This article was written in partnership with IG, the world’s No.1 CFD provider (by revenue excluding FX, February 2018). All views expressed in the article are the independent opinion of DollarsAndSense.sg
For those that attended DollarsAndSense’s inaugural event In The Footsteps Of Masters: Going Beyond #myfirsttrade, you would remember Jonathan Tan as the speaker who captured your attention with his simple to follow trading simulation.
A veteran in the trading field, Jonathan Tan of Charting Academy has more than 20 years of experience in the financial markets, of which 13 years were spent as a professional trader. Jonathan trades in various stock markets, including Singapore and the US. He also specialises in trading the Hang Seng, Dow Jones, S&P500 Futures and also Forex and commodities.
Jonathan started investing in the stock market right after the Asian financial crisis in 1998. Previously a Regional IT Manager for a large multi-national company (MNC), Jonathan quit his full-time job in 2006 to focus on full-time trading.
Today, Jonathan shares his daily updates and experience on social media channels including Facebook and Telegram. He also runs a Facebook Group – Gathering Of Traders, which is dedicated towards the discussion of trading signals in the financial market.
In this edition of #myfirsttrade, we sat down with Jonathan to hear more about his trading journey, trading strategies and how he arrived at where he is today.
DollarsAndSense (DNS): As an active trader, you must have carried out thousands of trades over the years. Do you still remember what was your first trade and how it performed? #myfirsttrade
Jonathan Tan (JT): I have been trading stocks for some time, using a buy and hold strategy. My formative experience in trading was when I decided to give Futures a try. My first trade in Futures was trading the Hang Seng Index. I entered the trade as it had bounced off from its support level on the smaller timeframe.
With a small contract, I made close to US$100 in a few short minutes! That made me realise that trading on a smaller timeframe has a possibility of becoming profitable. I do not need to wait for days.
DNS: What made you decide to do trading for a living? Did you always see yourself becoming a professional trader and sharing your trading strategies with thousands of students?
JT: I was a regional IT Manager for a large MNC and my salary was good. Although I had a few colleagues helping me to manage the entire Asia Pacific region, when it came to major problems, I had to step in to get it resolved.
Not everything can be resolved using remote software. My actual work usually starts when everyone is out of office so that I can get any issue resolved before the other departments come back to work at normal working hours. Due to the nature of my job and the cruciality of troubleshooting fast, eating packet food in front of the servers was a common occurrence for me. I also had an “emergency” bag in my car as I could be required to be on a plane at a moment’s notice.
My breaking point came when I was travelling with a Sales Manager together on an overseas trip and he was commenting on how wonderful his work and client entertainment experience was that made me reflect on my work. So even though the salary was good, I did not have much family time and was constantly under pressure to get everything fixed by the next working day.
I then started trading, committed to learning more about technical analysis in trading. With a live account, handling real funds taught me more lessons than using a demo account instead. Trading a demo account is good for beginners to learn how to maneuver around the trading platform but using a live account will involve more trading psychology since it involves real monies.
From that day, I spent a lot of my trading profits to upgrade myself continuously via lessons, webinars and testing out new strategies.
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DNS: Trading has been your profession since 2006. Has trading gotten “easier” with time? How much have the markets changed since you first started trading?
JT: I would say trading has gotten “easier” over time as I have gotten better with experience. It is like driving. Initially you must pay attention to every single step. But after driving for some time, a lot of those steps are ingrained into your thinking and it becomes second nature.
With the tools available to traders today, the markets have become far more accessible. I still remember that in the past, in order to get the prices of assets, you would need to open a trading account and there were minimum criteria you have to meet just to get an account opened.
To get good charts, you would have to pay a subscription for it and the charges are proportional to the number of markets you wish to trade. The more you wanted to trade, the higher the charges were.
Today, you can get good charts with great analysis for free. And with smart phones, you can get charts, signals and trade on the go, anytime and anywhere.
DNS: What are some of your go-to trading strategies and signals?
JT: I always prefer simple, effective and profitable strategies. One of it is by using candlesticks. Even though there are hundreds of candlesticks patterns, you just need to know two to four patterns to be profitable. If you have been watching my YouTube channel, you will notice that I always talk about Hammer and Shooting Star candles.
Even though it is a common technique, a lot of trainers don’t like to teach it because it is not a “secret”. Despite it being a common knowledge, I love this strategy because it has worked for me on many occasions
Right now, I have programmed these signals into my trading platform. With that, I will not miss any signals in any counters or timeframe. When all the good signals line up in front of me, I can decide if I want to take the trade or just give it a miss. This helps me to save time and effort so that I can do other things.
DNS: You trade stocks, futures, forex and commodities. What is your most frequently traded asset class?
JT: I trade about 60% of my portfolio into futures specialising in Hang Seng (Hong Kong), DAX (Germany) and Dow Jones (US). 30% will be into various major forex and commodities such as gold, silver or oil. The rest is in stocks or cryptocurrencies.
I love trading futures as it has a trend. Forex usually has a sideway trend on a bigger timeframe. Therefore, I use different strategies to trade futures and forex.
DNS: Based on your experience sharing your trading strategies in numerous countries, what are some of the most notable differences you see between these markets?
JT: I have conducted training in Singapore, Malaysia, Indonesia and Thailand. People in Singapore are more exposed to trading and hence understand my strategies easier.
On the other hand, Malaysia and Indonesia, due to the exchange rate restrictions on their local currencies with US$, it is more challenging to trade in their regions. Whereas, language pose as the main challenge for Thailand.
But no matter the barriers and the obstacles, a common characteristic that all of them have is the hunger and drive to learn more about trading. That alone is a great motivator to overcome all their doubts.
DNS: You have a Facebook group called Gathering Of Traders with more than 6,600 members. What are some of the most memorable things that you have learnt from these members?
JT:While my free Daily Signal Centre signal helps a lot of traders, I have received feedback on providing better entries for the group. It is through this feedback that I have incorporated a free Real Time Trade Alert since last year. Through the Telegram group, signals will be sent to their mobile phone in real time. A lot of traders find this very beneficial and it also saves them a lot of time.
It Takes The Right Tools And Commitment
Through our interview with Jonathan, his passion and commitment towards trading stood out. Anyone can be a trader, but not everyone can commit to sharing their ideas, analysis and insights on a daily basis. Jonathan’s dedication toward providing his followers with trading updates goes one step further by conducting seminars for keen learners, not just in Singapore, but also in neighbouring Southeast Asian countries.
With a large team of global analysts, a trading platform like IG provides users with news feeds and live TV, integrated into the platform. IG also has an online IG academy to help users learn through free online courses, webinars and seminars.
Jonathan also highlighted how various tools have been useful for his trading and how these tools were previously unavailable many years ago. In today’s digital age, there are hundreds and thousands of a of trading platforms for us to use, many of which provide additional services and tools.
IG’s trading platform also provides various indicators and other technical analysis tools that allow traders to identify and receive real-time signals to both your laptop and mobile devices.
For new users, a good way to start would be through a trading demo account. IG’s demo account allows you to practise your trading with $200,000 in virtual funds, allowing you to gain experience and get comfortable using the platform before you take your next step into your trading journey.