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:
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:
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.
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:
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.
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.
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.