tag:blogger.com,1999:blog-935072059836759128.post5735794184954353539..comments2023-11-05T18:54:47.602+08:00Comments on Fusion Investor: FB30ETF: Beating the Market?Senghttp://www.blogger.com/profile/08265958046623158053noreply@blogger.comBlogger10125tag:blogger.com,1999:blog-935072059836759128.post-45226995740100747342008-07-12T23:46:00.000+08:002008-07-12T23:46:00.000+08:00Hi Seng,First thing first, I really do appreciate ...Hi Seng,<BR/><BR/>First thing first, I really do appreciate you commenting further.<BR/><BR/>For FBM30ETF, the buy date would be 24-Apr and selling on 29-May. I notice the candle touching the MA line on 3-6 May, but I would think the whole candle need to clear the MA line for a sell signal.<BR/><BR/>The reason I back-date tested CI instead of ETF is because the ETF is fairly new, not able to get enough historical data for the testing. :p. I don't intend to trade futures, I am sure I will be mauled.<BR/><BR/>I am sure a lot of guys will want additional info from other indicators, but I think the others such as RSI, MACD, etc should only serve as confirmation signals for adding/reducing to the position. I still prefer MA as the dominant trigger. And buy more if I see things like double bottom, b/out, etc.<BR/><BR/>As for the reason for ETF, the main one for me personally is because I had a better experience 'sensing' the direction of CI, compared to individual companies. As I am a full-time employee, outside the finance world, I find myself at a disadvantage, in-terms of accessing the latest info about the company's fundamentals and news. The news impacting CI is more readily known (most the time), and it is less volatile (yet volatile enough for trading). And reading Moo's blog convinced me further that there's a lot of dodgy companies out there that can burn you up if you're not careful.<BR/><BR/>I used to trade (using the term loosely here) brokerage companies such as OSK, as a proxy of CI. To a certain extent, it worked OK particularly in big moves such as this recent one, but the divergence is sometimes too frequent to my liking. <BR/><BR/>Other than that, the instant diversification is helpful, if you don't have a lot of capital. If a guy really wants to average down (I strongly disagree in averaging down), he faces less risk of the counter going kaput.<BR/><BR/>A note though. I think the main attraction for ETF in the US is because of the performance of their market, which is around 10% average over a loong period of time. So, just tracking it will be good enough for most of them. And ETF is offered to track the market at a minimal cost. However, as KLCI is NOT S&P500, I dont think this is the reason to trade our ETF. I don't think index funds are a great idea either, due to the crazily high charges they impose to us, just to track the index!!<BR/><BR/>I notice I am being preachy, sorry for that.<BR/><BR/>Thanks.ahboyhttps://www.blogger.com/profile/05609555515089358610noreply@blogger.comtag:blogger.com,1999:blog-935072059836759128.post-30832756215834740912008-07-11T19:50:00.000+08:002008-07-11T19:50:00.000+08:00Dear ahboy,In my article, I refer to FB30ETF. But...Dear ahboy,<BR/><BR/>In my article, I refer to FB30ETF. But since your comments refer to KLCI, let's use KLCI instead because the 2 are different entities. Most of the time they may behave similarly, but sometimes, they CAN behave very differently. Best NOT to ass-u-me they behave identically.<BR/><BR/>Using the KLCI for the rest of this comment today ...<BR/><BR/>Since you are using 50 day MA, the KLCI first crossed the 50dMA on 23 April 2008 using closing price (not 22 April as in your note). So, the Buy would be done on 24 April, which is 1289.38.<BR/><BR/>Of course, in real life, you cannot buy KLCI.<BR/><BR/>You can buy FKLI, but that is futures and is not recommended to new investors, as it is highly geared, and most newbies would be completely wiped out if they don't practice sound money management techniques including stop loss.<BR/><BR/>Why don't you rework using the FB30ETF, since this is an actual case, whereas one can't really buy the KLCI at face value.<BR/><BR/>Remember, since we are comparing against a Buy & Hold investor who does basically nothing except to monitor price every day after work for 1-5 minutes, we have to assume that the trader is the same as the investor, i.e. both full-time work, both have no time to monitor intra-day prices, and both willing to only spend 5 minutes a day.<BR/><BR/>Cheers,<BR/>Seng.<BR/><BR/>PS.Why don't you give me your comments on FB30ETF, and then, I'll use that as a platform for another article to invite comments from others. Thanks.Senghttps://www.blogger.com/profile/08265958046623158053noreply@blogger.comtag:blogger.com,1999:blog-935072059836759128.post-34523225601651935142008-07-10T21:07:00.000+08:002008-07-10T21:07:00.000+08:00Hi seng,For example, I am refering to 22-Apr-08 as...Hi seng,<BR/><BR/>For example, I am refering to 22-Apr-08 as buy signal, and 2-June-08 as sell signal for the KLCI (assuming the ETF tracks CI perfectly). Since I monitor only closing prices, the execution of order will be the next trading day. Is this the same as how U would understand it?<BR/><BR/>I did some basic back-date testing, and tested June06-Jan08 as the up market (gain 56%), Jan04-Oct05 as flat market (gain 21%), and Feb08-May08 as down market (loss 0.3%). This is not too bad, but not great either. And yes, there's room for improvement, which is only appropriate considering SMA is the basic stuff of TA. <BR/><BR/>I hope other experts around can show me how to trade the ETF better.<BR/><BR/>p/s: Seng, can I request you to share your idea on trading this ETF, even if others seem not to be too interested. I was planning to use SMA (mainly) to trade this ETF until your comment comes along..:pahboyhttps://www.blogger.com/profile/05609555515089358610noreply@blogger.comtag:blogger.com,1999:blog-935072059836759128.post-23941345191978468062008-07-10T18:31:00.000+08:002008-07-10T18:31:00.000+08:00Dear ahboy,Conceptually, I understand what you are...Dear ahboy,<BR/><BR/>Conceptually, I understand what you are suggesting, but without actual transaction Buy/Sell date, I wonder if your understanding is the same as mine in detail.<BR/><BR/>If you run through your suggestion on a day by day basis, you might be surprised by the results.<BR/><BR/>With any methods, I urge you to consider writing down at least the first 3 complete trades (signal date, buy date, signal date, sell date).<BR/><BR/>You will gain additional insights from this process. <BR/><BR/>I am sure that after the first signal date is written down, you will want to modify the parameters, or seek improvements :-).<BR/><BR/>Yes, you are quite right. In flat markets, you will get whipsaws, which will cost money. Writing down the trades will allow you to know exactly how much you lose.<BR/><BR/>Specifically, the problem with 50day MA is that it doesn't get you in the trade "early enough", and it's "too late" to get out by the time the signal is given, although with such a big trend like this, one should be able to come out ahead. Even though it should beat the Buy and Hold investor, I think one can do better.<BR/><BR/>Of course, there is no Holy Grail too. Every method has its advantages and disadvantages, but it doesn't mean all methods are equal.<BR/><BR/>Cheers.<BR/><BR/>PS. Thanks for the post. Hopefully, it will inspire others to improve on your methods, to share and to write down the first 3 completed trades based on their suggested methods.Senghttps://www.blogger.com/profile/08265958046623158053noreply@blogger.comtag:blogger.com,1999:blog-935072059836759128.post-7718124256705442862008-07-10T13:18:00.000+08:002008-07-10T13:18:00.000+08:00hi seng,I was considering to trade this ETF, with ...hi seng,<BR/><BR/>I was considering to trade this ETF, with only the moving averages (50, 100 & 200) as guide. As in buy when the price cross up, and sell when it crosses down. I am not able to back-date test this, so I'm unable to come out with specific values. But from the charts, looks like it will be able to capture big moves, such as the ones we saw these last 3 years.<BR/><BR/>However, I am unsure how this will work out in periods of flat prices, such as those before this bull run.<BR/><BR/>Care to comment?<BR/>Thanksahboyhttps://www.blogger.com/profile/05609555515089358610noreply@blogger.comtag:blogger.com,1999:blog-935072059836759128.post-8460137353595124402008-07-09T18:13:00.000+08:002008-07-09T18:13:00.000+08:00Hi KC,I'm not sure what you mean by "Index".Actual...Hi KC,<BR/><BR/>I'm not sure what you mean by "Index".<BR/><BR/>Actually, there are huge differences between Futures and ETF.<BR/><BR/>Futures are "highly geared", whereas ETF is more like other funds with lower management fees.<BR/><BR/>Futures have expiry dates (usually cash settled, but not always), whereas ETF being a fund of equities don't.<BR/><BR/>ETF is actually a good vehicle for investors, just like equities.<BR/><BR/>As I mentioned in the "Advantages", there are at least 5 benefits to investors.<BR/><BR/>Perhaps you would like to reread that again.<BR/><BR/>Whilst it is not a bad vehicle for investors, the main point of my article is to share with readers my belief that beginning, small time traders can also benefit by trading the FB30ETF as opposed to futures or other speculative stocks. <BR/><BR/>Cheers,<BR/>Seng.Senghttps://www.blogger.com/profile/08265958046623158053noreply@blogger.comtag:blogger.com,1999:blog-935072059836759128.post-87453105431748663712008-07-09T18:00:00.000+08:002008-07-09T18:00:00.000+08:00ETF is no diff than futures & Index, a product cre...ETF is no diff than futures & Index, a product created for TRADING PURPOSE.<BR/><BR/>Only Good for BURSA & INVESTMENT BANKER.<BR/><BR/>What will Investor benefited from this product.KChttps://www.blogger.com/profile/07691493709389652505noreply@blogger.comtag:blogger.com,1999:blog-935072059836759128.post-89272027007828219192008-07-09T14:59:00.000+08:002008-07-09T14:59:00.000+08:00Hi Dennis,My own belief is similar to Buffett, i.e...Hi Dennis,<BR/><BR/>My own belief is similar to Buffett, i.e. markets are efficient most of the time, but not all the time.<BR/><BR/>My own personal observation of KLSE is that they are quite inefficient sometimes :-)<BR/><BR/>Personally, I prefer to stick to equities and cash, as opposed to bond funds. With bond funds, there are additional considerations such as higher interest rates causing bond prices to fall, not to mention the fund fees charged.<BR/><BR/>Hi chee meng,<BR/><BR/>I'm afraid it doesn't quite work that way. I like to see at least 5 to 10 attempts first before I disclose my own methods ... :-) I prefer to see readers trying to figure it out first, if not, I probably won't share it publicly ... :-)<BR/><BR/>Cheers,<BR/>Seng.Senghttps://www.blogger.com/profile/08265958046623158053noreply@blogger.comtag:blogger.com,1999:blog-935072059836759128.post-58265418428250043102008-07-09T14:47:00.000+08:002008-07-09T14:47:00.000+08:00i will love to read your coming article on thisi will love to read your coming article on thisAnonymoushttps://www.blogger.com/profile/15534284468510500826noreply@blogger.comtag:blogger.com,1999:blog-935072059836759128.post-74119944898676350482008-07-09T11:33:00.000+08:002008-07-09T11:33:00.000+08:00hi seng,actually i had this type of idea after tru...hi seng,<BR/>actually i had this type of idea after truly understanding market efficient theory and the situation in our market.<BR/><BR/>basically we can say that most of the stock for example those in FBM30 are either fully valued or overvalued. And there are very little time that these stock will be undervalued.<BR/><BR/>thats why i had this idea long time ago. but instead of trading FB30ETF, i'm considering Index Fund and use switching to bonds or money market fund as a way of selling. With the switching fees fixed in most trust unit, the fees used in trading will be very low.taupau81https://www.blogger.com/profile/13696546262519983707noreply@blogger.com