How will the 38 Oxley Road saga affect the SGD?

ST_20151205_OXLEY05_1892446

Image credit: The Straits Times

Before we start a little discussion about this topic, let’s have a look at how the SGD has been performing against the benchmark USD for since the public revelations by Ms Lee Wei Ling.

sgd

Image credit OANDA. Vertical yellow line showing date of release of news.

Ok. Truth be told on that day, when she put that attention grabbing picture questioning the values of the PM, I didn’t bother reading it. But everyone seemed so interested in the “dirty linen”, people started liking people’s Facebook profiles whom they didn’t give 2 cents over before this, and it wasn’t before long memes started sprouting all over, including one very ingenious call for anti-pink dotters to stand up against the enemies of the victim who happens to favour pink T shirts on TV.

So ok. What was my trading plan for Tuesday:

plan

That was all.

I don’t trade the SGD. The Smart Casual Trader does not trade the SGD. Why? Because I trade Smart: The SGD is controlled by the MAS and how they control the currency is something I don’t understand, nor trust. Also, the spreads on the SGD are lousy. And the SGD is somewhat pegged to a basket of currencies which is not known (at least, I’m not smart enough to know), and it’s smart not to trade pegged currencies.


So this brings back to the question: Will it have any effect on the SGD? Well, even if I were trading the SGD for whatever reason, I wouldn’t be too bothered, even if it could have led to the weird rise in the SGD in a single day as shown in the graph above. On hindsight we see that the USDSGD regained the loss and is kind of back to business as usual.

That’s because the Smart Casual Trader does not trade the news. Sure, there are strategies around that teach you how to trade through important announcements and news, but that’s not the Smart Casual way. Let me explain why:

  1. News is exaggerated to catch your attention. News is essentially click-bait. Journalists are encouraged to write in strong languages, webpages designed to catch and hold your attention, to induce fear, anger, euphoria, all emotions which have no place in Smart Casual Trading.
  2. By the time you read the news, think about how many hands it has passed through before reaching you: Think about insider information, bought information, hacked information, and let’s just put all that aside, and think about the journalist who first hears it while you were sleeping, drafts it, passes to the editor, and publishes it ASAP.  In fact, the usual practice is to have pre-written pieces ready to be published in the fight to be the first to get the news “right”.  You think the news cares about you? Think again.
  3.  Live conferences you say? Ok, then you’ll need to pay for a special service to feed you the live conference, you’ll need to compete against a bunch of huddled experts and analysts all ready to decipher the news (with their own biases), form your own decision, at the same time watch the market reacting to the news and fighting your own emotions and biases etc etc….

Ok after just writing the above I got bored of explaining why I don’t read the news nor rely on the news for trade decisions. I only rely on market action because that’s what gets me the money, not the news. It’s my actions and decisions on the market movements that gets me profit, not the news. And in my experience, the market pretty much reacts faster before you can even switch to the right channel to watch the news.

So back to the original question: Will the Oxley Road saga affect the SGD?

Sorry, don’t look at me. I profited through Brexit, the USD elections, the French Elections which I didn’t even know was happening, the recent shock GBP movements due to who knows what because I look at price action above all else. That’s my edge against everyone else who is trying to predict or interpret something from news, which has passed through many many dirty, biased hands, with the intent to make you worried, excited, and emotional.

I don’t trade the SGD and don’t care much about it as a Smart Casual Trader. So sorry. I have no opinion on this matter.

No comment. (And some people reaaaaaly need to keep their comments to themselves)

See you on my Facebook Page!

 

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