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Trading During COVID-19 Come With Both Greater Opportunity And Higher Risk. Here’s How Swim Trading’s Jay Tun Is Overcoming His Loss To Become A Better Trader #MyFirstLoss

Good traders thrive on market volatility, while those who don’t know what they’re doing drown.


This article was written in partnership with IG, the world’s No.1 CFD provider (by revenue excluding FX, published half yearly financial statements, June 2019). All views expressed in the article are the independent opinion of Dollars and Sense and do not in any way reflect the views, opinions, or endorsements of IG Asia Pte Ltd (Co. Reg. No. 20051002K) (“IG”). You can refer to our Editorial Policy here.

Starting his degree in Banking and Finance in 2009, Jay Tun had no intentions of ever becoming a trader. During his studies, he had to work part-time to earn a supplemental income, and that’s where he met a colleague who first introduced him to the world of trading.

Seeing his colleague fixed on his screen studying charts and earning a return from the market captured Jay Tun’s attention. He started his journey in trading and after graduating in 2012, decided to give it a shot full-time.

Since then, Jay Tun has experienced many ups and downs as he continues honing his skills and becoming a successful full-time trader. Through this journey, he has also started Swim Trading, his training academy and community, to help guide new traders finding their feet in the markets.

Read Also: Jay Tun, Founder And Principal Trainer At Swim Trading, Discusses The Pros And Cons Of Using Knock-Outs To Trade

Due to the COVID-19 lockdown measures in Singapore, he had to pivot his training sessions to go online. He also used this as an opportunity to promote his first large scale online event – How to identify strong stocks in the market – which sold out within two hours of launching.

In this edition of our #MyFirstLoss column, we had a Zoom meeting with Jay Tun to ask him how he overcame his initial setbacks to become a full-time trader, and how he has been navigating the current COVID-19-led lockdown.

Dinesh Dayani (DD): Hi Jay Tun, thanks for talking to me again. We’ve always started this column by asking if you remember the first time you made a loss? #MyFirstLoss

Jay Tun (JT): My first loss began on a very positive note actually. I was working part-time at what was then known as the Ministry of Community Development, Youth and Sports (MCYS), and a colleague there was constantly on his phone checking charts and prices.

I got very curious and asked him for a stock tip. This led me to buy Genting Singapore at $2.00 and I managed to sell it at $2.25 quickly after that. I earned 12.5% in the space of two weeks. It felt very easy.Advertisement

However, looking back, I had no concept of fundamentals or technical analysis and neither did I do any homework. I just relied on my faith in my colleague.Advertisement

When it fell to $2.00 again, I bought in again and was able to make another tidy profit very quickly. I took larger positions going in and out of Genting Singapore with three very profitable trades.

On the fourth occasion, I naturally bought Genting Singapore when it fell to $2.00 again. This time it fell to $1.98 – the first time I had to handle a negative position – and then further down to $1.88 and even lower. I continued holding on to my position partly because I’d become attached to the counter believing it would rebound, and I didn’t want to acknowledge that I made a mistake.

Finally, I cut my position at $1.58. I lost all my previously made profits from the first three trades and even ended up losing another $5,000. This was a lot of money for me as a 22-year-old student working part-time.

On hindsight, this was a very good initiation into the industry.

DD: What lessons did you learn from that episode?

JT: A part of me felt embarrassed and overwhelmed. After staying on the sidelines for a while, I realised that trading was something I found incredibly fun and challenging.

I also knew that if I wanted to continue trading, I had to change the way I approach my decisions. The road to coming back should not only be about making the money back but also gaining necessary knowledge. I had underestimated the amount of work required to become a successful trader over a long period.

My greatest takeaway was my mindset and how I looked at my trades – instead of focusing on the profits, my focus now is on could the amount of losses I can possibly incur on each trade, and the risks I am taking. I needed a proper trading strategy and risk management strategy, rather than relying on a hot tip by someone else.

DD: The market is very volatile today. Since March, we’ve witnessed i) the longest-ever bull run end, ii) the fastest ever 20% decline in the history of stock markets to enter a bear market within 16 days, and iii) a new bull run after the markets gained more than 20% in a matter of a few weeks.

Naturally, this has captured the interest of many people and new traders. What do you think these traders should know before starting?

JT: First, don’t jump in blindly because of greed. It’s one of the most dangerous things you can do.

Also, many of these new retail traders may never have traded or invested before. They may not be equipped with trading strategies and the mindset to succeed. Worst still, they may not be fully aware of market developments.

Personally, I feel that the current optimism is brewed largely by government stimulus. There are many reasons for a bleak outlook – unemployment is growing and economic growth looks to be as bad as it has ever been. We also probably have not felt the full effects of COVID-19 on businesses and the economy yet. In truth, we may be headed for a long-drawn soft market.

DD: This heightened volatility also presents more trading opportunities. How should new traders decide on the trades to make?

JT: Rule number 1 – stay away from trades and stocks that are making the headlines. By the time they are in the headlines, it is already too late to capture any price actions.

Many people also have misguided expectations on entering the markets. Understand that trading is not a get-rich-quick scheme or something you can try because you have lost your job, or someone has given you a stock tip.

Many may also think that just because they have attended a course or did some reading that they are going to make money. The reality is that courses simply accelerate your learning curve and can save you time and pain in figuring things out on your own. You still need to put in the work and clock in the time to become experienced – which no course can ever help to accelerate.

Another thing you should not do is just take the words of the trainer or course provider as gospel truth. Always question it.

DD: How has COVID-19 changed the way you trade?

JT: With heightened volatility in the markets, there may be a lot more trades to make but I am adopting a much tighter hold on risk management and being even more selective with my trades.AdvertisementAdvertisement

I am a lot more fearful now. Whereas in the past I may let trades play out, today I close positions the minute I sniff the first signs of something going against my expectations. My trade sizes are also a lot smaller compared to the past, in an effort to limit the risk I take on each trade.

During end January to early February, I was still doing swing trades. When the onslaught came, I was a little caught out. Many of my swing trades were affected with many stop losses triggered. Those that weren’t triggered, I tried to close immediately.Advertisement

I had to reprofile the market and adapt my trading strategy to it by switching to day trading – taking a very short-term view of the market, within days or even hours, rather than holding on to trades for a longer period.

The change in strategy has been rewarding and I’ve recovered the capital I lost on my initial stop loss positions. The takeaway I learnt was to adapt to the market and not to be obstinate by hanging on to the strategies that have worked before.

DD: Was Swim Trading’s business affected due to the lockdown measures.

JT: I could not hold any physical events or meet with any of my students, so going digital and stepping up my online engagement was essential.

In fact, with the greater volatility, my students have been coming to me a lot more frequently with their questions and discussions on our digital community channels. Naturally, traders are also more anxious nowadays.

They are coming to me for information as they have to adapt their trading strategies as well. But they are also seeking clarity on their trades. Sometimes, emotions can get to the best of us and running their trades and decision-making process with me helps them evaluate their strategies and make less emotional decisions.

With many more new traders on the scene, I am also in the midst of creating a beginner course, and will be sharing information for everyone on my Facebook group – Swim Trading Trade Discussion.

Greater Volatility Invites More Trading Opportunities. Whether They Are Profitable Or Not Depends On Your Trading Approach

One interesting thing Jay Tun brought up is that even though the heightened volatility in today’s market may create many more trading opportunities, he has actually become even more selective with his trades, and is extra cautious with the size of his trading exposure.Advertisement

For those looking to hone their trading acumen, IG Academy offers free and up-to-date resources you can tap on. You can get specialist insights into trading strategies to capitalise on global markets as well as keep up to date with the latest news and financial event as well as receive expert analysis on the markets. You can even learn how to make the most of volatility on this page on IG. Offering over 17,000 markets including the Volatility Index (VIX), you would be able to trade any asset classes or markets that you are familiar with.AdvertisementAdvertisementAdvertisement

Jay Tun’s community has also benefited from being able to bounce trading ideas and verbalise their trading decisions to ensure they aren’t based on emotions. Similarly, the IG Community brings together like-minded traders to share trade ideas and discuss market opportunities, which can be really valuable as volatility creates so many new trading opportunities.

The rapid change in the markets can take even an experienced trader like Jay Tun by surprise. However, he was quick to realise that he needed to adapt his trading strategies before entering new positions and was rewarded for his patience and prudence.

Similarly, if you wish to start trading, ensure that you understand the market as it may no longer be the same as the one you were trading in the past. An IG demo account can be an important tool to test out your trading strategies with virtual funds before going on your live account. When you are ready to do so, you can sign up for a live account with IG directly via MyInfo.AdvertisementAdvertisement

Read Also: Jay Tun, Founder And Principal Trainer At Swim Trading, Discusses The Pros And Cons Of Using Knock-Outs To Trade

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