Just across the causeway, the flavor is different from here. If you trade regularly in STI, you will find yourself alien to the Malaysia's market - KLSE. In the previous article of Market Has Life, I wrote that STI has an attitude of its own - Kiasu and Kiasi. Today let's talk about KLSE.
When you look at the charts in KLSE often you found that the cycle is much longer. It probably can be explained that because Malaysian is not that afraid to die (not that Kiasi) or Malaysian is much greedier.
You may argue that KLSE has different funds or even Singaporeans invested too. What makes you think that KLSE is different from STI? The truth maybe because they are also shaped themselves to approach differently in a different market. This is what I meant that Market is always different based on geographical, knowledge of investors, cultural and much more.
Not only the cycle is much longer than STI but the fluctuation too hence it makes more profitable if you know how to play swing with their tempo.
In STI, if you catch a breakout, normally it is about 5%-15% (for pennies) from the previous price. The breakout often comes with profit taking style (T+3, T+5 unless it is obivously cornered). However, KLSE's breakout can be up to 20%-30% non stop until the next profit taking session. It may sounds crazy but you can look at KLSE's counter yourself.
One undeniable fact is human nature is similar. They can be afraid too, even if the cultural and environment they grew up is different. So, T+3, T+5 scene can also be observed in KLSE, however the KLSE's force selling is not that obvious as STI.
When we talked about how profitable KLSE's breakout can be, I also mentioned that the fluctuation is much greater there thus when the price swings down you will definitely be shocked how low it can goes. So, avoid catching falling knives if you don't know what you are doing in KLSE.
As a conclusion, this is what KLSE's nature compared to STI:
- Longer swing cycle
- Greater price fluctuation
- Force selling can be seen with longer T+n
