prices Trading vs Investing Opportunities
• High = • Low = • Range = 4,300 1,500 2,800
• In-between Movements = 43,948 points or 15X
Have a view…..and Trade!
• Momentum OR Contrarian • Fundamental Analysis (Supply & Demand) • Value Analysis (Intrinsic Value vs Price) • Technical Analysis (Price Charts) • Aberration Analysis (Price Dislocations)
Trading vs Investing…..
• Adjust mindsets & approaches… • Operate within shorter time frames… • Capitalize on in-between price movements… • Long /Short /LongShort /ShortLong vs Long Only... • Be equally versatile with buy first/sell later & sell first/buy later… • Be More Technical /Less Fundamental • Optimize leverage with risk management control
What you should ask for in Trading?
• Transparent Prices • Transparent Information Flows • Immediate Known Executed Prices • Control over Buy/Sell Decision Making
Decision Principle….
• Money ON the table / Money OFF the table • Stand ON the road / Stand OFF the road • Trade it down – Go Short • Trade it up – Go Long
• Decision Principle :
GET ON / GET OFF
Trading the World….
• Global Outlook… • Accessing locally… • Trading globally… • Trading as a life skill…
Futures Price vs Cash Price: Movement & Convergence
Futures Price
Convergence
Cash Price Time
Delivery
Two (2) Derivatives Products / Opportunities @ BMD
• FKLI – FTSE Bursa Kuala Lumpur Composite Index Futures Contract • FCPO – Crude Palm Oil Futures Contract
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0 01/03/07 03/03/07 05/03/07 07/03/07 09/03/07 11/03/07 01/03/08 03/03/08 05/03/08 07/03/08 09/03/08 11/03/08 01/03/09 Mean 03/03/09 05/03/09 07/03/09 Mean Mean Mean 13 09/03/09 11/03/09 01/03/10 03/03/10 05/03/10 07/03/10 09/03/10 11/03/10 01/03/11 03/03/11 05/03/11 07/03/11 Mean High Low Diff
RM/MT
Mean =16.8 Mean = 21.2
KLCI Futures 5-year High Low Range
KLCI Futures Spot Month Daily Range (2007‐2011)
Mean = 12.8 Mean = 11.3 Mean = 13.6
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0 01/03/07 03/03/07 05/03/07 07/03/07 09/03/07 11/03/07 01/03/08 03/03/08 05/03/08 07/03/08 09/03/08 11/03/08 01/03/09 03/03/09 05/03/09 07/03/09 Mean Mean Mean 13 09/03/09 11/03/09 01/03/10 03/03/10 05/03/10 07/03/10 09/03/10 11/03/10 01/03/11 03/03/11 05/03/11 07/03/11 Mean Mean FCPO 3rd Month
RM/MT
Mean = RM41 Mean = RM89 Mean = RM60 Mean = RM44 Mean = RM59
CPO Futures 5-year High Low Range
CPO Futures 3rd Month Daily Range (2007‐2011)