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BEFORE YOU TRADE - Look - Calculate - RememberI don’t care if you’re new or old to the trading business. This will apply to you, regardless. In this short but vital article, we’ll go through 3 of “Before you do this – You need to do that”. #1: BEFORE YOU TRADE – LOOK Trading is a strategy game. You don’t just thumb suck a trade and guess where the market will head. No, you have your criteria on: • The markets you’ll analyse • The time frames you’ll use • The criteria you’ll follow • The entry, exit and risk levels you’ll apply Before you take a trade, you need to first look and find synergy between your strategy and the market you’re looking at. #2: BEFORE YOU SPEND – CALCULATE Trading is a risk game. You don’t just put in all your money in a trade because it feels good or looks too good to not risk. You are not in the game to be right… You are in the game to play calculated risks with your winners as well as your losers. I have a 2% risk rule per trade, in order to bank a 4% gain. This is the best strategy that works for my 19 year old, 4 step strategy, 62.5% win rate MATI Trader System. Whether the trade looks incredibly attractive and is almost a given, it doesn’t matter. Calculate your risks, follow your rules and calculate before your spend. #3: BEFORE YOU GET EMOTIONAL – REMEMBER Trading is a mind game. It can play with your emotions at times. • A loss can ruin your week. • A win can make you feel like a megalomaniac for a day. • Your birthday can make you think you’ll profit that day. • Your previous loss can cause you to doubt your trading strategy. • Your previous winner can scare you. “You need to remember that the financial markets don’t know you, care for you and remember that trading is a forever business.” Next time when you feel those emotions taking over, just remember that sentence… Did you find this useful, follow for more daily trading tips... Trade well, live free. Timon MATI Trader
JSE:J200Education
by Timonrosso
1
Compounding Trading EXPLAINED with an exampleListen up. If you want to grow your portfolio exponentially, you’ll need to understand this concept. It’s called ‘compounding’. In short, Compounding is a strategy where you allocate your money with your original and current portfolio in order to reinvest it and grow it into an even larger portfolio. Let’s cut to the chase with an example. Meet Jack and Jill. Jack and Jill both deposit R100,000 into their trading accounts and they decide to follow each other’s trades exactly. At the end of the first year, their portfolio performances were identical. As they enter their second trading year, Jack decides to do one thing different to Jill. He decides to withdraw all his profits so that he can enjoy a lavish holiday. Jill on the other hand, decides to reinvest her profits. This way, in the next year, she’ll be able to grow her account even more. They trade this way for the next 10 years. Let’s compare how their portfolios differ. Simple trading versus Compounding trading in action It is clear that Jill is a lot wealthier than Jack where, she has been able to grow her account from R100,000 up to R2,164,657 in just 10 years. Jack on the other hand is right back to where he started, but with 10 memorable holidays. Which position would you like to be in? Every year, Jack takes on the simple interest trading approach. This is where he continues to earn returns on his original portfolio value only. At the end of each year, he takes out the R36,000 in profits, that he earned, and uses the money to go on a holiday. Even after 10 years, Jack continues to bank a fixed R36,000 each year leaving his trading portfolio back to his starting account of just R100,000. Jill on the other hand, takes the compounding interest trading approach. This is where she continues to re-invest her earnings into her portfolio each year, in order to grow it even larger than the previous year. After 10 years of trading, Jill’s R2 million trading account continues to snowball and compound each year. The science of compounding is an extremely effective wealth building strategy. Do you have a trading or investing question, let me know and I'll be happy to help where I can. Trade well, live free. Timon Financial trader since 2003
JSE:J200Education
by Timonrosso
Future of Customer Services with Trading the marketsThe Future of Customer Services with Trading The new era of trading all depends on two things… The experience for trading and the superior customer service, that comes along with it… Consumers depend on it and companies reap the rewards by adapting to excellent customer service to prevent them from failing. In this article, we’ll focus on 7 trends that will shape customer service in the future. This applies for not only trading but with most businesses. Let’s get to them… Trend #1: Social Media Live Chat Human assistants will help answer their customer questions, with a live online chat software or by downloading an application. Think of Skype, Zoom, Facebook or via their personal website. As more people adapt to online communication, the more companies will utilise these opportunities. After all, it’s all about meeting the customers where they are most likely to be. WITH TRADING – There are already live online communication options where human operators can help with trading platform, charting, business features and offers. Trend #2: Virtual Chatbot A virtual chatbot is a pre-programmed response with an artificial intelligence software. You most likely know them as virtual assistants. This way is a cheaper, faster and more consistent approach to help answer customers questions without the need of a human operator. With virtual chatbots there’ll be no restricted or waiting times. Also with machine learning, means the bots will get better, they’ll be more researched and will provide better answers over time. WITH TRADING – You’ll be able to ask for financial markets information, prices, charts, how to guides and trading platform queries. Trend #3: RIP Phone Calls & Faxes Companies will strive to cut costs and cut out old fashion ways. This includes mobile-data related phone calls taking a back seat as well fax machines. WITH TRADING – You’ll notice that with most global Forex and trading companies, they have taken out the options of phoning and faxing them. This shouldn’t worry you as they are adapting to the new ways of trading. Trend #4: 24-Hour Support With Apps Instead of calling or messaging companies via mobile communication, companies are adapting to more text and voice messaging apps. I’m talking about WhatsApp and Facetime. It’s cheaper, faster and more accessible from anywhere in the world. This will bring about 24 hour support, for their customers. WITH TRADING – I’m sure you’ll be able to send a quick message to your broker via WhatsApp or another app to place or close a trade or facilitate other transactions. Trend #5: Video Email Email has been the most widely used tool for customer service. In the future, we’ll be taken to the next level where email will allow for video emails. This way we’ll have a higher level of engagement and with a more personal and natural touch. WITH TRADING – You’ll be able to ask your trading related query with an illustration rather than explaining via text. And when you receive your answer, it will be shown with an easy to understand and visualise demo explanation. Trend #6: Remote Working & Flexible Times COVID-19 was the catalyst that helped push the remote working environment for employees. As customer service and contact agents are confined more to their homes, they will be working with more flexible times. WITH TRADING – Instead of an employee having to work in an office setting, they will be more flexible with their times. Eventually, we’ll see questions answered by them at all hours of the day. Trend #7: Multi-language Support Customers are connecting with more companies, located all over the world. It is critical to offer customer service support in multiple languages. The more languages are offered, the bigger the reach for potential customers. WITH TRADING – Forex and crypto-currency is a global phenomenon, taking over the world. It is inevitable for these kinds of companies to offer their services in different languages. Final words With us being able to expose, report and send our reviews about our experiences, means one thing… Businesses will continue to strive to serve and improve their customer support and services. And that’s why, it is and should always be a priority for companies to improve. Is customer services improving with trading? Let me know in the comments... Trade well, live free. Timon MATI Trader
JSE:J200Education
by Timonrosso
Bidcorporation still in the Twilight-zoneIt definitely can seem tempting to buy (go long) a stock like Bidcorp as by theory it's broken above the Cup and Handle pattern and the moving averages look great 7>21 >200. However, it's also good to look at the broader picture of price action. Bidcorp has been moving in a sideways rectangle formation since February 2021... I think only above R30.00 will give me some semblance of hope of a new bull run... Until then, I'm hesitant to go long.
JSE:BID
by Timonrosso
2
25 METRICS and 10 BENEFITS of a Trading JournalTrading Journals are essential. It's your game plan to what you could potentially see in the future as a trader. In the above image are the 25 metrics every Trading Journal should have... And below are 10 benefits for having a trading journal... 1. KEEP TRACK A trading journal helps to keep track of your trades, including the reasons for making the trade, the results of the trade, and any lessons learned. 2. CUT OUR BAD HABITS It can help to identify and eliminate bad habits and biases in your trading. 3. POWERS DISCIPLINE A trading journal can help to improve your discipline, which is essential for long-term success in trading. 4. CONSISTENCY It can help you to develop a consistent and effective trading strategy. 5. FEEDBACK FOR REFINEMENT A trading journal can provide valuable feedback that can be used to refine and improve your trading. 6. FOCUS ATTAINED It can help you to stay focused and avoid making impulsive decisions. 7. TRACKS SUCCESS A trading journal can provide a valuable record of your progress as a trader, which can be useful for reviewing and analyzing your performance. 8. CONFIDENCE BOOSTER It can help to increase your confidence and reduce stress by providing a clear and objective record of your trading activities. 9. STAY ORGANISED A trading journal can help you to stay organized and avoid missing important details or opportunities. 10. LEARN AND IDENTIFY NEW POSSIBILITIES It can be a valuable tool for identifying and learning from your mistakes, which is essential for long-term success in trading. Why else do you think a trading journal is essential? Let me know and follow for more daily trading tips from information I've gathered over the last 20 years as a financial trader. Trade well, live free. Timon MATI Trader
JSE:J200Education
by Timonrosso
The Money Multiplier of TradingThere is one tool with trading, which you can accelerate your portfolio, compared to with investing. I’m talking about Gearing (or leverage). To wrap our head around this concept, here’s a more relatable life example. When you buy a house for R1,000,000, it is very similar to trading derivatives. Initially, the homeowner most probably won’t have the full R1,000,000 to buy the house with just one purchase. Instead, they’ll sign a bond agreement, make a 10% deposit (R100,000), borrow the rest from the bank and be exposed to the full purchase price of the home. This is a similar concept for when you trade with gearing. Gearing is a tool which allows you to pay a small amount of money (deposit) in order to gain control and be exposed to a larger sum of money. You’ll simply buy a contract of the underlying share, use borrowed money to trade with and be exposed to the full share’s value. Let’s simplify this with a more relatable life example: How gearing works with CFDs Let’s say you want to buy 1,000 shares of Jimbo’s Group Ltd at R50 per share as you believe the share price is going to go up to R60 in the next three months. You’ll need to pay the entire R50,000 to own the full value of the 1,000 shares (R50 X 1,000 shares). In three months’ time, if the share price hits R60 you’ll then be exposed to R60,000 (1,000 shares X R60 per share). Note: I’ve excluded trading costs for simplicity purposes throughout this section If you sold all your shares, you’ll be up R10,000 profit (R60,000 – R50,000). The problem is you had to pay the full R50,000 to be exposed to those 1,000 shares. When you trade a geared instrument like CFDs, you won’t ever have to worry about paying the full value of a share again. A CFD is an unlisted over-the-counter financial derivative contract between two parties to exchange the price difference of the opening and closing price of the underlying asset. Let’s break that down into an easy-to-understand definition. A CFD (Contract For Difference) is an Unlisted (You don’t trade through an exchange) Over The Counter (Via a private dealer or market maker) Financial derivative contract (Value from the underlying market) Between two parties (The buyer and seller) to Exchange the Price difference of the opening and closing price of the Underlying asset (Instrument the CFD price is based on) Let’s use an example of a company called Jimbo’s Group Ltd, who offers the function to trade CFDs. The initial margin (deposit) requirement is 10% of the share’s value. This means, you’ll pay R5.00 per CFD instead of R50, and you’ll be exposed to the full value of the share. To calculate the gearing (or leverage ratio) you’ll simply divide what you’ll be exposed to over the initial margin deposit. Here’s the gearing calculation on a per CFD basis: Gearing = (Exposure per share ÷ Initial deposit per CFD) = (R50 per share ÷ R5.00 per CFD) = 10 times gearing This means two things… #1. For every one Jimbo’s Group Ltd CFD you buy for R5.00 per CFD, you’ll be exposed to 10 times more (the full value of the share). #2. For every one cent the share rises or falls, you’ll gain or lose 10 cents. To have the exposure of the full 1,000 shares of Jimbo’s Group Ltd, you’ll simply need to buy 1,000 CFDs. This will require a deposit of R5,000 (1,000 CFDs X R5.00 per CFD). With a 10% margin deposit (R5,000), you’d have the exact same exposure as you’d have with a conventional R50,000 shares’ investment. Here is the calculation you can use to work out the exposure of the trade. Overall trade exposure = (Total initial margin X Gearing) = (R5,000 X 10 times) = R50,000 With an initial deposit of R5,000 and with a gearing of 10 times, you’ll be exposed to the full R50,000 worth of shares. In three months’ if the share price reaches R60, your new overall trade exposure will be R60,000 worth of shares (1,000 shares X R60 per share). If you sold all of your positions, you’d bank a R10,000 gain (R60,000 – R50,000). But remember, you only deposited R5,000 into your trade and not the full R50,000. This is the beauty of trading geared derivative instruments. Hope that helps for those who don't really grasp Gearing... Trade well, live free. Timon MATI Trader
JSE:AGLEducation
by Timonrosso
Losses are Just the Costs of TradingLosses are nothing! Come on. Don't you pay for food, electricity, taxes. Don't you run your company with expenses and costs? Don't you spend every now and then on a vacation, time away and even unpaid leave? This is life and it should be NO different with trading. Trading losses are nothing but costs that come with achieving future success. But... and it's a big but. Just like you can control whether to spend your ticket on Economy or First Class. Just like you can choose to go to a 3-star hotel or a 5 star. Just like you can choose between a chicken dish or a lobster. So to must you manage your risk with trading. The learning fees, and the losses you take with trading can all be controlled at a point with obviously your volume, the markets you choose and where you place your stop loss... Every trade needs to be taken into consideration with high risk management skills. Don't be scared of trading losses- it comes with the territory as with life. What do you think? Does this help? Trade well, live free. Timon MATI Trader Financial trader since 2003
JSE:J200Education
by Timonrosso
2
Prosus also long to R1,445.20 and correlates to Naspers ideaCup and Handle also has formed on Prosus with the Moving averages looking strong with 7>21>200 Target R1,445.20. There is a strong correlation with Naspers which is showing almost identical charts. The RSI has also broken above the Negative divergence and is in the upward momentum territory >50. The only concern as I often mention are the gaps in the charts which shows high volatility and potential for Gaps close. The bias however is bullish.
JSE:PRXLong
by Timonrosso
2
Naspers is going up - this is stuff they don't want you to knowCup and Handle has formed on Naspers and has even gapped up showing strong momentum. 7 >21 >200 Moving averages all turned up. Target 1 is R3,626.50 CONCERN is that Gaps close 70% of the time and Naspers is a wild one which acts erratically. Number of reasons which I don't think they'll be happy if I tell you but I'm an independent. 1. Companies love to trade the arbitrage between Tencent (China) and Naspers SA 2. Prop traders love to scalp on lower time frames chasing the daily runs, falls and gaps. 3. You'll see in the volume with Naspers there are tons of 1's thrown into the buys and sells. This is to spook traders out as they have to pay more brokerage. A company like Naspers is a major game player for many traders and for this reason, the erratic movements in the charts look like this.
JSE:NPNLong
by Timonrosso
Choose your Ideal Broker with a 10 Step checklistAre you looking for the right broker in 2023 and beyond but unsure what to look for? With the high competition nowadays, each broker offers different features, instruments and advantages. That’s why choosing one not an easy task for a beginner or even an experienced trader. You’ll need to drill down exactly what suits your trading style, personality and risk profile. I say this because, in the last two decades, I’ve been through a fair share of brokers. So, I know how difficult this decision can be and how it can determine whether you make money or not as a trader. In this article, I’ll share with you an easy-to-follow checklist which you can use to help you choose the right online broker in 2020 and beyond. What is a broker or dealer? A broker is a company or institution that gives a trader access to a live trading account and trading platform which enables them to buy, sell and monitor different instruments and assets. Here’s my checklist to find your ideal broker… Checklist item #1: Make sure the broker or dealer is regulated! This is a must… Whenever you sign up with a broker, make sure they are authorised, regulated and recognised by leading regulation authorities. You will most likely find this stated on the company’s website, in the ‘About Us’ or in their ‘Disclaimer’, along with their license number they hold with that regulator. Countries with dedicated financial regulatory agencies include: South Africa (FSB) – Financial Services Board. USA (SEC) – Securities And Exchange Commission (FINRA) – Financial Industry Regulatory Authority Eurozone (MiFID) – Markets In Financial Instruments Directive UK (FCA) – Financial Conduct Authority Australia (ASIC) – Australian Securities and Investments Commission India (SEBI) – Securities and Exchange Board of India Japan (JSDA) – Japan Securities Dealers Association Switzerland (FINMA) – Swiss Financial Market Supervisory Authority When you sign up with a regulated broker, you’ll at least have the security and assurance that they have met certain standards approved by the regulatory body, such as: Having the right capital to protect the clients’ funds Ensure the firm won’t go bust Confirm they have met certain requirements from the financial service provider Checklist item #2: Check their reviews and testimonials Before you make any decisions, you’ll need to see what others have said and are saying about the broker or the dealer company. You can do this by searching on Google, ‘Hello Peter’, trading forums or go onto their social media pages to read what other unbiased REAL clients have written about them when it comes to reviews, testimonials and ratings. Checklist item #3: Broker minimum requirements There are two minimums to take into account: Minimum balance and minimum deposit per trade. Most brokers require you to start with a certain minimum balance to set up your trading account. Nowadays, with the high competition, you should easily be able to find brokers or dealers who require no more than R1,000 up to R5,000 to open a trading account. If they require any more to open your trading account, just know that there are other brokers out their where you can start with less. As with the minimum deposit to take a trade, you can easily find reputable brokers where the minimum is under R200 per trade. Checklist item #4: Availability: What they can offer you You should have a good idea on what you’d like to trade. This is why before you sign up with the broker, you’ll need to see the availability and range of trading instruments the company has to offer. What assets do you want to trade? Shares, CFDs, Options, Futures, Spread Betting etc… What markets do you want to trade? Stocks, currencies, commodities, indices, bonds, ETFs or crypto-currencies… Where do you want to trade? Via phone, mobile or computer. What times would you like to trade? Morning, noon or night? What gearing and leverage would you like to trade? Whether you’re a Forex trader or a stock trader you’ll need to find out what gearing the broker has to offer. Such as 5:1 – 20:1 (for stocks) and 50:1 up to 200:1 (for Forex). E.g. With gearing (or leverage) of 50:1 this means if you deposit R1,000 into a trade you can hold a position exposed and valued up to R50,000. REMEMBER: the higher the leverage offered, the higher the reward but also the potential risk. Do they offer a demo account or a trial period? You should never rush into trading with real money, before getting to know your broker and your trading platform. That’s why you should ask your broker if they have a demo trading platform or account that you can use to test out what they have to offer with your strategies Checklist item #5: Do they offer trading education and training? A good and genuine broker should want you to be successful as a trader. And to do this, they should offer you a whole range of free education, training sources and tools such as: Training guides Glossary Trading videos, podcasts, forums Written articles Step-by-step trading tutorials Support staff Opinion-based resources Live trading events and webinars Trading calculators, tools and calendars Checklist item #6: The trading platform itself Majority of your analyses, preparation and the execution of trades are going to take place on the trading platform itself. This is why you’ll need to try it out, test it and learn how to use it, to see if it will suit your trading. Here is a list of items to watch out for with your trading platform: Item #1: Chart types: E.g. Line chart and candle sticks Item #2: Time frame options of: E.g. 1 hour, 4 hour, daily, weekly & monthly Item #3: Trading indicators and oscillators: E.g. RSI, Stochastics, MACD, OBV, ADX, Bollinger Bands etc… Item #4: Real time charts: E.g. Not having to refresh your screen every 15 minutes or download anything unnecessarily. Item #5: Live streaming data: E.g. News feed, live speeches & announcements, and SENS (Stock Exchange News Service). Item #6: Customized watch lists: Make sure there is a functionality to create, modify and monitor a watchlist with the markets you’ll be trading. Item #7: Trading order variety: E.g. Market, buy, sell, limit, stops, trailing stop loss and guaranteed stop losses Item #8: Trading journal: E.g. Portfolio profit & loss summary of open, closed and historical trades. Item #9: Trading order box: Where you’ll place your entry, stop loss, take profit, margin requirements, order quantity, gain potential, risk potential and risk to reward. Item #10: Reliability: When you’re testing the trading platform, this is where you can ensure it’s reliable in a way that: It runs smoothly It saves your layout, charts and profile It doesn’t crash The speed is good The features all work as they should The web-based (java) or desktop application works great The mobile app is easy-to-use and handle NOTE: TradingView connects a amazing and reliable brokers. Checklist item #7: Customer support It’s important to find out where you can contact your broker, in case you need help due to some technical or trading reason. Which mediums can you contact them through? • Phone • Email • Online live chat • WhatsApp • Skype • Forums Also when you give the representative a call, make sure they sound knowledgeable and confident in what they tell you. Think about how they respond to your questions, how quickly do they solve your queries, are they friendly and approachable? The contact support will also confirm their quality, efficiency, reliability and credibility for what the company already portrays and offers. Checklist item #8: Costs and fees You will never be able to avoid costs and fees completely, but you can minimize them by choosing the right broker. You’ll need to do a bit of research to compare the costs of buying, selling and holding trades. Make sure you look at the following: Spreads (Fixed or variable) Note: The spreads should be low for high volume traded markets Commissions (When you enter and when you exit) Margin interest Service charges Minimum charge per trade e.g. R100 Checklist item #9: Ease of deposits and withdrawals This is an important one… Each broker or dealer has their own measures and policies when it comes to their clients depositing into their trading accounts or withdrawing back into their bank accounts. Ask your broker how you can make a deposit whether it be via: EFT Credit Card PayPal Wire transfer Then confirm with your broker to send you their policies and costs on how you can withdraw your money and how long it will take whether it be: Via email to ask for a withdraw which will take under 3 trading days. Via the trading platform where you can withdraw through an authentication process. Via the broker who can only proceed with a withdrawal on the phone which will take three working days. Note: A withdrawal and deposit with a reputable and regulated broker should NEVER take more than three working days or warning bells should ring. Checklist item #10: Safety, security and legitimacy There are a few ways to check if the broker is safe and secure including: Their website starts with HTTPS: and not HTTP: They are insured and deal with top banks around the world. They have secured encryption processes. They have proven to show growth for their clients over the last five years. They have won broker awards or are listed in the top brokers in the country you’re looking at. Final Words You now have an idea on how to find the most ideal broker for you. Take your time to do the research and go through each line item one by one. Never rush into choosing a broker as this can be a significant decision for your financial future. If you enjoyed this piece then follow more daily tips and lessons on TradingView. I've been in the markets since 2003 and happy to share what I've learnt along the way. Trade well, live free. Timon MATI Trader PS: Connect with my few socials below.
JSE:J200Education
by Timonrosso