NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department “95% of traders lose money”

NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report GM TRADING PSYCHOLOGY AND MONEY MANAGEMENT 29 th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department

Disclaimer Trading Psychology and Money Management 29th October 2015 NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report NUS Invest is in no way affiliated or representative of any other company, organisation, club or society, and the views presented are solely our own opinions. The author(s) is not a licensed investment advisor. Our services are educational tools designed to assist you in your personal judgment. It is not designed to replace your licensed financial consultant, and nothing in the content shall be construed to be an offer or solicitation for the purchase or sale of a security. All content on our website and related services is for informational purposes only, and opinions have been made on a general basis. No consideration has been given to any particular individual or specific investment objectives, financial situations or other circumstances. As such, the content should not be relied upon as authoritative without further being subject to the recipient’s own independent verification and exercise of judgment. The fact that the content has been made available constitutes neither a recommendation to enter into a particular transaction nor a representation that any product described within is suitable or appropriate for the reader. Readers should be aware that many of the products which may be described within involve significant risks and may not be suitable for all investors, and that any decision to enter into transactions involving such products should not be made unless all such risks are understood and an independent determination has been made that such transactions would be appropriate. Tan Zhi Rong & Toh Kai Yun Global Macro Department

Agenda NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Trading Psychology Money Management Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department

Why the public always lose money? NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Never take profit and price collapse Take profit too fast If I lose, I hold. Paper loss is not loss Justify the trade has good fundamental and will rise eventually Money management Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department

Top 4 Emotions NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Fear: Panic selling, Not daring to pull the trigger, demo v real money Greed: excited about potential gains Joy: overly optimistic Anger: never try and “get back at the market” after a losing trade. Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department

NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department Greed Joy Anger Fear

Emotional Behavior NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report If I win, I hope to win more If I lose, I hope to win back If I lose a few times, I play bigger and bigger If I really like this trade, I will all in Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department

What affects Trading Psychology? NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report 1) Skill 2) Ability to absorb losses without panicking (Personality) 3) Risk appetite 4) Purpose of your trading Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department

1. Eliminate your emotions NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Establish your trading plans before the market opening to eliminate emotional reactions. Decide on entry points, exit points, and objectives. Recognize your negative emotions that cost you a lot more money than the market Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department

2. Cut losses Short NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report When a position starts going against you You've lost so much already, what's a little more? If a position still goes against you the third day in, get out Use stop loss orders Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department

2. Cut losses Short NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department Disposition effect: A tendency to hold onto losing investments in th e hope of a turn-around Realized losses Holding losses

3. Let Profits Run NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Fight your human nature – wanting to cash in your pretty good winner Let profits run =/= greed. Stay if the reasons to out on the position are still there Use trailing stops to protect your profits Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department

My Experiences NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Buying low-risk entries strategies “I’m all in” on warrants (10x leverage) Right rationale, wrong market conditions Lost a significant part of the account Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department

My Experiences NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Stopped trading for a month or so Confidence took a huge dent Suffered from “revenge trading” Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department

Lessons Learnt NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report 1.Never let your emotions come into play 2.Always stick to your plan – have stop losses 3.Learn how to say “no” to even a beautiful trade 4.Focus on trading well, money comes later 5.Be “senile” Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department

Most Importantly…. NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Enjoy yourself and love it. Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department

Money Management NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report “Trading is not about gambling, Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department It’s about taking Calculated RISK. ”

Money Management NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department Gambling “Just trade any amount! $888 sounds like a good number” “If this stock go up, I can earn $1000!” “Please, please go up, so that I can sell!”

Money Management NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department Poor Money Management “I shall sell once I earn $500 on this trade” “Just buy, hold, and don’t look at it!” “Hold longer! Maybe the stock price will recover?”

Money Management NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Q: Can you tell the difference between Gambling and Poor Money Management? A: Probably not, because they are the same thing. Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department

Money Management NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report 1. Did not consider RISK (amount of money you can lose) 2. Too focused on how much money you can make Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department

Money Management NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Money Management = Risk Management Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department Rule #1: Never Lose Money (Your Capital) Rule #2: Never Forget Rule #1. - Warren Buffett

Money Management NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Rule #3: Always place Stop-Loss Order Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department Example: Entry Point: $1.00 Target: $1.20 Stop Loss: $0.80 Do you want to camp 24/7 at your computer?

Money Management NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Rule #3: Always place Stop-Loss Order Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department Benefits: Reduces Risk Avoid excessive losses Reduce the need to check price level

Money Management NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Rule #3: Always place Stop-Loss Order Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department

Money Management NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Rule #4: How much should I risk then? Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department GAME ON: Find the Similarities

Money Management NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Rule #4: How much should I risk then? Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department 2% Apply the 2% Rule and you might end up being as *happy as him *Terms & Conditions Apply

Money Management NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Introducing the 2% Rule... Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department 1. Risk only 2% of your whole capital 2. Add commission fees and other miscellaneous fees into your Capital at Risk 3. Remaining sum is your Capital Available for Trading

Money Management NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Example 1: Basic Calculation Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department Risk Management Initial Capital$100,000 Capital at Risk (2%)$100,000 x 2% = $2,000 Capital Available for Trading$100,000 - $2,000 = $98,000

Money Management NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Example 2: Adding Commission Fees Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department Risk Management Initial Capital$100,000 Capital at Risk (2%)$100,000 x 2% = $2,000 Commission Fees ($10 per trade) $10 x 2 = $20 (Buy & Sell) Capital Available for Trading$100,000 - $2,000 - $20 = $97,980

Money Management NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Q: How many stocks can I buy now (Per Stock)? Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department Risk Management Capital Available for Trading$97,980 Capital at Risk (2%) Inc. Commission Fees ($100,000 x 2%) + $20 = $2,020 Entry Level$10 per share Stop Loss$8 per share Maximum No. of Shares$2,020/($10-$8) = 1,010 shares

Money Management NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Q: What if I want to buy multiple stocks? Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department 6% Max. Cap: 6% for portfolio, regardless of no. of trades Stock #1: 1% Risk Stock #2: 1% Risk Stock #3: 2% Risk Stock #4: 2% Risk

Money Management NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Rule #5: Survival First, Profit is Secondary Trading Psychology and Money Management 29th October 2015 Tan Zhi Rong & Toh Kai Yun Global Macro Department 1. Focus on one market first 2. Diversify only after you succeed 3. Do not put all your money into one stock. This is not gambling. 4. Create a excel spread sheet for easy calculation

NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report GM Thank You. Tan Zhi Rong & Toh Kai Yun Global Macro Department

NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report GM Ng Xin Yang (Director of Research) Global Macro Department Technical Analysis Series Quantitative Finance Series Fundamental Analysis Series

NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report GM Ng Xin Yang (Director of Research) Global Macro Department Slides for previous workshops: Multiple choice practice questions on our workshops: