Collin Seow, investor, trainer, Trading Representative with Phillip Securities Pte Ltd tells us about himself and his role as a remisier. He shares with us the strategy he uses to make money from the stock market as well as his opinion for 2015 and direction of Straits Times Index STI.
This is the story for readers who want to make money in the stock market or build career in the stockbroking business. Key success factors? You need a strategy and stamina to stay long in the game.
10 years in the stockbroking business
Hi Collin, please introduce yourself to our readers.
Before I was a remisier, I was a financial adviser for more than 8 years.I have been trading and looking at the stock market close to 20 years. Before becoming a remisier, I was trading almost full time, though I still have financial adviser license.
This is my 10th year in my stockbroking business. Six months into the business, one of my clients defaulted on $250,000. My commission at that time was only about $2,000 a month. I was then trading full time. My trades were more or less short term trading. I realized that I cannot continue to trade short term. I decided to go for a longer time frame and to develop a system so that I have time to do other things.
I started to get new clients and at the same time trade longer term. With a system, I was able to ride a bigger and longer trend. I managed to pay off the debts in one and a half year with the income from my broking business and my trading profits.
I was Top 10 in Phillip Securities in CFD and Money Market Fund for the past 5 years since they started to give out awards. In term of trading, (I cannot write much because my license does not allow me to reveal that), what I can say is that I have trained some people who have turn full time to become licensed traders and prop traders. Some have also setup their own trading school using similar strategies.
CyberQuote (the training arm of Phillip Securities) has invited me to be one of their trainers to train their licensed traders.
I was featured in a book called Secrets of Highly Profitable Traders which made the top 10 Straits Times best sellers for 24 weeks.
I am wearing 3 hats right now: (1) As a remisier, (2) As a trainer, (3) As an equity investor.
Difference between remisier and stockbroker/dealer
Some readers here may be new to the stock market. Can you tell us the difference between a remisier and a stockbroker/dealer?
In Singapore and Malaysia, we used to be called ‘remisier’. But now we are called ‘trading representative’. In Singapore stock broker stand for the company eg: Phillip Securities.
A remisier has a profit and risk sharing arrangement with the company. Generally, we will take 40% cut of the commission but in return, we take 100% of the risk.
A dealer works for the company and does not share the profit of the clients’ trade. However, he also does not have to take any risk.
As a Remisier, what edge do you give to individual traders and investors who work with you?
There are 3 areas that we can help the individual traders and investors.
Because we are much closer to the market, we are able to feel the pulse of the market much better. We will share information through our chatroom, email and telephone calls.
We believe in teaching people to fish rather than give them the fishes. That is why we also conduct frequent training to give our clients different trading tools, technical and fundamental analysis.
We help clients to place orders through the telephone when they are not available to do so. We can also set price alerts for them for particular stocks. If they call in to us, they can ask for our personal view about a particular stock. I have another remisier who works with me and together we can cover one another if one is busy on the phone or having an appointment.
His swing strategy
You have been conducting technical analysis training. How long have you been doing this and what strategy do you teach?
I have been training for about 6 years. Initially, it was just out of passion to educate clients but as the interest and clientele grew, I was invited to work with CyberQuote (Training Arm of Phillip Securities).
For short term, I teach swing trade which is trading for 5 days. For Iong term, I teach position trading using a trading system called TradersGPS.
I will just share one strategy here. This is a swing trade strategy.
- 20MA and 40MA must be sloping up (with 20MA above 40MA).
- Wait for price to pull back to 20MA but remain above the 40MA
- Look out for meaningful pullbacks to buy on a dip, which means we must wait for CCI (5) to be at -100.
- Next look for buy zone, which is the region between 20MA and 40MA. When price is inside this zone, it means getting ready to enter a trade.
- Buy when price trades 1 bid above previous day’s high. The high of previous candle is the most bullish point for previous day. If today high can conquer previous day’s high, it means today is more bullish than previous day. (At this time, your CCI may not necessary be at -100, but it should have visited -100 before)
- Stop loss at 1 bid below previous day low or today’s low, whichever is lower.
Collin Seow’s swing strategy using moving averages and Commodity Channel Index
2015 and direction of Straits Times Index
What is the big story of 2015?
The decline in oil price is certainly something interesting that we are looking at this year. This will benefit transport and logistic stocks but for the oil and gas industry, the outlook may be worse. Saying that, I believe if there is a war or a rumor of war in the Middle East, oil price may start shooting up again. For WTI (NYMEX) the immediate support is around $45, however this support has yet to be tested. Price now is around $50. You can get exposure through USO (United State Oil) which is a crude oil related ETF.
Secondly is the interest rate. China, EU and many other countries central bank has recently reduce their interest rates. The FED borrows to finance a portfolio of bonds (like any bank). The Fed pays 0.25% interest for these funds, which are used to purchase bonds earning 2.5%. Right now, the Fed is making a tidy profit. On $3 trillion, 2.25% is about $68 billion a year. This all works so long as the cost of borrowing is low. However, the Fed’s low cost is the banks’ incentive. The banks can pull out at any time, and they will as soon as they find a better deal. I think it will not be urgent for FED to increase interest rate. This is because there is less risk of inflation right now as oil price has drop from $100+ to $50 now.
6.The Straits Times Index appears to be very near to historical high. There also appear to be a lot of geopolitical uncertainty. What strategy should investors adopt to navigate the stock market safely. (Please qualify in terms of risk, expectation and time frame.; you may recommend different portfolio as well).
I think the STI is still on an uptrend right now, the resistance is around 3450, the lows are getting higher.
Straits Times Index
There is a clear uptrend line established since mid-2011. I think this is a significant uptrend line. I do not see much froth right now in the market. The general view now is still the fear of losing rather than the fear of losing out. Looking at the individual stock in the index, it does not look like a board base rally like in 2007 where every stock is testing new high. Right now, some of the stocks are testing high like the banks but some of the other stocks are just turning around. I think sectors and stock selection is more important right now. We may look at sectors and stocks that will benefit from the low oil prices for this year.
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Soh Tiong Hum is Director of TerraSeeds Market Technician Pte Ltd. TerraSeeds is a trading educator in Singapore since 2005.
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"I do not have a financial advisor's license. I am not qualified by any regulator to give financial advice. I do not know you the reader. Your investment means and motive may be different from me. My posts here are based on observations and meant for education. I am not responsible for for any consequence from your actions."