Steinhoff hit my price target and I am very worried for it now!We saw a major drop of 44% with Steinhoff to just 90cents and Its market capitalisation lost as much as R3bn in the fall from R6.9b yesterday
Steinhoff is in troubled waters with a debt of R185 billion.
There is a deal where if Shareholders will agree, they will end up owning 20% of the company.
The Creditors will own the rest.
The problem is the company will no longer be listed on the stock exchange.
From my experience when a company goes from listed to private it means a few things.
1. Liquidity issues
Volume will be low where you might not be able to exit a position with a rightful buyer or sell
2. lack of transparency
This leads to uncertainty for the business as shares holders won't have the transparent information like they would with a public company.
3. Valuation
With a company listed privately, this can lead to investors pricing in the business rather than shareholders. This can result in slower performance in the price of the share.
4. Market perception
The fact that a company has been delisted can be seen as a negative development by some investors, who may view it as a sign of financial distress or poor management. This can affect the market's perception of the company and its shares, which can in turn affect the value of your investment.
I would not touch Steinhoff with even my pocket money for sweets at this stage.
Trade well, live free.
Timon
MATI Trader
Tradingmindset
6 Reasons why the gold price will drop with interest rate hikes The FOMC announced another 50bps (0.50%) Interest Rate increase to 4.50% which has lead to short term downside for gold as an initial reaction.
The question for many remains.
Why does gold drop when interest rates rise?
There are a number of reasons, but here are the top 5…
#1: Investors look elsewhere
Higher interest rates can make other investments, such as fixed investment assets and bonds, more attractive to investors. Gold investors will then sell their gold holdings and take advantage of higher interest rate yielding assets. This can lead to investors moving their money out of gold, which can lead to a drop in price.
#2: Stronger U.S Dollar
A higher U.S dollar can lead to gold being more expensive for investors who use other currencies to buy it. This can lead to a drop in demand for gold, which brings the price lower.
#3: Higher borrowing costs
When interest rates rise, this increases the costs of borrowing for business and consumers. They now need to pay more to borrow money to fund their operations. This can hamper the economic activity and drop the demand for buying stocks, precious metals and other investments.
#4: Higher yields on gold-mining companies bonds
Fixed investment gold bonds may seem more attractive than holding and investing in gold itself. This leads to a drop in gold mining stocks which essentially helps with the drop in gold.
#5: More supply less demand
With the factors I mentioned above, with investors leaving gold this increases the supply of the metal and decreases the demand. This leads to a drop in the gold price.
#6: Uncertainty floods the markets
When interest rates go up, this leads to uncertainty in financial markets (where gold is no exception). Investors feel the uncertainty and become worried for the economy. This can lead to a decrease in demand for gold and a drop in its price.
These are all speculations in theory with why the gold price may drop with an increase in interest rates. We notice that the markets don’t always play according…
Since the May 2022 Gold has moved in a sideways consolidation pattern. And this means, we can see the price continue in the range. Until we actually see a break up or down, the analysis in the medium term is sideways. We’ll be watching this carefully.
Follow for more trading and fundamentals tips and analyses from the info I've learnt over the last 20 years as a trader.
Trade well, live free.
Timon
MATI Trader
Higher interest rates can also lead to higher yields on gold-mining companies' bonds, which can make these bonds more attractive to investors. This can lead to a decrease in demand for gold-mining stocks and a drop in the price of gold.
Higher interest rates can also increase the opportunity cost of holding gold, as the metal does not generate any income or interest. This can make investors less likely to hold onto gold as a long-term investment.
Gold is often seen as a hedge against inflation, and higher interest rates can signal that the central bank is trying to keep inflation in check. This can reduce the perceived need for gold as a hedge and lead to a drop in its price.
5 Reasons why Interest Rate hikes causes markets to fall - FOMC We had the CPI come our better than expected (7.1%) versus 7.3% expected.
This means finally inflation is decelerating at an accelerating rate which is good for the markets.
However, today with the FOMC they are expecting a 50 bps hike or 0.5% rise.
Just a reminder in simple terms
Interest rates is the amount of money (expressed as a %) that a lender charges a borrower for the use of their money.
The interest rate is the percentage of the money you borrowed that you have to pay back as a fee.
Now there are a few reasons why interest rate hikes can cause global markets to fall including.
1. Better places to invest in
Investors take their money out of stocks and financial assets and into banks where the potential return is higher.
2. Strong economy
When interest rates rise it tells is the economy is improving and getting stronger. This can lead to higher inflation expectations.
3. Expensive for businesses
When interest rates rise, it makes the borrowing more expensive for businesses. This is based on the borrowing of buildings, assets and equipment. They now need to pay a higher rate to finance their debt.
4. Better for bonds and fixed investments
Again, investors want a better ROI. They will take money out of the financial markets and more into bonds and other fixed-income investments.
5. Higher US Dollar
Higher Interest rates often lead to a stronger dollar. U.S Exports become less competitive which hurts many multi-national companies. and less attractive for U.S stocks.
Hope that helps. Save this so you have an idea on how Interest Rates move the markets. Follow for more daily tips. Thanks for the support.
Trade well, live free.
Timon
MATI Trader
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
What a Leopard can teach you about Successful trading I’m from South Africa.
I’ve observed the movements and ways of life of wildlife at different game reserves, resorts and zoos. Penwarm, Kruger National Park, Londolozi and Sabi Sand Game Reserve to name a few.
And I’ve seen how leopards work when they catch their prey.
This methodology is very similar to how we as trader should act in the financial markets.
They lurk behind the bushes in a crouch position. They can wait all day for just the right moment to pounce on its prey and bring the hunt back to its family.
Even though they know they can outrun their prey, they still wait for the perfect moment to pounce.
Either they’ll wait for the animal in a vulnerable position, injured or the perfect time where they will have a higher probability of catching it..
Patience my friend.
That’s the most important element to grow your portfolio.
You don’t make money taking a trade. You make profits while holding, waiting and letting the market play out.
Here are five reasons why Patience is key for your trading success.
#1: Stops you from making impulsive decisions
Once you’re in your trade, holding and leaving it alone can help you avoid making impulsive decisions that are based on emotions rather than careful analysis.
#2: Helps you spot high probability trades
You need to have the patience to wait for the right opportunities to arise, rather than jumping into a trade just because you're feeling anxious.
#3: Hold onto winners
Trading is NOT about banking small profits.
Because you do that and your losses will outweigh your winners.
Your Risk to Reward should ALWAYS be above 1.5 at the minimum.
This way you’ll hold onto your positions for longer periods of time, which can increase the potential for profits.
#4: Takes away fixation
When you enter into a trade, you may feel the instinct to watch it and observe ALL day.
This will spark up your cortisol levels and will distract you from your higher priorities you have in a day. Once you’ve taken the trade, leave it alone to do its thing. You have your winning trading strategy in place.
#5: Wait for the prey
Like a leopard, successful traders need to be patient and wait for the right opportunities to arise, rather than acting impulsively or making rash decisions.
This is why having a clear and proven plan can also teach us the importance of running it which is essential for success in the financial markets…
If you enjoyed this article follow for more Daily tips. I enjoy sharing information I've gained since 2003.
Trade well, live free.
Timon
MATI Trader
9 Top Trading Movies of All time!If one of your goals is to learn how to trade well and profitably during the festive season...
Then you’ve definitely seen the opportunity within the calm.
Why not enjoy a trading movie marathon within the next couple of weeks?
In this TradingView article I’m going to recommend 9 of the top trading movies of all time, which you can enjoy…
Movie #1:
Wolf of Wall Street
In this thrilling and erotic movie you’ll learn how Jordan Belfort went from being an entry-job broker into a man who made a fortune of over $200 million dollars.
He achieved this through a widespread of corruption on Wall Street and in the corporate banking world.
Movie #2:
Rogue Trader
Find out how Nick Leeson thrived from the Asian market to make risky trades and break the oldest bank in England.
Movie #3:
Margin call
Another movie which shows the falling of a Lehman Brothers-like bank during the financial crash and how they do everything they can to avoid becoming bankrupt…
The movie is filled with capitalism, greed and financial fraud.
Movie #4:
Boiler Room
In this action packed movie you’ll see how 20 millionaires were made overnight through illegal, greed & corruption stock market practices.
Movie #5:
Wall Street 1987
In this movie you’ll see a money and greed driven stock broker who will do anything to get rich, including practising insider trading with the help of his hero (Gordan Gekko).
Movie #6:
The Big Short
Another movie with smart but arrogant pricks who were able to make millions of dollars by betting against the entire housing market…
Movie #7:
Arbitrage
In this movie you’ll see one crisis after another as a troubled hedge fund giant is desperate to sell his trading empire who eventually turns to an unlikely person for help.
Movie #8:
Inside Job
In this movie you’ll see how unaccounted and reckless actions of Wall Street lead to the global financial crash of 2008.
Movie #9:
Wallstreet 2: Money Never Sleeps
In this movie you’ll see how unaccounted and reckless actions of Wall Street lead to the global financial crash of 2008.
Which one is your favourite and can you think of anymore you'd add to the list?
Trade well, live free.
Timon
MATI Trader
5 Questions to Ask before you take your next TradeThis is a reference guide with five questions you need to ask, the next time a trade lines up and you need to take a trade.
Ask and answer these questions out loudly to help you execute your trade easily the next time.
Question 1:
Do I have a strategy or plan?
First, you need make sure you have a proven and profitable strategy.
Or else how else will you take a trade?
Whether you’re following:
• Your own proven trading strategy
• My 20 year highly successful MATI Trader System
• The 9 year popular Red Hot Storm Trader service
You first need to establish you have a strategy and system to follow each time.
Once you have one of the above, move onto the next question.
Question 2:
Has a trade lined up?
Next, you’ll need to know if a trade has lined up according to a proven and tested trading strategy.
Whether your trading system is a swing, indicator, mean reversion, Gartley, moving average, volume or a price action system like the MATI Trader System.
you'll need to have the green light to know when a trade has lined up and whether it’s ready for the go.
Question 3:
Do I know where to place my trading levels?
Once a trade has lined up, you'll need to know or calculate exactly where to enter, place your entry, stop loss (for risk) and take profit (for reward) levels.
These three levels are essential for entering your trade.
This way you'll have a systematic approach with every trading position you take.
Question 4:
Do I know how much to put into my trade?
Next is position sizing.
Trading is one big risk to reward game.
You'll need to choose an exact percentage of your portfolio that you're willing to risk to gain with each trade.
With high probability trades, I never risk more than 2% of my portfolio.
With medium probability trades, I drop that risk to 1.5% of my portfolio per trade.
At this point, you also need to know how many CFDs you’ll need to buy/sell to make sure your risk is low.
Question 5:
Am I ready to press the button?
Finally, you'll need to do final checks.
This is where you’ll confirm with the strategy, check all your trading price levels and position sizes to confirm the that you’re ready to push the button to get you into your trade.
Once all is ready, you just need to do just one more thing.
Push that BUY or SELL button.
Those are the only questions you'll ever need to enter a trade. Unless I'm wrong, let me know what other question is missing from the list.
Trade well, live free.
Timon
MATI Trader
3 Trading Lessons from the Wolf Of WallstreetIn short, we learn how Jordan Belfort made a fortune selling Penny Stocks and top blue-chip stocks.
He was also able to turn from an entry-job broker into a man who made over $200 million dollars through widespread corruption on Wall Street and in the corporate banking world.
Spoiler Alert – It ended with Jordan showing his path to redemption through motivational speaking and teaching people how to sell through his programme called “The Straight Line System”.
And now Jordan charges over $100,000, to give advice to top companies and high net worth individuals.
While I was watching this legend of a movie, it reminded me of a live event of his I attended.
It was on 2 March 2014, where he taught us marketing, entrepreneurship and how to attract & sell products to an audience from A to B.
As he was explaining his approach, it caught my attention and taught me a few timeless principles with trading on the financial markets.
Here are the three top trading lessons I learnt from the ‘Wolf Of Wall Street’.
Lesson #1: MUST
Jordan Belfort says…
“Winners use words that say “Must” and “Will”.
His three common tenets to his ‘Straight Line system’ are:
1. We MUST control the sale and stay within the boundaries of the ‘Straight Line System’.
2. We MUST establish an instant rapport.
3. We MUST use that rapport to gather intelligence.
It’s all about commitment…
And that’s the big mistake I see most traders make.
They have the strategy, the plan and the steps to enter their trades and yet, when all is lined up, they procrastinate.
They use words like “should”, “could” and “would”.
“I SHOULD get into the trade, but I think the news is going to come out with worse than expected results.”
“I COULD get into the trade, but it’s my birthday and I don’t want to lose money today.”
“I WOULD get into the trade, but I feel it’s not going to work out.”
They continue to hesitate and make excuses to delay the most important actions at the right time.
If you want to make it in this game and become a winning trader, you got to follow your strategy and do what needs to be done when you’re supposed to.
If you don’t COMMIT, you’ll never show your full potential.
Throw out the word “should” and day the following:
“I MUST do what needs to be done and
I WILL do it as soon as I need to.”
Lesson #2: Figure of authority
When Jordan Belfort started the company Stratton Oakmont, he became successful in a short amount of time.
It wasn’t just the name.
It wasn’t just the skills.
And it wasn’t just his team…
No, this is because he used his winning formula and executed his plan with pure confidence…
When I attended Jordan’s event, he pretty much summed up three points that helped him follow through with his ideas and strategies every time.
1. Be enthusiastic as hell
2. Sharp as a tack
3. Be an expert
Trading is all about execution with confidence.
Whether you’re following your own strategy – You run the show.
You have to show your ‘enthusiasm’ with passion and commitment.
You have to be ‘sharp as a tack’ as you are the one who needs to be unbiased and find the trades that line up accordingly.
You have to show ‘figure of authority’ because you’re the boss and the one who makes the calls…
Lesson #3: The first four seconds
Jordan says, you get a mere four seconds to influence your prospects decision about you and your product or service.
If you possess the qualities where you’re ‘sharp’, ‘enthusiastic’ and an ‘expert’ – next is the execution.
You only have four seconds to execute your plan.
Any longer and the excuses and procrastination will start to creep up again…
When I see one of my five patterns line up and establish on a financial market, I start setting up the trade IMMEDIATELY.
I don’t look at the news, I don’t ask for a second opinion and I certainly don’t find reasons to not take the trade.
I give it four seconds, and go straight to the risk tool to calculate my stop loss and take profit levels.
AND I EXECUTE!
If you enjoyed this article and would like to see more follow and LIKE the article, so I know I'm in the right direction to what you wish to learn.
Trade well, live free.
Timon
MATI Trader
5 Laws of Trading SuccessTo trade successfully in the financial markets, it's important to consider five key factors:
The markets you choose to trade in.
The method you use to enter and exit trades
The money you use for risk management
The mind-set you bring to the process.
The miscellaneous rules and tools you use to increase your win rate and manage your drawdowns.
MARKETS
First, when it comes to the markets you choose to trade in, it's important to select ones that align with your knowledge, skills, and interests. This will help you make informed decisions and trade with confidence.
METHODS
Second, when it comes to methods, it's important to have a well-defined strategy in place for when to enter and exit trades. This can include using technical analysis to identify trends and patterns, or fundamental analysis to assess the underlying health of a company or economy.
MONEY
Third, when it comes to money, it's important to have a risk management strategy in place to protect your capital. This can include setting stop-loss orders to limit potential losses, or using position sizing to manage the amount of risk you take on per trade.
MIND
Finally, when it comes to the mind-set you bring to trading, it's important to maintain a sense of confidence and discipline. This can help you stay focused and make sound decisions, even when faced with volatility or uncertainty in the markets.
Overall, trading successfully in the financial markets requires a combination of selecting the right markets, using effective methods, managing money wisely, and maintaining the right mind-set.
MISCELLANEOUS
These are the extra tips, rules and tools you use to improve your trading strategy’s win rate, lower the drawdown and find way to optimise your system’s success. From having a time stop loss, ideas to adjust your stop loss, when NOT to trade, when trades are low, medium and high probability.
This is what gives you the extra edge in the markets…
If there another Law I’m missing?
These are just the 5 I’ve gathered over the last 20 years as a financial trader and strategist.
Trade well, live free.
Timon Rossolimos
MATI Trader
10 Steps to Start Trading WellTo start anything in life, no matter what it is or how long it may seem, you need to take the first step.
With trading it’s the same, with one little difference.
You have the opportunity to learn the costly mistakes, tips and the strategies that have worked for other successful traders.
This way you can, take the shortcut to kick start your trading career, make it easier and more enjoyable.
Here are ten quick steps you can take to start your trading on the right path.
STEP 1:
Choose the market/s you’d like to trade
(Shares, Forex, Commodities, Indices or Crypto-currencies).
STEP 2:
Choose a broker or market maker you’ll trade with
(Make sure they offer CFDs or Spread Betting trading).
STEP 3:
Learn how the trading and charting platform works
(Call your broker who’ll be happy to help with the above first steps).
STEP 4:
Make sure you have a proven and a profitable trading strategy
(Every strategy needs to have its own entry, exit levels and risk management rules).
STEP 5:
Back-test your trading strategy
(Back test 20 trades and then forward test 20 trades on your paper account).
STEP 6:
Deposit money into account
(You can start trading with less than R1,000 to test the markets in real-time).
STEP 7:
Take every trade according to the strategy
(This way you can develop your track record).
STEP 8:
Track your trading performance to ensure your portfolio is on the up
(Win rate, average winner, average loser, no. of winners, losers and other metrics).
STEP 9:
Read more trading books and watch YouTube videos to learn extra tips
(Each tip can help boost your winners, cut losers and increase your win rate).
STEP 10:
Keep your head in the game
(You’ll need passion, integration and determination to maintain your trading career).
It’s your turn
Print and laminate these steps, so you know how to start trading – the right way.
Trade well, live free.
Timon
MATI Trader
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
HOW BLOCKCHAIN WORKS - EASY POEMBlockchain, oh so grand,
A digital ledger in demand,
Decentralized and secure, like a band
A new way to assure and keep the bond.
Transactions are fair,
And free from despair,
A chain of blocks,
Connecting folks,
All across the land,
Blockchain, oh so grand.
This poem describes blockchain as a
decentralized, secure digital ledger
that is used to manage transactions.
It explains that the technology uses a chain
of blocks to connect people and ensure
that transactions are fair and transparent.
4 Sacrifices every trader makesFirst of all, trading is not a short-term proposition to get rich.
Anyone who says otherwise, needs to spend some time thinking about doing before speaking inside a jail cell.
No…
Trading is a lifestyle that you’ll need to adapt and integrate into yours and your family’s financial future.
Whenever you start something new, especially for a financial gain, you’ll need to make some form of sacrifices.
In today’s article we’ll discuss the four sacrifices every successful trader will make.
SACRIFICE #1:
Time
The money is not going to just fall into your lap. You’re going to need to put in the time to work through the process of successful trading.
As a new trader you’ll need to read as many books, websites and forums on how to trade.
This will prepare you for what trading is all about.
Then you’ll need to take time to learn which:
• Markets you wish to trade
• Method you’ll use to get in and out of your trade.
• Money you’ll risk to grow your portfolio
• Mind you’ll need to adapt to avoid any unnecessary emotions from taking over and interfering with the process.
Then finally you’ll need the time to back-test, forward-test and actually trade on a daily or a weekly basis.
This time can range from 5 minutes a week, which is what I follow with the MATI Trader System, to 5 hours a day if you’re more of an aggressive intraday based trader.
No matter what career you pursue, you’ll need to sacrifice the necessary time to learn the ins and outs of it.
SACRIFICE #2:
Money
Another inevitable sacrifice you’ll need to make is to take money out of your savings to trade.
I say savings because you should never risk any money you can’t afford to risk or any money that you use on a monthly basis to finance your life.
Once a month as you get paid, deposit just 5% of your savings into your trading account.
This way you’ll be able to grow your portfolio at a faster and a more sustainable.
The other side of money you’ll risk is of course, with every trade you take.
Most successful traders out there risk around 1%, 2% to 3% per trade, in order to make a 2%, 4% or even a 6% gain on your portfolio.
SACRIFICE #3:
Thrill
You’ll need to sacrifice the THRILL of trading and exchange it for FOCUS.
Trading should be seen as a business rather than playing the lottery once a week.
As much as I have loved trading the MATI Trader System for the last 18 years, I’ve also taken it very seriously.
Before you commit any money into the markets, you’ll need to have a solid watch list, trading system and money management rules to follow methodically.
This way you’ll have a mechanical approach to trading without the thrill, when you bank a profit or without the devastation, anger and disappointment.
Remember that a winning portfolio is not about taking a few trades but the 100s of trades over time.
Make sure you have the focus for when you trade in the week and sacrifice the thrill for on the weekends when the markets are closed.
SACRIFICE #4:
Space
The final sacrifice you’ll need to make is to make space.
Make sure your trading desk is clear of any distracting books, devices and objects that have no aid to your trading.
A cleaner and clearer trading desk will prevent a number of distractions for when you trade which could result in unnecessary stress, anxiety and worry.
Also you’ll most likely need to make space for just one more monitor.
By having two monitors, you can use one for your trading platform to buy, sell and modify trades.
The other monitor will then be used for your charting platform to analyse, assess and seek more trading opportunities.
Are they actually sacrifices?
Coming to the end of the article, I’ve just realised something.
These four ‘sacrifices’ you’ll make as a professional trader – Are they sacrifices or are they just opportunities you can take for trading to be smooth sailing?
How Bollinger Bands work and their best parametersJust a reminder...
A Bollinger Band resembles a moving cylinder with three lines.
A top, middle and bottom line.
These three lines are plotted on any chart and you’ll see the price of the markets moving in-between these levels.
When the price crossed above the middle line, the trend is up.
When price moves and stays below the middle line, the trend is down.
There are three parts to the Bollinger Bands. Upper, Middle and Lower Bollinger Band.
Here are my parameters…
The length (20) , shows you the Moving Average of the Middle Bollinger Band. Which in this case is 20 MA and is shown in the chart as the orange line…
The Source tells us we are using closing prices in the chart…
That means, when the JSE All Share Index closes for the day – that is the closing price that will be used for the BB.
StdDev is 2… Bollinger Bands are envelopes that base a Standard Deviation above and below a simple moving average of the price.
Because the distance of the bands is based on standard deviation, that’s why we are able to see a symmetrical envelope around the price…
Most Bollinger Bands parameters are set to 20MA and 2 Standard Deviations on most charting platforms.
But now you know what to set it to, to maximise your usage...
If you have any questions about indicators feel free to ask. I've been in the markets since 2003 and enjoy sharing information...
Trade well, live free.
Timon
MATI Trader
A Santa Claus Rally for the JSE in 2022? What is expected from a Santa Claus Rally?
The Santa Claus rally, is essentially where we see stock prices locally and globally rise and close off positively by the end of December.
And so, we can expect a rally in December which we can all profit from…
Why December? We aren’t 100% sure but we have some speculations on why the market tends to rally…
#1: Investment managers cut down on their taxes
This is the time when you’ll see investors and investment managers, selling their stocks to lock in tax reductions before the end of the year.
Once they sell their positions, they then buy other stocks and markets that they believe will rally in the next year.
The buying of these stocks, leads to a rise in stock prices which pushes the stock market indices up.
Theory #2: Investors enjoy their bonuses by buying into investments
Investors also like to spend their bonuses on investments like stocks…
And when they buy, demand picks up.
And this leads to higher stock market prices.
Speculation is one thing.
But nothing confirms a Santa Claus Rally more than proof in the charts…
The JSE has gone up 14 out of 19 Decembers!
What you see, is the monthly JSE-ALSI stock market chart since 2003…
Looking at the chart you can see how each December (Vertical blue line) performed from 2003 up ‘till 2021
Year Gain/Loss
Year Gain/Loss
2003 : 7.39%
2004 : 1.28%
2005 : 6.84%
2006 : 3.90%
2007 : -4.99%
2008 : 0.51%
2009 : 2.62%
2010 : 6.69%
2011 : -3.26%
2012 : 2.72%
2013 : 3.27%
2014 : -0.53%
2015 : -1.15%
2016 : 0.48%
2017 : -1.33%
2018 : 4.63%
2019 : 3.51%
2020 : 3.83%
2021 : 4.66%
So, there’ve been 14 out of 19 Decembers (74% win rate) that have shown positive gains.
And in total, the JSE has accumulated 41.07% gains in all of those Decembers.
This means, you have a higher chance of profiting from buying this Christmas than selling.
And right now, this December the JSE ALSI 40 is already up an insane 14.48% gain.
And I am seeing no signs of a slow down yet…
I guess a Santa Claus rally is more likely than not, but we have had three to four winning years in a row... Things are looking good for now but the month is young...
Do you think we will have a JSE Santa Claus Rally?
Let me know.
Trade well, live free.
Timon
MATI Trader
2 Steps to calculate Value Per Pip -USD/JPY - 2 Decimal placesHow to find the ‘Value Per Pip’ with the YEN
Here are the trade specifics:
Portfolio size: $5,000
Max risk percentage per trade: 2% ($100)
Trade type: Buy (go long)
Currency pair: USD/JPY
Entry price: 136.80
Stop loss: 136.30
Step 1:
Calculate pips risked in trade
As each pip movement is two decimal places on each currency, you’ll multiply the difference between the entry and your stop loss price by 100.
Here’s the calculation:
Trade risk in pips
= (Entry – Stop loss) X 100
= (136.80 – 136.30) X 100
= 50 pips
This means, you are prepared for the market to move 50 pips away from your entry before you’ll be taken out of your trade for a loss.
Step 2:
Find your ‘value per pip’
‘Value per pip’
= (Portfolio risked per trade ÷ Pips risked in trade)
= ($100 ÷ 50 pips)
= $2
This means, on your trading platform you’ll type in, $2 for where it says ‘Rands risked per pip’, ‘Pip value’ or ‘Volume’, place your entry price at 136.80 and your stop loss price at 136.30 in order to risk $100 of your portfolio.
If you found this useful, I'd like to hear in the comments.
Trade well, live free...
Timon
MATI Trader
3 Steps to find your Value per Pip with Forex - 4 decimalsDo you know how much money you’ll risk every time you take a Forex trade?
To be an astute Forex trader, you’ll not only need to know your trading levels such as your entry, stop loss and take profit price, but you’ll also need to how much money to deposit into your trade to risk a certain portion of your portfolio.
We’ll go through a three step checklist, you’ll need to find your ‘value per pip’ which is also known as your ‘rands risked per pip’.
The ‘value per pip’ explained
The ‘value per pip’ is the amount of money in your portfolio that you’re willing to risk or gain for every one pip that moves in or against your favour.
If you choose a ‘value per pip’ of R5 and the market moves 20 pips away from your entry price, this means you’ll incur a R100 loss (R5 risk per pip X 20 pips movement).
Similarly, if the market moves in your favour of 20 pips, then you’ll be up with a gain of R100.
However, we all have different portfolio values and so the ‘value per pip’ will be different for each of us.
That’s why you’ll need a checklist to follow in order to find your ‘value per pip’.
3 Steps to find your ‘Value Per Pip’
Here are the specifics for the trade
Portfolio value: R50,000
2% Max risk per Forex trade: R1,000
Trade type: Buy (go long)
Currency pair: AUD/USD
Entry price: 0.7010
Stop loss price: 0.6970
Next, you’ll need to follow three steps:
Step 1:
Calculate the portfolio risk per trade
Before each trade you take, you’ll need to know exactly how much money you’re prepared to risk.
If you’re a risk averse trader, like me, you’ll risk 2% per trade.
If you’re an aggressive trader, maybe you’ll risk 5% of your portfolio per trade.
For this example, let’s stick to 2% risk.
You’ll then multiply your current portfolio amount by the risk percentage you’re willing to lose in the trade.
Here’s the calculation.
Risk per trade
= (Portfolio size X Max percentage risk per trade)
= (R50,000 X 2%)
= R1,000
R1,000 is all you are prepared to risk per trade, when your portfolio value is R50,000.
Step 2:
Calculate pips risked in trade
The next step is to calculate how many pips you’re prepared to lose between the entry price and your stop loss price.
As each pip movement is four decimal places on each currency, you’ll multiply the difference between the entry and your stop loss price by 10,000.
Here’s the calculation:
Trade risk in pips
= (Entry – Stop loss) X 10,000
= (0.7010 – 0.6970) X 10,000
= 40 pips
This means, you are prepared for the market to move 40 pips away from your entry before you’ll be taken out of your trade for a loss.
Step 3:
Find your ‘value per pip’
You now have all of the variables you’ll need, to calculate the ‘value per pip’ with your Forex trade.
Here’s the calculation.
‘Value per pip’
= (Portfolio risked per trade ÷ Pips risked in trade)
= (R1,000 ÷ 40 pips)
= R25
This means, on your trading platform you’ll type in, R25 for where it says ‘Rands risked per pip’, ‘Pip value’ or ‘Volume’, place your entry price at 0.7010 and your stop loss price at 0.6970 in order to risk R1,000 of your portfolio.
You have the three step checklist to find your ‘value per pip’ for every Forex currency that has decimals 4 points to the right.
Trade well, live free.
Follow for more daily Trading Tips and lessons I've gained over the last 20+ years.
Timon
MATI Trader
How much money in your account to bank your monthly income?“How much money would you like to bank a month?”
$3,000
$5,000?
$30,000?
To answer this question and to get you on the path of achieving this income, you’ll need just one tool.
Pull out your profitable trading plan
You and I both know that to set a monthly income goal for trading, you’ll need a solid, proven and easy to follow game plan.
If you do have a trading strategy that you’re happy with and works for you, then great.
You should already have a strong indication on how your portfolio has performed during an array of different market environments.
Obviously the more data you have on your trading, the higher the reliability that you’ll earn similar monthly returns in the future.
Once you have gathered your historical trading data, you’ll then need to jot down four important stats namely:
Four stats to create a desired income per month
Stat 1:
No. of expected winning trades per month.
Stat 2:
Average % gain in rands per trade.
Stat 3:
No. of expected losing trades per month.
Stat 4:
Average % loss in rands per trade.
To choose the monthly income you’d like to pocket per month, you’ll need to know how much you’ll need in your trading account.
Let’s say you want to bank an average $3,000 on average per month, with both winning and losing trades.
For this article, let’s use the metrics of the MATI Trader System that I’ve back and forward tested for the past 20 years.
Let’s plug the stats into the table to see.
Expected return a month: $3,000
Stat 1:
3 Winning trades per month.
Stat 2:
4% Average gain per winner.
Stat 3:
2 Losing trades per month.
Stat 4:
2% Average loss per loser.
We now have all the information to calculate how much money you’ll need, in order to bank an average monthly $3,000.
1 Formula to calculate how much you need in your trading account
Step 1:
Find out the total percentage gain you can earn per month
= (Winning trades X Gain % per winner)
= (3 Winners X 4% Gain)
= 12% gain.
Step 2:
Calculate the total percentage loss you can lose per month
= (Losing trades X Loss % per loser)
= (2 Losers X 2% Loss)
= 4% loss
Step 3:
Finally calculate the amount of money you can net on average per month
= (Total gain %) – (Total loss %)
= (12% Gain – 4% Loss)
= 8% Net gain
Step 4:
Know your trading account size to pocket a desired monthly income.
= (Expected amount to earn ÷ Net % return per month)
= ($3,000 ÷ 8% Return)
= $37,500
So to bank around $3,000 on average per month, with 3 winners and 2 losers, you’ll need to have a trading account of $37,500.
Don’t be fooled if you think you’ll bank $3,000 EVERY month!
As you know, my goal through sharing this information is to show you how realistic successful trading works
With pretty much every trading system, you can expect around three to four losing months a year. This year I had around 5 losing months - It's been a tough one.
Some months you may be down $2,000 and other months you’ll be up $5,000, we never know for certain how the future will pan out.
However, with a proven and a long back and forward tested trading system, with this formula will give you the edge of what the likelihood of your returns will be.
The formula works on any size portfolio or desired income - I am just giving you an example with banking a $3,000 a month...
If you enjoyed this article or would like to share feedback I'd love to hear it :)
Trade well, live free..
Timon
MATI Trader
Why I LOVE Trading View - Best I've seen in 20 yearsWhether you're new to trading or you’re an advanced chartist – we all have the same expectations when it comes to choosing a charting platform.
It must be online, fast, safe, customizable and user friendly.
And you know what – it should be free!
With the high competition of charting platforms available world-wide, each company must ensure they have free, live streaming, cutting edge, secure and easy to use platforms to offer their customers and clients at the very least – top-notch service.
I’ve used many charting platforms since 2003. From London School of Investments, Amibroker, MetaStock, ProTrader, Cycle Trends, IG Markets, Oanda, MetaTrader, Sword Fish… You name it.
But there is ONE free charting platform, which has become my absolute favourite over the years,
Trading View...
TradingView (est. 2012) is a world leading, cutting-edge FREE online visualisation financial charting platform for beginners up to the most advanced professional traders, with over 10 million subscribers.
The platform has direct access to unlimited live streaming data from stocks, futures, bonds, indices, Forex, commodities, ETFs and even crypto-currencies.
It allows you to customise your watch lists, back test your strategies, share, publish or enjoy live and active trading ideas, signals and tutorials through the platform or directly to your Twitter and Stock Twits feed.
With TradingView you’ll be able to enjoy this free charting phenomena across either your web browser, Android or Apple iOS devices.
It's incredible to have such a thorough and advanced charting platform. It's even more amazing for new traders under 5 years of experience to have this cutting-edge technology platform to learn how to trade and enjoy the trading process...
Trade well, live free.
Timon
MATI Trader
My three favourite Moving Averages on any chartI have three Moving Averages that I plot on any market.
7 MA
21 MA
200 MA
Here is the JSE ALSI 40 with the three moving averages.
In the above daily chart of the JSE you can see I’ve plotted the 7MA (Red), 21MA (Blue) and 200MA (Black).
Now I have two simple rules for when the market is in an uptrend or a downtrend.
Downtrend with the three Moving Averages
You know the market is in a downtrend when the price is below the 200 MA.
Also, 200MA is above the 21 Moving Average.
And the 21 MA is above the 7MA.
In other words.
7MA < 21MA < 200MA.
You can see on the left part of the chart where the trend is down (Red arrow).
This tells me that the momentum is bearish and the market is more likely to fall than rise.
I will then avoid buying the market and instead will only look to short (sell) and profit from a falling market.
Then we have the
Uptrend with the three Moving Averages
What tells me the market is in an uptrend is when the price is above the 200 MA.
Also the 7MA is above the 21MA.
And the 21MA is above the 200MA.
You can see on the right part of the chart where the trend turns up (Green arrow).
This tells me that the momentum is bullish and the market is more likely to continue to rise.
I will then only look for longs (buy) the market and avoid shorting or selling the market.
Now you have my favourite 3 Moving Averages in a bag for you to plot on your chart and master the trends.
Trade well, live free.
Timon
MATI Trader
Connect below with the socials...
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
How many Crypto Currencies are there?You’d probably think there are around 100, 200 maybe 1,000 crypto currencies.
And that’s because the news only covers a handful, but I think you would be surprised at the actual number.
Right now, there are over 12,000 different crypto currency coins out there.
And they are increasing by 1,000 new crypto currencies every month.
The amazing thing is, unlike shares, these coins are very easy to create and regulate - YOURSELF.
You can even hire someone from Fiverr to make you a crypto-currency for less than $20.
I could even get a MATI Trader coin made if I wanted to.
But this isn’t good news in my opinion.
You see, most crypto currencies have very little purpose other than making money for their developers through investors buying and selling the coin.
So which cryptos do I trade?
For me it’s only down to two crypto currencies.
Bitcoin and Ethereum. The Father and the mother of the crypto market.
They are the biggest, most recognized and understood than any other crypto in circulation.
But the crypto winter is not over and the bottoms are not set yet.
There still needs to be a lot of fixing and regeneration of confidence before we see any upside with crypto…
I’m sitting on my hands right now, until we see a change in the trend.
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.
