Tips for Starting to Trade Overseas Shares in Taiwan

Have you ever heard about the Asian Tigers? This is a titled is assigned to four Asian countries: South Korea, Hong Kong, Singapore and Taiwan. And just as the tiger is one of the strongest and most revered land mammals, these countries fit the description well, especially when discussed with reference to economics. These budding tech hubs are booming in ways that more advanced capital markets, such as the Australian market, can now only dream of. Taiwan, in a special way, drives global technology through its high-tech products that range from semiconductor fabrication and integrated circuits designs, to the ubiquitous tablets and desktops that we use in our day to day lives.

Innovation and manufacture of tech products are the backbone of the vibrant Taiwan economy. It is the source of more than 90% of the world’s motherboards, and its stock market, Taiwan Stock Exchange, which is one of the top 20 stock markets in the world, lists huge tech companies such as Acer and D-Link. With the global shift in gears towards a more tech-oriented world over the past decade, Taiwan is surely one of the global trailblazers and is thus a great market to invest in if you are looking to invest in the lucrative technology and electronic sectors.

However, when starting to trade international securities in Taiwan, a few tips and tricks are sure to keep losses at bay while also keeping your returns healthy.

Safeguard yourself against risks of profuse losses

As an investor, oftentimes your main focus may be on making profits and thus you may miss red flags that may lead to losses. The stock market, like any other investment form, comes with a risk of traders sustaining losses, especially when dealing with international shares. You should therefore take advantage of order types such as stop-loss order (also known as sell-stop orders) which allow for you to automatically sell your shares when they reach a pre-set minimum cost. This will prevent you from suffering immense losses courtesy of abnormal market fluctuation (for example: in case of a market crash).

It is worth noting that the price point at which you set your stop loss order will depend heavily on style of trading. Some traders will set it much lower than the expected lows while others may prefer to stick to lows that fall just below the normal fluctuation limits. This risk-curbing strategy is particularly useful for those who may not be able to sit observing the stock market all day and night.

Losses are part of the number game

When trading, it is inevitable that you will lose at trade at many points. However, it is key to remember that even professional traders must cope with losses from time to time. Trading is a game of numbers, and the aim at the end of the day is simply to ensure you have more wins than losses.

Discipline beats luck nine times out of ten

When it comes trading, discipline is everything. Laying out and following a strict trading plan will have you maximising on your profits while cutting down your losses. Your trading plan must lay out rules as to when you should enter a trade, how much you are willing to make from the trade, how much you are willing to lose while trading, and when you should leave a trade. This is a system that all professional traders use. No successful trader merely ran on luck.

Research before you trade

Do not run your trades on guesswork, hearsay or rumours. Your trading moves should mostly be grounded on hard facts that you took your time to research about, and a bit of intuition. Before putting your hard-earned money in someone else’s business, you must make sure that you understand the business, how it works and how they make their money. These facts are what will guide you towards making prudent investment decisions and thus minimise losses.

In a nutshell, trading in Taiwan is definitely an opportunity that no trader should pass up, especially the more passive traders. The Taiwan market allows for long term offshore stock trading with potentially lucrative returns. The market still has a lot of room for growth, and thus, if the above tips are kept in mind, you are sure to reap great returns as the global technological era advances.

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