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The world we live in today is very different from just 30 months ago. For many of us, the first thing that comes to mind would be the COVID-19 pandemic. While true, far more has changed since then.
Just to name a few major developments impacting global markets today: COVID-19 is still raging on; Russia has invaded Ukraine; global supply chains are strained (due to the invasion and COVID-19); oil prices are climbing towards levels last seen in 2008; gold prices are near all-time highs; inflation rate is spiraling towards multi-decade highs; interest rates are rising at the fastest pace in over a decade; employees are pining for hybrid work environments; and the list goes on.
These are just some of the things that investors and/or traders must navigate in the #TheNewNormal today. To help us chart through these rough waters, we chat with one of the world’s most followed traders Rayner Teo to learn how he is adapting to the unpredictable landscape.
Dinesh Dayani (Dinesh): You’ve always been providing high-quality content on your blog, YouTube channel, Facebook Page, Telegram Channel and more. As testament to this, you are one of the world’s most followed traders today. Congratulations!
Have you seen a spike in younger retail traders following you since early 2020?
Rayner Teo (Rayner): I don’t have the data to quantify it as a spike. But, I do notice more young people wanting to learn to trade the markets recently. On my YouTube channel, I get comments from many students who want to learn how to trade.
Dinesh: With the influx of new financial influencers on the various social media platforms, how are you engaging your audiences differently today as compared to when you first started?
Rayner: Let me start with what I’m still doing the same way. There are certain core, fundamental principles that we need to stick to.
Number one is providing useful educational and trading content that we (at TradingwithRayner) put out. We want it to be something that people can learn from even if they see it for the first time. So, we try not to digress or go round in circles, but instead, be very concise and straight to the point.
We are also staying true to who we are. For example, I am familiar with the stock trading, forex trading, price action trading – these are my domain expertise. So, we talk about things that we are familiar with. For things that are outside of our expertise, we either bring in an outside expert for their opinions or we don’t talk about it at all. The last thing we want is to mislead people into thinking that we are good in something when in fact we are actually quite new to it.
For what has changed – we’ve always been experimenting with different content types to cater to different needs of people. Over the years, the overall audience attention span seems to be getting shorter. Maybe it’s due to the rise of short video clips posted on social media. In response, we have been producing short 10-minute YouTube videos, and even micro or shorter videos for IG shorts or TikTok that last 15 seconds. However, we still have two-hour-long webinars for people who want in-depth content and training.
Dinesh: The world feels like a different place today, compared to pre-COVID-19. Again, it’s not just because of the pandemic. Are you seeing any shift in the topics that investors and traders who are following you becoming more interested in?
Rayner: What I’m seeing is that more people are interested in cryptocurrency trading, especially when crypto was on the rise and breaking out to new all-time highs. However, interest has dropped quite a bit ever since it’s not been “very bull”.
Other popular themes that I’m seeing is options trading, at least in Singapore context, as well as day trading, which is maybe more prevalent in the U.S. context.
Dinesh: In the past two years alone, we’ve seen markets crash nearly 30%, spike to new all-time highs, and now, another spiral back down into bear territory. Assets such as gold and oil are climbing near all-time highs, while cryptocurrency has slumped.
What should traders pay attention to when trading today, given the especially volatile investment landscape?
Rayner: Regardless of whether it’s a bull market, bear market, or assets, the key thing is to know your edge in trading. A lot of it is about nailing down your fundamentals.
What’s going to happen if you don’t have an edge in the market? In the long run, you will consistently lose money, because the odds are not in your favor. So as a trader, it doesn’t matter what the current market condition is. You must know what is your edge in the market.
Different trading markets will have different strategies that you can use to exploit your edge. So, it’s very important that you know your edge even before you trade in the markets.
Dinesh: You’ve been a trader and educator for nearly a decade now. To be successful over a long period of time, you must be willing to adapt and constantly learn.
Can you share a few things that you have recently learned that has improved the way you trade today or refined your thoughts on trading?
Rayner: My biggest learning points always come from other successful traders. They have amassed a lot of experience. You can take advantage of it by learning from their wisdom, knowing the pain and lessons they have gone through. From there, I like to reverse engineer proven trading concepts and develop trading systems that work for me.
For example, I recently read a book called “Short Term Trading Strategies That Work” by Larry Connors (CEO and Founder of Tradingmarkets) and Cesar Alvarez (from Alvarez Quant Trading). The book shares a few trading systems for the stock market. I learned about the concepts behind these trading systems instead of the actual trading systems.
My interest has always been to understand the concepts behind trading strategies. Like, why does a particular trading system work? And why does that system work in the stock market?
One takeaway from the book would be that the stock market is in a long-term uptrend – stocks, which are trading higher, are likely to continue higher. The idea behind this system is that stocks that move higher do so because of strong consistent earnings, positive sentiments, or because they are fundamentally strong companies. These factors aren’t going to change overnight. Thus, strong stocks are likely to continue higher.
A stock trader can take advantage of this phenomenon by buying the dips and selling the rallies. That’s the basic concept behind the strategy. Of course, we still need to take into consideration our risk management, position, sizing, when to enter, and when to exit.
Don’t Be Fixated By Unpredictability In The Markets
Like Rayner mentioned, he does not let the markets dictate his trading strategy. Instead, traders need to nail down their trading fundamentals and strategies.
We need to build our base knowledge by reading financial websites like DollarsAndSense, learning via YouTube videos by reputable trainers such as TradingwithRayner’s Rayner Teo as well as attending free webinars and online courses provided by platforms such as the IG Academy.
There’s really no end to how much we can learn about trading. Even after successfully trading and developing training materials for over a decade, Rayner continues to learn from other successful traders by reading their books and following them on Twitter.
Similarly, the DollarsAndSense team (myself included) are always talking to traders and investors to understand their thought process and viewpoints – and we share these interviews on our #TheNewNormal column. We can also access forums and blogs and interact with like-minded traders and trading analysts by staying connected with the IG Community.
In the process of learning to trade, we can also lean on IG to guide us in creating a trading plan. From time to time, even experienced traders such as Rayner will pick up on new trading strategies. We don’t have to trade with real money to test these strategies. By opening a demo account with IG, both new and experienced traders looking to test new strategies or trade new products can use up to $200,000 in virtual credits.
When you are confident enough to trade with real money, you can progress to a live account to deploy these strategies.
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