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There is a saying that 90% of the retail trader and investors tends to lose money.
Why is it so? And what is that 10%, who makes money, do differently?
Watch below video as I answer this question using a unique 5M framework.
So, You want to be a trader or investor.
Just like any other business you need to have the right set of tools and fundamentals in place to set you up for success.
There is a saying that 90% of the traders don't make money consistently.
So what sets apart those 10% of people who consistently make money from the market?
You see, if you want to be a great artist or you want to start your own business, you need to have certain core strategies, fundamentals in place.
But what happens in trading business is that when someone starts trading, they usually fund a trading account, find a good broker and either listen to some people, and look for the tips etc. and start trading.
And the results are usually not good,.
But on the...
Is there an investing strategy that one can use to profit from 2020 US Presidential Election?
Historically, S&P 500 volatility has typically been higher in election years than in non-election years, as markets frequently reprice the probability of the future administration’s policies.
Since 1932, an incumbent US president has never failed to win re-election unless a recession has occurred during their time in office.
If you examine the return of the S&P 500 Index for each of the 23 election years since 1928, you'll see that in only four of them was it negative.
However, this year may not be as straight forward as the data may suggest.
The most profitable year of a presidential cycle is the third, followed in order by the fourth, second, and first.
Based on widely published research, the 3rd year of presidential cycle has proven to be one of the best years to invest.
In fact, a research published by Marshall...
The price of one American oil futures contract crashed on Monday into the negative for the first time in history.
The May WTI crude contract CL.1, -113.23% CLK20, -113.23% closed at -$37.63 a barrel, a one-day drop of $55.90, or 306%, according to Dow Jones Market Data. Those prices—at negative $$ per barrel—mean that companies must now pay a buyer to take oil off their hands and store it if they want to exit the market.
Since the COVID-19 epidemic started, S&P500 crashed over 30% to 2192+/- from the high of $3393.52 in just matter of 4weeks. Dow Jones, Dow Transport, Nasdaq and Russell 2000 all suffered similar fates. However, market panic was nowhere else as pronounced as in Crude Oil.
On 8 March 2020, Saudi Arabia initiated a price war with Russia, facilitating a significant fall in the price of oil. Over a few weeks, US oil prices fell by 34%, crude oil fell by 26%, and Brent oil fell by 24%. The price war was triggered by a breakup in...
What is a circuit breaker in stock market? How does it work? And what is a trading halt?
Though these are rare occurrences but market situations like today can trigger these rare triggers.
A trading halts, sometimes referred to as a circuit breaker is a financial regulatory instrument that is in place to prevent stock market crashes from occurring. As a result, circuit breakers stop trading as per rules in order to allow accurate information to flow amongst market participants.
As a reminder, on Monday 9 Mar20, Asian markets on average have crashed over 4% and ES Mini S&P500 futures, Nasdaq futures are all in locked limit down trading halts.
For the New York Stock Exchange (NYSE) circuit breakers have three tiers. These circuit breakers react to the price change in the S&P 500. The first tier is a 7% decline in the S&P 500. Should that occur, trading will pause for 15 minutes. The next level is a 13% decline, that...
Outbreak of coronavirus or Covid-19 has resulted in crippling stock markets world over.
After hitting all time 2weeks ago, S&P500 has crashed over 10% in less than two weeks and the results are not much different elsewhere in the global markets.
Though there are several ways one can slice and dice asset classes, for this article I will assume four major asset classes and exclude cash and currencies:
Since the crash began on 21st Feb, safe heavens assets like US Bonds have outperformed broader stock markets by roughly 15-16%.
US 30 Years Bonds have rallied +5.23% while S&P500 down -10%.
Surprisingly, Gold which acts has a safe heaven during uncertain times, didn't deliver great results either during these 8days period.However, ever since coronavirus outbreak was spreading from early...
On a weekend afternoon, I received a phone call from one of my mentees who was learning to trade options using a high probability options trading system.
He was a diligent trader who always analysed his trades after they closed and made it a point to read up on trading. This time around, he had a few losing options trades in S&P500. After analysing his trades, though, he couldn’t identify what errors he had made which had led to losses. So, he decided to give me a call to seek my help.
We talked for a while on the phone, and I spent a good amount of my time understanding his trades. I realised soon that there were no errors on his part!
He had a workable trading approach that provided good results with a nice payoff and winning ratios. He followed his rules accordingly, and his execution was perfect. The losses that had happened were simply because- there were economic situations outside his control, and markets can remain irrational longer than one...
Time and again, I have seen people talk about options as if options are from different planet and something average investor or trader can’t make money with? Are options really that bad? I mean, do people even understand what options are before they start trading options? A lot of money is being made in options. I mean, a lot. Even Warren Buffett trades options. Options can’t be as bad as people make out, can they?
As someone who has been writing about options for 90+ months, I thought to clear some of the biggest myths about options. With this new series of articles my intention is to introduce you to a framework that gives ideas on how to think about options and reasons on why you shouldn’t or should trade options. Once you understand the “WHY”, you can find tons of options trading books in the market which can introduce you to options language should you decide to trade those.
The Objective of this series is to...
Options Trading can be extremely rewarding. However, it is also a fact that majority of Options traders struggle to make money consistently. Before you begin to trade options, it is crucial to understand basic nature of options and how Options are different from other trading instruments e.g. stocks or forex.
Here is simple, straight forward TOP10 list that might help you in understanding basic nature of options.
Options give you the right to buy or sell an underlying instrument at specific price. Options are available on a variety of different underlying assets including stocks [e.g. Apple (AAPL), Microsoft (MSFT)], futures (e.g. S&P500 futures commonly known as ES_Mini), Commodities (e.g. Crude Oil, Gold, Wheat), Forex (e.g. JPY, CHF, Euro), Bonds (e.g. 30Year, 10 Years) and indices (e.g. S&P500, Nasdaq, Dow Jones). In fact, the list just keeps on growing. Once you have identified the desired market or underlying asset to trade, you may simply check...