Capital Trend Explained : How & When to apply capital trend in investment analysis

Every seasoned trader and investor understands the significance of interpreting capital trends. It serves as a crucial tool for making well-informed decisions when entering and exiting the stock market. Why is the capital trend so common for traders and investors in the Hong Kong Exchange and China stock market? Interestingly, this isn't a feature commonly found in US stock brokers. So, how does it function, and why is it predominantly recognized in Asian stock brokers?


The capital trend records immediate filled transactions. For instance, while most investors place buy orders at a lower price and wait for sellers to meet their terms, orders awaiting fulfilment are not considered in the capital trend. Only transactions executed at the best buy or sell price, represented by the Best Ask Price or Best Bid Price, are factored into capital inflow or outflow.


"Understanding capital trends is like deciphering the heartbeat of the market."

If the total inflow for the day surpasses the outflow, it's a Net Capital Inflow day. Conversely, if the outflow exceeds the inflow, it's classified as a Net Capital Outflow day.


How to Decipher the Capital Trend Pie Chart

The pie chart visually represents daily total capital inflow and outflow, categorised as Large, Medium, and Small.


Large: More than 10 times the average transaction volumes of the previous month.

Medium: Transaction volumes equal to or less than 10 times the previous month’s average per transaction volume.

Small: Less than or equal to the average volume per transaction in the month.

Comparing it with the average transaction volume of the previous month provides a more dynamic analysis than categorising a fixed amount, like 10,000 lots, as Large, or smaller as Medium.


Application of R&S Capital Trend Analysis

While capital trends are used as a reference in our investment analysis, they aren't the centrepiece of our daily assessments. However, having access to capital trend data enriches our analysis, enabling us to identify any inconsistencies between net capital trends and prices.


Example: TENCENT's Contradictory Movement

Consider TENCENT's price moving downwards in a day despite a significant net capital inflow. This contradicts the expectation of a bullish trend, which typically demands substantial net inflow to support a higher climb in price. This anomaly challenges the conventional law of demand and supply, signalling a potential price fall the next day.

In the dynamic world of trading, understanding capital trends is like having a secret decoder for market behaviour. It provides a nuanced perspective that can make all the difference between a successful and unsuccessful trade.


Ever wondered how the pros make those savvy market moves? It's all in the capital trends, and we're excited to tell you that M+ Global is among the select few brokers in Malaysia offering this invaluable data to their investors!


Why M+ Global?

1. Capital Trend Insights: M+ believe in empowering their clients, and that starts with giving you the tools to read the market's heartbeat. Their exclusive access to capital trend data provides a unique edge in understanding market dynamics.


2. Kelvin, Your Guide: Meet Kelvin, our seasoned remisier. He's here not just to handle your trades but to guide you through the nuances of investing in the Hong Kong & US stock market. With Kelvin, you're not just trading; you're learning and growing your wealth.


3. Low Capital, High Returns: You don't need a mountain of cash to start. With as little as RM2,000, Kelvin will guide you to potentially generate up to 20% in a day. Our per-trade value hovers around RM250, making it accessible for everyone.


How to Get Started:

Open a Trading Account: Ready to dive into the world of informed trading? Open a trading account with Kelvin at M+ Global. It's your ticket to the exclusive world of capital trend insights.


Educational Support: Investing in the Hong Kong market might seem daunting, but with Kelvin by your side, it becomes an exciting journey. Get access to educational support that demystifies the complexities and helps you make confident decisions.


Low Capital, Big Potential: Experience the thrill of trading with low capital while aiming for significant returns. Kelvin will guide you on leveraging your resources wisely.


Ready to Begin Your Trading Adventure?

Don't miss out on this opportunity to trade smarter, not harder. Join M+ Global, where capital trends meet educational support, and your success story begins. Open your trading account with Kelvin today and embark on a journey to financial empowerment!

Let's make every trade count!

Disclaimer: Trading in financial instruments involves risk, and it is important to conduct thorough research and seek professional advice before engaging in any trading activity. The information provided in this blog is for educational purposes only and should not be construed as financial advice.