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STOCK market is risky, stay away from it, is the advice we normally hear. And a recent survey confirms that Malaysian investor population is aging (40-60 years old); and the younger ones are getting fewer and further away due to lack of knowledge and market uncertainties.

Beyond Insights Chief Trainer and Coach Kathlyn Toh, based in Petaling Jaya, said one of the main reason for the fear is that the baby boomers and GenX generations have gone through several financial crisis, and many people have lost a lot of money in the stock market during those times, and even in good times.

Toh said: The majority of people who lose money suffered because they did not do their risk management properly (if at all); and these are the people who passed down their bad experience and nightmares to the younger generation,

The younger generation may not realise the impact of not investing yet, since their parents are the ones who have gone through bad times, and the ones who fund their expensive education and realise the impact of inflation more than the younger ones.

She added the truth is there are many people who made huge returns during the crisis, just that they get less attention from the media.

In this Q&A, Toh shares some of her trading success secrets in the US stock market.

Q There seems to be a lot of fear trading in foreign stock exchange due to weak global economy? Is that true?

Thats just perception. In fact the global stock exchanges provide us with so many more ways to manage risks using instru-ments like CFD, Options and Futures, which gives us the ability to make money in both uptrend, downtrend, and sideway markets. So we can make money even in bad economy.

There are ways to manage risk e.g. Options provides many ways to limit the risk. Without Options you can use a stop loss to limit the risk. This is one of the most regulated stock exchanges in the world and the most transparent. With the advent of technology, everyone can just trade and monitor their stocks from home with just a computer, or even an tablet or smartphone. Its very convenient.

QHow do you reduce the risk of losing money in the stock market?Fear always comes from what is un-

known. When we have the proper knowledge about trading and the right mindset about risk management, the fear will go away. Our

This skill not only gives me financial freedom, but time freedom and location freedom as well. I am no longer bound to long hours job. I can trade anytime I feel like it, and I can do it from anywhere in the world

as long as I have internet connection. Now I have time to spend with people I care about and also things that

matter to me.

KATHLYN TOH (Director and Chief Trainer of Beyond

Insights)

SATURDAY, MAY 24 2014

INTERVIEW THE EXPERTS

All questions and enquiries can be emailed to: gchuah@gmail.com or call 1300 226 787

By Gerald Chuah

main job as investor or trader is to deal with uncertainty by lowering our risks to the minimum.

For example, one of my Golden Rule is that I only risk 2% of my capital in any single trade. Meaning to say, if something goes totally wrong with the trade, I will only lose 2% of my capital. When I know that market volatility is high, I will also hedge my positions, i.e. placing trades that can help me recover losses if the

market goes the other way. With all the risk management in place, I can sleep soundly at night because I know how much I can possibly lose in the worst case scenario.

QWhat trading strategy do you use to succeed in stock trading?I use a four-step formula, called

STPM.

1SELECT - Screen top fundamen-tally strong growth stock.2TIMING - For Trading, I time my entry based on my pre-defined market patterns. For Investment I have a way to evaluate the valuation of the company based on its earnings capabil-ity and growth rate to determine the right price to buy.

3PROTECT I have a strict money management strategy. I only risk 2% in a trade and I have a mechanism to make money even when I am half right, and I use CFD and Options to hedge in high volatility environment.

4MULTIPLY I use CFD and Options to multiply my income as CFD only requires 5-10% of the stock price and Op-tions requires 2-10% of the stock price to trade, therefore it gives me the ability to multiply my income by about 10x faster.

QHow do you pick your favourite bas-ket of stocks?I have nine major criteria to select

stocks with some sub-criteria. This includes both objective and subjective criteria. The most important is to make sure the com-pany is actually making money, has good track record in good and bad times, and have good earnings growth for the future.

I personally like high growth stocks but you need to understand a stock cannot be a high growth stock forever, so the key is to understand their life cycle. I have a course called Power Investing which teaches people all these criteria and how to screen them with a powerful screening tool and analyse the shortlisted ones.

QWhat trading instruments and plat-form do you use, and why?CFD, Options on Stocks, and Stock

related indices. Stocks have fundamentals to support and provide a higher probability of winning when combined with technical analysis and money management.

CFD provides a way to invest with less money, and Options is the most versatile instruments that gives me the ability to make money in more than one direction concurrently, and allow me a limited risk strategy to trade and hedge (protect) my portfolio.

By using instruments like Contract For Difference (CFD) and Options to trade with lower capital, provides us the ability to make money in uptrend or downtrend mar-ket with a better way to hedge (protect) our money. By following these steps, you can achieve consistent results in trading and even trade for a living.

*Kathlyn Toh will be speaking at the National Achievers Congress 2014 at 10.15am this Sunday (May 25) at MIECC, MINES Resort City, Selangor. During her presentation, she will reveal her 4-Step Formula for Success in the Stock Market.

For details visit www.beyondinsights.net or www.facebook.com/beyondin-sights, for latest updates on upcoming courses and seminars.

TRADING SUCCESS SECRETS