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Current DateTime: 09:41:04 23 Nov 2009
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    • Coping With Less Liquidity  03 Oct 2009

        As global central banks seek out a perfect exit strategy, CNBC takes a look at how currencies could trend with the exodus of liquidity. And while derivatives may have been taboo during the financial crisis, some investors seem to be falling in love with the game of risk.

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Current DateTime: 09:41:05 23 Nov 2009
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    • Top Aussie Stocks to Bet On  23 Nov 2009

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Current DateTime: 09:41:05 23 Nov 2009
LinksList Documentid: 32505855
Protect Your WealthProtect Your Wealth
Text Size
Oct.30
7:11 PM ET
Thursday, 30 Oct 2008
Trading According to Your Risk Profile
Posted By:CNBC.com
Topics:Asia

Extreme volatility in global markets over the past few weeks has seen many market participants capitalizing on day trades. And this may be the smart thing to do says Andrew Sullivan, Sales Trader at MainFirst Securities Hong Kong. He tells CNBC that this trading pattern does pay off in an environment where share values fluctuate wildly.

"When you see stocks move 10, 15, maybe 20 percent in a day, it is quite wise to lock in some of these gains straight away rather than wait to see if it is going to continue the next day. That often disappoints," comments Sullivan.

(For the full Andrew Sullivan interview, click video on the left)

Day traders are traders who buy and sell stocks throughout the session in hopes that their holdings will continue to rise or fall in value for the short period of time that they own the stocks.

However Sullivan went on to say that day-trading is very difficult as investors have to look for momentum which they can only gauge by watching the stocks very closely.

"There is no easy way of playing these markets, its just vigilance and constant attention."

For investors who do not want to risk losing their wealth in these turbulent markets, Sullivan recommended that they park their money in government bonds. "They are seen as a very safe haven, a very safe way of keeping your capital," says Sullivan.

But for traders with some risk appetite and who are in the markets for the long-haul, Sullivan said they should cast their sights towards China. Even though the communist state's economic growth is slowing, it is still growing nevertheless, and economic measures recently approved by the Chinese State Council should have a positive effect over the long-term.

"Investors will be looking at Chinese stocks affected by domestic consumption which is still going to be quite good. They will look at investing in companies that will benefit from increased infrastructure spending such as on railways."

Comments? Questions? Send them in here.


Catch "Protect Your Wealth" on CNBC's Asia Pacific network every Tuesday on "CNBC's Cash Flow," Wednesday on "Asia Squawk Box" and Thursday on "Capital Connection."

© 2009 CNBC, Inc. All Rights Reserved

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