3 Top Reasons Why I Prefer Index Trading Over Stock

indexMy Trading History

The first stock that i traded was “Singlun” and it was back in 2004. It was of an investment mode that i looked at Singlun, which into apparel manufacturing sector. It was a good dividend stock back then, until Vega Co privatised and de-list Sing Lun in 2008.

And this first trade lead me on, where i pursed my ever hungry for different trading methods, from fundamental analysis to technical analysis. Soon, i was into Penny Stock, where i got my fat pot of gold with my first penny trade – JapanLand. I would say my profit was more than my loss, but my day job didnt allow me to continue on, as trading penny require constant monitoring.

With that, it lead me to Options trading where i attained the infamous Dr Clement Chiang’s Options Trading course. I guess some of the reader will know his story, but for those that dont, follow this site.

Within the period from 2004 till now, i have try from Blue Chip to Penny Stock, and from Options to Index trading. Trading during these whiles, i get to know that this Stock Market is as cruel as the food chain hierarchy in animal kingdom! And it is full of manipulation!

Nevertheless, knowing that stock market is manipulative, it helps to improve the way of how i executed my trade.

 

Index Vs Stock Trading, and the 3 reasons why i like Index Trading are

Less Preparation Work

Firstly, stock trading requires you to be full prepared for your trade, depending you on which school of thought РFA or TA, you in. You will find yourself sourcing over a dozen of websites to get various key information like the NAV, EPS, TrendLine, Support and Resistant Lines, Insider trades, or some TIPS from friends. Some may just keep track from the Top 30, or based on the Top Gainer or losser or Volume Spike to generate a watchlist of stocks that have a high potential of profitable trades. And study the charts over and over again. I have went through it and i know it takes a lot of time and efforts.

On the another hand, Index Trading requires less effort as compare with Stock Trading. I just need to study and revise out the direction of the Index, with in reference of a long and short time view. And i ready to trade.

 

Flexible Time

There are a lot of Stock Markets out there, and since i based in Singapore, naturally i will trade Singapore Stocks. As i have my day job, i definitely will have tasks assigned and i cant juggle with all these day job’s activities with trading. Can you imagine this? That you are presenting to your Head of Department over some proposal and your¬†Stock broker sms that some Stock Operator trying to sell down the stock that you have a “Long” position. That will be a unpleasant situation to be in.

For me, the best time for me to trade will be after work. And there are markets still available for me to carry over Index Trading. Like DAX and DOW. The best part about Index Trading will be, i traded with a Mobile Application during traveling back to my home. No time wasted.
More Personal/Family Time

With the 2 points as above, it frees up a lot time, that was previously occupied by either the preparation work or the monitoring portion. With the time make free from chosing Index over Stock Trading, i can have more quality time with my family, friends or with myself! And that definitely sometime which i enjoying at the moment. :)

 

My Index Trading Plan

My plan will be simple, with an objective to carry trades with overall profit of 10 dollars, less the losses. (I cant be winning all the times).

I decided to have a smaller objective, as that will allow me to be less greedy and be in a better control of my emotion.

In each month of 20 working days(estimated), my monthly income will be around $200($10 * 20 working days) and that will be another additional source of income.

 

DAX & DOW

DOW Daily Chart

DOW Daily Chart – Watch out for first support at 16532, with second support around 16296.

 

DAX Daily Chart

DAX Daily Chart – Look like Dax is hurt badly, oversold, but need to be nimble.

Fredrick Lim

author: 

I started bigfatpillar.com to share some of my ideas, concept or thinking along the way as i'm building my own Big Fat Pillars in area like Financial, Health, Family, Spiritual of my life. In short, making our money work harder in Wealth Creation, Preserve and Improvement.

And i will definitely much appreciate all constructive comments/suggestion/advise to enhance our this Big Fat Pillars in our life.

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