You will write a short checklist you run before placing any overseas order.
Pilots run a checklist before every flight, even after thousands of hours. The reason has nothing to do with forgetting how to fly. A short list catches the one thing that slips on a tired day. Placing an order at night, on a phone, in a market that runs on another continent's clock, is exactly the kind of task where one thing slips.
In this exercise you write a short checklist you run before every overseas order. It should take under a minute to run and fit on one screen. The worked example is Hakim's, built from the mistakes in lessons 6.1 to 6.3.
Start with when your order will meet the market. Is the regular session open now? If not, will your order wait for the open, or go into a pre-market or after-hours session where spreads are wider? Lesson 6.1, US market hours from a Singapore timezone, covered how both depend on the time of year and your broker's settings.
Hakim's first line: "Session: regular hours? If not, is extended hours off?" He had placed his first order at 8pm without knowing either answer.
Next, check the four parts of the order: type, limit price, quantity and duration. This is where most expensive mistakes happen. A market order placed where a limit was meant. A limit typed as 150 when 15.0 was meant. A quantity in units when you meant dollars, or the other way round. A good-till-cancelled order you forget about, as lesson 6.2, Market, limit and stop orders, and when each one hurts, described.
Hakim's lines: "Type: limit unless I have a reason." "Price: within a sensible range of the last close." "Quantity: units or amount, and does the total look right in S$?" "Duration: day order unless I mean otherwise."
Reading the total value in Singapore dollars is the quickest way to catch a misplaced decimal. If the order would cost ten times what you planned, you will see it.
Then check how the trade settles. Which currency will you pay in? Will the broker convert automatically from Singapore dollars, and at what spread? Or will it draw on a US dollar balance? Lesson 2.2, Convert per trade, in bulk, or hold US dollars, covered the routes.
This matters most when you hold balances in more than one currency, or when you buy a fund on a line priced in pounds rather than US dollars, as in lesson 5.3. An automatic conversion you did not expect can cost more than the commission.
Hakim's line: "Currency: paying from USD balance, no auto-conversion?"
Last, look at the live bid and ask before you submit. If the gap between them is much wider than usual for this fund, something is off: the session has just opened, news has hit, or you are on a thinly traded line. Waiting an hour or a day usually costs nothing for a long-term purchase.
To know what is unusual, you need to know what is normal. For the funds you buy often, note the typical spread during the regular session a few times, so you have a reference.
Hakim's line: "Spread: no wider than usual? If wider, wait."
Hakim's finished checklist had seven lines:
Session: regular hours? If not, is extended hours off? Type: limit unless I have a reason. Price: within a sensible range of the last close. Quantity: units or amount, and does the total look right in S$? Duration: day order unless I mean otherwise. Currency: paying from USD balance, no auto-conversion? Spread: no wider than usual? If wider, wait.
He saved it as a note pinned next to his broker app. Then he tested it on his next three orders and wrote down the fill price for each beside the price he had expected. On the second order, the spread line made him wait until the next evening, and he got a better fill than he would have that night.
Your checklist may look different. If you never use extended hours, drop that line. If you trade on two brokers with different settings, add a line for the one that catches you out. Keep it to eight lines or fewer, because a checklist too long to run every time stops being run. Write yours now, put it where you will see it before you trade, and use it on your next three orders.
Write a checklist of no more than eight lines, keep it beside your broker app, and use it for your next three orders.
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