How to create a compass in the Singapore stock market

When it comes to investing, having a compass is vital. Figuratively speaking, of course. A compass can help you navigate choppy waters and find your bearings in the stock market.

There are different types of compasses available for investors.

Directional indicator

The most common type is the directional indicator, which points out the trend of a particular security or index. This type of compass is beneficial for short-term traders who need to make quick decisions about investing their money.

Momentum indicator

Another type of compass is the momentum indicator, which measures the speed and magnitude of price changes over a given period. This type of compass is helpful for long-term investors who want to identify stocks that are trending upwards.

Volume indicator

A final type of compass is the volume indicator, which measures the number of shares traded over a given period. This type of compass helps identify stocks that investors are heavily trading.

These different compasses can be found on most trading platforms, such as Bloomberg or Reuters. Most platforms also provide tutorials on how to use these compasses effectively.

So, how do you use a compass in the Singapore stock market?

Here are a few tips:

Understand the trend

The directional indicator will point out the general trend of a security or index. If you see that the indicator is pointing downwards, it might be wise to sell your shares and invest elsewhere. Conversely, if the indicator is pointing upwards, it might be wise to buy more shares.

Identify the momentum

The momentum indicator can help you identify stocks that are trending upwards. If you see that the indicator is moving upwards quickly, it might be wise to invest in that stock. Similarly, if the indicator moves downwards, staying away from that stock might be wise.

Look at the volume

The volume indicator can tell you how popular security is with investors. If security is being heavily traded, it might be worth considering investing in it. Conversely, if security has a low trading volume, it might not be worth investing in.

Use the tutorials

Most trading platforms provide tutorials on how to use their compasses effectively. Make sure you take the time to learn how to use them before investing your money.


To learn how to use a compass is to experiment with it. Try different indicators and see which ones work best for you. Find out which timeframes work for you and stick to them.

Stay disciplined

The market can be a volatile place, so it’s crucial to stay disciplined when investing your money. Do not get too caught up in the moment and make rash decisions about where to invest your money. Take the time to study the market and make informed decisions about putting your money.

Have a plan

Before investing in stock, it’s essential to have a plan. Decide how much money you’re willing to lose and how long you’re willing to wait for your investment to pay off. It will help you stay disciplined when investing your money.

Don’t panic

When the stock market takes a downturn, it’s easy to panic and sells your shares at a loss. Resist the urge to do this and stay calm. The stock market always goes up and down, so don’t worry if your shares are temporarily down. Wait for the market to recover before you sell your shares.

Do your research

The best way to make money in the stock market is to research. Study the companies that you’re thinking of investing in and make sure they’re healthy and profitable. Please don’t invest in companies struggling financially, as they’re more likely to go bankrupt.

In conclusion

A compass can be valuable for investors navigating the Singapore stock market. By understanding how to use different compasses, investors can make more informed investment decisions and potentially earn higher returns on their investments.

Check out Saxo capital markets pte for more information.


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