Mid day update: 30th November 2015

Will keep this short as I am not in the best of moods, had my share of trolls today after posting on Etoro again. Big mistake from me, never again.

On to the account:
All trade ideas today worked with exceptional success. 2 trades closed with good profit.
1 trade closed with a small 3% profit.
This was the AUDUSD, I thought the sell position would fall more but it did not, in hindsight I should have TP at 0.7170 but I made a mistake. I closed as I think mid week the AUD will turn firm as I think the RBA will hold rates and Aussie GDP will be firm. Therefore, I closed at a small profit rather than risk my team being dragged into the red.

This far, at the time of writing this, overall equity of the account is up by 3.5% today, so its been a good start to the week. I am eager to chase more profit, despite it being the end of the month and smashing our 20% target this month, as always if opportunity presents itself, we will go for it!

As you all know, we have more trade ideas for tomorrow which we will act on, but for the rest of today, we shall wait to see what opportunities the US trading session bring us.

Will try to post more when I am felling more like it. Thanks for understanding,

Mohammed

Our Alternative Trading Platform

So as many of you know, I have been checking for supplementary platforms to complement our social trading. I tried many platforms over the last month, as many of you who followed my experiment on the forum will know. It took a long time because I wanted a platform that would offer features that would be good for this group. In order to meet these requirements a platform had to:

1.) Be regulated and trustworthy.
2.) Not have massive deposit conditions.
3.) Have multiple platforms and instruments.
4.) Be simply to deposit, confirm id and withdraw.
5.) Be reliable and not have down time.
6.) Have negative balance protection.
7.) Have competitive spreads.
8.) Have a responsive support team.
If any of these conditions were not satisfied, I failed it from the list and moved on to the next one.

I am happy to say that after lots of trial and error, I found the perfect platform for us and it meet all the above conditions:

1.) Be regulated and trustworthy:

Plus500 Ltd is listed on the AIM, section of the London Stock Exchange as you can see here: (http://www.plus500.com/Investors/Investors.aspx)’. It is also regulated by the Financial Conduct Authority. This is very reassuring.

2.) Not have massive deposit conditions.

You can deposit varying amounts from $100 to several thousands. This makes it suitable for all of us, as I know that our budgets vary greatly in the group.

3.) Have multiple platforms and instruments.

There are excellent feature rich products for PC, tables and phones. These platforms are also more reliable than the ones we are used to. They do not lag and do not give login errors. They have charts that stream along side your trades in real time that can even have technical indicators added to them. All of this on your mobile. Brilliant!

There are multiple CFDs available encompassing emerging currencies, global equities from most stock markets(e.g. Individual polish companies). There is also every type of commodity you can imagine, from both types of oil, gas (which we are going to have a special section of the forum dedicated to), cotton, iron etc. You name it, chances are they have it. This is very important as it means we can capitalize on every opportunity and we are not limited to just a few choices.

4.) It is simple to deposit, confirm id and withdraw.

Deposit is simple, from Credit Card, Paypal or Skrill and is instant (I did not try the Wire Transer option, so I do not know how fast it is.)

To confirm your ID is very easy and took only two days to get it all approved.

Withdrawal had no fees and took 4 days (actually took less than 3, but had 4 written in the draft). One day to be approved and 3 days to arrive. Of note, they refund your money to the source of deposit. They say they do this to comply with Anti-Money Laundering, which is required of them since they are regulated. This is a bonus in my book as it protects your account from theft at the same time.

5.) Be reliable and not have down time.

The systems have never lagged on me. I see prices (tick) in real time and they are accurate.

6.) Have negative balance protection.

You can not lose more than your deposit. This means that you know fully the extent of the financial commitment that you are getting yourself into, should it all go wrong.

7.) Have competitive spreads.

3 for oil, 2 for EURUSD etc. Its not the greatest, but its better than what we use socially. I do not think I need to say more on this.

8.) Have a responsive support team.

Whenever I have a query, the support team has gotten back the same day and with an answer and a solution. It was a personal response, not a generic email. This makes me feel valued as a customer but also means I know that if something goes wrong, I can get in touch with a human being (not an autoresponder) who actually solves the problem.

In addition to all of this, there were two features that I thought were absolutely excellent:

A.) Guaranteed Order and Stop:

The orders have guaranteed entry and exit points. This is amazing. Imagine no longer losing more than you wanted because the market blazes past your SL, or orders not being opened as a result of this. This is amazing control and is something long overdue. I wish Etoro had this.

B.) Trailing Profit:

Automatically moving SL’s to lock in profit so you are protected from spikes.

Conclusion:

Therefore I have no hesitation in announcing to you that the platform I pick for us to complement our Etoro adventure is Plus500. The time spent finding this platform was totally worth it, and I am glad to be able to recommend this to the community. Of course remember, as you trade on your own or with advice of the group, your capital is at risk and this platform is more suitable for those who have experience of trading alone. You can create an account at Plus500 today by signing up below.

 

Plus500 Trading Platform

 

Unlike Etoro, there is no social aspect to this platform. Its just reliable, available to all and covers A LOT of markets and that is the point. Eventually in a year or two, everyone here is going to be vastly more experienced. Each one of us can cover a pair or niche and support each other, discuss etc. I do not think that given enough motivation and effort from everyone and patience and willingness to learn this an impossible task. We can do THIS! Then everyone can decide what they want to invest in, how much. The point is that we will be organised, effective and very broad in our expertise and we should not be limited by having only a few trade choices or having unreliable programs. Ideally, the end game plan here is to use both Etoro and Plus500.

1.) We have a social account all together on Etoro where we compound for 2 years and leave to grow.
2.) We have individual accounts with Plus500 where we trade many more CFDs. This can be each persons individual “pocket money”.

Either way, I am happy with this and think that we have the ideal solution.

Regulatory bodies (So you know we can trust them):

Plus500UK LTD is authorised and regulated by the Financial Conduct Authority.
Plus500 CY LTD is authorised and regulated by the Cyprus Securities and Exchange Commission.
Plus500 AU LTD is regulated by Australian Securities and investments Commission – Australia only

Honesty Disclaimer:

As many of you know, I am not after this for personal gain. I declined multiple invitations from Etoro to join their popular investor program and multiple commission deals from other brokers who wanted me to refer people to them. Quite frankly, I do not believe in misleading those who trust me for personal gain.

I wish to make two things clear. I am referring this platform after trying it and many others because I believe it to be the most suitable for our purposes based on the criteria above. However, it does have a referral program where I get a small bonus added to my balance if people sign up using my link and I figured since people are going to sign up anyway, why not claim the bonus. Better than letting it go to a billion dollar stock trading company right? I hope none of you will blame me for this, I am being fully honest and transparent about it in public here.

Weekly Scenarios for Week starting Monday 30th November 2015

First I wish to say to maxfaye1 Happy Birthday.

Second I wish to highlight the events of the following week for you:

In Europe:

General consensus is that ECB will at the very least lower the overnight deposit rate from -0.2 to -0.3% thereby forcing banks to increase their volume of loans. The Euro is very likely to be sold off in with this in mind and Draghi’s comments that the ECB will “do whatever it takes to bring inflation to its target” still fresh in the mind of investors.

In the US:
At the same time, US has its NFPs out on Friday, and the number is expected to be firm at 200k. However, it is becoming apparent that now even if the number is not firm, it would have to be a disaster to make the FED delay its rate hike. So even if it slightly dissapoints at the end of the week

In Australia:
The RBA is likely to hold rates (I deduce this from reading their monetary policy and hearing their members speak, no further rate hike ), and the countries GDP is expected to be firm showing 0.7% growth for the quarter and 2.3% growth year on year, this will support it towards the end of the week.

In China:
PMIs are out early in the week and should they dissapoint, it should give risk aversion in the market a strong boost, thereby boosting the JPY (This could also happen if Russia and Turkey continue to have their war or words).

In Canada:
The bank of Canada are expected to hold, on top of that GDP is expected to show 2.3% quarter on quarter growth. Expect CAD strength this week as highly probable.

Trade ideas:

4 new ones this week, might post on forum. Maybe, maybe not. Still inner conflict over this one.

But will say this for the good of the community, EURUSD will be VERY volatile this week. If Draghi doesn’t make the markets happy, expect a massive jump. If he makes them happy, expect a dive towards 1.0450 or lower. Friday could also be chaotic for this one. Trade with caution and Good luck everyone.

Lesson 6: Where to trade?

After polls on the forums, it appears that the group wanted a combination of practical and theoretical material for its next lesson. This will cover the theoretical part. I did write this yesterday (Saturday 28th of November 2015) before I decided not to release any more material. However seeing it sit in my documents folder, it seemed a pity to let it go to waste so I’m releasing it for the benefit of the community hoping that someone somewhere may at least gain some benefit from it.

At this point, you should have completed the foundation lessons and therefore you will have a good understanding of the fundamentals and a decent understanding of risk versus reward and money management. In effect, you are ready to start putting your book knowledge into practice in the real world and slowly building confidence and slowly learning. At the end of the day, the best way for you to learn is from experience. Unfortunately there is no substitution to this. Anyone who tells you otherwise is very mistaken.

Now I can try to tell you some of the different types of trading that are available to you. Specifically for you. Please understand that I’m not trying to tell you what you can and cannot do, however I’m trying to save you time. I do not wish you to try many conventional ways of trading only to be discouraged by the tiny to minuscule gains that you will receive. You see this is the part where it is going to become awkward for me, quite simply because I’m going to jump to a few assumptions about my readership and these assumptions may be wrong in some cases and may be construed as offensive in others, however I suspect that in many of the cases I am spot-on.

If you are following me on Etoro and reading this blog, chances are that you are trading for wealth generation for either savings later down the line or quite simply you want an additional stream of income to supplement your ordinary streams of income. In short in all likelihood you are not a rich individual who is trading with large amounts and have started with small to modest seed capital (i.e. hundreds or thousands).

One thing you have to realise about investment is the more you put in the more you get out. Since you’re starting with small amounts of capital and you want to achieve larger than ordinary gains (effectively having your capital earned for you at a market beating rate), you have to rely on leverage.

For example let us assume that you have $1000 and you want this to grow by 5% in one week. Assume that you invested this all (never a good idea but for this example we will assume this) in a buy of a single pair which we call USD/Random. Assume this pair currently has a rate of 1.0000

If you used no leverage, you would need this pair to increase up to 1.0500 in order to achieve your 5% gain. That is 500 pips in that week. While it is possible for this to happen, it rarely happens and is not very likely to repeat itself often when it does.

If you used 50X leverage ( like we mostly do on our social account on Etoro) you would need it go increase to only 1.0010 or 10 pips to realise such a gain. This is very likely, as no doubt you’ve seen us do this very often. Of course on the other side of this, with increased reward also comes increased risk but this is part of the game that you will know you have to accept. You cannot realistically expect to see gains of 100% with the risks of only 1%. At least not in this world.

Therefore since leverage applies to you, there are three methods of trading that I suggest:

1.) Your nest egg: This can be your social account that you leave alone on Etoro with gains compounding over time and building to a respectable amount.
2.) Your pocket money: This you can effectively do via contracts for differences. This is where you place larger orders (leveraged orders) and the amount gained or lost is the difference in value between the contract at the opening point and the closing point. Fortunately since you only need to place a small amount and cover the margin fees, you can conduct deals for several thousands with much less money and therefore profit greatly. This is useful for people that want something in addition to their nest egg, because let’s face it it does feel a bit better if you have the opportunity to touch and spend some of your money from time to time. After all, it’s all very great to say that we can be disciplined and not touch the nest egg, however how many of us legitimately have the self-control to leave money on touched for a year or two? How many of us might need the money a little sooner? We will have a lot of trade ideas for CFDs on the forum soon (keep an eye out for this), with many of you also contributing your ideas. You will be amazed at how successful you can be, you will surprise yourselves, and if things go wrong, what you have learned about strict money management will come through and save you.

3.) Options: an option is a purchase of the right to execute a trade at a given point in the future. It can either be put (sell) or call (buy). These can be highly profitable and have a smaller risk since if the deal does not work in your favour, you don’t have to exercise the option and you can simply let it expire thereby only losing the smaller amount of the reservation price. For example purchase the option to sell (put) 50,000 units of EURUSD in one hour from now. If the price of the pair has gone down, then you have profited. If it doesn’t go down, then you have only lost the price of the option which would be significantly smaller than but cost you would lose if you conducted a conventional trade. For this reason options are also a good way of protecting large positions as an insurance (hedge). We will cover this in more detail in a later lesson.

Now ideally at this point many of you have already completed your foundation test and are showing a much greater understanding for the fundamentals that drive the market. Even better, many of you are participating in debates on the forums and formulating your trade ideas. Ideas in which you are confident enough to follow through and from what I can see so far they are mostly profitable. Ask yourself, could you have seen yourself doing this just 3 weeks ago? Be honest! Keep up this enthusiasm, trade in the right places and manage your money well and over time you will see results become even more rewarding, building up more confidence, improving your understanding even further and coming closer and closer to realising your dream. Everybody started in your position once. Remember that every time you become discouraged.

Now that you know what sort of platforms to use and you have a basic fundamental knowledge, all future lessons will focus solely on trading. No more boring theory people. I promise. Well done on making it this far!

P.s. After posting this, I am really itching to go on and finish what I started. I want to try and build this community the way I envisioned, but I really can not do it if I have members going against me every step of the way. As a community, we were built on being transparent, having integrity and above all we have to respect for facts. When people start challenging that and standing up for people who abuse those who rely on them, then it all falls apart. Nothing is more painful that seeing your people defend the actions of guys who tried to do to others everything that you are against. Seeing that thrown in your face twice on your own forum. Really made me sick. Honestly do not know if I am going to go back to posting there after that.

Not posting on my forum anymore will only trade on Etoro

You spend ages of your time completely free trying to help people. You spend months fixing the damage done to their accounts by people who scammed them. What do you get in return? People counteracting what you try to do and instead of spending time reading up on the help you give them, they treat you like Siri and defend some of these leeches. 

Not wasting anymore time on that forum. Not wasting anymore hours typing free lessons for you, because less than 10% of you deserve them. The rest of you treat me like a cash cow or Siri app with No Respect. From now on will focus on trading and updating copiers from here only.

And instead of spending countless hours of my time helping a community that does not deserve it, i will spend it doing volunteer work or something better.

End of week update: Saturday 28th November 2015

Well it is the end of another week and time to report on what I did with our money and our community. Just to be clear, I do consider them both OURS and not MINE.

Trading:

Well to start with, many things went wrong for us this week:

Firstly, the JPY strengthened due to a haven bid after Turkey shot down a Russian jet and a war of words began.

Secondly, our USDCAD buy order at 1.3285 just missed out by 4 pips. It currently sits at 1.3370, so unfortunately we missed out on 85 pips there.

Thirdly, due to the US holiday, we had a quiet finish to the week.

In spite of all of this I am happy to report that this week, we made a profit with overall account equity (withdrawable cash) increasing by 5%. This bring our total for the month to over 72%, which is more than 350% of our 20% monthly target and means that this week we have made several hundreds of thousands of dollars for our copiers. That in my opinion is a great achievement given the amount of investors who had had catastrophic losses this month.

So in short, the account is very healthy, and growing(in real terms and balance terms) and we continue to surpass our targets. I am delighted with our progress on the trading side.

Community:

With regards to our community, I could not be prouder. The foundation graduates continue to debate strategies amongst themselves and are improving. Evidence of this is apparent in the fact that many of them are opening their own trades with a high degree of success and profitability. I could not be prouder of them.

Also posting less on Etoro has been spiritually good for me, as I do not encounter spam or trolling as much and yet I am still able to interact with my copiers effectively. I feel this has improved my clarity of thought, so I will continue to communicate via the blog and forums instead of via my Etoro wall.

Also will maybe try to make this site a little prettier as well, since many people are using it regularly now.

Next Week:

Next week will bring many opportunities and we will enter new trades (will be posted on the forum on Sunday night as usual).
There are key economic events that we should be mindful of including (So all of you check your economic calendars). For example, just off the top of my head, I can recall:

Australian GDP
Australian Interest Rate Decision
Chinese PMIs
ECB meeting on Wednesday
Non-Farm Payrolls on Friday

Will be using a secondary platform in addition to Etoro to trade securities that Etoro does not feature. Will share details when the community and I finalize our choice. A draft of the post seems to have been sent to some people by accident, (the subscribers). Please do not sign up for it yet. The draft has been prepared along side my forum post to save me time in future (I am very busy these days) and while I made the withdrawal request and it was approved with no fees, it will take up to 4 days to arrive. Before I publish it properly, I want to make sure that all goes smoothly, otherwise if something goes wrong, I will feel responsible.

Finally, let me thank you all for taking the time to read my thoughts and wish you all an excellent weekend.

Update: Markets still quiet

So just another update, because I am very bored. The markets are still quiet. We will continue to hold as we go into next week.

The Sterling fell today, as GDP was not revised upwards from its preliminary of 2.3% year on year, dashing market hopes that the UK economy grew firmer. So once again it seems this week has been a painful one for the sterling bulls. Next week, with the US back from their holiday, it looks like it can be even more painful.

Will have some new trade ideas for you all on the forum on Sunday afternoon and will post our weekly summary later today or tomorrow.

P.S. A surprise to all on this adventure, as many of you know I have been getting somewhere with one of the new platforms, hopefully by next week will be ready to share all with everyone. But I think its going to be an excellent supplement to Etoro, which will continue to be the only social trading I do.
This additional platform will enable me to trade securities not offered on Etoro, e.g. Natural Gas and it will allow people to expand their learning exponentially on the forums as they discuss countless other currencies and commodities. (Wonder who will be the first one to start debating the price of cotton). I actually have a draft already written and am only waiting for withdrawal to be completed within the 4 days promised before I publish the post.

Hope you all have a great weekend,

Mohammed

Update: Japanese data Friday 27th November 2015

Good morning. I just wanted to drop a few observations about the Japanese data that was released this morning. People have been asking me about it since there has not been a pronounced market reaction. I felt it would be best to address it here rather than cover it in many different messages. So keeping it as short and simple as possible:

1.) House hold spending posted a significant decline (disappointing for expectations for a modest gain.)

2.) Inflation was flat.

3.) Unemployment decreased (the only positive).

4.) The US is on holiday.

This in combination with the two facts will put pressure on the BOJ to do more.

1.) The economy is in a recession with a contracting GDP (in contrast to the rest of the world.)

2.) The BOJ admitted in minutes released on Tuesday that they are concerned inflation is failing to meet their targets.

The JPY has benefited this week from political turmoil that has resulted in a bid tone for the yen and a relatively quiet end of the week due to the US holidays. This is the limitation of the positives in its favour and effectively, the currency remains fundamentally week. It is highly likely to give up its gains (as modest as they are) of the last few days at the first opportunity. I remain bullish on the USDJPY at this point and see no reason to change my views.

 

Update: Thursday 26th November 2015

Well no real surprises today. With the US on holiday, the markets remain relatively quiet. This morning after extremely soft Capital Expenditure (CAPEX) data, the AUD has finally weakened after rising on the back of yesterdays merger being given approval. So that trade is going in the right direction and fundamentally the AUDUSD should continue to fall.

With regards to the USDJPY, it did advance this morning but then lost all gains following comments from Russia that its aircraft received no warning and that they were sending S-400 air defense systems to Syria. This of course has once again resulted in bids for the JPY and haven assets but the USD remains fundamentally supported, as shown by its refusal to fall significantly.

Currently, the account has 3 trades that are in the red. (2 slightly, one medium) but none of these trades are in danger and the account remains positive for this week despite the last three days having no green.  At this point there is no logic in cutting the trades as they still do have value and there is more to gain from keeping them.

Either tomorrows soft Japanese inflation will once again turn this in the right way, or next weeks barrage of US data will once again showcase just how strong the American economy is performing in contrast to a Japanese economy that is now in recession.

You may have noticed that I have not logged into Etoro today. This is because I do not wish to post there. Until they incorporate a block feature doing so is not productive. As always I wish you all profitable trades,

Mohammed

Update 25th November 2015

Its been a very long day, so I will try to keep this short and to the point.

On the trade side:

US data was solid as expected. Durable Goods far surpassed expectations, employment was solid and home sales were strong. The fundamentals still support our positions, so I see no reason to change them.

The account has improved since yesterday and is now technically in green for the week, although the last two days have not been profitable and our three open trades have yet to yield results. The trades have really suffered from some unforeseen circumstances:

JPY: Strengthened by Market Risk aversion due to Turkey (A NATO member) shooting down a Russian plane. Nobody could have seen this coming.

AUD: Tight liquidity means that the 70 Bn approved merger of Shell and BG has strengthened the AUD.

Anyway I see these circumstances as temporary (I especially hope the first one does not escalate), and have confidence in the trades. (Hope these are not the ones that ruin our 27 profitable streak).

Our USDCAD buy did not trigger (we missed it by 4 pips) and the order has now been cancelled.

On the social side:

My forum got spammed today like no tomorrow. Luckily the mods cleared the damage. Thanks guys.

trjackson launched a chat room for the forum people. (It was great to chat with you all today!).

I will be posting less on Etoro now (you may have noticed this today). Sick of all the spam, sick of all the nonsense so I am choosing to not deal with it. If you message me on Etoro, chances are you will not get a reply. So please accept my apologies in advance.

Hope you all have had a good day,

Mohammed