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Former investment bank FX trader: some thoughts
Hi guys, I have been using reddit for years in my personal life (not trading!) and wanted to give something back in an area where i am an expert. I worked at an investment bank for seven years and joined them as a graduate FX trader so have lots of professional experience, by which i mean I was trained and paid by a big institution to trade on their behalf. This is very different to being a full-time home trader, although that is not to discredit those guys, who can accumulate a good amount of experience/wisdom through self learning. When I get time I'm going to write a mid-length posts on each topic for you guys along the lines of how i was trained. I guess there would be 15-20 topics in total so about 50-60 posts. Feel free to comment or ask questions. The first topic is Risk Management and we'll cover it in three parts Part I
Why it matters
Using stops sensibly
Picking a clear level
Why it matters
The first rule of making money through trading is to ensure you do not lose money. Look at any serious hedge fund’s website and they’ll talk about their first priority being “preservation of investor capital.” You have to keep it before you grow it. Strangely, if you look at retail trading websites, for every one article on risk management there are probably fifty on trade selection. This is completely the wrong way around. The great news is that this stuff is pretty simple and process-driven. Anyone can learn and follow best practices. Seriously, avoiding mistakes is one of the most important things: there's not some holy grail system for finding winning trades, rather a routine and fairly boring set of processes that ensure that you are profitable, despite having plenty of losing trades alongside the winners.
Capital and position sizing
The first thing you have to know is how much capital you are working with. Let’s say you have $100,000 deposited. This is your maximum trading capital. Your trading capital is not the leveraged amount. It is the amount of money you have deposited and can withdraw or lose. Position sizing is what ensures that a losing streak does not take you out of the market. A rule of thumb is that one should risk no more than 2% of one’s account balance on an individual trade and no more than 8% of one’s account balance on a specific theme. We’ll look at why that’s a rule of thumb later. For now let’s just accept those numbers and look at examples. So we have $100,000 in our account. And we wish to buy EURUSD. We should therefore not be risking more than 2% which $2,000. We look at a technical chart and decide to leave a stop below the monthly low, which is 55 pips below market. We’ll come back to this in a bit. So what should our position size be? We go to the calculator page, select Position Size and enter our details. There are many such calculators online - just google "Pip calculator". https://preview.redd.it/y38zb666e5h51.jpg?width=1200&format=pjpg&auto=webp&s=26e4fe569dc5c1f43ce4c746230c49b138691d14 So the appropriate size is a buy position of 363,636 EURUSD. If it reaches our stop level we know we’ll lose precisely $2,000 or 2% of our capital. You should be using this calculator (or something similar) on every single trade so that you know your risk. Now imagine that we have similar bets on EURJPY and EURGBP, which have also broken above moving averages. Clearly this EUR-momentum is a theme. If it works all three bets are likely to pay off. But if it goes wrong we are likely to lose on all three at once. We are going to look at this concept of correlation in more detail later. The total amount of risk in our portfolio - if all of the trades on this EUR-momentum theme were to hit their stops - should not exceed $8,000 or 8% of total capital. This allows us to go big on themes we like without going bust when the theme does not work. As we’ll see later, many traders only win on 40-60% of trades. So you have to accept losing trades will be common and ensure you size trades so they cannot ruin you. Similarly, like poker players, we should risk more on trades we feel confident about and less on trades that seem less compelling. However, this should always be subject to overall position sizing constraints. For example before you put on each trade you might rate the strength of your conviction in the trade and allocate a position size accordingly: https://preview.redd.it/q2ea6rgae5h51.png?width=1200&format=png&auto=webp&s=4332cb8d0bbbc3d8db972c1f28e8189105393e5b To keep yourself disciplined you should try to ensure that no more than one in twenty trades are graded exceptional and allocated 5% of account balance risk. It really should be a rare moment when all the stars align for you. Notice that the nice thing about dealing in percentages is that it scales. Say you start out with $100,000 but end the year up 50% at $150,000. Now a 1% bet will risk $1,500 rather than $1,000. That makes sense as your capital has grown. It is extremely common for retail accounts to blow-up by making only 4-5 losing trades because they are leveraged at 50:1 and have taken on far too large a position, relative to their account balance. Consider that GBPUSD tends to move 1% each day. If you have an account balance of $10k then it would be crazy to take a position of $500k (50:1 leveraged). A 1% move on $500k is $5k. Two perfectly regular down days in a row — or a single day’s move of 2% — and you will receive a margin call from the broker, have the account closed out, and have lost all your money. Do not let this happen to you. Use position sizing discipline to protect yourself.
If you’re wondering - why “about 2%” per trade? - that’s a fair question. Why not 0.5% or 10% or any other number? The Kelly Criterion is a formula that was adapted for use in casinos. If you know the odds of winning and the expected pay-off, it tells you how much you should bet in each round. This is harder than it sounds. Let’s say you could bet on a weighted coin flip, where it lands on heads 60% of the time and tails 40% of the time. The payout is $2 per $1 bet. Well, absolutely you should bet. The odds are in your favour. But if you have, say, $100 it is less obvious how much you should bet to avoid ruin. Say you bet $50, the odds that it could land on tails twice in a row are 16%. You could easily be out after the first two flips. Equally, betting $1 is not going to maximise your advantage. The odds are 60/40 in your favour so only betting $1 is likely too conservative. The Kelly Criterion is a formula that produces the long-run optimal bet size, given the odds. Applying the formula to forex trading looks like this: Position size % = Winning trade % - ( (1- Winning trade %) / Risk-reward ratio If you have recorded hundreds of trades in your journal - see next chapter - you can calculate what this outputs for you specifically. If you don't have hundreds of trades then let’s assume some realistic defaults of Winning trade % being 30% and Risk-reward ratio being 3. The 3 implies your TP is 3x the distance of your stop from entry e.g. 300 pips take profit and 100 pips stop loss. So that’s 0.3 - (1 - 0.3) / 3 = 6.6%. Hold on a second. 6.6% of your account probably feels like a LOT to risk per trade.This is the main observation people have on Kelly: whilst it may optimise the long-run results it doesn’t take into account the pain of drawdowns. It is better thought of as the rational maximum limit. You needn’t go right up to the limit! With a 30% winning trade ratio, the odds of you losing on four trades in a row is nearly one in four. That would result in a drawdown of nearly a quarter of your starting account balance. Could you really stomach that and put on the fifth trade, cool as ice? Most of us could not. Accordingly people tend to reduce the bet size. For example, let’s say you know you would feel emotionally affected by losing 25% of your account. Well, the simplest way is to divide the Kelly output by four. You have effectively hidden 75% of your account balance from Kelly and it is now optimised to avoid a total wipeout of just the 25% it can see. This gives 6.6% / 4 = 1.65%. Of course different trading approaches and different risk appetites will provide different optimal bet sizes but as a rule of thumb something between 1-2% is appropriate for the style and risk appetite of most retail traders. Incidentally be very wary of systems or traders who claim high winning trade % like 80%. Invariably these don’t pass a basic sense-check:
How many live trades have you done? Often they’ll have done only a handful of real trades and the rest are simulated backtests, which are overfitted. The model will soon die.
What is your risk-reward ratio on each trade? If you have a take profit $3 away and a stop loss $100 away, of course most trades will be winners. You will not be making money, however! In general most traders should trade smaller position sizes and less frequently than they do. If you are going to bias one way or the other, far better to start off too small.
How to use stop losses sensibly
Stop losses have a bad reputation amongst the retail community but are absolutely essential to risk management. No serious discretionary trader can operate without them. A stop loss is a resting order, left with the broker, to automatically close your position if it reaches a certain price. For a recap on the various order types visit this chapter. The valid concern with stop losses is that disreputable brokers look for a concentration of stops and then, when the market is close, whipsaw the price through the stop levels so that the clients ‘stop out’ and sell to the broker at a low rate before the market naturally comes back higher. This is referred to as ‘stop hunting’. This would be extremely immoral behaviour and the way to guard against it is to use a highly reputable top-tier broker in a well regulated region such as the UK. Why are stop losses so important? Well, there is no other way to manage risk with certainty. You should always have a pre-determined stop loss before you put on a trade. Not having one is a recipe for disaster: you will find yourself emotionally attached to the trade as it goes against you and it will be extremely hard to cut the loss. This is a well known behavioural bias that we’ll explore in a later chapter. Learning to take a loss and move on rationally is a key lesson for new traders. A common mistake is to think of the market as a personal nemesis. The market, of course, is totally impersonal; it doesn’t care whether you make money or not. Bruce Kovner, founder of the hedge fund Caxton Associates There is an old saying amongst bank traders which is “losers average losers”. It is tempting, having bought EURUSD and seeing it go lower, to buy more. Your average price will improve if you keep buying as it goes lower. If it was cheap before it must be a bargain now, right? Wrong. Where does that end? Always have a pre-determined cut-off point which limits your risk. A level where you know the reason for the trade was proved ‘wrong’ ... and stick to it strictly. If you trade using discretion, use stops.
Picking a clear level
Where you leave your stop loss is key. Typically traders will leave them at big technical levels such as recent highs or lows. For example if EURUSD is trading at 1.1250 and the recent month’s low is 1.1205 then leaving it just below at 1.1200 seems sensible. If you were going long, just below the double bottom support zone seems like a sensible area to leave a stop You want to give it a bit of breathing room as we know support zones often get challenged before the price rallies. This is because lots of traders identify the same zones. You won’t be the only one selling around 1.1200. The “weak hands” who leave their sell stop order at exactly the level are likely to get taken out as the market tests the support. Those who leave it ten or fifteen pips below the level have more breathing room and will survive a quick test of the level before a resumed run-up. Your timeframe and trading style clearly play a part. Here’s a candlestick chart (one candle is one day) for GBPUSD. https://preview.redd.it/moyngdy4f5h51.png?width=1200&format=png&auto=webp&s=91af88da00dd3a09e202880d8029b0ddf04fb802 If you are putting on a trend-following trade you expect to hold for weeks then you need to have a stop loss that can withstand the daily noise. Look at the downtrend on the chart. There were plenty of days in which the price rallied 60 pips or more during the wider downtrend. So having a really tight stop of, say, 25 pips that gets chopped up in noisy short-term moves is not going to work for this kind of trade. You need to use a wider stop and take a smaller position size, determined by the stop level. There are several tools you can use to help you estimate what is a safe distance and we’ll look at those in the next section. There are of course exceptions. For example, if you are doing range-break style trading you might have a really tight stop, set just below the previous range high. https://preview.redd.it/ygy0tko7f5h51.png?width=1200&format=png&auto=webp&s=34af49da61c911befdc0db26af66f6c313556c81 Clearly then where you set stops will depend on your trading style as well as your holding horizons and the volatility of each instrument. Here are some guidelines that can help:
Use technical analysis to pick important levels (support, resistance, previous high/lows, moving averages etc.) as these provide clear exit and entry points on a trade.
Ensure that the stop gives your trade enough room to breathe and reflects your timeframe and typical volatility of each pair. See next section.
Always pick your stop level first. Then use a calculator to determine the appropriate lot size for the position, based on the % of your account balance you wish to risk on the trade.
So far we have talked about price-based stops. There is another sort which is more of a fundamental stop, used alongside - not instead of - price stops. If either breaks you’re out. For example if you stop understanding why a product is going up or down and your fundamental thesis has been confirmed wrong, get out. For example, if you are long because you think the central bank is turning hawkish and AUDUSD is going to play catch up with rates … then you hear dovish noises from the central bank and the bond yields retrace lower and back in line with the currency - close your AUDUSD position. You already know your thesis was wrong. No need to give away more money to the market.
Coming up in part II
EDIT: part II here Letting stops breathe When to change a stop Entering and exiting winning positions Risk:reward ratios Risk-adjusted returns
Coming up in part III
Squeezes and other risks Market positioning Bet correlation Crap trades, timeouts and monthly limits *** Disclaimer:This content is not investment advice and you should not place any reliance on it. The views expressed are the author's own and should not be attributed to any other person, including their employer.
A common argument thrown by traditional investors is that cryptocurrencies don't have an intrinsic value. The classical example is saying that Bitcoin is not as good as gold because you can build stuff with gold, while Bitcoin's only use is speculation, but I don't find this true at all. First of all, you can use Bitcoin to pay fees to write into the most decentralized and robust database in history. That by itself has instrinsic value. And second but not less important, you can actually own Bitcoin easily. A lot of investors don't actually possess gold. They posses contracts that say that they own gold “somewhere” with no easy way or no way at all to redeem it. So you usually couldn't due anything with the gold you “own”. You cannot melt it, forge it, or anything. Same for stocks. They often are not under your name. Heck, sometimes there are not even stocks involved at all. You only have a contract that tracks the price of them. So, a lot of people can't do anything with their stocks other than trading them through intermediaries and during trading hours/days. You usually don't receive a dividend or have a way to vote on the company's direction. Unlike some cryptocurrencies that actually provide you with that and you can actually own by yourself, unlike the gold, stocks, or forex, you probably would never be able to withdrawn (only your balance in a specific asset, not in any other of the assets you allegedly possess). Yesterday I tried to discuss this on investing, and I got a lot of backlash, with a lot of people missing the point, thinking that I was suggesting buying stocks based on the dividends they offer or something similar, which is far from what I'm saying. So I thought about starting the same discussion in this community to see if the argument lands better or I'm really missing something here. What do you think?
From the first half of the news trading note we learned some ways to estimate what is priced in by the market. We learned that we are trading any gap in market expectations rather than the result itself. A good result when the market expected a fantastic result is disappointing! We also looked at second order thinking. After all that, I hope the reaction of prices to events is starting to make more sense to you. Before you understand the core concepts of pricing in and second order thinking, price reactions to events can seem mystifying at times We'll add one thought-provoking quote. Keynes (that rare economist who also managed institutional money) offered this analogy. He compared selecting investments to a beauty contest in which newspaper readers would write in with their votes and win a prize if their votes most closely matched the six most popularly selected women across all readers: It is not a case of choosing those (faces) which, to the best of one’s judgment, are really the prettiest, nor even those which average opinions genuinely thinks the prettiest. We have reached the third degree where we devote our intelligences to anticipating what average opinion expects the average opinion to be. Trading is no different. You are trying to anticipate how other traders will react to news and how that will move prices. Perhaps you disagree with their reaction. Still, if you can anticipate what it will be you would be sensible to act upon it. Don't forget: meanwhile they are also trying to anticipate what you and everyone else will do. Part II
Preparing for quantitative and qualitative releases
Data surprise index
Using recent events to predict future reactions
Buy the rumour, sell the fact
The trimming position effect
Some key FX releases
Preparing for quantitative and qualitative releases
The majority of releases are quantitative. All that means is there’s some number. Like unemployment figures or GDP. Historic results provide interesting context. We are looking below the Australian unemployment rate which is released monthly. If you plot it out a few years back you can spot a clear trend, which got massively reversed. Knowing this trend gives you additional information when the figure is released. In the same way prices can trend so do economic data. A great resource that's totally free to use This makes sense: if for example things are getting steadily better in the economy you’d expect to see unemployment steadily going down. Knowing the trend and how much noise there is in the data gives you an informational edge over lazy traders. For example, when we see the spike above 6% on the above you’d instantly know it was crazy and a huge trading opportunity since a) the fluctuations month on month are normally tiny and b) it is a huge reversal of the long-term trend. Would all the other AUDUSD traders know and react proportionately? If not and yet they still trade, their laziness may be an opportunity for more informed traders to make some money. Tradingeconomics.com offers really high quality analysis. You can see all the major indicators for each country. Clicking them brings up their history as well as an explanation of what they show. For example, here’s German Consumer Confidence. Helpful context There are also qualitative events. Normally these are speeches by Central Bankers. There are whole blogs dedicated to closely reading such texts and looking for subtle changes in direction or opinion on the economy. Stuff like how often does the phrase "in a good place" come up when the Chair of the Fed speaks. It is pretty dry stuff. Yet these are leading indicators of how each member may vote to set interest rates. Ed Yardeni is the go-to guy on central banks.
Data surprise index
The other thing you might look at is something investment banks produce for their customers. A data surprise index. I am not sure if these are available in retail land - there's no reason they shouldn't be but the economic calendars online are very basic. You’ll remember we talked about data not being good or bad of itself but good or bad relative to what was expected. These indices measure this difference. If results are consistently better than analysts expect then you’ll see a positive number. If they are consistently worse than analysts expect a negative number. You can see they tend to swing from positive to negative. Mean reversion at its best! Data surprise indices measure how much better or worse data came in vs forecast There are many theories for this but in general people consider that analysts herd around the consensus. They are scared to be outliers and look ‘wrong’ or ‘stupid’ so they instead place estimates close to the pack of their peers. When economic conditions change they may therefore be slow to update. When they are wrong consistently - say too bearish - they eventually flip the other way and become too bullish. These charts can be interesting to give you an idea of how the recent data releases have been versus market expectations. You may try to spot the turning points in macroeconomic data that drive long term currency prices and trends.
Using recent events to predict future reactions
The market reaction function is the most important thing on an economic calendar in many ways. It means: what will happen to the price if the data is better or worse than the market expects? That seems easy to answer but it is not. Consider the example of consumer confidence we had earlier.
Many times the market will shrug and ignore it.
But when the economic recovery is predicated on a strong consumer it may move markets a lot.
Or consider the S&P index of US stocks (Wall Street).
If you get good economic data that beats analyst estimates surely it should go up? Well, sometimes that is certainly the case.
But good economic data might result in the US Central Bank raising interest rates. Raising interest rates will generally make the stock market go down!
So better than expected data could make the S&P go up (“the economy is great”) or down (“the Fed is more likely to raise rates”). It depends. The market can interpret the same data totally differently at different times. One clue is to look at what happened to the price of risk assets at the last event. For example, let’s say we looked at unemployment and it came in a lot worse than forecast last month. What happened to the S&P back then? 2% drop last time on a 'worse than expected' number ... so it it is 'better than expected' best guess is we rally 2% higher So this tells us that - at least for our most recent event - the S&P moved 2% lower on a far worse than expected number. This gives us some guidance as to what it might do next time and the direction. Bad number = lower S&P. For a huge surprise 2% is the size of move we’d expect. Again - this is a real limitation of online calendars. They should show next to the historic results (expected/actual) the reaction of various instruments.
Buy the rumour, sell the fact
A final example of an unpredictable reaction relates to the old rule of ‘Buy the rumour, sell the fact.’ This captures the tendency for markets to anticipate events and then reverse when they occur. Buy the rumour, sell the fact In short: people take profit and close their positions when what they expected to happen is confirmed. So we have to decide which driver is most important to the market at any point in time. You obviously cannot ask every participant. The best way to do it is to look at what happened recently. Look at the price action during recent releases and you will get a feel for how much the market moves and in which direction.
Trimming or taking off positions
One thing to note is that events sometimes give smart participants information about positioning. This is because many traders take off or reduce positions ahead of big news events for risk management purposes. Imagine we see GBPUSD rises in the hour before GDP release. That probably indicates the market is short and has taken off / flattened its positions. The price action before an event can tell you about speculative positioning If GDP is merely in line with expectations those same people are likely to add back their positions. They avoided a potential banana skin. This is why sometimes the market moves on an event that seemingly was bang on consensus. But you have learned something. The speculative market is short and may prove vulnerable to a squeeze.
Two kinds of reversals
Fairly often you’ll see the market move in one direction on a release then turn around and go the other way. These are known as reversals. Traders will often ‘fade’ a move, meaning bet against it and expect it to reverse.
Sometimes this happens when the data looks good at first glance but the details don’t support it. For example, say the headline is very bullish on German manufacturing numbers but then a minute later it becomes clear the company who releases the data has changed methodology or believes the number is driven by a one-off event. Or maybe the headline number is positive but buried in the detail there is a very negative revision to previous numbers. Fading the initial spike is one way to trade news. Try looking at what the price action is one minute after the event and thirty minutes afterwards on historic releases.
Some reversals don't make sense Sometimes a reversal happens for seemingly no fundamental reason. Say you get clearly positive news that is better than anyone expects. There are no caveats to the positive number. Yet the price briefly spikes up and then falls hard. What on earth? This is a pure supply and demand thing. Even on bullish news the market cannot sustain a rally. The market is telling you it wants to sell this asset. Try not to get in its way.
Some key releases
As we have already discussed, different releases are important at different times. However, we’ll look at some consistently important ones in this final section.
Interest rates decisions
These can sometimes be unscheduled. However, normally the decisions are announced monthly. The exact process varies for each central bank. Typically there’s a headline decision e.g. maintain 0.75% rate. You may also see “minutes” of the meeting in which the decision was reached and a vote tally e.g. 7 for maintain, 2 for lower rates. These are always top-tier data releases and have capacity to move the currency a lot. A hawkish central bank (higher rates) will tend to move a currency higher whilst a dovish central bank (lower rates) will tend to move a currency lower. A central banker speaking is always a big event
Non farm payrolls
These are released once per month. This is another top-tier release that will move all USD pairs as well as equities. There are three numbers:
The headline number of jobs created (bigger is better)
The unemployment rate (smaller is better)
Average hourly earnings (depends)
Bear in mind these headline numbers are often off by around 75,000. If a report comes in +/- 25,000 of the forecast, that is probably a non event. In general a positive response should move the USD higher but check recent price action. Other countries each have their own unemployment data releases but this is the single most important release.
There are various types of surveys: consumer confidence; house price expectations; purchasing managers index etc. Each one basically asks a group of people if they expect to make more purchases or activity in their area of expertise to rise. There are so many we won’t go into each one here. A really useful tool is the tradingeconomics.com economic indicators for each country. You can see all the major indicators and an explanation of each plus the historic results.
Gross Domestic Product is another big release. It is a measure of how much a country’s economy is growing. In general the market focuses more on ‘advance’ GDP forecasts more than ‘final’ numbers, which are often released at the same time. This is because the final figures are accurate but by the time they come around the market has already seen all the inputs. The advance figure tends to be less accurate but incorporates new information that the market may not have known before the release. In general a strong GDP number is good for the domestic currency.
Countries tend to release measures of inflation (increase in prices) each month. These releases are important mainly because they may influence the future decisions of the central bank, when setting the interest rate. See the FX fundamentals section for more details.
Things like factory orders or or inventory levels. These can provide a leading indicator of the strength of the economy. These numbers can be extremely volatile. This is because a one-off large order can drive the numbers well outside usual levels. Pay careful attention to previous releases so you have a sense of how noisy each release is and what kind of moves might be expected.
Often there is really good stuff in the comments/replies. Check out 'squitstoomuch' for some excellent observations on why some news sources are noisy but early (think: Twitter, ZeroHedge). The Softbank story is a good recent example: was in ZeroHedge a day before the FT but the market moved on the FT. Also an interesting comment on mistakes, which definitely happen on breaking news, and can cause massive reversals.
Everything You Always Wanted To Know About Swaps* (*But Were Afraid To Ask)
Hello, dummies It's your old pal, Fuzzy. As I'm sure you've all noticed, a lot of the stuff that gets posted here is - to put it delicately - fucking ridiculous. More backwards-ass shit gets posted to wallstreetbets than you'd see on a Westboro Baptist community message board. I mean, I had a look at the daily thread yesterday and..... yeesh. I know, I know. We all make like the divine Laura Dern circa 1992 on the daily and stick our hands deep into this steaming heap of shit to find the nuggets of valuable and/or hilarious information within (thanks for reading, BTW). I agree. I love it just the way it is too. That's what makes WSB great. What I'm getting at is that a lot of the stuff that gets posted here - notwithstanding it being funny or interesting - is just... wrong. Like, fucking your cousin wrong. And to be clear, I mean the fucking your *first* cousin kinda wrong, before my Southerners in the back get all het up (simmer down, Billy Ray - I know Mabel's twice removed on your grand-sister's side). Truly, I try to let it slide. Idomybit to try and put you on the right path. Most of the time, I sleep easy no matter how badly I've seen someone explain what a bank liquidity crisis is. But out of all of those tens of thousands of misguided, autistic attempts at understanding the world of high finance, one thing gets so consistently - so *emphatically* - fucked up and misunderstood by you retards that last night I felt obligated at the end of a long work day to pull together this edition of Finance with Fuzzy just for you. It's so serious I'm not even going to make a u/pokimane gag. Have you guessed what it is yet? Here's a clue. It's in the title of the post. That's right, friends. Today in the neighborhood we're going to talk all about hedging in financial markets - spots, swaps, collars, forwards, CDS, synthetic CDOs, all that fun shit. Don't worry; I'm going to explain what all the scary words mean and how they impact your OTM RH positions along the way. We're going to break it down like this. (1) "What's a hedge, Fuzzy?" (2) Common Hedging Strategies and (3) All About ISDAs and Credit Default Swaps. Before we begin. For the nerds and JV traders in the back (and anyone else who needs to hear this up front) - I am simplifying these descriptions for the purposes of this post. I am also obviously not going to try and cover every exotic form of hedge under the sun or give a detailed summation of what caused the financial crisis. If you are interested in something specific ask a question, but don't try and impress me with your Investopedia skills or technical points I didn't cover; I will just be forced to flex my years of IRL experience on you in the comments and you'll look like a big dummy. TL;DR? Fuck you. There is no TL;DR. You've come this far already. What's a few more paragraphs? Put down the Cheetos and try to concentrate for the next 5-7 minutes. You'll learn something, and I promise I'll be gentle. Ready? Let's get started. 1.The Tao of Risk: Hedging as a Way of Life The simplest way to characterize what a hedge 'is' is to imagine every action having a binary outcome. One is bad, one is good. Red lines, green lines; uppie, downie. With me so far? Good. A 'hedge' is simply the employment of a strategy to mitigate the effect of your action having the wrong binary outcome. You wanted X, but you got Z! Frowny face. A hedge strategy introduces a third outcome. If you hedged against the possibility of Z happening, then you can wind up with Y instead. Not as good as X, but not as bad as Z. The technical definition I like to give my idiot juniors is as follows: Utilization of a defensive strategy to mitigate risk, at a fraction of the cost to capital of the risk itself. Congratulations. You just finished Hedging 101. "But Fuzzy, that's easy! I just sold a naked call against my 95% OTM put! I'm adequately hedged!". Spoiler alert: you're not (although good work on executing a collar, which I describe below). What I'm talking about here is what would be referred to as a 'perfect hedge'; a binary outcome where downside is totally mitigated by a risk management strategy. That's not how it works IRL. Pay attention; this is the tricky part. You can't take a single position and conclude that you're adequately hedged because risks are fluid, not static. So you need to constantly adjust your position in order to maximize the value of the hedge and insure your position. You also need to consider exposure to more than one category of risk. There are micro (specific exposure) risks, and macro (trend exposure) risks, and both need to factor into the hedge calculus. That's why, in the real world, the value of hedging depends entirely on the design of the hedging strategy itself. Here, when we say "value" of the hedge, we're not talking about cash money - we're talking about the intrinsic value of the hedge relative to the the risk profile of your underlying exposure. To achieve this, people hedge dynamically. In wallstreetbets terms, this means that as the value of your position changes, you need to change your hedges too. The idea is to efficiently and continuously distribute and rebalance risk across different states and periods, taking value from states in which the marginal cost of the hedge is low and putting it back into states where marginal cost of the hedge is high, until the shadow value of your underlying exposure is equalized across your positions. The punchline, I guess, is that one static position is a hedge in the same way that the finger paintings you make for your wife's boyfriend are art - it's technically correct, but you're only playing yourself by believing it. Anyway. Obviously doing this as a small potatoes trader is hard but it's worth taking into account. Enough basic shit. So how does this work in markets? 2. A Hedging Taxonomy The best place to start here is a practical question. What does a business need to hedge against? Think about the specific risk that an individual business faces. These are legion, so I'm just going to list a few of the key ones that apply to most corporates. (1) You have commodity risk for the shit you buy or the shit you use. (2) You have currency risk for the money you borrow. (3) You have rate risk on the debt you carry. (4) You have offtake risk for the shit you sell. Complicated, right? To help address the many and varied ways that shit can go wrong in a sophisticated market, smart operators like yours truly have devised a whole bundle of different instruments which can help you manage the risk. I might write about some of the more complicated ones in a later post if people are interested (CDO/CLOs, strip/stack hedges and bond swaps with option toggles come to mind) but let's stick to the basics for now. (i) Swaps A swap is one of the most common forms of hedge instrument, and they're used by pretty much everyone that can afford them. The language is complicated but the concept isn't, so pay attention and you'll be fine. This is the most important part of this section so it'll be the longest one. Swaps are derivative contracts with two counterparties (before you ask, you can't trade 'em on an exchange - they're OTC instruments only). They're used to exchange one cash flow for another cash flow of equal expected value; doing this allows you to take speculative positions on certain financial prices or to alter the cash flows of existing assets or liabilities within a business. "Wait, Fuzz; slow down! What do you mean sets of cash flows?". Fear not, little autist. Ol' Fuzz has you covered. The cash flows I'm talking about are referred to in swap-land as 'legs'. One leg is fixed - a set payment that's the same every time it gets paid - and the other is variable - it fluctuates (typically indexed off the price of the underlying risk that you are speculating on / protecting against). You set it up at the start so that they're notionally equal and the two legs net off; so at open, the swap is a zero NPV instrument. Here's where the fun starts. If the price that you based the variable leg of the swap on changes, the value of the swap will shift; the party on the wrong side of the move ponies up via the variable payment. It's a zero sum game. I'll give you an example using the most vanilla swap around; an interest rate trade. Here's how it works. You borrow money from a bank, and they charge you a rate of interest. You lock the rate up front, because you're smart like that. But then - quelle surprise! - the rate gets better after you borrow. Now you're bagholding to the tune of, I don't know, 5 bps. Doesn't sound like much but on a billion dollar loan that's a lot of money (a classic example of the kind of 'small, deep hole' that's terrible for profits). Now, if you had a swap contract on the rate before you entered the trade, you're set; if the rate goes down, you get a payment under the swap. If it goes up, whatever payment you're making to the bank is netted off by the fact that you're borrowing at a sub-market rate. Win-win! Or, at least, Lose Less / Lose Less. That's the name of the game in hedging. There are many different kinds of swaps, some of which are pretty exotic; but they're all different variations on the same theme. If your business has exposure to something which fluctuates in price, you trade swaps to hedge against the fluctuation. The valuation of swaps is also super interesting but I guarantee you that 99% of you won't understand it so I'm not going to try and explain it here although I encourage you to google it if you're interested. Because they're OTC, none of them are filed publicly. Someeeeeetimes you see an ISDA (dsicussed below) but the confirms themselves (the individual swaps) are not filed. You can usually read about the hedging strategy in a 10-K, though. For what it's worth, most modern credit agreements ban speculative hedging. Top tip: This is occasionally something worth checking in credit agreements when you invest in businesses that are debt issuers - being able to do this increases the risk profile significantly and is particularly important in times of economic volatility (ctrl+f "non-speculative" in the credit agreement to be sure). (ii) Forwards A forward is a contract made today for the future delivery of an asset at a pre-agreed price. That's it. "But Fuzzy! That sounds just like a futures contract!". I know. Confusing, right? Just like a futures trade, forwards are generally used in commodity or forex land to protect against price fluctuations. The differences between forwards and futures are small but significant. I'm not going to go into super boring detail because I don't think many of you are commodities traders but it is still an important thing to understand even if you're just an RH jockey, so stick with me. Just like swaps, forwards are OTC contracts - they're not publicly traded. This is distinct from futures, which are traded on exchanges (see The Ballad Of Big Dick Vick for some more color on this). In a forward, no money changes hands until the maturity date of the contract when delivery and receipt are carried out; price and quantity are locked in from day 1. As you now know having read about BDV, futures are marked to market daily, and normally people close them out with synthetic settlement using an inverse position. They're also liquid, and that makes them easier to unwind or close out in case shit goes sideways. People use forwards when they absolutely have to get rid of the thing they made (or take delivery of the thing they need). If you're a miner, or a farmer, you use this shit to make sure that at the end of the production cycle, you can get rid of the shit you made (and you won't get fucked by someone taking cash settlement over delivery). If you're a buyer, you use them to guarantee that you'll get whatever the shit is that you'll need at a price agreed in advance. Because they're OTC, you can also exactly tailor them to the requirements of your particular circumstances. These contracts are incredibly byzantine (and there are even crazier synthetic forwards you can see in money markets for the true degenerate fund managers). In my experience, only Texan oilfield magnates, commodities traders, and the weirdo forex crowd fuck with them. I (i) do not own a 10 gallon hat or a novelty size belt buckle (ii) do not wake up in the middle of the night freaking out about the price of pork fat and (iii) love greenbacks too much to care about other countries' monopoly money, so I don't fuck with them. (iii) Collars No, not the kind your wife is encouraging you to wear try out to 'spice things up' in the bedroom during quarantine. Collars are actually the hedging strategy most applicable to WSB. Collars deal with options! Hooray! To execute a basic collar (also called a wrapper by tea-drinking Brits and people from the Antipodes), you buy an out of the money put while simultaneously writing a covered call on the same equity. The put protects your position against price drops and writing the call produces income that offsets the put premium. Doing this limits your tendies (you can only profit up to the strike price of the call) but also writes down your risk. If you screen large volume trades with a VOL/OI of more than 3 or 4x (and they're not bullshit biotech stocks), you can sometimes see these being constructed in real time as hedge funds protect themselves on their shorts. (3) All About ISDAs, CDS and Synthetic CDOs You may have heard about the mythical ISDA. Much like an indenture (discussed in my post on $F), it's a magic legal machine that lets you build swaps via trade confirms with a willing counterparty. They are very complicated legal documents and you need to be a true expert to fuck with them. Fortunately, I am, so I do. They're made of two parts; a Master (which is a form agreement that's always the same) and a Schedule (which amends the Master to include your specific terms). They are also the engine behind just about every major credit crunch of the last 10+ years. First - a brief explainer. An ISDA is a not in and of itself a hedge - it's an umbrella contract that governs the terms of your swaps, which you use to construct your hedge position. You can trade commodities, forex, rates, whatever, all under the same ISDA. Let me explain. Remember when we talked about swaps? Right. So. You can trade swaps on just about anything. In the late 90s and early 2000s, people had the smart idea of using other people's debt and or credit ratings as the variable leg of swap documentation. These are called credit default swaps. I was actually starting out at a bank during this time and, I gotta tell you, the only thing I can compare people's enthusiasm for this shit to was that moment in your early teens when you discover jerking off. Except, unlike your bathroom bound shame sessions to Mom's Sears catalogue, every single person you know felt that way too; and they're all doing it at once. It was a fiscal circlejerk of epic proportions, and the financial crisis was the inevitable bukkake finish. WSB autism is absolutely no comparison for the enthusiasm people had during this time for lighting each other's money on fire. Here's how it works. You pick a company. Any company. Maybe even your own! And then you write a swap. In the swap, you define "Credit Event" with respect to that company's debt as the variable leg . And you write in... whatever you want. A ratings downgrade, default under the docs, failure to meet a leverage ratio or FCCR for a certain testing period... whatever. Now, this started out as a hedge position, just like we discussed above. The purest of intentions, of course. But then people realized - if bad shit happens, you make money. And banks... don't like calling in loans or forcing bankruptcies. Can you smell what the moral hazard is cooking? Enter synthetic CDOs. CDOs are basically pools of asset backed securities that invest in debt (loans or bonds). They've been around for a minute but they got famous in the 2000s because a shitload of them containing subprime mortgage debt went belly up in 2008. This got a lot of publicity because a lot of sad looking rednecks got foreclosed on and were interviewed on CNBC. "OH!", the people cried. "Look at those big bad bankers buying up subprime loans! They caused this!". Wrong answer, America. The debt wasn't the problem. What a lot of people don't realize is that the real meat of the problem was not in regular way CDOs investing in bundles of shit mortgage debts in synthetic CDOs investing in CDS predicated on that debt. They're synthetic because they don't have a stake in the actual underlying debt; just the instruments riding on the coattails. The reason these are so popular (and remain so) is that smart structured attorneys and bankers like your faithful correspondent realized that an even more profitable and efficient way of building high yield products with limited downside was investing in instruments that profit from failure of debt and in instruments that rely on that debt and then hedging that exposure with other CDS instruments in paired trades, and on and on up the chain. The problem with doing this was that everyone wound up exposed to everybody else's books as a result, and when one went tits up, everybody did. Hence, recession, Basel III, etc. Thanks, Obama. Heavy investment in CDS can also have a warping effect on the price of debt (something else that happened during the pre-financial crisis years and is starting to happen again now). This happens in three different ways. (1) Investors who previously were long on the debt hedge their position by selling CDS protection on the underlying, putting downward pressure on the debt price. (2) Investors who previously shorted the debt switch to buying CDS protection because the relatively illiquid debt (partic. when its a bond) trades at a discount below par compared to the CDS. The resulting reduction in short selling puts upward pressure on the bond price. (3) The delta in price and actual value of the debt tempts some investors to become NBTs (neg basis traders) who long the debt and purchase CDS protection. If traders can't take leverage, nothing happens to the price of the debt. If basis traders can take leverage (which is nearly always the case because they're holding a hedged position), they can push up or depress the debt price, goosing swap premiums etc. Anyway. Enough technical details. I could keep going. This is a fascinating topic that is very poorly understood and explained, mainly because the people that caused it all still work on the street and use the same tactics today (it's also terribly taught at business schools because none of the teachers were actually around to see how this played out live). But it relates to the topic of today's lesson, so I thought I'd include it here. Work depending, I'll be back next week with a covenant breakdown. Most upvoted ticker gets the post. *EDIT 1\* In a total blowout, $PLAY won. So it's D&B time next week. Post will drop Monday at market open.
Part III - My 10 Minutes/Day Trading Strategy You can find Part II here: https://www.reddit.com/Forex/comments/h7m1jh/part_ii_10_minuteday_trading_strategy/ Okay I’ve thought about what to include in Part 3 and this is what I’ve landed on: Some technical nuances and tricks that build on Parts I and II. I was going to include entry and exit points in Part III but it would be waaaay too long if I did. So that will have to wait for Part 4 or 5. There’s some really good stuff in this post though, I promise. The stuff in this post will lay the foundation for the options you will have in terms of determining your entry and exit points. Technical Nuances & Tricks: In this section I want to discuss some techniques that are optional to use. I am going to keep this fairly simple and focus on 2 main topics: fibonacci and horizontal levels of support and resistance. Horizontal Support and Resistance:
There are many ways of identifying support and resistance. I personally subscribe to the K.I.S.S. (Keep It Simple, Stupid!) method when using this strategy.
When I identify a strategy setup (Off BB, Stochs overbought/oversold, indecision candle + setup candle) I will simply look to the left and see if there is any prior support or resistance that lines up with the technical strategy. I will also look for prior support or resistance levels to make sure they are not in the way of my target (will cover targets in the next subsection)
Support and Resistance are not always clear lines drawn in the sand. Usually they are areas. Areas of prior demand and/or prior oversupply in the market.
IF you want a mechanistic manner of identifying support and resistance then here’s an easy indicator: load up the Bill Williams Fractal Indicator and simply look for groupings of fractals near highs and lows of the market
KEEP AN EYE ON THE STOCHASTICS IN EACH OF THESE EXAMPLES
The way I apply fibonacci in my “normal” trading does require a lot of discretion. And it is this discretionary element that trips up a lot of traders and scares them off using fibonacci.
This strategy removes ANY DISCRETION involved in using fibonacci levels. This couldn’t be more in keeping with the entire K.I.S.S. philosophy of this trading strategy
We use Fibonacci in this strategy as an OPTIONAL tool. If you decide to use Fibonacci with this strategy, the best way of using it will be to have a mechanistic method for determining entry and exit points.
Fibonacci retracement levels can be used for limit entry orders and stop loss orders.
Fibonacci extension levels can be used for take profit orders
You can copy my fibonacci settings in the screenshot below. I use the following fibonacci % levels:
It really is a stupidly simple way we will draw the fibs (note: it will be the SAME WAY on every single trade). We simply draw the fibs over the setup candle. ALWAYS draw the fibs in the direction that price is moving ie: from left to right. So if you have a bullish setup candle you draw your fibs from the LOW to the HIGH of the setup candle. If you have a bearish setup candle you will draw the fibs from the HIGH of the candle to the LOW of the candle. I will cover in a future post which levels we use for entry and exit, although many of you will be able to figure it out quickly. Examples below:
Creating a blog couldn’t be easier and yet more complicated in 2020. There are so many different things to think about, and yet so many different platforms you can use to streamline the process. Understandably you’ll already have an idea of what you want to write about, I, unfortunately, can’t help you with that, but what I can do is show you how you can set up a killer blog that will drive readers to your website. We’ll take you through what you’ll need to get started, our five steps to setting your blog up, the best blogging platforms to use, how to get your blog discovered, and the do’s and don’ts of blogging. But first, we need to establish what type of blog you want to set up.
What type of blog?
Firstly you’ll want to have a goal in mind. What are you aiming to achieve through your blog? Do you want to pull in more users to your sales pages by writing about your brand, to increase its publicity? Do you want to build a blog that promotes brands and products from other companies? Or do you just want to set up a blog documenting your travels around the world? In order to pick the right software for you, you’ll want to have a grasp before you start of how big this blog is going to be, whether you’re going to monetize it, and what type of blog it’s going to become. For example, if you’re planning on building an affiliate blogging programme, where you promote other brand’s products and call readers to action to but the products, you’ll be writing a lot of content and will benefit from having a more comprehensive blogging system with lots of plugins to promote sales. But if you’re looking to just set up a personal, or a personal brand blog talking about yourself and your brand, you may not perhaps need as many comprehensive features as you would if you were building an affiliate blog. You may also want to build an online portfolio of your work, which could require an entirely different piece of blogging kit, as opposed to the traditional blog that hosts articles and journals.
What you’ll need to get started.
There are 3 key things you’ll need to get up and running.
A blogging platform.
After you’ve identified the type of blog you want to set up, plus whether you’re going to make money from it, you’ll then need to pick a blogging platform tailored to your needs. Many people chose to operate on WordPress as it is one of the most comprehensive blogging systems going, but they forget platforms like Wix and Squarespace that are great for both helping you save and make money and are great options for those who are less tech-savvy and are new to the blogging game. Plus if you’re blogging for business, you might want to think about using LinkedIn for your business blog. We’ll go into more detail on what blogging platforms are best for your needs shortly, but make sure to keep in mind your objectives and technical experience when choosing the right platform for you.
A hosting platform.
Every website needs a web host to store their website’s information on the internet. A web host is an online service provider that will store your website’s information on one of its online servers. This will put your blog out there to the world. The best web hosts will perform a variety of functions for you, for example, Wix is an all-in-one package that will host your website for you, allow you to register a domain name, and has easy to use website design tools to help you start your blog. Web hosting can be expensive though so make sure you pick the best value for money host that can cater to the amount of traffic you have running through your website. Check out our post on the 11 best hosting providers. [Insert blog link here]
A domain name.
I’m sure by now you already know what sort of blog you want to set up, whether that’s a travel, blog, a blog accompanying your online store, or perhaps an affiliate marketing product review blog. You’ll have a niche and an idea and now all you need is a name. Every website online has what’s called a domain name. It’s included in the website address at the top of your search bar, for example, our domain name is www.digitalsupermarket.com. You’ll need to register a domain name after you purchase a hosting plan, to enable customers to find your site quickly and easily. One good tip is to find a hosting platform like Bluehost or GoDaddy that will provide you with a free domain name when you register for one of their web hosting plans as domain registration can be fairly pricey. Pick a great domain name that is easy for customers to read and type into Google so they can find it easier online. TOP TIP: To increase your blog’s search engine ranking, and to help more people find you on Google, try to pick a domain name that has either a .com or .co.uk ending. These domains often rank a lot higher in Google searches than .org’s, .net’s, and .info’s, and for that reason can be slightly more expensive, yet can help boost your site’s reach and credibility.
The Best Blogging Platforms For You.
There are a wealth of platforms out there catering to all your blogging or online portfolio needs. We have listed some of the main ones below shedding some light on what needs they service and why they might be a great option for you.
WordPress - The best software to give you full customisation.
WordPress is perhaps one of the most renowned blogging platforms in the world, running approximately 35% of the internet. It’s favoured highly by professional bloggers because it gives you total freedom to do whatever you want with your blog. WordPress can help you build your blog using one if its search engine optimised themes, you can customise using its drag and drop website builder tool to create a stunning blog. What’s more, is you’ll be able to use its professional blogging service to post your content online and take advantage of the hundreds of third party app plugins, you can integrate into your blog, to improve automation, add new features, and drive traffic to your site. The only downside of WordPress is that it can be quite technical and can take some time getting used to, but once you’ve got the hang of things, you’ll have great control over everything on your webpage. Pros: Cons:
Domain name registration
Tons of third-party plugins and apps
Technical and can take some getting used to
Not the best if you’re not tech-savvy or are just starting out.
Wix - Best for monetizing your site.
Wix is probably the most streamlined and easiest blog providers. It’s so simple and easy to use, it’s therefore great for anyone just starting out in the blogging world. You can customise one of its stunning templates with Wix’s drag and drop editor, and then upload blog posts to your site by slotting in pictures, gifs, social media buttons, sidebars, and other widgets that will help your blog stand out. One of the coolest features about Wix is its marketplace integration, where you can install a whole variety of third-party applications to your blog to provide your users with greater features and usability. Wix is the perfect all-in-one blogging solution to help you easily build a platform to amplify your business to the world, helping you to make more money, but it can also save you a lot of money as it’s cost-efficient plans roll up, web hosting, blog posting, and domain registration all into one product! Check out our Wix review and our comparison of Wix and Squarespace for a deep dive into Wix’s main blogging features. [Insert link here] Pros: Cons:
Streamlined and easy to use blogging software
Includes as a package, web building tools, domain registration, and web hosting
Tons of third-party plugins and apps on the Wix marketplace
Great platform to help make money and save money on its reasonably priced subscription plans
Don’t get the same full control as you see with WordPress
Locked into using Wix’s templates.
Squarespace - Best for creating visually stunning blogs.
Squarespace is very similar to Wix, in that it is an all-in-one web building and blogging platform that can help you build a blog you can monetize efficiently. It sets itself aside though through its better design and customisation features, making it one of the best platforms on the marketing if you’re looking to design a visually aesthetic blog. I’d recommend using this platform if you are a business operating in some sort of design, arts, or culinary industry. Although it offers minimal template options, Squarespace’s templates are works of art and offer you great customization when building your blog. Plus Squarespace offers a great blogging tool that lets you schedule posts and customize your blog to suit more mobile audiences. Pros: Cons:
Streamlined and easy to use blogging software
Can build a visually stunning blog on Squarespace with its streamlined tools
Excellent blogging features
All-in-one web host, domain registrar, and web builder
Can’t add third-party applications on Squarespace
LinkedIn - Best for blogging businesses.
Aside from setting up a blog on your own site, corporate entities can use LinkedIn to enhance and amplify their presence online. LinkedIn has more than 575 million users, most of whom are professionals and members of corporate conglomerates, and you can use this social platform to target some of the most influential people in the world. If you’re blogging about business this is the perfect platform to use a pre-existing community of people to enhance your social standing. You’ll then be able to build connections and followers on your profile who can easily share your blog on their platform through a couple of simple clicks. Pros: Cons:
Utilise LinkedIn’s pre-existing community of business people to amplify your brand
Target corporate directors and influential people directly through LinkedIn
Check out what people are looking at on LinkedIn and tailor your content to that market
Again you are confined within what LinkedIn’s platform will let you do, it’s not your site and you don’t have full customisation
Instagram - Best for the Artists.
Instagram is one of the biggest blogging sites in the world and without realising it, we are all technically bloggers in some way with our Instagram accounts, right? Ultimately for professional use, it is great for building a portfolio that has some form of visual or graphic eye-catching media around it. Instagram lets you post videos, photos, boomerangs, even write a blog in the photo’s caption if you wanted to! Best of all, Instagram is free, and you can use its business software to link up your online store, to drag users away from your profile, using its product tagging features, and land them in your online checkouts. Our top tip for using Instagram is to post regularly and keep on the theme of your blog. Don’t go off-piste as you’re followers will catch on quickly and unfollow you. And with 1 billion people using the platform each day, it is a great way to gain people’s attention and build your brand’s presence online. Pros: Cons:
Best for the creatives.
Totally free and easy to use interface.
Access to a pre-existing community of people.
Online selling capabilities.
Again you are confined within what Instagram’s platform will let you do, it’s not your site and you don’t have full customisation
The Do’s And Don’ts Of Blogging
Here are a couple of top tips to bear in mind when building your blog to help you create an awesome, lead driven platform.
Don’t use complicated language too soon.
With that in mind, do include language that your target audience will understand. But remember they are still here to learn, so don’t drop people in at the deep end right away by using complex jargon off the bat. Define terms and spell it out in layman’s terms for people at the outset, and as the post goes on, then introduce more complex writing. Introducing technical jargon at the start of your posts is an instant turn off for most readers.
Don’t waffle - Keep it succinct.
People want to get to the punchline now. 43% of people admit to skimming through blogs to get to the information they need, meaning to get your blogging site converting leads, you need to engage the reader early on and offer information succinctly throughout your post. Plus don’t make your blog too long. Depending on what you’re writing, a lot of people will see large volumes of text and will switch off immediately. There is no set limit for what a good and bad amount of text is, that’s something you’ll have to figure out per your industry, but from my experience, the shorter, the better.
Don’t make headlines too long.
Also ensure that your headline is not more than 60 characters long. If it gets too long it won’t rank well in search engines and people just won’t want to read it. Check out this headline analysis tool which will analyse the effectiveness of your proposed headlines.
Don’t plagiarise or use credited images.
Copying other people’s work is lazy and can land you in a lot of hot water in extreme cases if you breach a copyright regulation. But it’s also just unfair on the person who has worked hard or been creative to write that work. The same goes for images, people need to make a living from the content and photos they’re taking so don’t steal that off them.
Do write killer headlines.
People are like goldfish. You only have about 3 seconds to get their attention. That’s why it is important to write catchy, funny, and enticing headlines to draw your reader in. One good way to do it is to use the “How To” and “10 Best” strategies. These sorts of titles telling people ‘How to set up a blog’ or ‘the ten best web hosting platforms’ are search engine optimised, lead winning titles that rank highly in Google searches. Try them out and see!
Do post regularly.
The key to creating a great blog that builds leads is posting regularly. Although it is not the best idea to post regularly. Ideally, you want to post 3-4 times a week to get the best influx of traffic to your site. You’ll also want to check out when’s best to post for your target audience, for example, if you’re in the FOREX market, you’ll want to post your blogs perhaps at 8 AM, before the markets open when city workers are on their staring at their phones on their morning commuter trains to the city.
Do share on social media.
Share your content far and wide on your social platforms. Everyone is on social media these days and its outreach is simply phenomenal. That’s why you should always share your posts to your social channels to get greater traffic on your website, and include share buttons all-around your blog to invite your readers to share your articles too!
Do use SEO keywords to drive more traffic.
In a nutshell, SEO keywords are the phrases people put into search engines when they are looking for information on a certain subject. They are how you get found on your website. Depending on what you are writing about, there is always a set of keywords relating to that topic that you can implement, to help you show up higher in people’s google searches. For example, people might regularly search in google, ‘what is the best compost for growing sunflowers?’ When you come to writing about growing sunflowers in your blog, you might want to use these words or incorporate this question into your blog somewhere, to help you rank higher on Google.
Do use call’s to action to take your readers to the next step.
If you don’t challenge your reader at the end of your blog to follow you on Instagram, or check out your sales pages, you’ll never get the leads or sales you are looking for. With that in mind, build compelling calls to action at the end of each of your posts, to pull readers into taking the next step. Check out our post on landing pages to see a couple of cool ways on how to implement calls to action on your site [insert link here].
Do identify a target audience.
People will often tell you to write as though you were in the shoes of the person you’re looking to bring to your website, but it’s true! Identify what type of people you’re writing to, for instance, if you’re writing a business blog about FOREX trading, you’ll write with potential traders in mind who have one eye on the stock market and the other on your blog. Or if you’re a wedding florist, you’ll set your portfolio up to target those people looking to get married in the next year.
Leads, Sales, Results.
Blogging is one of the most influential marketing strategies in the world and the best bloggers can reap some awesome rewards for producing some truly awesome content. It is fairly straightforward to get started and we advise if you’re a small business, or someone with minimal blogging experience, to try out Wix or Squarespace first before you jump into using more technical platforms like WordPress. Once you’re up and running remember our top tips on what to do and what to avoid when writing your blog. Plus don’t forget to think about optimising and adding useful applications to your site to help you build and grow your content. Check out these 39 awesome blogging tools you can use to drive greater traffic to your site! Found this article useful? Make sure you share it with your friends on Facebook and Twitter and let us know in the comments if you have any other useful blogging tips.
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November 2030 Well, uh, this sucks. Just a few short months after the Arab States of the Gulf finally unified, the world economy decided to explode. This is what we in the business of economics call a very bad thing. The effects across the FAS have been relatively disparate. The United Arab Emirates, easily the most diversified economy in the region, has been the least heavily impacted (though it's still bad). Diversification programs in Oman and Bahrain have also helped to stave off some of the worst impacts of the crisis, though they haven't been as successful in avoiding the effects as the UAE. Qatar and Kuwait, still almost entirely reliant on hydrocarbon exports, are not happy with this turn of events. Falling global oil prices, though propped up a little by a sudden increase in demand from China, have left their economies struggling much more than the rest of the country, and in desperate need of assistance from the better off parts of the country. One major pain point in this crisis has been the FAS's economic ties to the United States. While most of the FAS's trade is with Asia, Africa, and Europe, the US financial system still plays a crucial role in the FAS. The stability of the US Dollar has long been used to protect the economies of the Gulf using their vast Forex reserves (earned from oil sales) to peg their currency to the US Dollar. With the US Dollar in complete collapse, the value of the Khaleeji is plummeting right along with it, causing a significant degree of harm to the FAS's economy. To help offset this harm (and to decouple the FAS's economy from a country that the FAS is starting to view as maybe not the most reliable economic partner), the Central Bank in Dubai has announced that the Khaleeji will switch its peg from the US Dollar to a basket of foreign currencies (the Euro, the Pound Sterling, the Swiss Franc, the US Dollar, and the Japanese Yen). The FAS hopes that this will help to salvage the Khaleeji's value, better protecting the economy from the collapse of the dollar-based international financial system. Rumor has it that the Central Bank is discussing the idea of unpegging the Khaleeji entirely and allowing it to float freely, but so far, the Central Bank has made no moves towards floating the Khaleeji. Crises suck. They shatter the status quo and throw established norms and procedures into chaos. No one really wins during a crisis. But in another sense, they're a double-edged sword. The status quo is often a repressive entity, reinforcing existing hierarchies and preventing dramatic shifts in the order of things. Chaos breaks that apart, giving the ingenuitive and the entrepreneurial on opportunity to better their lot in ways they otherwise could not. Put differently: chaos is a ladder, and the FAS intends to be the one climbing it. As the largest economy in the Arab World (and one of the world's 20 largest economies) by both nominal GDP and GDP per capita (by a significant margin--it's probably either Saudi Arabia or Egypt in second place in nominal GDP, and definitely Saudi Arabia in second place in GDP per capita, but the FAS more than doubles the country in second place in both categories, so it's sort of a moot point), the FAS hopes to cement its place as the regional economic power. The FAS has announced a new slate of policies intended to attract rich investors, manufacturing firms, and financiers fleeing the new nationalization program of the United States. New free trade zones have been created throughout the country--especially in the struggling, undiversified regions of Kuwait and Qatar--with the goal of convincing fleeing American manufacturers to set up shop in these areas. Attractions include wildly low tax rates (as low as zero percent in some instances), a common law framework (as opposed to the Sharia-based legal system in most of the FAS), highly subsidized land prices (sometimes free), relaxed financial restrictions (making it easier to move money in and out of the FTZ), and, for large enough firms moving enough operations into the country, preferential visa treatment (making it easier for them to relocate foreign employees into the country). Sitting at one of the major crossroads of global trade, moving operations to the FAS offers easy access to both the world's established consumer markets (like the EU and East Asia) as well as to some of its largest growing markets (South and Southeast Asia, East Africa, and MENA). Pair this with wildly high standards of living (for people who aren't slaves Asian or African migrant workers) and established expatriate communities, and the FAS becomes an incredibly attractive option for American and other foreign firms looking to relocate. In addition to manufacturing-oriented FTZs, special attention has been paid to attracting service-oriented firms to new and existing FTZs in the vein of Dubai Internet City, Dubai Design District, Dubai Knowledge Park, and Dubai Media City, with the goal of developing a robust service economy that can capture growing markets in the MENA, South Asia, and East African regions. In advertising these zones, the governments of the FAS have highlighted the success of previous ventures in Dubai, which have attracted the regional headquarters of giants like Facebook, Intel, LinkedIn, Google, Dell, Samsung, Microsoft, IBM, Tata Consultancy, and more. Perhaps one of the most substantial pushes, though, is to attract American financial services and FinTech firms to base in the FAS (particularly Dubai, Kuwait City, Doha, and Abu Dhabi, the traditional centers of regional finance). New financial industry free trade zones have been set up in the four cities, structured in the vein of the Dubai International Financial Centre (DIFC). These financial FTZs boast an independent and internationally regulated regulatory and judicial system, a common law framework, and extremely low taxation rates. All government services in these regions are available in English (the lingua franca of international finance), and in events where ambiguity exists in the legal and regulatory systems, the systems are set to default to English Common Law (except for the Kuwait City International Financial Centre, which is hoping to better tailor itself towards American financial firms by defaulting to American Civil Law from pre-2020 rather than English Common Law). Much like in the DIFC, these new FTZs will also run their own courts, staffed in large part by top judicial talent from Common Law (or in the case of Kuwait City, American Civil Law) jurisdictions like Singapore, England, and (formerly) Hong Kong. Using these FTZ, the four cities hope to raise their profile as financial centers. Dubai in particular is hoping to break into the top ten global financial centers--and it stands a good chance of doing so, too, as it sits at number 12, just behind cities like LA, SF, and Shenzhen--while the other cities are just hoping to boost their profile into the 20s or 10s (according to Long Finance, Dubai is number 12 in the world and 1 in the region, Abu Dhabi is number 39 in the world and two in the region, Doha is number 48 in the world, and Kuwait City is number 91).
WHILE WE WERE FIXED ON CAA RIOTS. THIS TOO HAPPENED!
US dilutes Iran oil sanction. INDIA to go ahead on Chabahar port work. Foreign Secretary Jaishankar in IRAN.
India-IRAN will trade in INR to save lot of our FOREX reserves!
Biggest train bridge approved that will reduce travel time between Assam & Arunachal from 600 km to 40 km
In-land water transport extended to reduce logistic costs.
Petrol price reduced in India as Saudi /UAE decide to help India.
India adds stealth force to our MOUNTAIN CORPS, strategically important for mountain war fare with Chinese.
India jumps in electricity accessibility ranking from 99th to 26th, a huge movement of 73 positions.
Special Economic Zones being set up in next 6 months to boost MAKE IN INDIA and Exports to create more job opportunity.
Hyundai to set up new plant in Chennai for local manufacture of their very efficient electric car.
Flexi fare in some trains to be removed starting April 2020.
GST collection rose from ₹ 85K crs per month to ₹95K crs and last month it crossed ₹100K crs , 95% of input credit is cleared within next month and compensation to state for short fall has reduced in last three months....no state is now against GST since it has released lot of admin pressure from state govt....
Opening of Sikkim airport is considered one of the best in the recent times by international aviation teams.
Statue of Unity became biggest attraction for Indian & Global Tourists! In the first week of December it earned revenues of ₹2.1 crs in ticket collection alone!
Mumbai local train network will be completely revamped in next 5 to 6 yrs....
Foreign enemy property is going to be auctioned soon. Govt expected to fetch revenues in excess of ₹ 1 lakh Crores!
Indian Army destroyed several terror camps, BAT HQ, damaged Brigade HQ of Pakistan Army resulting in dozens of Pakistani casualties.
India tested successfully nextgen Pinaka Missiles with range of 90 km!
India tested modified Akash supersonic Missiles fitted with indigenous RamJet engines placing us in the top three Nations!
Modi has supercharged MAKE IN INDIA program by placing orders for 83 more TEJAS MK1A Aircrafts and promised additional order of 200 Aircrafts if HAL/ADA develop AMCA with 6th Gen features powered by indigenous 120 KN jet engines by 2024!
india’s entry into UNSC is closer than ever with all 4 permanent members and 10 out of 12 non permanent members supporting us! This support is the highest so far!
Fiially, Pakistan judiciary and Army is at loggerhead and some massive political change is soon expected!
Our media does not tell you these but will speak only about crime, dirty politics and not about above achiements of the Govt.
I'm fairly new to Forex. I've spent a great deal of time understanding Forex and I'm still immersing myself in as much information as I can find. I started a 100k demo account to practice strategies and feel as though I have a pretty good system. I trade on the daily chart and use a series of indicators and monitor shorter time frames to make sure things don't go awry. At the time I wasn't too concerned with leverage/margins. I'm currently practicing on a demo account of $2k taking into account leverage. I'm trading no more than 2 mini lots and 3-5 micro lots at a time such that I'm leveraging no more than $1k of "my money" and a $1k buffer. I'm pretending to use "max leverage." My plan: Try to build $1k of profits. Reinvest profit to build to $2k. Turn $2k to $5k, $5k to $10k. Eventually get to a point where I can turn it into a sustainable income. Then transfer to a live account. Am I living in unicorn land with illusions of grandeur? I'm concerned with relying on using max leverage. Do people make sustainable incomes on Forex trading? I'm in a trade of GBPJPY short at 10,000 units. Current profit is at $188.00. The trade value is $6509. According to IG brokerage the GBPJPY margin is 5%. Using max leverage I'm only using $325 of "my money." If I chose to trade 100,000 units, given I have the funds for leverage, I would have $1880.00 of profit. That seems like sustainable income territory to me. Please guide me Forex community!
In terms of the best “Return on Investment”, Is it better to work on getting a really high paying job in Finance or get an average job and using the free time to invest in other income generating operations such as personal investing, real-estate and rental property etc.
I’m currently a University student majoring in Finance in my last year of school. I’ve been doing a lot of research lately in terms of what options will provide me with the highest income in the future and would like some suggestion or advice in terms of what will provide me with the greatest ROI relative to the associated risks and benefits. I initially wanted to get into IB or AM but not from a target school so ya’ll already know where this is going.. Option 1. At this point, my first option would be to work in Corporate Finance, primarily in a FP &amp;amp;amp; A, Credit Analyst or some type of valuation and advisory role. Because I have little to no work experience, I plan on increasing my excel and modelling skills through the “FMVA” or Wall Street Prep”. And hopefully gaining additional experience through either an internship or volunteering for free in some finance type position. Now if I plan on moving up the ranks and maybe get a shot in IB or Corp Dev.. I will have to also take either the CFA or MBA down the road. Option 1: Estimated income of $100k - $200k+ within a 3-6yr time frame. If I’m a senior FP &amp;amp;amp; A, Finance manager or land a position in IB or AM by then. ————————————————————— Option 2. Get a normal finance job paying maybe around $50k a year or work as an FP&amp;amp;amp;A, same route as above but Disregard the CFA and MBA. And instead of pursuing these additional time consuming and costly designations in order to advance through the Corp ladder, I can Allocate a certain % of annual income into side operations such as personal investing in terms of equities, small cap, forex trading. After 2-3years, hopefully after saving, I’ll have enough capital to invest in real-estate/rental property as well. Option 2 will hopefully provide me with 3 streams of income, 2 of which are residual streams of income. 5-6years time frame. $200k+ potentially more if I get lucky with my personal investments. Expand once these operations are more established. Anyways, which of these 2 options will provide me with the best ROI relative to the risks and benefits associated to each? Any other thoughts on each of these 2 options? It really comes down to using my free time off work to either gain additional credentials to advance my career or invest in other income generating operations. Any advice or suggestions would be greatly appreciated! Thanks! ;)
So here is the core element of what I believe, drives US foreign policy (Wars/Conflicts/Sanctions) and also domestic policy. I tried to trim my draft down so it's not a TLDR, but not leave out any critical information or citations/sources. This is pulled directly from this brief article: Petrodollar "KEY TAKEAWAYS
Petrodollars are dollars paid to oil-producing countries for oil.
The emergence of the petrodollar dates back to the early 1970s when the U.S. reached an agreement with Saudi Arabia to standardize the sale of oil based on the U.S. dollar.
Petrodollar recycling creates demand for U.S. assets when dollars received for oil sales are used to buy investments in the United States.
Recycling of petrodollars is beneficial to the greenback because it promotes non-inflationary growth.
A move away from petrodollars could potentially increase borrowing costs for governments, companies, and consumers if sources of money become scarce."
This list of facts should make clear just how dependent US currency is on the global oil economy. Which brings us to something called The Triffin Dilemma . "By "agreeing" to have its currency used as a reserve currency, a country pins its hands behind its back. In order to keep the global economy chugging along, it may have to inject large amounts of currency into circulation, driving upinflationat home. The more popular the reserve currency is relative to other currencies, the higher itsexchange rateand the less competitive domestic exporting industries become. This causes atrade deficitfor the currency-issuing country, but makes the world happy. If the reserve currency country instead decides to focus on domestic monetary policy by not issuing more currency then the world is unhappy." "Reserve Currency ParadoxBecoming a reserve currency presents countries with a paradox. They want the "interest-free" loan generated by selling currency to foreign governments, and the ability to raisecapitalquickly, because of high demand for reserve currency-denominated bonds. At the same time they want to be able to use capital andmonetary policyto ensure that domestic industries are competitive in the world market, and to make sure that the domestic economy is healthy and not running large trade deficits. Unfortunately, both of these ideas – cheap sources of capital and positivetrade balances– can't really happen at the same time." Obviously, the US and global economy is a complex system with many moving parts but I think, just this small amount of information begins to clarify the bigger picture. It seems as though most people have accepted the idea that we have engaged in bad faith wars in the name of stealing oil, which is true on some level, but we are not actually trying to seize the oil, we are trying to force the entire world to participate in OUR oil economy in a way that benefits us the most. Which leads me to the final part of this post. The Non-Alignment Movement (NAM) is a collection of approximately 120 nations that have joined together, starting back during the cold war, in an effort to remain independent and not be pressured in to choosing sides between the US and Russia. Many of these countries, such as Iran, Iraq, Afghanistan, Libya and most recently, Venezuela and Syria, have either dropped the petrodollar or made efforts to trade in other currencies. If this list looks familiar, it's because we have invaded, occupied and/or attempted regime change backed by MSM reporting of human rights violations or threat of nuclear proliferation. Obviously, we have pretty solid evidence that most of these claims were completely false. One of the main focuses of NAM these days, has been to conduct trade and handle the oil on their land, any way they see fit and they have been mounting a pretty strong coalition in response to the insanely harsh sanctions that we have tried to levy. Article About NAM and US Sanctions . This is essentially economic terrorism and unfortunately, most people, including myself, are not quite able to grasp just how de-stabilizing these sanctions are but it is slowly becoming clear to the public that we have been carrying out this policy of global dominance for decades. The Trump WH and John Bolton just happen to be much more open about their motives: In January, White House National Security Advisor John Boltonissueda veiled threat on Twitter:My advice to bankers, brokers, traders, facilitators, and other businesses: don’t deal in gold, oil, or other Venezuelan commodities being stolen from the Venezuelan people by the Maduro mafia. We stand ready to continue to take action. On his Twitter account, Trumpinsisted, “We have only one real currency in the USA, and it is stronger than ever, both dependable and reliable. It is by far the most dominant currency anywhere in the World, and it will always stay that way. It is called the United States Dollar!” I realize that this may not be the most exciting topic, considering the kind of news we have been peppered with recently, but I think it is important for people to consider. It seems pretty clear that almost all of our military operations around the world have everything to do with giant oil companies, defense contractors and the petrodollar and have nothing to do with spreading democracy or freeing civilians from oppressive regimes. Our allegiance with Saudi Arabia makes a lot more sense and our insane obsession on Russia also starts to take focus. Russia is also a member of NAM and is basically the biggest country that has chosen to defy the US. And since we can't push them around like a weaker country, we rely on a constant fear-mongering campaign by our media outlets. Following the NAM summit, Venezuelan Economy Minister Tareck El Aissamiannouncedhis country’s establishment of a payment system to meet obligations to Russia that will be covered with rubles. The developments have sent the US establishment into a frenzy. Still working on part 2, but hope some people will find this informative....
Just 2 more Conspiracy Theories that turned out to be True
(i couldn't post in the previous one , word limit )
1.Big Brother or the Shadow Government
It is also called the “Deep State” by Peter Dale Scott, a professor at the University of California, Berkeley. A shadow government is a "government-in-waiting" that remains in waiting with the intention of taking control of a government in response to some event. It turned out this was true on 9/11, when it was told to us by our mainstream media. For years, this was ridiculed as a silly, crazy conspiracy theory and, like the others listed here, turned out to be 100% true. It is also called the Continuity of Government. The Continuity of Government (COG) is the principle of establishing defined procedures that allow a government to continue its essential operations in case of nuclear war or other catastrophic event. Since the end of the cold war, the policies and procedures for the COG have been altered according to realistic threats of that time. These include but are not limited to a possible coup or overthrow by right wing terrorist groups, a terrorist attack in general, an assassination, and so on. Believe it or not the COG has been in effect since 2001.After 9/11, it went into action. Now here is the kicker, many of the figures in Iran Contra, the Watergate Scandal, the alleged conspiracy to assassinate Kennedy, and many others listed here are indeed members of the COG. This is its own conspiracy as well.
The CIA and Its Allies in Control of the United States and the World is a book written by Air Force Col. L Fletcher Prouty, published in 1973. From 1955 to 1963 Prouty was the "Focal Point Officer" for contacts between the CIA and the Pentagon on matters relating to military support for "black operations" but he was not assigned to the CIA and was not bound by any oath of secrecy. (From the first page of the 1974 Printing) It was one of the first tell-all books about the inner workings of the CIA and was an important influence on the Oliver Stone movie JFK. But the main thrust of the book is how the CIA started as a think tank to analyze intelligence gathered from military sources but has grown to the monster it has become. The CIA had no authority to run their own agents or to carry out covert operations but they quickly did both and much more. This book tells about things they actually did and a lot about how the operate. In Prouty's own words, from the 1997 edition of The Secret Team: This is the fundamental game of the Secret Team. They have this power because they control secrecy and secret intelligence and because they have the ability to take advantage of the most modern communications system in the world, of global transportation systems, of quantities of weapons of all kinds, and when needed, the full support of a world-wide U.S. military supporting base structure. They can use the finest intelligence system in the world, and most importantly, they have been able to operate under the canopy of an assumed, ever-present enemy called "Communism." It will be interesting to see what "enemy" develops in the years ahead. It appears that "UFO's and Aliens" are being primed to fulfill that role for the future. To top all of this, there is the fact that the CIA, itself, has assumed the right to generate and direct secret operations. "He is not the first to allege that UFOs and Aliens are going to be used as a threat against the world to globalize the planet under One government."
The Report from Iron Mountain
The Report from Iron Mountain is a book, published in 1967 (during the Johnson Administration) by Dial Press, that states that it is the report of a government panel. According to the report, a 15-member panel, called the Special Study Group, was set up in 1963 to examine what problems would occur if the U.S. entered a state of lasting peace. They met at an underground nuclear bunker called Iron Mountain (as well as other, worldwide locations) and worked over the next two years. Iron Mountain is where the government has stored the flight 93 evidence from 9/11.A member of the panel, one "John Doe", a professor at a college in the Midwest, decided to release the report to the public. The heavily footnoted report concluded that peace was not in the interest of a stable society, that even if lasting peace, "could be achieved, it would almost certainly not be in the best interests of society to achieve it." War was a part of the economy. Therefore, it was necessary to conceive a state of war for a stable economy. The government, the group theorized, would not exist without war, and nation states existed in order to wage war. War also served a vital function of diverting collective aggression. They recommended that bodies be created to emulate the economic functions of war. They also recommended "blood games" and that the government create alternative foes that would scare the people with reports of alien life-forms and out of control pollution. Another proposal was the reinstitution of slavery. U.S. News and World Report claimed in its November 20, 1967 issue to have confirmation of the reality of the report from an unnamed government official, who added that when President Johnson read the report, he 'hit the roof' and ordered it to be suppressed for all time. Additionally, sources were said to have revealed that orders were sent to U.S. embassies, instructing them to emphasize that the book had no relation to U.S. Government policy. Project Blue Beam is also a common conspiracy theory that alleges that a faked alien landing would be used as a means of scaring the public into whatever global system is suggested. Some researchers suggest the Report from Iron Mountain might be fabricated, others swear it is real. Bill Moyers, the American journalist and public commentator, has served as White House Press Secretary in the United States President Lyndon B. Johnson Administration from 1965 to 1967. He worked as a news commentator on television for ten years. Moyers has had an extensive involvement with public television, producing documentaries and news journal programs. He has won numerous awards and honorary degrees. He has become well known as a trenchant critic of the U.S. media. Since 1990, Moyers has been President of the Schumann Center for Media and Democracy. He is considered by many to be a very credible outlet for the truth. He released a documentary titled, The Secret Government, which exposed the inner workings of a secret government much more vast that most people would ever imagine. Though originally broadcast in 1987, it is even more relevant today. Interviews with respected top military, intelligence, and government insiders reveal both the history and secret objectives of powerful groups in the hidden shadows of our government. Here is that documentary: vid For another powerful, highly revealing documentary on the manipulations of the secret government produced by BBC, click here. The intrepid BBC team clearly shows how the War on Terror is largely a fabrication. For those interested in very detailed information on the composition of the shadow or secret government from a less well-known source, take a look at the summary available here.
2. The Federal Reserve Bank
The fundamental promise of a central bank like the Federal Reserve is economic stability. The theory is that manipulating the value of the currency allows financial booms to go higher, and crashes to be more mild. If growth becomes speculative and unsustainable, the central bank can make the price of money go up and force some deleveraging of risky investments - again, promising to make the crashes more mild. The period leading up to the American revolution was characterized by increasingly authoritarian legislation from England. Acts passed in 1764 had a particularly harsh effect on the previously robust colonial economy. The Sugar Act was in effect a tax cut on easily smuggled molasses, and a new tax on commodities that England more directly controlled trade over. The navy would be used in increased capacity to enforce trade laws and collect duties. Perhaps even more significant than the militarization and expansion of taxes was the Currency Act passed later in the year 1764.
"The colonies suffered a constant shortage of currency with which to conduct trade. There were no gold or silver mines and currency could only be obtained through trade as regulated by Great Britain. Many of the colonies felt no alternative to printing their own paper money in the form of Bills of Credit."
The result was a true free market of currency - each bank competed, exchange rates fluctuated wildly, and merchants were hesitant to accept these notes as payment. Of course, they didn't have 24-hour digital Forex markets, but I'll hold off opinions on the viability of unregulated currency for another time. England's response was to seize control of the colonial money supply - forbidding banks, cities, and colony governments from printing their own. This law, passed so soon after the Sugar Act, started to really bring revolutionary tension inside the colonies to a higher level. American bankers had learned early on that debasing a currency through inflation is a helpful way to pay off perpetual trade deficits - but Britain proved that the buyer of the currency would only take the deal for so long... Following the (first) American Revolution, the "First Bank of the United States" was chartered to pay off collective war debts, and effectively distribute the cost of the revolution proportionately throughout all of the states. Although the bank had vocal and harsh skeptics, it only controlled about 20% of the nation's money supply. Compared to today's central bank, it was nothing. Thomas Jefferson argued vocally against the institution of the bank, mostly citing constitutional concerns and the limitations of government found in the 10th amendment. There was one additional quote that hints at the deeper structural flaw of a central bank in a supposedly free capitalist economy.
"The existing banks will, without a doubt, enter into arrangements for lending their agency, and the more favorable, as there will be a competition among them for it; whereas the bill delivers us up bound to the national bank, who are free to refuse all arrangement, but on their own terms, and the public not free, on such refusal, to employ any other bank" –Thomas Jefferson.Basically, the existing banks will fight over gaining favor with the central bank - rather than improving their performance relative to a free market.
The profit margins associated with collusion would obviously outweigh the potential profits gained from legitimate business. The Second Bank of the United States was passed five years after the first bank's charter expired. An early enemy of central banking, President James Madison, was looking for a way to stabilize the currency in 1816. This bank was also quite temporary - it would only stay in operation until 1833 when President Andrew Jackson would end federal deposits at the institution. The charter expired in 1836 and the private corporation was bankrupt and liquidated by 1841.While the South had been the major opponent of central banking systems, the end of the Civil War allowed for (and also made necessary) the system of national banks that would dominate the next fifty years. The Office of the Comptroller of the Currency (OCC) says that this post-war period of a unified national currency and system of national banks "worked well."  Taxes on state banks were imposed to encourage people to use the national banks - but liquidity problems persisted as the money supply did not match the economic cycles. Overall, the American economy continued to grow faster than Europe, but the period did not bring economic stability by any stretch of the imagination. Several panics and runs on the bank - and it became a fact of life under this system of competing nationalized banks. In 1873, 1893, 1901, and 1907 significant panics caused a series of bank failures. The new system wasn't stable at all, in fact, many suspected it was wrought with fraud and manipulation. The Federal Reserve Bank of Minneapolis is not shy about attributing the causes of the Panic of 1907 to financial manipulation from the existing banking establishment.
"If Knickerbocker Trust would falter, then Congress and the public would lose faith in all trust companies and banks would stand to gain, the bankers reasoned."
In timing with natural economic cycles, major banks including J.P. Morgan and Chase launched an all-out assault on Heinze's Knickerbocker Trust. Financial institutions on the inside started silently selling off assets in the competitor, and headlines about a few bad loans started making top spots in the newspapers. The run on Knickerbocker turned into a general panic - and the Federal Government would come to the rescue of its privately owned "National Banks.
"During the Panic of 1907, "Depositors 'run' on the Knickerbocker Bank. J.P. Morgan and James Stillman of First National City Bank (Citibank) act as a "central bank," providing liquidity ... [to stop the bank run] President Theodore Roosevelt provides Morgan with $25 million in government funds ... to control the panic. Morgan, acting as a one-man central bank, decides which firms will fail and which firms will survive."
How did JP Morgan get so powerful that the government would provide them with funding to increase their power? They had key influence with positions inside the Administrations. They had senators, congressmen, lobbyists, media moguls all working for them. In 1886, a group of millionaires purchased Jekyll Island and converted it into a winter retreat and hunting ground, the USA's most exclusive club. By 1900, the club's roster represented 1/6th of the world's wealth. Names like Astor, Vanderbilt, Morgan, Pulitzer and Gould filled the club's register. Non- members, regardless of stature, were not allowed. Dignitaries like Winston Churchill and President McKinley were refused admission. In 1908, the year after a national money panic purportedly created by J. P. Morgan, Congress established, in 1908, a National Monetary Authority. In 1910 another, more secretive, group was formed consisting of the chiefs of major corporations and banks in this country. The group left secretly by rail from Hoboken, New Jersey, and traveled anonymously to the hunting lodge on Jekyll Island. In fact, the Clubhouse/hotel on the island has two conference rooms named for the "Federal Reserve." The meeting was so secret that none referred to the other by his last name. Why the need for secrecy? Frank Vanderlip wrote later in the Saturday Evening Post,
"...it would have been fatal to Senator Aldrich's plan to have it known that he was calling on anybody from Wall Street to help him in preparing his bill...I do not feel it is any exaggeration to speak of our secret expedition to Jekyll Island as the occasion of the actual conception of what eventually became the Federal Reserve System."
At Jekyll Island, the true draftsman for the Federal Reserve was Paul Warburg. The plan was simple. The new central bank could not be called a central bank because America did not want one, so it had to be given a deceptive name. Ostensibly, the bank was to be controlled by Congress, but a majority of its members were to be selected by the private banks that would own its stock. To keep the public from thinking that the Federal Reserve would be controlled from New York, a system of twelve regional banks was designed. Given the concentration of money and credit in New York, the Federal Reserve Bank of New York controlled the system, making the regional concept initially nothing but a ruse. The board and chairman were to be selected by the President, but in the words of Colonel Edward House, the board would serve such a term as to "put them out of the power of the President." The power over the creation of money was to be taken from the people and placed in the hands of private bankers who could expand or contract credit as they felt best suited their needs. Why the opposition to a central bank? Americans at the time knew of the destruction to the economy the European central banks had caused to their respective countries and to countries who became their debtors. They saw the large- scale government deficit spending and debt creation that occurred in Europe. But European financial moguls didn't rest until the New World was within their orbit. In 1902, Paul Warburg, a friend and associate of the Rothschilds and an expert on European central banking, came to this country as a partner in Kuhn, Loeb and Company. He married the daughter of Solomon Loeb, one of the founders of the firm. The head of Kuhn, Loeb was Jacob Schiff, whose gift of $20 million in gold to the struggling Russian communists in 1917 no doubt saved their revolution. The Fed controls the banking system in the USA, not the Congress nor the people indirectly (as the Constitution dictates). The U.S. central bank strategy is a product of European banking interests. Government interventionists got their wish in 1913 with the Federal Reserve (and income tax amendment). Just in time, too, because the nation needed a new source of unlimited cash to finance both sides of WW1 and eventually our own entry to the war. After the war, with both sides owing us debt through the federal reserve backed banks, the center of finance moved from London to New York. But did the Federal Reserve reign in the money trusts and interlocking directorates? Not by a long shot. If anything, the Federal Reserve granted new powers to the National Banks by permitting overseas branches and new types of banking services. The greatest gift to the bankers, was a virtually unlimited supply of loans when they experience liquidity problems. From the early 1920s to 1929, the monetary supply expanded at a rapid pace and the nation experienced wild economic growth. Curiously, however, the number of banks started to decline for the first time in American history. Toward the end of the period, speculation and loose money had propelled asset and equity prices to unreal levels. The stock market crashed, and as the banks struggled with liquidity problems, the Federal Reserve actually cut the money supply. Without a doubt, this is the greatest financial panic and economic collapse in American history - and it never could have happened on this scale without the Fed's intervention. The number of banks crashed and a few of the old robber barons' banks managed to swoop in and grab up thousands of competitors for pennies on the dollar. See:
The crypto market’s correlation with traditional markets (by Robert Aron Zawiasa)
https://medium.com/@Zawiasa/the-crypto-markets-correlation-with-traditional-markets-79e8209a6d8 At the time of Corona virus and the — not so related — economic meltdown, many questions the correlation between the virtual economy of cryptocurrencies and the “trad” one. Why is it such an important question? For many years crypto evangelists predicted Bitcoin as a new safe-haven, the “digital gold”. — Oh boy, they were wrong. The correlation is not imaginary, trad market players now have significant capital in cryptocurrency and when they need to pull liquidity to cover fiat liabilities, they just do it. The reason for the steep drop in % terms is because the BTC market is not liquid enough at this point in time. Is it a problem? A heresy of the crypto evangelion? A heresy for sure, but not a problem at all. Let’s be honest and admit it: The crypto community found nothing unusual in the recent price-drops. I, myself even shorted the market, because crypto is still full of promises but lacking adoption.
Okay, so they are correlating and crypto is full of shit and scammy and basically the same, right?
Not so! Do you remember the times when we had to wait days for a transaction? Paying with wire transfer for something in China was insanely expensive? When merchants preferred cash over credit cards, because of high fees? When you had to hire a broker for investing? Those times are gone and yes, not because of crypto solved these problems, but crypto definitely accelerated this transformation, urged the financial world to change rules or die. Now what if I say, this is only the beginning and these are only entry-level benefits of what really crypo promises?
Crypto promises us the “digital America”
Uh, I said it. Crypto is the new land and all the resourceful wants their own pieces of it. The reason behind why so many are thinking about Bitcoin as the digital gold is because the digital America’s gold rush is happening now. We all know deep in our consciousness that the world is heavily changing, the youth is changing, society is being digitalized even if brain-computer interfaces are not a thing yet..
Damn son you are weird and I stopped reading here.
The reason you feel weird about our descendants living online is because you know it will happen, but stay in the present now and I will tell you what crypto is doing to our traditional economy!
What is the “crypto dream”?
Many of the early adopters joined not because they wanted to make money, but because they think the current money system is unfair. Common citizens are paying the highest on almost everything and most of the time they don’t know about it. The financial sector’s practices are so hidden, almost like an occult knowledge. There are a few people who understand it and then there are everyone else, the vulnerable. This makes the first statement of the dream:
Financial systems should be transparent.
One of my biggest frustration as a teenager was I did not see real good opportunities in the world. I read about them, I saw them in historical movies, but in reality workplaces were boring and abusive, investments were only for the rich. Neither the booming housing market or fake forex trading seemed like a good fit for me. I had very little money, but a big passion to forge my fortune.
Opportunities should be there for everyone.
The wolves of Wall Street created our current system in the ideology of “I own what I could acquire” and backfired each other just like everyone did. They have done this, because there is no trust in the traditional world, but trust is heavily needed. But if things are transparent and open, we only need one more thing to wake up from this nightmare:
Cooperations should work without trust.
You read it right, a trustless environment provide uncheatable cooperation. There is no single entity that has authority over the system, and consensus is achieved without participants having to know or trust anything but the system itself.
I don’t eat your utopian bullshit! Your software is written by people I still need to trust.
People tend to be happier to direct trust towards organizations than systems. However, while organizations are made up of people who are easily corruptible, trustless systems can be governed entirely by computer code. All of the source code in crypto should be accessible to everyone. If it is not, then it is not a part of our ecosystem.
The technology behind crypto
Many being confused about the blockchain, thinking it is not a big deal. We had many software far older than Bitcoin, implementing the very same ideas. What Bitcoin had — which made the blockchain a very unique thing — is philosophy. It was intended to use a special way and confronted a very big thing, nobody thought it could be possible to confront. The blockchain is a way to store information. A decentralized, fully transparent one, which is accessible for everyone 7/24. It never stops, It cannot be stopped and people make it doing different things. The first use case its inventor made it doing is persisting transactions, money transfers. He told all of us it is just an experiment, which he didn’t tell is the capabilities of this technology. So fast people realized it is possible to do extraordinary things with it, like running a whole computer on the blockchain, making it behave like a virtual computer instance. No one did things like this before: A global computer which cannot be stopped, which is capable to run all kinds of software on it.
What was the impact?
People go mad about it, especially greedy people who don’t know a bum about the technology but have money to pour in. At one point, the fundraising softwares running on the Ethereum global computer had more impact and volume than the whole VC industry in America. This was only the early rising of crypto, 2017 spring. Later that year, everyone hopped on the train who were brave or stupid enough. Did crypto had a real economy at that point? Was it an industry? Real-world adoption? NOPE It was a bitter funny hype train, challenging everyone inside or outside the community, but it showed us one thing: We have the gold. Not so much people are capable to find and extract gold, to be honest: Most of us are just lurkers, fortune hunters and times could be rough when a mass hype destructs all the mines, but people had keep going, continuing the work.
How the crypto economy relates to the traditional economy now?
It is expanding much faster than any other economy in the world. Our frontiers in adoption are companies like Crypto.com paying hundred millions of dollars ($50 bonus for every new customer) to onboard millions of users, others like Coinbase paying $166 anyone to motivate in learning about cryptocurrencies. Handshake is airdropping hundreds of dollars (on current rates) to open-source developers and these are just a few examples of how generous and prosperous our thriving world is. In comparison: Revolut, a fintech company which is very similar to Crypto.com only paid 10 USD for new card holders and no one would ever pay you to educate yourself about financials. Developers? They historically get a fraction of a fraction of the pie in Silicon Valley. (Sorry Y Combinator, you are a delightful exception) These companies I mentioned are very traditional ones and they are not innovating in software, but keeping our gates open to the new world. I don’t want to credit here any of the thousands of developer teams, all working on the “real deal”. I only leave here a link to the list of all variants of the Bitcoin source code alone. Understanding what blockchain companies are working on is a whole new profession now. The idea of a crypto company is the DAO (Decentralized Autonomous Organization). Which covers trustless, often anonymous and fully transparent organizations with profit sharing and they are aimed to become better alternatives to traditional companies. Most of us in the community have different understanding, proposals and hopes about what a DAO should be, but common sense tell us it is the next big thing to emerge.
Wild West is Happening
We are building railway systems across the land, making connections and interoperations between blockchains. We are attracting a lot of immigrants day-to-day, because we have better paying workplaces, better interest rates and in overall a flourish economy. We are growing a strong identity to support our nation as the blockchain developers, economists, philosophers and investors. Our money is under our control as we own our future and all of us knows: We will soon show the world, what we are capable to achieve. This is my view of the crypto world. This is the manifesto of “digital America”. RAZ contact me at zawiasa.hu
Planning for a trip is a very tiring, yet one of the most exciting thing in my opinion. I do a very extensive planning, and at times I plan an itinerary even when I don't have any upcoming travel plans. I also enjoy taking inspiration fro other people itinerary. Although, I feel that there is too much information out there. Lot of effort goes into figuring out, what information is to be used and what is to be ignored. Step by Step guide on how to plan your next trip - deciding destinations, booking flight and stay, preparing for trip and having fun while traveling.
1. Shortlisting BROAD region or country to visit
Deciding the region to travel to depends on below two factors, in the order decided by personal situation and priority (a must-try experience or activity Versus save some money)
Dates of Travel: broad idea of month of travel or holiday season
Number of travellers is a factor. I travel economy and I stay in affordable hotels.
Flight/ Train prices: broad range around $100 / $500 / $1000 two-way ( nearby / little far / very far)
Stay prices: broad range around $30 / $100 / $200 per night ($100 in Bali gets a private villa with pool VS a dingy room in Paris, but assuming a viable stay experience, some places won't offer anything decent for less than $200/300)
Intercity/ Intracity commute: affordable public transport VS semi-affordable car rental (toll/ one way/ two way) VS depends-on-location Taxi services VS expensive private drops (island destinations)
Output: Broad region or country which can be visited (i.e. Europe/ SEA / LatAm/ Asia / Oceania / NorAm or slightly more specific Maldives/ Mauritius / French Polynesia / Caribbean)
2. Narrow down on Country to visit -
Decide on the primary/ landing country
Flight search for deals around travel dates Seasonality: not extreme temperature, not too hot (I prefer shoulder seasons) Crowd: not very crowded, but also not deserted ( else, lot of attractions and restaurants are closed down) Remove countries which have any safety concerns around travel dates
For tie-breaker between 2 destinations
Popular festivals Food preference Language comfort and friendly locals What wife says! Output: Landing country for the trip is finalised
3. Book the onward/return Flight or Train tickets
Two-way flight: if budget is a constraint + good return flight deal is available + not going to far away destinations on trip
One-way flight: if return destination could be different then just book onward flight
With good research, (one-way to A + A to B + one-way from B) is cheaper than (two-way from A) Output: Flight tickets booked
4. Finalise Itinerary - Cities and number of days
Interests of yours and co-travellers
Commute time and convenience
Return city is same or different (circular trip or linear trip)
I try to stay a minimum of 3 days in a city, so that the only things I remember isn't airport, transit, and hotel check-ins. Output: A day-wise and city-wise itinerary planned out in a shareable Google sheet, Excel or tool
5. Book Internal commute
Commute can broadly be
Public transport: I prefer Trains/Buses in Europe, Flights in Asia/SEA
Car Rental: Freedom to explore at will. Two-way rental only makes sense. Toll fee, Parking to be taken into account.
Private Transport: Island destinations where the resorts arrange your commute
(An overnight commute, will save you from booking a stay in the hotel for that night) Output: Internal Commute booked and and added to itinerary tool
6. Book Stay or Hotels
This is the impossible trinity of stay. Normally, you get only 2 out of the 3 among ( Good Location, Good Amenities, Good Price)
Location or area of city to stay in
*City - Centre (nearby attractions, happening, expensive) VS Outskirts ( faraway attractions, quiet, affordable)
Prefer day-trips VS spending time in the city (parking is a concern)
Safety of area and connectivity
Amenities or comfort of Stay
Hotel VS Hostel VS Airbnb ( meet fellow travellers, party, stay with locals, keep to yourself)
Amenities: Kitchen, Pool, Gym, Pet-Friendly
Budget or Price per might
I research on hotel booking website and read detailed reviews. Output: Stay Booked and added to itinerary tool
7. To-Do list and shared folder -
Create and execute To-Do List
Visa, Travel Insurance, Health care
Packing list: based on season, activity planned
Shopping list: based on season, activity planned
Shared Folder: Add all flight and hotel bookings and important docs to this and share with co-travellers
Output: All basic and mandatory things planned for the trip
8. Plan activities for the trip
I keep this part of the trip slightly flexible. While, I have 4-5 top things to do( per city ) figured out before the start of trip, for other things, I explore things on the go.
Research things to do: read about activities and food you want to try on blogs, google, tripadvisor, lonelyplanet, youtube etc.
Bookmark activities: bookmark or notes tool, Google maps, Tripadvisor, Trip Planing tool
Book activities: some popular activities, events tickets or a restaurant you want to visit, have to be booked in advance
Output: You are 90% ready for the trip
9. Get ready for the trip
Pack your things - necessary travel documents (passport, visa)
Online check-in of flights
Download offline Google maps
Sort out payment (Currency, Forex cards etc.)
Google translate or popular phrases
Important and emergency contacts noted down
Inform your family about your plan in case of emergency
Sort out your airport/station to hotel commute
Inform hotels about any additional requirements
Research any safety and local tips
Output: Start your trip
10. Enjoy your trip
Keep flexible schedule
Meet local people and fellow travellers
Eat local cuisine
Don't waste time sleeping in the room
Respect the local customs and culture
Do some shopping and bring back gifts for friends and family
Output: Have a fun trip
11. Go back to Step 1. Start planning for your next trip
While I come back with great memories and share my travel stories. I start planning for my next trip, having no idea of when to go or where to go. Original post at Best Trip planning guide on Tripspell
How to get started in Forex - A comprehensive guide for newbies
Almost every day people come to this subreddit asking the same basic questions over and over again. I've put this guide together to point you in the right direction and help you get started on your forex journey. A quick background on me before you ask: My name is Bob, I'm based out of western Canada. I started my forex journey back in January 2018 and am still learning. However I am trading live, not on demo accounts. I also code my own EA's. I not certified, licensed, insured, or even remotely qualified as a professional in the finance industry. Nothing I say constitutes financial advice. Take what I'm saying with a grain of salt, but everything I've outlined below is a synopsis of some tough lessons I've learned over the last year of being in this business. LET'S GET SOME UNPLEASANTNESS OUT OF THE WAY I'm going to call you stupid. I'm also going to call you dumb. I'm going to call you many other things. I do this because odds are, you are stupid, foolish,and just asking to have your money taken away. Welcome to the 95% of retail traders. Perhaps uneducated or uninformed are better phrases, but I've never been a big proponent of being politically correct. Want to get out of the 95% and join the 5% of us who actually make money doing this? Put your grown up pants on, buck up, and don't give me any of this pc "This is hurting my feelings so I'm not going to listen to you" bullshit that the world has been moving towards. Let's rip the bandage off quickly on this point - the world does not give a fuck about you. At one point maybe it did, it was this amazing vision nicknamed the American Dream. It died an agonizing, horrible death at the hand of capitalists and entrepreneurs. The world today revolves around money. Your money, my money, everybody's money. People want to take your money to add it to theirs. They don't give a fuck if it forces you out on the street and your family has to live in cardboard box. The world just stopped caring in general. It sucks, but it's the way the world works now. Welcome to the new world order. It's called Capitalism. And here comes the next hard truth that you will need to accept - Forex is a cruel bitch of a mistress. She will hurt you. She will torment you. She will give you nightmares. She will keep you awake at night. And then she will tease you with a glimmer of hope to lure you into a false sense of security before she then guts you like a fish and shows you what your insides look like. This statement applies to all trading markets - they are cruel, ruthless, and not for the weak minded. The sooner you accept these truths, the sooner you will become profitable. Don't accept it? That's fine. Don't bother reading any further. If I've offended you I don't give a fuck. You can run back home and hide under your bed. The world doesn't care and neither do I. For what it's worth - I am not normally an major condescending asshole like the above paragraphs would suggest. In fact, if you look through my posts on this subreddit you will see I am actually quite helpful most of the time to many people who come here. But I need you to really understand that Forex is not for most people. It will make you cry. And if the markets themselves don't do it, the people in the markets will. LESSON 1 - LEARN THE BASICS Save yourself and everybody here a bunch of time - learn the basics of forex. You can learn the basics for free - BabyPips has one of the best free courses online which explains what exactly forex is, how it works, different strategies and methods of how to approach trading, and many other amazing topics. You can access the BabyPips course by clicking this link: https://www.babypips.com/learn/forex Do EVERY course in the School of Pipsology. It's free, it's comprehensive, and it will save you from a lot of trouble. It also has the added benefit of preventing you from looking foolish and uneducated when you come here asking for help if you already know this stuff. If you still have questions about how forex works, please see the FREE RESOURCES links on the /Forex FAQ which can be found here: https://www.reddit.com/Forex/wiki/index Quiz Time Answer these questions truthfully to yourself: -What is the difference between a market order, a stop order, and a limit order? -How do you draw a support/resistance line? (Demonstrate it to yourself) -What is the difference between MACD, RSI, and Stochastic indicators? -What is fundamental analysis and how does it differ from technical analysis and price action trading? -True or False: It's better to have a broker who gives you 500:1 margin instead of 50:1 margin. Be able to justify your reasoning. If you don't know to answer to any of these questions, then you aren't ready to move on. Go back to the School of Pipsology linked above and do it all again. If you can answer these questions without having to refer to any kind of reference then congratulations, you are ready to move past being a forex newbie and are ready to dive into the wonderful world of currency trading! Move onto Lesson 2 below. LESSON 2 - RANDOM STRANGERS ARE NOT GOING TO HELP YOU GET RICH IN FOREX This may come as a bit of a shock to you, but that random stranger on instagram who is posting about how he is killing it on forex is not trying to insprire you to greatness. He's also not trying to help you. He's also not trying to teach you how to attain financial freedom. 99.99999% of people posting about wanting to help you become rich in forex are LYING TO YOU. Why would such nice, polite people do such a thing? Because THEY ARE TRYING TO PROFIT FROM YOUR STUPIDITY. Plain and simple. Here's just a few ways these "experts" and "gurus" profit from you:
Referral Links - If they require you to click a specific link to signup for something, it means they are an affiliate. They get a commission from whatever the third party is that they are sending you to. I don't care if it's a brokerage, training program, hell even an Amazon link to a book - if they insist you have to click their super exclusive, can't-get-this-deal-any-other-way-but-clicking-my-link type bullshit, it's an affiliate link. There is nothing inherently wrong with affiliate programs, but you are literally generating money for some stranger because they convinced you to buy something. Some brokers such as ICMarkets have affiliate programs that payout a percentage of the commission you generate - this is a really clever system - whether you profit or blow your entire account, the person who referred you to the broker makes a profit off you. Clever eh?
Signal Services, Education & Training Programs, Courses - If somebody is telling you they are making a killing with a signal service and are trying to convince you to join it, I guarantee they are getting a piece of your monthly fee. And better still, these signal services often work...for about a week. Just long enough to suck a bunch of poor fools into it. You see people making money, you want in so you agree to pay the $200+/month subscription fee. You follow the signals and it looks like it's making money for a few days or weeks. Then it turns sideways, you start losing money hand over fist. Pretty soon you have lost most of your trading account because you blindly followed a signal service. And better still - when you go screaming at the person running the signal service they will be very quick to point you to their No Refunds policy. To add insult to injury, the buttfucker that referred you to the signal service in the past will likely listen to you getting mad, and then come back with something like "Sorry it didn't work out, but I just joined this other amazing service and it's working great, you should come join it to earn your money back. Here's my link..." You get the point here right?
Multi-Level Marketing (MLMs) - These people are scum. They are going to offer you training and education, signals, access to forex experts and gurus, and all kinds of other shit with the promise that you will live the dream and become financially free. They are also loading you into a pyrmaid scheme where you will be hounded to recruit other people and make money off them just like you got roped into it. A really prime example here is iMarkets Live (or IML for short). Don't touch this shit with a 10 foot pole. I don't care what they are claiming, you will lose everything using them.
Fund Managers - These people make my skin crawl. It's a classic scam and it works like this - somebody will post online about how much money they are making trading forex/commodities/stocks/whatever. Most of the time they won't explicitly post they are offering a trading service, rather they just put the message out there and wait for the ignorant masses (that's you) to contact them. They will charm you. They will lie to you. They will promise you the moon if you simply wire them some money or give them API access to your trading account. Care to guess what happens next? If you send a wire transfer (or Western Union...hell any kind of payment to them) they will vanish. Happens usually after they take a bunch of suckers for the ride. You sent them $2,000 and so do 9 other suckers. They just made $20,000 and are gone. With API access to your account, you will find your account gets blown super fast or worse - possibly leaving you open to persecution by the broker you are using.
These are just a few examples. The reality is that very few people make it big in forex or any kind of trading. If somebody is trying to sell you the dream, they are essentially a magician - making you look the other way while they snatch your wallet and clean you out. Additionally, on the topic of fund managers - legitimate fund managers will be certified, licensed, and insured. Ask them for proof of those 3 things. What they typically look like are:
Certified - This varies from country to country, in the US it's FINRA (http://www.finra.org). They need to have their Series 7 certification minimum. You can make the case that other FINRA certifications are acceptable in lieu of Series 7, but the 7 is the gold standard.
Licensed - They need to have a valid business license issued by the government. It must clearly state they are an investment company, preferrably a hedge fund because they have some super strict requirements to operate (and often require $25,000+ in fees just to get their business license, so you know they at least have some skin in the game).
Insured - They need to be backed by an insurance company. I'm not talking general insurance for shit like their office burning down. I'm talking about a government-implemented protection insurance program - in the US I believe that is issued by the Securities Investment Protection Corporation (https://www.sipc.org/).
If you are talking to a fund manager and they are insisting they have all of these, get a copy of their verification documents and lookup their licenses on the directories of the issuers to verify they are valid. If they are, then at least you are talking to somebody who seems to have their shit together and is doing investment management and trading as a professional and you are at least partially protected when the shit hits the fan. LESSON 3 - UNDERSTAND YOUR RISK Many people jump into Forex, drop $2000 into a broker account and start trading 1 lot orders because they signed up with a broker thinking they will get rich because they were given 500:1 margin and can risk it all on each trade. Worst-case scenario you lose your account, best case scenario you become a millionaire very quickly. Seems like a pretty good gamble right? You are dead wrong. As a new trader, you should never risk more than 1% of your account balance on a trade. If you have some experience and are confident and doing well, then it's perfectly natural to risk 2-3% of your account per trade. Anybody who risks more than 4-5% of their account on a single trade deserves to blow their account. At that point you aren't trading, you are gambling. Don't pretend you are a trader when really you are just putting everything on red and hoping the roulette ball lands in the right spot. It's stupid and reckless and going to screw you very quickly. Let's do some math here: You put $2,000 into your trading account. Risking 1% means you are willing to lose $20 per trade. That means you are going to be trading micro lots, or 0.01 lots most likely ($0.10/pip). At that level you can have a trade stop loss at -200 pips and only lose $20. It's the best starting point for anybody. Additionally, if you SL 20 trades in a row you are only down $200 (or 10% of your account) which isn't that difficult to recover from. Risking 3% means you are willing to lose $60 per trade. You could do mini lots at this point, which is 0.1 lots (or $1/pip). Let's say you SL on 20 trades in a row. You've just lost $1,200 or 60% of your account. Even veteran traders will go through periods of repeat SL'ing, you are not a special snowflake and are not immune to periods of major drawdown. Risking 5% means you are willing to lose $100 per trade. SL 20 trades in a row, your account is blown. As Red Foreman would call it - Good job dumbass. Never risk more than 1% of your account on any trade until you can show that you are either consistently breaking even or making a profit. By consistently, I mean 200 trades minimum. You do 200 trades over a period of time and either break-even or make a profit, then you should be alright to increase your risk. Unfortunately, this is where many retail traders get greedy and blow it. They will do 10 trades and hit their profit target on 9 of them. They will start seeing huge piles of money in their future and get greedy. They will start taking more risk on their trades than their account can handle. 200 trades of break-even or profitable performance risking 1% per trade. Don't even think about increasing your risk tolerance until you do it. When you get to this point, increase you risk to 2%. Do 1,000 trades at this level and show break-even or profit. If you blow your account, go back down to 1% until you can figure out what the hell you did differently or wrong, fix your strategy, and try again. Once you clear 1,000 trades at 2%, it's really up to you if you want to increase your risk. I don't recommend it. Even 2% is bordering on gambling to be honest. LESSON 4 - THE 500 PIP DRAWDOWN RULE This is a rule I created for myself and it's a great way to help protect your account from blowing. Sometimes the market goes insane. Like really insane. Insane to the point that your broker can't keep up and they can't hold your orders to the SL and TP levels you specified. They will try, but during a flash crash like we had at the start of January 2019 the rules can sometimes go flying out the window on account of the trading servers being unable to keep up with all the shit that's hitting the fan. Because of this I live by a rule I call the 500 Pip Drawdown Rule and it's really quite simple - Have enough funds in your account to cover a 500 pip drawdown on your largest open trade. I don't care if you set a SL of -50 pips. During a flash crash that shit sometimes just breaks. So let's use an example - you open a 0.1 lot short order on USDCAD and set the SL to 50 pips (so you'd only lose $50 if you hit stoploss). An hour later Trump makes some absurd announcement which causes a massive fundamental event on the market. A flash crash happens and over the course of the next few minutes USDCAD spikes up 500 pips, your broker is struggling to keep shit under control and your order slips through the cracks. By the time your broker is able to clear the backlog of orders and activity, your order closes out at 500 pips in the red. You just lost $500 when you intended initially to only risk $50. It gets kinda scary if you are dealing with whole lot orders. A single order with a 500 pip drawdown is $5,000 gone in an instant. That will decimate many trader accounts. Remember my statements above about Forex being a cruel bitch of a mistress? I wasn't kidding. Granted - the above scenario is very rare to actually happen. But glitches to happen from time to time. Broker servers go offline. Weird shit happens which sets off a fundamental shift. Lots of stuff can break your account very quickly if you aren't using proper risk management. LESSON 5 - UNDERSTAND DIFFERENT TRADING METHODOLOGIES Generally speaking, there are 3 trading methodologies that traders employ. It's important to figure out what method you intend to use before asking for help. Each has their pros and cons, and you can combine them in a somewhat hybrid methodology but that introduces challenges as well. In a nutshell:
Price Action Trading (Sometimes called Naked Trading) is very effective at identifying when trends will start and finish. This gives you the advantage of staying ahead of the market and predicting when a change in trend direction will occur. It has the disadvantage of being really easy to screw it up if you don't plot your support and resistance lines properly and interpret the chart wrong. Because you can identify a change in trend direction, you'll generally make more profit on a new trend than a technical strategy will.
Technical Analytics (or TA) uses math and statistics to try and identify where the market is headed or confirm/reject whether a trend is happening. It has the advantage of being very math and stat driven which is hard to refute the numbers, but it has the disadvantage of being late to the party when it comes to identifying trends (hence why people call TA a lagging strategy). When people fail using TA, it's not because of the math - it's because you misinterpreted what the math is telling you.
Fundamental Analysis (or FA) uses news and macro scale events to predict what is going on. A really good example right now is Brexit, what a clusterfuck that is. Every time some major brexit news breaks it causes all sorts of choas in almost every currency pair. Fundamental trading has the highest potential profitability per trade but it also has the highest potential drawdown per trade.
Now you may be thinking that you want to be a a price action trader - you should still learn the principles and concepts behind TA and FA. Same if you are planning to be a technical trader - you should learn about price action and fundamental analysis. More knowledge is better, always. With regards to technical analysis, you need to really understand what the different indicators are tell you. It's very easy to misinterpret what an indicator is telling you, which causes you to make a bad trade and lose money. It's also important to understand that every indicator can be tuned to your personal preferences. You might find, for example, that using Bollinger Bands with the normal 20 period SMA close, 2 standard deviation is not effective for how you look at the chart, but changing that to say a 20 period EMA average price, 1 standard deviation bollinger band indicator could give you significantly more insight. LESSON 6 - TIMEFRAMES MATTER Understanding the differences in which timeframes you trade on will make or break your chosen strategy. Some strategies work really well on Daily timeframes (i.e. Ichimoku) but they fall flat on their face if you use them on 1H timeframes, for example. There is no right or wrong answer on what timeframe is best to trade on. Generally speaking however, there are 2 things to consider:
Speed - If you are scalping (trading on the really fast candles like 1M, 5M, 15M, etc) odds are your trades are very short lived. Maybe 10 minutes to an hour tops. For the most part, scalping strategies will produce little profit per trade but make up for it in the sheer volume of trades. Whereas swing trading may only make a few trades but each one could be worth a significant amount of money.
Spread (the fee you pay to the broker when you trade) - If you are a scalper, the spread is your worst enemy because you have to overcome it very fast to make a profit on your order. Whereas swing trading the spread hardly impacts you at all.
If you are a total newbie to forex, I suggest you don't trade on anything shorter than the 1H timeframe when you are first learning. Trading on higher timeframes tends to be much more forgiving and profitable per trade. Scalping is a delicate art and requires finesse and can be very challenging when you are first starting out. LESSON 7 - AUTOBOTS...ROLL OUT! Yeah...I'm a geek and grew up with the Transformers franchise decades before Michael Bay came along. Deal with it. Forex bots are called EA's (Expert Advisors). They can be wonderous and devastating at the same time. /Forex is not really the best place to get help with them. That is what /algotrading is useful for. However some of us that lurk on /Forex code EA's and will try to assist when we can. Anybody can learn to code an EA. But just like how 95% of retail traders fail, I would estimate the same is true for forex bots. Either the strategy doesn't work, the code is buggy, or many other reasons can cause EA's to fail. Because EA's can often times run up hundreds of orders in a very quick period of time, it's critical that you test them repeatedly before letting them lose on a live trading account so they don't blow your account to pieces. You have been warned. If you want to learn how to code an EA, I suggest you start with MQL. It's a programming language which can be directly interpretted by Meta Trader. The Meta Trader terminal client even gives you a built in IDE for coding EA's in MQL. The downside is it can be buggy and glitchy and caused many frustrating hours of work to figure out what is wrong. If you don't want to learn MQL, you can code an EA up in just about any programming language. Python is really popular for forex bots for some reason. But that doesn't mean you couldn't do it in something like C++ or Java or hell even something more unusual like JQuery if you really wanted. I'm not going to get into the finer details of how to code EA's, there are some amazing guides out there. Just be careful with them. They can be your best friend and at the same time also your worst enemy when it comes to forex. One final note on EA's - don't buy them. Ever. Let me put this into perspective - I create an EA which is literally producing money for me automatically 24/5. If it really is a good EA which is profitable, there is no way in hell I'm selling it. I'm keeping it to myself to make a fortune off of. EA's that are for sale will not work, will blow your account, and the developer who coded it will tell you that's too darn bad but no refunds. Don't ever buy an EA from anybody. LESSON 8 - BRING ON THE HATERS You are going to find that this subreddit is frequented by trolls. Some of them will get really nasty. Some of them will threaten you. Some of them will just make you miserable. It's the price you pay for admission to the /Forex club. If you can't handle it, then I suggest you don't post here. Find a more newbie-friendly site. It sucks, but it's reality. We often refer to trolls on this subreddit as shitcunts. That's your word of the day. Learn it, love it. Shitcunts. YOU MADE IT, WELCOME TO FOREX! If you've made it through all of the above and aren't cringing or getting scared, then welcome aboard the forex train! You will fit in nicely here. Ask your questions and the non-shitcunts of our little corner of reddit will try to help you. Assuming this post doesn't get nuked and I don't get banned for it, I'll add more lessons to this post over time. Lessons I intend to add in the future:
Why you will blow your first account and what to do when it happens
Trading Psychology (this will be a beefy one and will take a while to put together)
Exotics vs Majors and which you should focus on as a newbie (aka how to blow your account in a single trade with exotics)
Forex is commonly traded in specific amounts called lots, or ... $0.1: $0.01: USD/JPY: 1 USD = 80 JPY: $0.000125: $12.5: $1.25: $0.125: $0.0125: Your broker may have a different convention for calculating pip values relative to lot size but whatever way they do it, they’ll be able to tell you what the pip value is for the currency you are trading at that particular time. In other words, they ... 0,01 LOT (Stück) = 1.000 EUR gehandeltes Volumen . Welche Positionsgröße du wählst, hängt von deiner persönlichen Risikomentalität ab, aber auch von dem maximal zulässigen Hebel. Im Forexmarkt darfst du seit der ESMA-Regulierung von 2018, einen maximalen Hebel im Forexmarkt von 1:30 bei den Majors und 1:20 bei den Nebenwerten nutzen. Micro lots are the smallest tradeable lot available to most brokers. A micro lot is a lot of 1,000 units of your account funding currency. If your account is funded in U.S. dollars, this means that a micro lot is $1,000 worth of the base currency you want to trade. If you are trading a dollar-based pair, 1 pip would be equal to 10 cents ... You’re trading 1 standard Lot (100,000 base units) on GBP/JPY. From our example before, we know that the value is 6.5 GBP. Now, we need to take into account the EUR/GBP rate in order to calculate the Pip Value. Let’s assume that the rate is currently at 0.85000. So: 6.5GBP/(1GBP*0.85 EUR)= (6.5 GBP/1 GBP)/0.85 EUR≈7.65 EUR Leverage ... Standard Lot: A standard lot is the equivalent to 100,000 units of the base currency in a forex trade. A standard lot is similar to trade size. It is one of the three commonly known lot sizes; the ... Through Land-FX MT4, you can place orders as small as 0.01 lot which is 1,000 units, just like many other brokers.. But please note that the 0.01 lot trading volume is available only for the “Standard Account”. For ECN and corporate account, you can only place orders from 0.1 lot(10,000 units). Forex 0, beleggen in ethereum met succes!, put options brokerage, previous3-schritte-strategie video 0.01 (micro lot) 1:500: 1.4 pips on EUR/USD: ECN: $2 000: 0.1 (mini lot) 1:200 : 0.3 pips on EUR/USD + 0.35 pip/Lot commission . There are two basic accounts available with Land-FX: commission-free Standard account and ECN one with tighter spreads and commission fee. Micro lots are available for trade on the Standard account type and besides, inexperienced traders are offered free demo ... Ein Micro-Forex-Konto ist ein Einzelhandelskonto, auf dem der Händler nicht viel Geld riskieren möchte. Der handelbare Mindestbetrag beträgt 0.01 Lose oder 1 Mikrolot und ist ein voreingestellter Betrag von 1000 Währungseinheiten. Nicht alle Forex-Broker bieten Mikrokonten an, mit denen Sie Mikro-Lots handeln können. One mini lot [0.1 lot] is roughly equivalent to $10,000, which is 10% of $100K. One micro lot [0.01] is roughly equivalent to $1,000, which is 10% of $10K. So if you have $50,000 in your account, and want to only use 10% ($5000), you could trade half a mini lot (or 5 1-micro-lot trades) for example.
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