Think of it this way

I am very confident that these trades will hit their TPs in the next 3 or 4 weeks. When they do, we effectively double the original account equity. Which would be an excellent result. So do not panic, and check back next month.

Fundamentally our trades remain supported. Nothing has changed.

Jan 2016: Retiring from Etoro

This is not one of those posts to seek attention or to harvest compliments, so please do not ask me to reconsider, I have made up my mind. I am commited to leaving Etoro towards Mid-Jan when these current trades meet their targets. The genuine reason is that openbook is no longer fun and life is too short to spend reading comments from people who literally just want to to get a rise out of provoking sensitive people like me. Not going to waste anymore time with it, have already wasted far too much.

Will still keep this community active untill December 2018 and will still post regularly and share trade ideas and reply to your questions when I can. I have taken this decision as I no longer feel comfortable posting on Etoro or dealing with the crowds there. While there are a lot of kind people, there are also a lot of nasty ones and with no privacy or block function, one is forced to read walls of abuse, spam and self promotion all day.

I will share more of my plans when we have these trades where we want them. In the mean time, I am getting back to my holiday (seriously this time) and will speak to you all when I get back. Thanks for respecting my decision and for your support.

Why do people never accept their own share of the blame?

Lets just take a look at just one messages that I get today for example:

 

mikeboyland

A few things to clear up:

The person is right about one thing. December has been terrible. Anyway you look at it, the performance is terrible from my part. No excuses for it and I wont make any.

However:

1.) Coasting on PI earnings? Um nope. The star has been next to my name less than 10 days and it was actually forced onto me, clearly since you made that comment you do not even know the first thing about me. Not had a penny from Etoro so far. Wish it was true that I could coast from earnings on them though, it would be nice to actually have been compensated for all the abuse I have had over the last 5 months.

2.) User engagement rude? Sure. I guess blogging my thoughts and explaining each trade and considering all reasonable questions can be considered rude by some. It is funny that you have such an opinion on me when you have never even taken the time to say hello to me or interact with me. But I guess you are upset and just speaking what comes to mind. Fair enough. You are entitled to your opinion. Personally, I always try my best to be considerate and inform people of whats happening but I guess people should always expect more than just my free time and effort.

3.) Not reflecting the real world? I actually think my predictions were quite good for what happened this last year, the results alone prove that (with the exception of this last month). The stuff that I could not foresee (Oil crashing to 7 year lows, Japan easing months ahead of market expectations, Turkey and Russia having problems), I can not apologize for that. If I knew everything that would happen in this world, would I truly be doing a regular 8-5 job? Think about that for a second. In addition, since I posted daily, if it was detached from reality, you could have clicked uncopy at any time. Why didn’t you?

4.) If you decided to set your SL at 40% and got stopped out, that is your business. Clearly you reached the risk limit you were willing to put up with and that is your choice it is your money. But as always you were informed of my choices and why every step of the way. If you did not choose to cut earlier, that was your choice. This has been explained to people time and time again. But such individuals do not want responsibility.

5.) I am going to say something terrible now (and I will feel guilty for saying this for a while) but in some small way I am glad you were forced out of the copy, as you strike me as the sort of person who does not deserve to benefit from the hard work of others. Fact is, for better or for worse, I spend dozens of hours each week analyzing, posting and trading. It is a lot of effort and as soon as something goes wrong, the abuse and criticism piles up. I would love to see all these people who randomly criticize do a better job. I really would.

Regardless of how things turn out, and I am very confident they will turn out very well, I have a clear conscience as I always did my best and was always honest and transparent. Anyone who did not like the analysis could have uncopied at any time.

Anyway I am done interacting with people on Etoro, will just trade on it and not post a word there again. It honestly is not worth it. Too many delluded individuals who think they can click copy once and then retire (and that is a polite way of expressing my thoughts). Those who have always supported me and stood by me through good and bad (and there are many of you and I do thank you), you know how to contact me when you need me.

Update: 20th December 2015

I wanted to make a post despite being on holiday as I have noticed that some members are nervous and I can not relax or have peace of mind knowing that they are nervous. As many of you who have been with me for a while know we trade fundamentally chasing profits with the idea of compounding gains for higher gains over longer periods. This means that we do not worry about individual months (even though we want to make big gains in every month – that will never happen), but rather the result at the end of a year. In short I will not panic if today we have less than yesterday, but I will be devastated if over a year we have nothing to show for our all efforts (because then what was the point of it all). With that said, I understand that when people see trades going the wrong way, it is easy to get nervous when things go wrong, easier than to enjoy when things go right.

I want to confirm the the community, that while I can not guarantee the success of our trades, I only maintain trades that I am confident in. That does not mean that all trades will be winners and sometimes massive trades can wipe out, however trades I make are based on analysis and not on chance and I will always tell you the truth, in good and bad. I will never say stupid things like “these losses are part of a bigger plan” or the “big boys are playing with us”.

December is generally not a good month for FX due to tight liquidity, erratic movements due to re-partition of funds and large institutions re-positioning for the year ahead. In short, fundamentals can often be ignored for a while as proven this last month and perhaps in future it is better for traders to avoid taking large value positions during this month, we can put that one down to experience. The market can be random at all times, but during this December, it appears to have been one big mess.

However, I believe that nobody should be forced into long term trades that they are not comfortable with, so let me take a moment to explain to you the pairs that I have chosen to take longer term investments in while I am on holiday and then you can all decide to either stick with them or close on your own choice regardless of the outcome. Once again, I clarify, can we lose a lot? Yes. Do I think we will? No. However, I do not like seeing people panic (its not good for them) and always remember investing is risky and it is ALWAYS a possibility that one gets blown out, regardless of how small the chance. You should always remember to NEVER EVER trade with any money that you will miss.

Ok, lets look at my choices:

BUY NZDUSD:
THE FED just raised. The RBNZ just cut. The Fed is looking to raise more over the next year (at least 3 times, 4 times according to the FED members curve), the RBNZ is likely to HAVE cut more over the next year, even if they do not want to. There could not be a more clear case of divergent monetary policy as shown by the spread in generic two gear government bonds and the NZDUSD is headed down. Fundamentally it has no other choice. Expect it to start its gradual descent towards 0.63 very soon.

NZDUSD

 

BUY GBPJPY:
The pound has been hit by the unexpected announcement that Cameron wants to hold a referendum over the UKs membership in the EU earlier than expected. This has made investors nervous about the pound, however such nervous activity is quickly forgotten (think back to GREXIT earlier this year). The BOE is holding its monetary policy and the GBPUSD is almost at its bottom. It will not fall much lower at this point.
The USDJPY However is a different story. The JPY has benefitted this last month due to investors seeing it as a safe haven (Russia/Turkey, Commodity Crash etc) and due to profit taking on the USD. However the fact remains that in the last week the USD has tightened monetary policy while the BOJ has increased easing measures. As markets return to following the fundamentals, this pair will re-approach its 125 highs of the year and go even higher.

USDJPY

This in turn will affect the GBPJPY cross which will also restart its climb to 190 shortly. Just look at the bond spreads below relative to the currency to see how cheap the GBPJPY currently is at this point. It has only gotten to this point because of panic in the market which caused TEMPORARY JPY firmness and TEMPORARY GBP softness (as described below). Once things return to normal, there is NO reason why this pair should not recommence its ascent:

GBPJPY

 

BUY AUDNZD:
Not much to say here expect the Australian economy is recovering far better than expected, while the New Zealand economy is not. The bond spreads below tell the whole story, look for this to pass 1.10 and start to approach 1.12.

AUDNZD

BUY GBPCHF:
1.55 is back where it should be in the medium term. This has a similar story to the GBPJPY, haven currency and Temporary sterling softness. SNB will be dovish over the next year, more so in the likelihood of the ECB having to ease further. As for the BOE, the UK economy is technically strong. Aside from inflation being flat (a large contribution of which is the price of hydrocarbons), employment is solid, retail and growth are solid. Markets are pricing in no raise in rates until Feb 2017, but I believe they are wrong and that we could start to see a move towards the latter half of 2015. This pair is solid.

There, I have done my duty and informed everyone of my plans and why I have taken those plans. Now it is down to all of you as adults to make an informed decision to either stick with these plans or cancel. Whatever you do, nobody will judge you, after all it is your money. With that said, I can get back to my holiday. I wish you all an advanced Merry Christmas, A happy new year and I hope to see many (if not all) of you on Jan 4th 2016 to begin our two year journey. At least next year we all take the first step together so we wont have such a great divide in between our gains (or losses for those who joined in December). Thanks for your time,

Mohammed

Update: 18th December 2015

I did not want to have to post until after  my holiday, but due to the significance of this mornings events, their is little choice in the matter. The BOJ has shocked all the markets by boosting stimulus much earlier than expected, and the divergence between the USD and JPY has started months earlier than expected. This is good for us.

You are probably asking why the USDJPY etc are down from yesterday at the moment if this is good? Well I have a few ideas that i think are valid:

1.) Tight liquidity in December and Institutions hitting their TP. After the announcement, the USDJPY jumped to 123.52 and the GBPJPY jumped to 183.88. I think a lot of the US and European institutional investors would have hit their TPs at this point.

2.) Falling oil prices.

3.) Further profit taking on the USD as we come on the end of the week.

I think the current fall is nothing to worry about and will be VERY short lived as fundamentally the BOJ has losened monetary policy while the FED is tightening and the BOE is holding. As a result, I am extending out TP on the GBPJPY from 188 to 190, as I feel we may now gain more on this trade then envisioned.

It will also be interesting to see what happens when OIL expires today.

Back to packing,

Mohammed

Last LONG post of the year: 17th December 2015

Well next week, I will be going on holiday from the 24th December until the 4th January and so will not be making my regular long winded posts that bore the community to tears. I will still be in touch via the new twitter account that I set up earlier today and will still be trading (although I have extreme confidence in all of our trades yielding excellent profits probably before the end of the year), but will not have time to post during this period as quite frankly, I feel that I am overdue a break and the opportunity to relax. This all started as a hobby but has started to occupy a lot more time than I originally envisioned. In fairness, without the support of many of you great people, this would not have worked and I would have given up on this project ages ago, but I have learned that with the help of others who care, one can continue.

As this is my last long post for the year (unless something drastic happens – which is highly unlikely), I just wished to share my plans for the future with all of you. Please note that this is a plan for those who are realistic and patient and who want to actually achieve something. If you are looking to wake up with a full bank account tomorrow, then this really is not for you and you should stop reading at this point.

A few things about the previous year and how we got to this point:

So a bit of background. Some of you have been following me for a few months, others are relatively new, but if you have taken the trouble to join this little community that we have been building, then I consider you one of us and I thank you for all of your support. This all started in May when I signed up at Etoro out of curiosity. I started trading, and then gained some copiers (do not even remember how that happened). Things continued and copiers built up, one by one until Etoro manually blocked my account when I reached 98 copiers and an AUM of $100,000 USD. They had contacted me to tell me to join their PI program and I refused. Many people , dozens per day started messaging me asking about how they could copy and why not, and eventually I asked Etoro how we could reach a compromise. They said that if I showed my full name and put a real picture instead of the Itachi one (which I still believe to this day brought us luck), they would lift the ban. I agreed to these terms as I had nothing to lose. I had never deceived or harmed anyone and had nothing to be ashamed of, so why hide my identity. It would be far better to simply agree to this concession and let people who wanted to, to copy. So that was that, and 2 weeks later the number of copiers swelled from 97 to 900. November proved to be an excellent month and the numbers kept growing, but Etoro proved to have many technical issues, so I decided to ask a friend to set up a blog for me to communicate with all of you. I guess I did it because I wanted people to talk to and interact with, real people, not just nicknames and avatars. One thing led to another and here we find ourselves today.

So I wont lie, since the start of this month, things have not been easy and while it would have been great to have an excellent final year to the month, that looks very unlikely. Many things went wrong. Infact everything went wrong and against our expectations. Just to name a few:

1.) The ECB failed to deliver what the market expected.

2.) Russia and Turkey had disagreements.

3.) Commodities crashed to levels not seen in years.

But none the less, we tried our best and were honest with everyone and minimized the damage to the best of our ability and we are still doing our best to make the most out of this month. I respected myself and the community and told them the truth, did not blame anyone and did not pretend that things were part of some elaborate strategy. The result, the majority of the community stood by me and were patient, understanding and supporting and for that, they have my thanks. We survived our worst month without too much damage being done and if we got through this, believe me, we can get through anything. As I look back over the past year, I realize going forward that in many ways I have grown in the last few months and a large part of that was due to the influence of many of you. So Thank you. All of you.

Oh and I forgot to add, even with December being a loss producing month thus far, our profit for the year stands at over 2000%, which I feel is excellent for the first 7 months of this adventure.

Trading strategies over the next year:

FX trading:

In 2014 where there is clear long term direction. In 2014 there was a clear divergence of monetary policy as the ECB actively sought to devalue its currency and start easing monetary policy. This made it a very easy year to trade and even complete novices were able to generate 3 figure gains. Incidentally, this is why such people were not trading or performing at a much lesser standard in 2015 and living on the glory of the past year. It is because things were not so straight forward and hence those who lacked experience showed their “novice” traits by being scared into not trading at all. With Commodities crashing to their lowest levels in years, the FED repeatedly calling for increases in rates and then stalling, the threat of Greece exiting the EU and Russia and Ukraine clashing, this year had a lot of elements that threw in an uncertainty factor.

It is one thing to avoid entering the market when there is a great deal of uncertainty. It is another thing entirely to not trade at all and say it is because of fear of risk. Anybody knows that with higher risk comes higher reward and anyone who does not trade is not a trader. I am sorry that this truth hurts the ego of some but it hurts for two reasons. Firstly, because you know it is the truth and secondly because the truth usually hurts when it shatters one self illusions.

Anyway I am digressing from my point. 2016, certainly the second half, will prove to be another year in the form of 2014, with clear direction. Commodities have more or less bottomed out and will not have the epic crashes witnessed in 2015. The Greeks have solved most of their problems and the Fed has initiated the all-important step of normalizing monetary policy and this is what gives the market a clear direction.

The voting members of the FOMC change next year. The nature becomes more Hawkish, and it is not unreasonable to expect at least 3, perhaps as many as 4 hikes next year. This in contrast with other central banks that are expected to ease (even the ones who say they won’t want to, are likely to have to) which include:

1.) ECB.

2.) BOJ.

3.) RBNZ.

4.) RBA.

5.) SNB.

In short going long on the USD over the course of the next year (sensibly and at the right times) is effectively a license to print money and we will do a lot of this “printing” together over 2016. Of course this is not the only plan, and there are neutral currencies like the Sterling that will eventually have their central banks seeking to normalize that present many opportunities, but we have no way to see directly into the future, so for now, we will handle it as it comes.

Equity Trading:

This is a year for Japanese equities. Japanese companies are currently Cash rich. A weak Yen supports their export potential. Weak oil prices help them. They have access to cheaper borrowing than US counterparts and have had large capital expenditure on growth this last year. This will yield some results and expect high performances from Japanese companies over the next year. Keep an eye on these near reporting time and you will not be disappointed.

How I hope to help take the community forward from January 2016:

Lessons:

Will still continue to post new weekly lessons in the new year and new challenges to the community.

Distribution of responsibilities:

This is something that the community has to organise. You have been provided with a Chat Room, a forum and free blogs where you can freely post your uncensored thoughts and ideas. Many of you have already done your foundation learning. Organise yourselves amongst you and pick a currency to cover and blog about (when you have time). Help build this place into a resource that can be used by everyone, all the while improving your own knowledge and skills. Have the confidence and try yourselves, you will be surprised at what you can accomplish.

Our trading:

My trading vision for 2016 will be split into group trading and solo trading for the community as we all grow and develop together.

Group trading: Because we are a community afterall.

Etoro: The target will be 20% a month, just as it was for these last 6 months. From January on wards I will not make a single withdrawal from this account and have a 2 year target of realizing a gain of: 7949% over the course of 2 years. I will be spending almost zero time on posting open book though, the comments from some of the people who use it over the last few weeks have really made me realize that such an environment is not good for me.

Options: On January the 4th we will begin community (social trading) longer term options, with expiry periods of 1 month. This will be higher risk, but higher return and will give weekly pocket money to you that you can spend so that you do not get tempted to touch your Etoro nest egg funds.

Hot Forex: I have decided to do open a PAAM account after multiple people have suggested it. I will start with only 1000 in it and do slightly higher risk trading aiming for 6% per week with a vision to get out after 2 years with a final target of:

$1000 * 1.06^104 = $428,000 to show for it afterwards.

I will set up the fund with a requirement of 500 deposit(to show that it is accessible to almost anyone but also to keep away the people who deposit 100 and want to retire the next week) and a success fee of 10%. There are two reasons behind this, both entirely selfish:

1.) I want to do something nice with the success fee after 2 years.

2.) I want to see if this can be the first step in setting up my own fund one day. A silly dream at this point, but we all have to start somewhere, maybe this is my small start.

If you wish to join me, please sign up here. Once you have signed up you search for ohemgee invest to copy.

Should you take part, trading starts Monday January 11th 2015.

 

Solo Trading: This is important as it makes you actually put what you have learned to the test.

Solo Options: Where you can trade solo options using your fundamental knowledge starting for only $1.

CFDs: Where you can trade countless securities, commodities, currencies and stocks not offered by Etoro.

 

Finally:

This big mouth has finally run out of things to say, so this concludes what I guess will be my first annual summary. I hope that the one next year and the one in two years are even more joyful and filled with even more positives. I hope you all stick around for it. I know I am not going anywhere.

Update: 16th December 2015

So things are looking a little better, but make no mistake we are still FAR from a profitable month and still in the red as we write this, with a monthly unrealized loss of equity of approximately 5%. In short, I am not trying to cover up the fact that this month has been a disaster for us.

We managed to close the two USDJPY sells (one intentionally, one with a fat finger) in profit. And as of writing this regained half off the unrealized losses on the account so far. We also opened two new trades, both medium to longer term AUDNZD buy and GBPJPY buy. I have done this as I believe both pairs are currently undervalued. The JPY has enjoyed a show of strength recently due to haven bids and is over-rated in my opinion, while I feel that the GBP is currently undervalued. I did feel earlier that the Sterling would be dragged down further by the Euro as the ECB increased stimulus, but since they did not, my thoughts on the subject have changed. I would also like to point out that the GBPJPY has fallen now for 8 consecutive days and is long overdue a correction.

At the same time, I feel the NZD is overvalued at this time as the markets are still considering RBNZ governor Wheelers comments, without realizing that they are miles away from being anywhere close to his inflation targets. Another reason for picking these crosses was that as we go into a choppy FOMC meeting, I did not want to have excessive USD exposure and at the same time, I did not want to leave money unused. Its a fact that unused capital is effectively useless to us, so this gives us a lower risk way to use the capital while we attempt to get some gains.

With regards to the meeting, I think this will happen tonight:

1.) The fed will raise rates by 25bps.

2.) They will give a dovish outlook but NOT as Dovish as the market expects.

3.) They are highly likely to cite the headwind issues of a strong dollar.

4.) It will be very choppy.

We go in holding an exposed NZDUSD sell. I do not want to close this at this time, as I feel that their is a 60% change it will recover and hit a modest TP in the waves the Fed announcement causes. If it does not and it stops out, then so be it. We tried and sometimes things SL. It will be a loss, but not a catastrophic one.

Another issue today is that (many suspect) once again UK data has been leaked. This strange activity has been happening for months and it is highly disappointing that such activity continues, especially in a country like the UK which is supposed to have regulations preventing such activities. I guess (assuming that the many who suspect this at right) we have to accept that this trend will continue since it seems nothing is being done about it.

Regardless of what happens today, even if it turns badly, my attention for the rest of this week (other than keeping an eye on our trades when I have the change and looking for more opportunities) will be considering a plan of action for next year. As many of you know from January I am planning to place a significant deposit and not make any withdrawals for a period of two years, while I attempt to compound it and see what gains I may realize. I am as of yet undecided whether to do this on Etoro or elsewhere at this point, but will make my mind up before I go on holiday on the 23rd.

Good luck to everyone tonight,

Mohammed

 

Thanks to most of you, no thanks to some of you.

To the vast majority of you that show support, encouragement and patience. Thanks. Could not do it without you.
To the minority who make a lot of noise:

Hey Mo open trades. Hey Mo set sl in positive. Hey Mo up or down. Hey Mo why didnt you close yesterday when it was 0.5% green….
Read carefully. You entitled feeling individuals are actually counter productive. You are owed nothing and your opinions do not matter to me in the slightest as I did not ask for them. You are just sitting there making noise AFTER events. News flash. A two year old can give you an opinion about something AFTER it has happened. I am the one in charge here not you. So if you are going to be a backseat driver then do not copy. Your comments are not helpful. 

I have written down all these names of everyone who has been saying this over and over the last few days and will block them as soon as Etoro implements the feature. If it doesnt implement one soon, then I will simply move to another network. It is that simple.

The real icing on the cake is none of the rude people seem to be able to say “Thanks for quickly getting us out of this situation. You handled it well, reversing loses and keeping the account safe. Thanks for giving up your time.”

P.s. This is a good time for you to look in the mirror and examine your attitudes. Poor character is a major obstacle to actually achieving anything.

Update: 15th December 2015

So as I posted yesterday, I felt oil prices would recover as despite the market panic, the extent of oversupply was still physically the same as the week before and other than tight liquidity and some panic selling, there was no reason why they should have fallen in excess of 13% over the week. Thankfully they did and we find ourselves not out of trouble but in a much better position. I expect US equities to perform well, oil to hold steady and US inflation to show improvement this afternoon. This should further support out positions.

With regards to the FOMC decision tomorrow, I have spent some more time researching it extensively. In particular looking at the curves for expected fed future hikes and expected market future hikes. While I expect the fed to be a bit more cautious, I still believe their curve will remain steeper than the markets tomorrow. I also believe from the failure of the USD to rally in the build up of an expected rate increase indicates that its current bid has taken into account market dovishness. I think while the Fed will be conservative, they will not be as conservative as the market expects. Could I be wrong? Absolutely! But what is the point in speculation if we do not follow our expectations?

Finally after an abysmal start to the week, things are looking a little better and I am actually more hopefully that we can reduce this months damage. As long as Inflation data does not disappoint severely this afternoon, I think we can shortly get out of the market with a smaller loss than our current unrealised losses.

As for the people who jumped ship, their loss (although I do not blame them). High risk trading is not for everyone and indeed anyone who expects to make more than 10X their money each year without significant losses or setbacks clearly does not understand that the capital markets reward risky investors. We have some great months, good months, bad months and terrible months, but what matters at the end of the day is where you are after a year or two years. Not after 2 weeks.

Thanks for being patient and good luck to all of us,

Mohammed

 

Update: 14th December 2014 – It continues to go horribly wrong

So all seemed to be going well when I last checked the account on my lunch break, losses were getting smaller and we were on target to meet our objective of getting out with minimized losses. A few hours later and there is a completely different story. Oil tanks causing bids for JPY and CHF and taking our positions deep into the red. Thank god, i got back in time to cancel our GBPJPY buy.

But this puzzles me. You see even though OPEC did not cut production and the markets continued to be over supplied, the over supply is no greater than it was a month ago. It is not as if tomorrow there will be an addition 5 million barrels per day on the market. All producers are more or less at their maximum. In addition, with respect to Iran, it is true that they will be exporting soon, but they need months and billions invested to get the capability to export the amounts they are talking about. It will not happen over night…

So why the massive fall in oil prices? I think it is a combination of the following:

1.) Liquidity being tight this time of year, so even small volumes make a massive difference.

2.) Markets panicking.

3.) People being over bearish (remember the EURO in April?)

In all honesty if we look at this physical markets, supply is the same as it was one month ago. It is NOT greater. Demand is greater than thought (China and Japan have had greater growth than expected). I personally do not think that the price can fall much further and I think it will not be many days until we are back at 40 again. Just my thoughts. If I am wrong, then we have a massive loss to end the year on. Not exactly how I wanted to finish, but it is what it is. Sometimes, we just make mistakes and when we make them, we have to admit that we made them and learn from them.