10 Techniques to Generate Profit in the Malaysian Stock Market — Technique No. 9 Is the Most Popular Among Local Retail Investors
•By Mahersaham Team
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The stock market is not a place to ''get rich quick'', but with the right strategy and consistent discipline, it can be a goldmine for building long-term wealth. In this article, we will explore 10 popular and practical techniques that can help retail investors in Malaysia generate profits — from classic investment strategies all the way to more active trading techniques.
Let us look at each one!
This is one of the most evergreen strategies, often associated with the legendary investor Warren Buffett. The approach involves finding stocks that are trading below the company''s true value (or intrinsic value).
What should you look for?
Highly suitable for patient investors who enjoy performing fundamental analysis.
This strategy focuses on companies expected to grow rapidly in terms of revenue and profits. Typically, such companies are still young and operate in fast-growing industries.
Example sectors: technology, electric vehicles (EV), artificial intelligence (AI), fintech.
These types of stocks may not pay dividends, but their price appreciation potential is very high if the company truly grows.
If you favour passive income, this strategy is highly suitable. It involves purchasing shares of companies that consistently pay dividends to shareholders.
What should you research?
This type of investment is highly suitable for the long term, particularly for those planning to generate passive income during retirement.
If you enjoy monitoring charts and market movements, this technique may be for you. Swing trading involves buying stocks and selling them after a few days or weeks, based on price ''waves''.
Use tools such as: candlestick patterns, RSI, MACD, and support & resistance levels.
However, it requires high discipline and emotional control as you will face more frequent price fluctuations.
This strategy is for the truly active. Stocks are bought and sold on the same day, aiming to profit from daily price movements.
High risk, high pressure — but if you are skilled, it can become a source of daily income.
What you need:
Sometimes stock prices fall not because of deteriorating company performance, but due to panicking market sentiment. This is an opportunity to buy quality stocks at a discount.
Example: a stock price drops 15% due to global uncertainty, but the company''s fundamentals remain strong.
The key: understand why the price has fallen. If the drop is only temporary, this is the best time to strike.
If you do not want the headache of trying to time the market, the DCA strategy is a wise choice. Invest a fixed amount every month, regardless of whether prices go up or down.
Example: Investing RM500 into the same stock or ETF every month.
This strategy helps average out your purchase cost and reduces the risk of buying at peak prices.
This strategy involves buying stocks that are showing price strength (momentum) and selling when the momentum begins to fade.
Use indicators such as RSI, moving averages, and volume to identify stocks that are currently ''hot''.
But beware: when momentum stalls, prices can drop rapidly. Therefore, this technique requires high discipline to cut losses when necessary.
Every year, certain sectors become the focus of investors. This strategy involves investing in sectors that are ''trending'' or receiving government policy support.
Examples:
This strategy suits investors who are attuned to changes in economic trends and current news.
This is a short-term strategy — buy the stock before the ex-dividend date, collect the dividend, then sell afterwards.
However, be careful: typically the stock price will drop after the ex-dividend date. So this technique requires careful planning and is suitable for use only in certain market conditions.
Every strategy has its own advantages and risks. What matters most is to know your investment profile and goals:
You can also combine several strategies depending on market conditions and your level of experience.
If you are just starting out, begin with the basics such as value investing and dividend investing. Then, once you are confident, try more active techniques like swing trading or momentum investing.
Want to learn all these techniques under Mahersaham''s guidance? Click the link below:
Successful investing starts with solid knowledge.
Investment Basics:
Download our free ebook for a complete guide.
Open a CDS Account:
Ready to start? Open a CDS account now.
For beginners, value investing and dividend investing are the best choices. Both techniques are easier to understand, carry lower risk, and are suitable for building long-term wealth without needing to monitor the market every day.
Swing trading involves holding stocks for several days to weeks to capitalise on short-term price movements. Day trading involves buying and selling stocks within the same day. Swing trading is more suitable for retail investors who have full-time jobs.
Yes, momentum investing can be effective on Bursa Malaysia, especially during strongly trending markets. Investors need to identify stocks showing consistent price increases and trading volume to capitalise on that momentum.
You can start investing on Bursa Malaysia with capital as low as RM100. The minimum purchase is 100 units (1 lot) of shares. Many penny stocks are priced below RM1 per unit, making them affordable for new investors.
Mastering various stock investment techniques allows you to choose the strategy most suited to your risk profile and financial goals. Start your investment journey today with the right steps.
Open your CDS account today through our step-by-step guide here to begin investing in the stock market.
Download the free stock basics ebook to learn the fundamentals of stock investing from scratch.