Year: 2018

Scams – How to avoid scams in trading and investing
Scams in the world of trading are not rare, so pay attention to the following situations.

By Guy Avtalyon

The intent of all the scammers is to get hold of your money. Scams come to us with many faces, different forms, but all of them have one goal: to make us poor. They are getting us to reveal our personal details, steal our information, or make us to voluntarily give them cash.

At first, everyone thought the Internet was a safe place. But we all can become an easy target for evil actors who want to steal our personal data.

How to recognize scams?

Criminal minds can reach into our private lives, our homes, and our work offices.

And there is little we can do about it. Attack tactics and tools vary from traditional attacks from malicious software to ingenious phishing scams. They are usually developed in regions where justice can’t easily reach out to catch them.

The forex market involves very active trading of over $1 trillion each day, with futures and currency options, it is closer to $5 trillion daily. The market does not have strong regulation, although things have started to improve recently.
Let’s say, everyone wanting help in making money in the stock market will be interested in finding a trading system.

There are plenty available.

Unfortunately, there are so many humbugs in the trading system.

How to separate the legitimate trading systems from the scammers?

Based on research and experience, here are some good ways to mark trading system scams:
- Do your own research. There is no need to be in a hurry when you have to invest your own money. You should first read up on the steps of investing. Make sure you know at least the basic setups of trading and investing. Be very cautious with online trading.
- Choose a trading system. Successful trading systems can be a hedge fund or mutual fund. If you want to invest in something that has clear systematic knowledge-based information, you have to pick some trusty trading system.
- * Examine a trial period. An investment scam often does not include trial-periods or customer satisfaction. Before you invest your money, you should invest your time in researching the terms and conditions of the item.
- * Check a broker report. It has to be registered, so you may get reports that include information such as qualifications, reliability, and employment history. This can help you to spot any previous problems or concerns before investing.
Cybercriminals will pull you to believe you can make money easy and fast on the internet. They’ll promise you plans and methods of getting rich quickly. It is quite simple especially when someone is in a difficult financial situation.

How do trading scams work?

This scamming method is similar to the romance scam.

Cyberattackers approach to the emotional side of victims. For example, the false posting of non-existent jobs for a variety of positions is one of the online criminals’ methods.

Using different job types, such as work-at-home, the victim is pushed to give personal and financial data with the promise of a well-paid job. Of course, it carries lots of money in a very short time. For sure.

Never share sensitive financial information with anyone you don’t know well. Scammers can reach you out via phone, SMS, or email. They can contact you, pretending they are from a financial institution or government agency.

They could tell your account is compromised or needs to be updated. These criminals are trying to trick you into giving them your credit card number, Social Security number. This scam is known as phishing.

Keep in mind, your bank or credit card provider will never ask you for personal data in that way. If you receive a suspicious call or email, call the credit card provider or bank immediately to check on your account status.

Let’s go back to trading.

One of the challenges a novice forex investor faces is how to determine which operators to trust in the forex market and which to avoid. Signal sellers are a good example. Some analysts propose that many or even most signal sellers are scammers. A frequent criticism is that if it were really possible to use a system to beat the market, why would anyone that has this information make it widely available?

Other analysts distinguish between known scammers and more reputable information sources such as Metatrader, that offer a well-thought-out signaling service.

Behind these views lies a larger difference of opinion on whether anyone can predict the next move in a trading market. The best way to determine if a signal seller can benefit you is to open a demo trading account with one of the better-known forex brokers. Be patient, and you’ll determine whether predictive signaling works for you or doesn’t.

Some forex brokers do not deal fairly with their customers and defraud them. You should trade with a broker that also handles other stock market trades and is subject to SEC and FINRA oversight.

The forex trade itself may be unregulated, but no broker as the subject of such oversight would risk its license for other securities by defrauding its forex customers.

Follow these signals because such scammers are always coming back. With the same or slightly altered face.
5th September 2018
How to create your first trading strategy

Find how to create your first trading strategy, what to look at and how it differs from investing strategy

By Guy Avtalyon

Okay, you want to create your first trading strategy and, to be honest, I understand your dilemma. You would like to be successful and you want to know, what strategy should you choose to nail it.

Listen, there!

What is the trading strategy?

A trading strategy is a set of trading settings that serve the currency trader or stock to determine whether to buy or sell a currency or stock, where to enter and exit the position. And how much capital they invest in trade, and in doing so, earn a difference in price.

The trading strategy is a fixed plan that is designed to achieve a profitable return by going long or short in markets.
A broker can offer you the opportunity to enter into trades that are multiple times the value of the margin that you place. The market is fluid and you can open a trade or exit from one very quickly, so there is potential to make considerable returns.

What is the investing strategy?

The investment strategy is a set of rules, behaviors, or procedures, designed to guide an investor’s selection of an investment portfolio. People have different profit objectives, and their individual skills make different tactics and strategies appropriate.

To complicated? Wait!!! There are more!

A trading strategy can be – automated (various robots for trading, etc.) – manual (the vast majority of traders use their own trading system.)

We would like to show you some of them which are successful. We will give you a brief description of 5 simple strategies that can help you to maximize your profits:

Swing trading

You can enter a successful swing trade by timing your trade. Do that when is a breakout after a consolidation.
What does this mean? A period of consolidation occurs when a currency pair moves in an almost precisely defined price range. A breakout will occur. What really happens is that the values of the currencies “breakout” the resistance level. If you predict the breakout accurately, you’ll profit from that trade.

A swing trade uses a channel trading strategy. Trades take place between the support and resistance levels of swing highs and swing lows.

Rangebound trading

Here you will need to identify a currency pair that trades within a certain range. Then, you have to identify the support and resistance levels and then time your trade by taking these movements into account.

It is likely that there will not be a big difference between the upper and lower prices of the range. Because of this reason, you could trade in one of two ways.

The first option is to trade within the range which will limit your profits as the price difference is bound to be minimal.

The second way is to look for a breakout from the range. If this happens, you will have to react quickly. You can make a quick profit, but you can lose out. When you see a “false breakout” be extremely cautious because it may mean the market is moving against you so you’ll end up in losses.

Position trading

A position trade is not a short-term trade. It is based on macroeconomic trends. It could run over weeks or months or years. Traders take a long-term position based on an understanding of how inflation or the rate at which an economy is growing, will affect the value of a currency.

If you want to adopt this strategy, you have to stay stick to two rules. First, do not use much leverage. A maximum of 10:1 is quite good in the forex trading. Secondly, the size should be relatively small. This is because you are thinking that some large movement in the relative price of the currency pair is possible.

Carry trade

A carry trade means to enter the trade that could take advantage of the interest rate differential of the two currencies. That means you will be selling a currency with a low-interest rate and buying one that provides a greater rate of interest. Normally, you would choose a currency pair where the higher interest rate currency will appreciate to the lower interest rate currency.

Carry trades can be high-risk. They are based on a combination of technical and fundamental analysis.

Momentum trading

Well, you have to know that the price constantly lies, but momentum tells the facts.
At the simplest level, you can use momentum trading when rates are going up, then you should buy and when they are declining, you should sell and maximize your profits in the forex market.

If you want to implement this strategy, you have to identify the currency pairs that show the greatest momentum and have moved most strongly. It is possible by tracking price movements over a period of several weeks.

Then trade those pairs that show the greatest momentum.

What do you need to be successful in trading?

Let’s go back to the beginning and say a few words about how for every trader is important to use a reliable and robust trading platform. You will need an Expert Advisor (EA). It allows you to conduct backtesting of your trading strategy before you commit your funds. You will need one that functions effectively on your smartphone and your tablet as well, a versatile platform that works well under Windows, MacOS, and Linux.

A system with 100% success does not exist so that you must not expect any of these systems to get your earnings each and every time. But, while following all the rules you can only end up in the plus!

How to create the first trading strategy?

New traders start to learn trading strategies from other traders. They are mirroring strategies from experienced traders. But, how do they get started with their trading strategy?

Fun fact 1: Creating your first trading strategy is easy.
Fun fact 2: Creating a profitable trading strategy is hard.

Basically, you have to follow some basic steps while formulating your first trading strategy. Building your own can be fun, easy, and surprisingly quick.

But, don’t expect your first trading strategy will make you rich.

So, what you have to do?

Recognize the real reason why you want to enter the market and have principles.

Before you start creating your own trading strategy, you must have an idea of how the market works. Most importantly, you need to answer this question.

How to make money from trading?

To answer this question you have to read and learn about both technical and fundamental analysis. Avoid get-rich-quick offers. Take care of demand and supply. Never have trust in theories that claim that people are perfectly rational.

Your principles will define your every step in the market, so it is very important to stick with it. It will need your full attention. It is an urge to follow one principle in your first trading strategy. Never choose complicated solutions. The simpler, the better. Trade by the KISS rule (Keep It Simple Stupid).

In the beginning, you don’t want to be astounded by a complex strategy. Besides, a trading strategy with more moving parts is harder to manage and improve.

How to choose a market for first trading strategy?

What do you want to trade: Forex, Options, Futures, Equities?

If you want to trade forex, you have to understand what you are buying and selling with a currency quote. You have to learn about the different models of forex brokers. You have to know how the margin is calculated. If you want to trade equities, you must know what a share means or the difference between a blue-chip and penny stock.

There’s a lot to learn about each market but you can not start to learn until you choose your trading market. The rule of thumb is that you must understand the market you choose to trade.

Define a trading frame

Yeah, I know.

It’s not easy to decide on a trading time frame. At first, you will not know if you like more quick scalping or daily swing trading.

Maybe an idea to try intraday trading isn’t bad. You’ll be able to watch the market for long-term periods. But you have to know, when you trade fast time frames, you get fast feedback which shortens your learning period.

If you are not able to watch the market for long-term periods, start with end-of-day charts. With some effort, you can learn enough to decide if swing trading is for you.

What have you to define?

Entry trigger. – It will help you enter the market without hesitation or demur. Both, bar and candlestick patterns are useful triggers. If you prefer indicators, oscillators like the RSI and stochastics are good solutions also.

You have to plan your exit trigger. – The market can go against you, causing you limitless losses. Having a stop-loss option is crucial. You need to plan when to exit if things go wrong and also you need to plan when to exit if things do go your way. The market will not go in your favor always. That’s why you have to know when is the moment to take profits.

Take care about the position size

Set your risk limit. – Once you have your entry and exit rules sorted out, you can work on limiting risk. The basic way to do so is by position sizing. This means that for a certain trading setup, your position size determines how much money you are putting on the line. If you double your position size, and you will double your risk. You should be very careful about your position size.

And it’s time to choose a tool to determine the trend. – You don’t trade when you see a Pin Bar (shortener for ‘Pinocchio Bar,’ a single candlestick set up that clues price action traders into potential reversals in the market). Trade only when the market is rising, and you should use a bullish Pin Bar to trigger your trade. You don’t trade when you see a Gimmee Bar (price action reversal candle formation). Trade only when you conclude that the market is going sideways, and you use a Gimmee Bar to enter the market.

You have to decide on a tool to help you judge the market context, trending or not, up or down. For example, choose price action tools like swing pivots or trend lines. You can also use technical indicators like moving averages and MACD (Moving Average Convergence Divergence).

Write down your first trading plan

Write down your trading rules. – It is always good advice. Your trading strategy is still simple and you might be able to memorize the trading rules. But you must write down your trading rules. If you write down the trading plan you will get a robust and trustworthy method. Just in order to ensure discipline and consistency. It also gives you a record of your trading strategy. You will find it useful when you have to improve it.

When you have written rules, you can backtest the strategy. – When you have a discretionary trading strategy, backtesting can be an arduous process. Discretionary trading is decision-based trading where the trader decides which trades to make based on current market conditions, and system trading is rule-based trading where the trading system decides which trades to make, regardless of current conditions. So, if you have a discretionary trading strategy you need to replay the market price action and record your trades manually.

But if you have a mechanical trading strategy and a coding background, you can speed up this stage. Looking through the trades one by one is a fantastic way to develop your market instincts. This can also help you think of ways to improve your trading strategy.

Should you be worried if the first trading strategy is not profitable?

It’s okay. Your trading strategy is not fixed, it is a living thing. As your experience and knowledge grow, your trading strategy will improve. Try to avoid radical changes to your trading strategy.

Your goal is to achieve a positive expectancy with every trade. Not positive profits for each trade. Statistics have to work for you.

One thing is the most important when you create your first strategy and enter the market for the first time.

Don’t be stubborn on the market. That could be the biggest mistake.

3rd September 2018
What Are The Main Characteristics Of Call Options?

Ways to use call options trading to make money

By Guy Avtalyon

Call options represent a deal between a buyer and a seller to buy a stock at an accepted and agreed price. This agreement lasts up until a fixed expiration date. The buyer has the right, there is no obligation, to exercise the call and purchase the stock. The seller is obliged to deliver the stock if the option is exercised.

What are call options in stocks?

A trader would choose to buy a call option if expects the stock is going to rise in the near future. Some traders buy options rather than to buy a particular share because the options are cheaper than stocks.
Call options are limited by time, of course. They have an expiration date associated with them. The same comes with all options.
What are the main characteristics of call options?
No matter if the options is “call” or “put” the characteristics are the same. Both have three essential characteristics: exercise price, expiration date, and time to expiration.

Call options are a kind of a derivatives contract that gives the buyer the right to buy a stock at a specific price known as the strike price of the option and has to exercise it within a defined time frame. The seller has an obligation to sell the stocks to the buyer if the buyer chooses to exercise the option to make a purchase. There is one requirement that the buyer must fulfill – such has to exercise the option at any time but prior to a named expiration date. The expiration date depends on buyers and seller agreement and may vary from three months to even one year.

The seller will receive the buying price for the option, but the amount depends on how close the option strike price is to the price of the stock at the time the option is bought. Also, on how long is a period of time to the option’s expiry date.
To put a long story short, the options price will vary depending on how possible or not possible is for the buyer to profitably exercise the option before the expiry date.

What is the exercise price of stock options?

The exercise price is the price at which stock can be bought or sold when trading a call or put options.
For example, you own call options for ABC company with an exercise price of $50. The underlying stock is trading at $60. It indicates the call options are trading in the money by $10. So, the exercise price is lower than the current stock.

The call options will give you the right to buy the stock at $50 even it is trading at $60. That allows you to make $10 per share if exercise the option. Your profit would be $10 reduced by the premium or cost you paid to the seller for the option.
But if ABS company is trading at $60, and the strike price of your call option is $65, the situation is quite different. Your option is out of the money. You will not profit if exercise that option because why would you like to pay $65 by using the option if you can buy the stock at a lower price for $60.

How many options contracts you can buy?

Each option contract holds 100 shares of the underlying stock. Buying 2 call options contracts, for example, grants the owner the right, but not the obligation, to buy 200 shares (2 x 100 = 300).
Suppose you think ABC Company stock is going to rise over a specific period of time. You may consider buying as many call options as your budget allows you. In other words, consider the trade amount that your account can support. This means to decide the maximum amount of money you want to use to buy call options.

What is the expiration date?

Options do not last forever. They have an expiration date.

But if the stock closes below the strike price and a call option has not been exercised by the expiration date, it expires worthless. And the trader no longer has the right to buy the underlying asset and the trader loses the premium paid for the option. Most stocks have options contracts that last up to nine months. Traditional options contracts typically expire on the third Friday of each month.

What do we pay when trading the options?

When you buy the stock for the stock price, you buy options for what’s known as the premium.

Premium is the price to buy options. In 100 XY call options example, the premium might be $4 per contract. It means the total cost of buying one XY 100 call option contract would be $400 ($4 premium per contract x 100 shares that the options control x 1 contract = $400). If the premium were $6 per contract, instead of $4, the total cost of buying 2 contracts would be $1,200 ($6 per contract x 100 shares that the options control x 2 total contracts = $1,200).

What orders to use when trading options?

Options prices are constantly changing, like stocks.

So, you may choose the type of trading order with which to purchase some options contract. There are several types of orders, including market, limit, stop-loss, stop-limit, trailing-stop-loss, and trailing-stop-limit.

2nd September 2018
Costa Coffee sold to Coca Cola!

1 min read

Whitbread, a leisure group taking in coffee shops and hotels, said earlier this year it would spin off Costa Coffee and list it as a separate entity, following pressure from activist investor Elliott.

Whitbread has agreed to sell Britain’s biggest coffee chain to Coca-Cola in a £3.9bn deal. On Friday the company said a sale of the business is now “in the best interests of shareholders”.

Whitbread’s stock rose more than 18% in early trading on Friday.

Leisure group Whitbread says sale ‘in best interests of shareholders’.

Profit of this deal will be used to pay down debt and increase the pension fund. Whitbread said it intends to return a majority of net cash proceeds to shareholders.

Earlier this year it was reported that Whitbread has been got close to a potential buyout of Costa Coffee.

The company said the sale of the coffee chain will allow it to focus on its Premier Inn hotels business.

Hospitality group Whitbread is cutting hundreds of management roles, two months after confirming plans to spin off its Costa Coffee business, The UK Independent revealed earlier in July.

The company will let at least 250 managers go as part of a restructuring of its restaurant business, which is held under the Premier Inn brand.

Employees were told about the redundancies but were given no further detail at that time.

But on Friday everything became clear.

Workers have been concerned that job cuts were appearing since the Costa spin-off was announced, and feel that the process has not been handled well by Whitbread, according to a source close to the company.

Chief executive Alison Brittain said: “This transaction is great news for shareholders as it recognizes the strategic value we have developed in the Costa brand and its international growth potential, and accelerates the realization of value for shareholders in cash. This combination will ensure new product development, continued growth in the UK and more rapid expansion overseas.”

Whitbread bought Costa Coffee, which is now the UK’s biggest coffee chain, for just £19m in 1995. when it had only 39 shops and now has more than 2,400 UK coffee shops, as well as some 1,400 outlets in 31 overseas markets. Costa Express has 8,237 vending machines worldwide.

For Coca-Cola, the transaction represents a leap into the global coffee market, where it has little presence, allowing it to diversify away from fizzy and sugary drinks, which have declined in popularity among increasingly health-conscious consumers.

Coca-Cola chief executive James Quincey told investors on a conference call that Costa was “a winning company that can go global”.

He admits that retail sales were a new area for Coca-Cola, but said Costa already had “a strong management team” and that Coca-Cola intended to “make it attractive for them to stay”

Think the Coca-Cola dividend, its stocks provide a remarkable wealth to investors like Warren Buffett.

Risk Disclosure (read carefully!)

1st September 2018
The Barriers to Learning About Stocks and how to avoid them

Be objective, don’t expect the success overnight, have reasonable expectations, think in all probabilities.

By Guy Avtalyon

First of all, never base your decisions on emotions, rumors, or rush to the next hot opportunity. This is one of the most influential barriers to learning about stocks.

You will end up losing money as a result. Some investors despite their problems, continue with the same actions and keep getting the same bad results.
Investors have to remove barriers on their path to success. Otherwise, success will never come. All investors must seek to continuously remove new barriers as they appear.

What kind of barriers to learning about stocks you may have?

Emotions

The fear and greed! Many investors experienced the obscure of ability to rationally consider through an investing opportunity. This leads to poor investment decisions and a loss of money.

For instance, it is in an investor’s best interest to sell high and buy low, investors hate to sell winners and are unwilling to buy out-of-favor stocks. Why so many investors hold winning investments too long? When they fall back, they continue to hold on to them, hoping they will return to their previous highs. They even lie that they will sell if the price returns to the level at which they bought it.

Also, there are investors who hold on to losing investments! Okay, they might be in love but why to hold for so long? They have some hope. If they wait and hold longer, their shares will recover. That might happen never.

They can sell to at least break even, very often such investors become losers. Because their capital is tied up in a losing investment and is unable to produce a return. This reduces account balances and expands stress levels.

Most investors admit that holding investments too long is the mistake that was most detrimental to their success.

Less knowledge

Some investors think if you just buy and sell the right stock, you will always make money.

That’s wrong! Totally mistake! Barriers to learning about stocks!

Sometimes, investors can have less understanding of how markets work. That drives stock prices and successful investing performance.

Also, so many investors tend to overestimate their strength to beat the market. As a result, they take on unnecessary risks. People are often drawn to powerful performance, even when it’s not sustainable.

Many investors follow the hottest sector and don’t have a sufficient understanding of the risks involved.

For instance, investors realize they should not overweight their portfolios with too much money in one investment, but they continue to do so. It isn’t rare that people buy too much stock in the company where they are employed, because the company’s available retirement funds and use of options as a part of their compensation package makes this easy.

Barriers to learning about stocks may leave investors with a portfolio that lacks diversification.

Some other investors don’t understand how bonds work, and they avoid them. Few of them realize that bonds hold a preferred position should a company declare bankruptcy.

Many others don’t realize that when interest rates rise, bond prices go down. When it comes to understanding important concepts such as how a central bank sets interest rates and the yield curve, even fewer investors have sufficient knowledge to make rational decisions.

And more interesting, most investors do not know when to sell a stock that has substantially appreciated. They continue to hold the stock instead of selling part of their position.

In that way, they could capture some of the profit and make capital convenient and available for other investments. They can’t realize that as the price of the stock goes up their portfolio becomes even more unbalanced.

The market has the ability to balance portfolios for investors, sometimes to their astonishment. Many investors are confused by the idea that rebalancing entails selling some of the investments that have performed best and buying more quality stocks that have lagged.

Losing the Bigger Picture

Despite many investors like to say they invest with a long-term perspective, they continue to make decisions based on short-term movements and ideas. Most investors believe that setting long-term goals for such things as buying a home or providing for retirement are important. But still, they fail to establish viable financial plans to do so.

Without these plans, their decisions are decaying. Basing decisions on unpredictable market fluctuations can be very dangerous because there is a good chance that these investors will make the wrong decision. That can obstruct their ability to achieve their long-term goals.

When the investors realize that the market has risen, they pour cash into stocks and mutual funds, trying to grab part of the profit the professionals have realized. When the market puts in a decline, some investors panic and sell close the bottom. And very often, this pattern continues, causing such investors to lose much of their capital.

How to remove barriers to learning about stocks

No matter what your barriers are, it is important to put together and plan to remove them. Here are some steps you can take to eliminate these barriers to your investing success. Experts advise doing this.

* Learn to monitor your performance: Measuring your performance creates a record of what has worked and what has not. This can help you to recognize problems that you repeat. You should record the overall market trend, the sector trend, the reason for making the trade, the exit target, and the trailing stop. Do this for each trade no matter if you sell or buy. This record is very useful in evaluating your investing activities and can be used to identify what barriers you are meeting that obstruct your success.

* After you have measured your actions, you can identify what you have to change: Inspect your past tradings and find patterns that show to barriers to success. Maybe you impulsively buy the next stock without thinking? Does your explanation prove to be wrong most of the time? The key is to identify the investing behavior that inhibits your performance.

Stay focused and avoid barriers

* Stay focused on what you need to change. Like any effort to change behavior, you must remain focused on the actions you take to reinforce the investing behavior you wish to have. If you think you are not focused on how to change your behavior, then take a break from your investing until you recover your focus.

* Determine how you will understand your losses. Keep in mind that losses are part of investing. Learning how to deal with them is one of the most important pieces of successful investing behavior. You have to define what your loss looks like through your stop loss and reasons for the trade. You must accept the loss as part of the trading. Accepting a loss is a trading skill that is a crucial behavior. Making a losing trade ahs to be an acceptable process in your trading strategy, you’ll eliminate the emotion and fear that comes from a loss. You’ll jump to the next opportunity without fear.

* Become an expert at one investing strategy: There are many ways to evaluate the market and select stocks that offer good investment opportunities. Don’t try to understand every perspective on a stock. It is best to get to know one reliable investing strategy. In that way, you will gain confidence in your investing access. This knowledge will form a valid base for your investing. And when you become an expert you can expand your knowledge base by adding a new approach.

Think twice to avoid barriers

* Think in probabilities: The market is in permanent movement. It forces the investor to continually evaluate the risk-reward ratio of each opportunity. You can’t move the market, that’s why you need to rate what is the greatest possibility that will move the market, key sectors and the stocks you are watching. Evaluating what is most possible to happen in the sense of probabilities could help you to make a valid investing estimation.

* Learn how to be objective: Many investors want to believe that the market will do what they think it should do, rather than what it actually does. Any limits you place on the market will usually turn out to be wrong. The market does what the market does. Investors are best served if they maintain an objective perspective. If you are neutral, then you will not feel any pressure to move quickly. You will not be afraid to make an investment decision. And the most important, you will not force your opinion on the market, but rather sense what the market is trying to tell you.

Do not expect this to happen overnight. Removing the barrier is a long-term process. But if you have a defined plan, you will be able to create a program to remove the barriers that keep you from achieving success as an investor.

31st August 2018
How To Start Trading?
Trading the stock market is easy if you know how to start.

By Guy Avtalyon

How to start trading? First of all, never do it on your own. Ask to be advised by some experts. It is always best to access a financial advisor who will tell you how you should invest or trade, established in your financial situation, and risk appetite. Talk to others who invest.
Read books, journals, and newspapers for recommendations. You can talk to your stockbroker for advice but don’t listen to everything he says.
Always take a second opinion as brokers might have vested interests. In the beginning, it is best to go for known brands and big companies that have a good business status.

What do you need to know before you start trading?

Without knowledge, you may feel lost. Let’s make clear the basics because you’ve decided to join the crazy world of trading stocks and shares.
You have to know that shareholders usually have a right to vote at company conferences.

Of course, if you own just one of the three billion Facebook shares don’t expect Mark Zuckerberg to listen to your ideas!
Another thing you need to know is that a company’s shares are indivisible.

You cannot buy fewer than one share.

Shares were pieces of paper that shareholders kept in a safe but since the ‘90s, this all changed to virtual shares. Before you start trading stocks, you have to buy them! You can do this in many different but easy ways.

Some companies allow you to buy their shares directly from them but If you can’t purchase the shares directly or you’re not sure which company to invest in, ask your bank. Also, banks offer an online trading service connected to your existing accounts.

Ask your bank to see if this option is possible. If your bank doesn’t offer a trading service, you can buy shares through a brokerage company. You can find many of trusty brokerages, just do a search. But be cautious. Never pick the first you find, read some reviews, ask around, visit forums.

Brokers buy and sell securities in exchange for a commission. You can set up a simple brokerage account online or hire a so-called ‘full-service broker’ who will trade stocks on your behalf. They can be a consultant or advisor for you. This will cost a little more but it is worth it because you know nothing about shares or stocks or trading or investing.

How to start trading?

So, you want to start trading stocks or CFDs, but you have always remembered three things:
1. Never invest more money than you can afford to lose. With shares and CFDs, there is a risk of losing all the money you have invested.
2. Follow your head, not your heart. Your heart will always pull you towards certain stocks. Stop and think. Only invest in companies that seem able to grow their profits, despite your emotions.
3. Never invest your savings in just one company. ‘Never put all your eggs in one basket,’ as the mantra goes. Place your investments across many different companies.
This way, you’ll significantly decrease the risk of loss, and increase the chance to multiply your investment.

When you set up your online broker account, simply take the leap and make your first trade.

Start with small, 1, 10, or 20 shares that will serve its purpose and bring you in the game.

If trading with real capital isn’t viable, start with a simulator for virtual trading. Numbers of different online brokers offer virtual trading for practicing and learning.

It’s too easy to lose money in a stock exchange, so start with a virtual where the money is virtual, but the stocks, stock prices, are real. Maybe the best way is to start your trading journey with virtual money, understand how they are performing, recognize when you can sell them, is it the right time, etc.

Before you start putting your real money, you would learn the tricks of the trade with virtual money. Take it slow. You’ll need time to understand everything. Not even the most experienced traders know everything. Most important for beginners in trading is to have a trading plan, trading strategy, and to stick to them. Also, never forget to keep up your trading journal. That is an amazing tool. Add to it all your entries, exits, price of assets you trade, at which price you bought it, and at which you sold it. That will provide you a full picture of how successful your trades were. Do it with virtual trading in a demo account, also.
28th August 2018
Call options -How to sell & write

4 min read

Call options are an investment contract in which a fee is paid for the right to buy or sell shares at a future date. When we are talking about writing a put or call option we are speaking about an investment contract in which a fee is paid for the right to buy or sell shares at a future date.

Put and call options for stocks are typically sold in lots of 100 shares.

A little review of history.

The origins of writing an option date back to ancient times. Don’t think it is something new. Aristotle, the Greek philosopher, recorded an early example of options trading in his ”Politics”.

The philosopher and mathematician Thales of Miletus studied astronomy as a way to predict olive harvests for his region. Thales believed there would be a coming bountiful olive harvest. But did not have the money to buy his own olive presses. So instead paid a fee for the right to access the olive presses of others.

Do you see? This was the first options contract.

So, writing a call option means that you are selling a call option. If you sell a call (also known as a “short call”) then you are obliged to sell stock at the strike price.

Typically, a call is sold against long stock.

When you buy some option $400 call option that you have the right to buy 100 shares of some company at $400.

And maybe you asked yourself the question “who exactly am I buying it from?”

To have the right to buy the stock at the strike price, somebody has had to take the other side of that transaction and agreed to give you the right to buy it.

The ones that take the opposite side of the call option buyer are the “call option sellers.” And sometimes they are known as “call option writers”.

When you BUY call options, you bought it from someone.

That means that someone is giving you the rights to buy the underlying stock at the strike price by selling you that option.

The act of CREATING and SELLING that call options contract to you by that person is the act of WRITING a call option.

In execution, this means opening a call options position using the SELL TO OPEN order.

When you do that, you create a new call options contract for trading in the options market and that is known as “Write” a call options contract because you are exactly “writing it up”.

Selling options, whether Calls or Puts, is a popular trading technique to increase the returns on the portfolio.

Selling Premium can prove successful when performed on a selective basis. But, if you don’t follow some specific guidelines, your long-term prospect of profitability is doubtful.

Selling options for Income can be debatable because you don’t know are you making money with your options trading. When you take a look in your overall portfolio it can be difficult to measure each transaction success.

But in this environment is yield-seeking, and selling options is a strategy designed to generate current income.

Selling options is a bit more complex than buying options.

That can involve extra risk. If sold options expire worthlessly, the seller gets to keep the money received for selling them.

To be clear with more details.

There are two types of call option selling.

If you bought a call option and the price has gone up you can always just sell the call on the open market. This type of transaction is called a “Sell to Close” transaction because you are selling a position that you currently have.

If you do not currently own the call option, but rather you are creating a new option contract and selling someone the right to buy the stock from you, then this is called “Sell to Open“, “Writing an Option“, or sometimes just “Selling an Option.”

Writing or selling a call option is when you give the buyer of the call option the right to buy a stock from you at a certain price by a certain date. Simpler, the seller (also known as the writer) of the call option can be forced to sell a stock at the strike price. The seller of the call receives the premium that the buyer of the call option pays. If the seller of the call owns the underlying stock, then it is called “writing a covered call.” If the seller of the call does NOT own the underlying stock, then it is called “writing a naked call.” A covered call enables you to own a stock with unlimited downside risk and collect a premium for the call you sold.

When you sell a covered call you are actually selling a synthetic put.

If you are not comfy selling naked puts, then you should not be comfy selling a covered call. It is exactly the same as selling a put.

If you are comfortable with the covered call, then there are numerous factors to analyze when entering any options position.

Now, it is convenient to look at what factors can make a trade more likely to be profitable than another.

At the top of any list is liquidity or the percentage of the difference between the bid and ask.
If you are giving away too great a percentage to the market-makers or algorithms, then the costs of entering the transaction are too high.

You should look to trade an options contract that has a bid/ask spread of less than 1.5%. Always consider that the more you give away to the bid/ask spread, not only entering but exiting the transaction.

Well, this may prove difficult at times, but it isn’t easy to make money.

Besides this, all trade evaluations must consider the cost of commissions. While all of these costs make profitable trading that much more difficult, they must be included in your analysis.

You should consider the relative strength index of the underlying, extreme conditions tend to provide more interesting trading opportunities.

A seller is obligated to buy or sell an underlying security at a specified strike price if the buyer chooses to exercise the option.

There must be a seller for every option buyer.

There are several resolutions that must be made before selling options:

1) What security to sell options on
2) The type of option (call or put)
3) The type of order (market, limit, stop-loss, stop-limit, trailing-stop-loss, or trailing-stop-limit)
4) Trade amount that can be supported
5) The number of options to sell
6) The expiration month

When all this information is collected, a trader goes into the brokerage account, select security and go to an options chain. Once an option has been selected, the trader goes to the options trade ticket. Then enter a sell to open order to sell options and makes the appropriate selections to place the order.

Here are the key things you should remember with respect to buying and selling call options.

You buy a call option only when you are bullish about the underlying asset.

Upon expiry, the call option will be profitable only if the underlying has moved over and above the strike price. Buying a call option is also referred to as ‘Long on a Call Option’ or simply ‘Long Call’. To buy a call option you need to pay a premium to the option writer.

The call option buyer has a limited risk (to the extent of the premium paid) and a potential to make an unlimited profit. The breakeven point is the point at which the call option buyer neither makes money nor experiences a loss.

P&L = Max [0, (Spot Price – Strike Price)] – Premium Paid
Breakeven point = Strike Price + Premium Paid
When you sell a call option (also called option writing) only when you believe that upon expiry, the underlying asset will not increase beyond the strike price.

Selling a call option is also called ‘Shorting a call option’ or simply ‘Short Call’.

When you sell a call option you receive the premium amount. The profit of an option seller is restricted to the premium he receives, however his loss is potentially unlimited.

The breakdown point is the point at which the call option seller gives up all the premium he has made, which means he is neither making money nor is losing money.

Since short option position carries unlimited risk, he is required to deposit margin. Margins in case of short options are similar to futures margin.

P&L = Premium – Max [0, (Spot Price – Strike Price)]
Breakdown point = Strike Price + Premium Received
When you are bullish on a stock you can either buy the stock in the spot, buy its futures, or buy a call option.

When you are bearish on a stock you can either sell the stock in the spot (although on an intraday basis), short futures, or short a call option.

The calculation of the intrinsic value for the call option is standard, it does not change based on whether you are an option buyer/ seller.

You sell a call option when you are bearish on a stock.

When you sell a call option you receive a premium.

Selling a call option requires you to deposit a margin.

When you sell a call option your profit is limited to the extent of the premium you receive and your loss can potentially be unlimited.

Nothing more, nothing less.

Risk Disclosure (read carefully!)

27th August 2018
Steve Wozniak will join a cryptocurrency startup called Equi Capital

1 min read

Apple Inc. (AAPL) co-founder Steve Wozniak, according to some media, will join a cryptocurrency startup called Equi Capital, concentrated on investments in the digital token collection. Coindesk, www.coindesk.com, reported: ”Speaking to Null Transaction, the bitcoin proponent said this is the first time he has worked with a blockchain company in his career, adding that he ‘was amazed at the technology behind [cryptocurrency]’.”

Equi aims to act as an investment firm, Wozniak said.

According to the startup’s Twitter page, it hopes to help both retail and professional investors purchase equity in companies in an effort to replace traditional investing firms.

Steve Wozniak said:

“Our approach is not like a new currency, or something phony where an event will make it go up in value. It’s a share of stock, in a company. This company is doing investment by investors with huge track records in good investments in things like apartment buildings in Dubai. We have one person in our group who has listed out a whole apartment building for bitcoin.”

Wozniak did not provide details on what his role would be at the startup but he did indicate that the company may register in Malta. Malta is a well-known area which has been working to develop a friendly regulatory environment aimed to attract firms in the blockchain and cryptocurrency space.

Continuing to promote the potential use cases for blockchain technology, Steve Wozniak said, “I’ve encountered people working in real estate avenues, types of Uber systems, everything we’ve got in our life, especially involving transactions – retail sales, car sales, manufacturing of goods … working on bitcoin applications … and they all have value.”

The tech guru’s choice of first crypto project is a bit surprising.

As reported by The Next Web, Equi has had a pretty rough path so far. At first, they were launching its token via ICO. But because of lack of interest, the sale was canceled and pre-sale investors were refunded.

A follow-up bounty scheme to reward users with tokens for publicizing the project also saw major issues when a partner marketing company soon walked away, indicates the news source. Going the bounty route also raises the thorny issue, according to CoinDesk, that the U.S. Securities and Exchange Commission has indicated that even giving away tokens may break securities rules.

Note: During the weekend, Bitcoin, a cryptocurrency leader, was trading above $6,700 at the time of this writing. The most popular and largest cryptocurrency in the world, the past week showed signs of upward impulse and return to the stability at this price point. Other digital currencies were trading laterally.

Ethereum reached $280, Litecoin was a trading bit under $58 per token.

Risk Disclosure (read carefully!)

26th August 2018
Apple is charging their batteries with Tesla’s employees

2 min read

The personnel flow has been going from Tesla Inc to Apple Inc, the iPhone maker has poached at least 46 employees from Tesla in 2018!

Elon Musk called Apple ”Tesla graveyard”, as his employees are being poached by Apple.

Dozens of current and former Tesla employees have left for Apple since late 2017, according to research conducted by CNBC.

Back in 2015, Tesla CEO Elon Musk said that Apple serves as the “Tesla graveyard” for staff that left or was no longer needed. “if you don’t make it at Tesla, you go work at Apple.”

But Apple Inc seems to have decided to show him that it is a furious playground.

According to several current and former Tesla employees and LinkedIn data, manufacturing, security and software engineers, and, more recently, supply chain experts, are now at Apple.

The Tesla employees that have left Tesla have joined various departments at Apple, not only Project Titan, Apple car development endeavor. And, they are reportedly working on “display, optics, and battery-tech” for the myriad of mobile devices that Apple makes. Apple seems to have employed no less than 46 people that used to work for Tesla since the beginning of 2018.

According to a current Tesla employee who kept in touch with former colleagues, Apple appears to be placing renewed emphasis on manufacturing processes and equipment, the report said.

The company outsources production to firms like Foxconn, but still offers input on new processes and techniques, as well as other areas of manufacture.

Apple is paying bigger salaries than Tesla

Apple can afford to pay 150% of the salaries that Tesla doles out. Multiple sources told CNBC that Apple pays about one-and-a-half times the salary for technicians, software, and manufacturing engineers compared to Tesla. That might be one of the reasons that high-profile talent like Tesla’s VP of engineering Doug Field is now back at Apple, after a few years at the electric car-maker. Apple has hired former Tesla Autopilot, QA, Powertrain, mechanical design and firmware engineers, and several global supply chain managers too. Some employees joined directly from Tesla, while others had been dismissed or laid off before joining Apple.

One Tesla engineer, as their spokesperson, commented on Apple’s poaching that Tesla must be comparatively poor, but work is more meaningful:

”We wish them well. Tesla is the hard path. We have 100 times less money than Apple, so of course they can afford to pay more. We are in extremely difficult battles against entrenched auto companies that make 100 times more cars than we did last year, so of course this is very hard work. We don’t even have money for advertising or endorsements or discounts, so must survive on the quality of our products alone. Nonetheless, we believe in our mission and that it is worth the sacrifice of time and the never-ending barrage of negativity by those who wish us ill. So it goes.”

Runaways from Tesla to Apple

And CNBC reports that the company from Cupertino is on a hiring spree, poaching “scores” of ex-Tesla employees for a variety of projects, citing better pay at the iPhone giant.

All sources come from LinkedIn profiles. Doug Field, a high profile executive who oversaw engineering for the Tesla Model 3 hasn’t updated his profile at that time. The Wall Street Journal reported earlier this year he planned to take a “six-week sabbatical.” But this month it came out that he took a job at Apple. That means he is returning to the company he had worked for before Tesla. How things look now, Field is working on Project Titan, Apple’s car project. Apple has a team of at least a few hundreds working on autonomous vehicles, with test vehicles driving on streets of California these days.

Tesla’s employees say that, even before Field left, they saw more colleagues voluntarily leaving than they had in prior years at Tesla.

Tesla disputes that more people are leaving than in recent years and says the data does not back it up. The company told CNBC that voluntary attrition has decreased by one-third over the last twelve months, and noted that it has recently added talent from Apple and other companies.

But the truth seems to be somewhere else.

A former Tesla vehicle engineer who was laid off by the company in June said that stock options at Apple would probably be more attractive than they are at Tesla during a rocky time. Many employees at Tesla already sell their options as soon as they are able to in order to make up for the relatively average salaries and the high cost of living around Silicon Valley, he said.

Maybe the panic caused by a large number of employees leaving Tesla and going to Apple has caused Musk to tweet on August 7th that he is considering taking Tesla company private at $420 per share buyout and that he has secured the funding needed to do so.

Tesla has had a turbulent year, with controversies on daily bases, and the stock options that Tesla employees receive may be less desirable given the stock’s volatile price. Compared to Apple, which became the first company to be valued over $1 trillion earlier this month, Tesla is not giant.

Risk Disclosure (read carefully!)

24th August 2018
Is Elon Musk In Trouble?

1 min read

Short of it would be that Elon Musk is in trouble. Long, that he’s really really in trouble.

It all started on August 7th when he tweeted that he is considering taking Tesla company private at $420 per share buyout and that he has secured the funding needed to do so. From there the things just snowballed. First, the price of Tesla stocks sharply raised to $379 from $341, then short-sellers started voicing their concern that Musk has attempted to manipulate the price of stocks of his company in an effort to hurt them financially and the USA Security and Exchange Commission has started an inquiry into his tweets.

Elon Musk – The naughty guy in the world of white collars

But the Musk’s troubles do not end here. In a bit longer Instagram story, of which post is now deleted, rapper Azealia Banks claimed that she witnessed over the weekend after 7th August, while visiting her Canadian colleague and Musk’s girlfriend Grimes, entrepreneur’s meltdown and him being scolded by Grimes for tweeting about the buyout while under the influence of LSD. That tale continued with a bizarre string of posts made by Banks in which she demands from Musk to return her phone so she could retrieve her “quality nudes” and go home. A phone which allegedly Musk’s lawyer blackmailed her and paid off her lawyer into handing over to “delete evidence”.

The tweet is a trick?

Elon Musk is known for taunting short-sellers on Twitter, and many of them observe the situation with that knowledge in mind. In the light of that fact they are seeing the tweet about taking Tesla private, and some have decided to file a class action suit against Musk as they see this tweet as a securities fraud. Such also may be the conclusion of the SEC investigation, but with the regulators being customarily tight-lipped about their investigations we may wait up to a couple of years before finding out whether they will take any legal actions against Musk or not. For now, the only thing which can be concluded about it is that SEC is under great public pressure to take legal action against Musk.

Whole this time Musk did not sit idle. He has already given a lengthy interview to the New York Times defending his actions. Going as far as to claim that he just added customarily 20% premium on top of the then current price and that he just rounded it up and came up with $420 per share. And that it has nothing to do with marihuana and drugs sub-culture iconography. He self-effacingly lambasted own over-reliance of automatization of production as the reason for not meeting the production goals. Also in recent days, there was a deluge of articles and op-eds written in big financial media glorifying Musk’s work ethics and lamenting about his pains of having to work on his own birthday. Alas, Musk might be an entrepreneurial genius but the math is not his stronger suit as 120% of $341 is not $419 as he claims.

What will happen with Elon Musk and Tesla we will find out in the future, for now, one can only see this tale as a cautionary one.

Kids do not do drugs, and if you do them do not mix them with social networks.

Risk Disclosure (read carefully!)

23rd August 2018