Warning Signal?

We are currently in the 2nd longest bull market run in the history of the US stock markets. And although anything that you might have purchased might have gone up and made good profits so far, its time to be cautious as we go forward. Lets look at how it ended the last time the markets were riding a great bull up, specifically the last 7 times.

Longest bull market run
Considering we have seen at least an average of a 50% drop after, this time might not be very different from that figure considering we saw a 57% crash in the most recent episode in the 2008 financial crisis. Although the numbers are scary, it does not have to be panicky as long as you know how to prepare and be positioned right for this once in a lifetime wealth transfer. Remember stock markets are a zero-some game meaning your profits are someone else’s losses and vice versa. Its only a matter of the $$ changing hands and a great opportunity for us. Even when you look at the charts below of the precious metals ( gold and silver ) futures – we notice that the volume has gone up considerably in the last couple of years where people are trying to hedge for the impending correction.

GC Futures 20Y chart SI Futures 20Y chart

And during the same time, the S&P 500 futures contract has been losing volume and been on a unexpected, unsustainable run up. This is hanging by a thread and the slightest of the triggers could lead to the start of the crash. Although its hard to predict when the crash will happen, we can be prepared for what is to come.

S&P Futures 20Y chart

For those who have attended my coaching or training, you know I always talk about buying precious metals especially more SILVER than GOLD for various reasons that will make this post way too long. I am not a big fan of holding the FIAT currency but I constantly use it to generate more $$ and buy ASSETS with real value using it. Because only these will stand the test of time, and now that we are in a precarious time, would you not want to buy insurance for your stocks? Yes its possible through the purchase of put options and it will help mitigate the risk in case there is a crash TOMORROW. You or I can’t predict when exactly its going to happen, but we can certainly PREPARE for it.

If you are new to the world of OPTIONS and do not understand how they work – I highly suggest that you start spending some time towards learning it – as the returns from it are far grateful than what you can imagine. In fact I have broken down the basics of options into small understandable modules that is easy for anyone to consume, and I highly suggest you start with it. Click here to get access to this course right away! You don’t want to wait on this – See you there!

Intro Course Outline

Day Light Saving Time

Daylight saving time (DST) or summer time is the practice of advancing clocks during summer months by one hour so that evening daylight lasts an hour longer, while sacrificing normal sunrise times. Typically, regions with summer time adjust clocks forward one hour close to the start of spring and adjust them backward in the autumn to standard time.
Most of the United States begins Daylight Saving Time at 2:00 a.m. on the second Sunday in March and reverts to standard time on the first Sunday in November. In the U.S., each time zone switches at a different time.
In the European Union, Summer Time begins and ends at 1:00 a.m. Universal Time (Greenwich Mean Time). It begins the last Sunday in March and ends the last Sunday in October. In the EU, all time zones change at the same moment.
Introduced for the first time in 1918 during World War I for just one summer, Daylight Saving Time was used only intermittently and only in some states until World War II, when it was reintroduced nationwide and year-round as “War Time”. The practice lasted from 1942 to 1945, but was followed by patchwork local use again afterwards. A federal law on DST was enacted in 1966, and it has been in use in various permutations and with a number of adjustments ever since.

Many people have difficulties remembering which way the clock moves when the time changes. One easy way is to remember the mnemonic “spring forward, fall back“.

Note that the spelling “daylight savings time” (with an “s” at the end of “savings”) is considered to be incorrect, even though it is more commonly used, especially colloquially. The correct spelling is “daylight saving time” as the term refers to the ‘saving’ of daylight in the morning, to be used in the evening. There is no connection with the word “savings” as used in “savings accounts” or “savings bonds”, which refers to money deposits held in bank accounts.

daylight-saving-time-2017
“It takes 20 years to build a reputation and 5 minutes to ruin it. If you think about that, you’ll do things differently.” – Warren Buffett

2018 Guide to Trade Bitcoin Futures

I’d like to wish all of you a very happy and prosperous new year and one of the goals I have for 2018 is to explore things I did not do in 2017. What better way to start than by getting my feet wet in BTC trading? I had put away trading bitcoins for some time as I did not want to open separate trading accounts just for these crypto-currencies. I just logged into my TD Ameritrade account to find out that they are offering both the CBOE and CME Bitcoin Futures for retail investors to trade. And now that its finally trading on the US Stock Markets, I decided to give this a try on the first trading day of 2018.

My First Trade on BITCOIN

xbt long 02-jan-2018
Screenshot of /XBT Chart  from TD Ameritrade

I traded on a single contract of /XBT and went long at 13,360 as there was minor support at that level. This was a slightly aggressive trade with a tight stop loss, and the trade started working in my direction. Usually I would have scaled up this position on the way up, but with the high margin and trying out a new product for the first time, I decided to stick to just the 1 contract and exited at 14,090 when the underlying hit the 200SMA on the 15min chart.

Profit per contract: $14,090-$13,360 = $730
Time in Trade: A little over 7 hours

CONTRACT Specifications

For those of you wondering about the differences in the two Futures Contracts, here are the summaries of both of them.

btc
Click here for CME Contract Specifcations!

xbt
Click here for CBOE Contract Specifcations!

Things to Note:

1. Spread Size: Because these futures contracts are still very new and not even a month old, the volume in these is quite low. So when you are trading these, its important to note that your STOP LOSSes can’t be too tight because you will be taken out very early. Also right when you enter the trade, you will see an open loss on the position as the spread is about $50-100. So you would need to make at least a profit of the spread size to break even and if you want to close your position immediately after opening it, you will be definitely looking at a loss.

2. Margin Calculations: Margin is calculated based on what BTC is currently trading at right now. So if you want to take a position in these for a long term, make sure you factor this into your calculation before getting into it. So this means that its a dynamic value and you need to make sure you have enough cash in your portfolio to be trading these futures. Because if it goes onto a strong rally, and we have seen this to happen within a day, you might be required now to put up a lot more margin than what you had originally used to get into the position. On the flip side, your margin could also drastically reduce, if the BTC falls as margin is always calculated as a percentage of what BTC is trading at right now. Also exact margin amounts will be different for different brokers. The ones mentioned above are what my broker is offering which is TD Ameritrade.

3: Volatility: Finally, if you can’t be making money trading S&P 500 Futures (/ES), Gold (/GC) or crude oil (/CL) you should not even be thinking about this. BTC is a lot more volatile than any of these underlyings, and so unless you are consistently able to make profits trading these underlyings, it would be foolish to try the BITCOIN futures. The daily range of BTC from what I saw in the chart of the last few weeks is easily a few thousand dollars – and you are never ever going to get that kind of volatility in trading S&P or Gold Futures.

BITCOIN ETFs

If you do not want to trade the futures, “ARKW” is an ETF that is attractive which has some exposure to Bitcoin. In fact the top weighted holdings in this fund is for “GBTC” and holds other tech giants like Amazon, Twitter and Netflix. Here are the top 10 holdings,

ARKW
Source: https://ark-funds.com/arkw

And if you need more information on what GBTC is, you can use the link here to read up more on their website here,
What is GBTC?

What CRYPTOS should I consider?

If you want to be trading or investing in any other crypto-currencies, make sure you look at the market cap and invest in the ones with the largest market caps. Here are the top 10,

top 10 cryptos by market cap
Source: https://coinmarketcap.com/

BITCOIN Scams

Finally there are a lot of scams out there, now that everyone is talking about it. So make sure the next BITCOIN related thing you hear that can make you an overnight millionaire and that it can give you passive income and guarantee you 1% per day and at least 140% in 6 months is all a big load of BS. So learn how to invest in the coins directly or trade them through the futures. Here is a list,

bitcoin scams
Source: http://badbitcoin.org/thebadlist/index.htm

 That is all I had to share at this point about my experiences with BITCOIN trading so far. If you found value in it – please do like, comment and share it with all your friends. Happy 2018!

Do Not Fall For These Scams

I would first like to apologize if this article puts down some of the work you do. I just want to share what I have experienced and come across as the most common scams. There are way too many out there and someone has to write about it. I write this today as one of my university friends just shared that he almost got scammed.

That being said, lets get right into it. Any post that says guaranteed returns, definite payout, work from home, less than 30min is definitely a scam. As a wise man once told me, “If it sounds too good to be true, then it probably is”. Not saying all but the majority of them.

Here is the most common scam. I am sure all of you have seen it and are tempted by whether or not it really works and to give it a try. Don’t be shy, I admit myself that when I first started investing, I clicked a few of those just to see what they were about. And it all ended with the same thing being, give us your credit card details or that you need to make a small deposit to get started. But I commend these scammers, most of them even have a template. And it would look something like this.

bo scam1

bo scam2

The next category is “investment/financial advisors or insurance brokers”. There are a few people in the industry who do great work, but the vast majority of those who have approached me or who I have seen sell to my friends/family come under this category. They are like anybody else and take it as doing a job. Besides these big investment companies lure them in with huge bonuses and fixed paychecks to get them started, and then slowly hit them with quotas that they need to hit to continue getting compensated as they were originally promised. That leads to most of them not bothering to find out and just use “attractive” numbers pulled out of nowhere to market these products. Most of these people are just pushing products from a bigger company just so that they can keep their job. Why is this true? Every single one of those insurance brokers who came to me to sell me something, I asked them to show me proof that they in fact have actually invested in it, and none of them came back to me. Especially in finance a little knowledge can be dangerous, and here are what some of them claim to lure you in. Here is an example,

fund scam

Now I have no idea where this guy pulled out these numbers from and key words to note are “closing”, “oversubscription” and “bonus features”. I am quite sure these are all words/phrases that were given to him in the manual of how to push products that you never owned, never tried but you want to make a commission out of it. What impressed me most is that he is committed to his script no matter what and he conveniently ignored all of my questions. YES EVERY SINGLE ONE OF THEM. I think i know why – because he has probably never heard of them before.

To add some perspective, we are at the peak of bull market run here. And no matter what you would have invested in, it would have gone up and that does not mean that you made a good investment. Its high tide now and even the ship that sank would still be thrown into the air. Instead of investing in his “aggressive” fund, had you closed your eyes and invested in the S&P 500, you would have made 25% annualized. Enough said, I rest my case.

Now I am not saying that its always like this, but there are really good salesmen/marketers who do not give you the whole truth. Not necessarily are they lying to you, but they just don’t give you all the information or they themselves do not have all the information. What do I mean by that? Take a look at this ad, this is the most over the top insane ad that I have seen.

FB_IMG_1508824201313
PC: Avijeet Sen

Now CPF please tell me, which investment vehicle is this that GUARANTEES you becoming a MILLIONAIRE in 30 days! And the catch is that you only need to invest 1 CENT. I am sold. Alright I am off to top-up my CPF right now. See you guys – I can’t let this opportunity pass. But this does not even come anywhere close to the biggest scam in all of history. Watch this very well made video by Mike Maloney to find out why. This is important to understand and the sooner you know and prepare for it, the sooner you can plan for a future without any surprising road blocks.

Okay I was kidding. So to summarize just re-think what you hear and what you are invested in to see if its the best you could do with your time and capital you have now. I have in fact prepared an extensive basic financial course for all interested in having a solid base for your investments. Take a look at it right here! Good luck!

Trade$hifu
Stop Stressing. Start Living!

How do I get started?

Before you climb the mountain, you need to know that you can do it. If you are not sure, find someone who has done it and follow him. So here is my story,

My story on Straits Times

There are many many books out there and one is often confused on which books to read first to get you started. After having read over 500 books myself in the last 4 years, the books mentioned below are those that had a great impact on me. If you are completely new and want to trade for a living, I’d suggest to follow the books in the order mentioned. The ones with a (*) is my favorite book in the category mentioned. Happy reading!

“The best time to take action toward a dream is yesterday; the worst is tomorrow; the best compromise is today.”

Motivational:

*Rich Dad Poor Dad – Robert Kiyosaki
Think and Grow Rich – Napolean Hill
Awaken the Giant Within You – Tony Robbins
The Art of Thinking Clearly – Rolf Dobeli

Trading Psychology:

Reminiscences of a Stock Operator – Edwin Lefèvre
*One Good Trade – Mike Bellafiore
Disciplined Trader – Mark Douglas
Trading for a Living – Alexander Elder

Options Trading:

Options Futures and Other Derivatives – John C Hull
*Options as a Strategic Investment – Lawrence McMillan
Options Volatility and Pricing – Sheldon Natenberg
Options Greeks for Profit – J L Lord

“For the things we have to learn before we can do them, we learn by doing them.” ― Aristotle

By now you should have been motivated by the books mentioned above. If that was not motivating enough, then you can read my story which is a lot shorter and get inspired.

Now that you are motivated and ready to learn options trading, you should read up on the basics of what are calls and puts, basic options trading strategies, option pricing models and the impact of volatility on your trades. These topics are easily available online but I would recommend to use this free resource right here as its organised well,

Free Resource to Learn Options Basics.

Once you have a full understanding of this, then I highly recommend you take my introductory course in order to cement your understanding of these basics. This also serves as the pre-requisite to my premier programs, and if you are considering about accepting me as your mentor, this is a must.

TradeShifu’s Introduction to Options Course

Once you have reached here, you should have a good understanding of the basics of options. However to be able to do some trades using this new instrument that you have just learnt, you should be able to analyse charts and be able to do some basic technical analysis to make an informed decision of which way you want to be trading. Even if you think you are an expert in charts, please do brush up your skills here,

http://stockcharts.com/school/doku….

Finally, now you are at the last step in your conquest to make money from the stock market. To be able to do execute your trades, you need a broker who can do it for you. My personal top 2 US stock brokers are TD Ameritrade and Interactive Brokers.

– If you are a Singapore/Malaysian resident, I would recommend you opening an account with TD at the below link,

(I might be able to get you a huge discount on your trading commissions, pm me to check if you are eligible)

You do not have to fund your account just yet nor do you have to risk your hard earned money straight away. Most of these brokers provide access to a virtual/demo account when you create an account with them. I would suggest everyone trade on this virtual account and master the use of the platform so you can get the most of it. I personally traded on a virtual account for 7 months before going live. The objective when you are demo trading should be that,

1) Trade as if it was real money and react to positive/negative trades accordingly.

2) Make all the mistakes here on the demo account and learn from them as they will be invaluable lessons for the future and a tonne of $$ saved.

3) You can convince and prove to yourself that you have developed an edge in the market and been able to generate consistent profits month after month.

Now you are ready to face the beast in the real world. Get your battle gear on and begin your trading journey.

“You don’t learn to walk by following rules. You learn by doing, and by falling over.” ― Richard Branson