Succeed in Forex Even if You Don't Know Where to Start!
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- Master geographic diversification for the lowest stress currency trading possible.
- Trade forex in the long term where the big money moves are had.
- Learn to scale in and scale out to ramp up gains and chop down losses.
- Enslave your dollars to work toward enriching you and yours.
- Harness your dollars to work toward enriching you and yours.
- Shed false pretenses about the market and your life expectations that are holding you back.
- Determine if Forex is right for you.
- Discover why your desire to get rich fast can hurt your returns.
- Know why it is vital that you ignore the news anchors, investment newsletter editors and market analysts.
- Start with as little capital as possible to reduce your initial risk.
- Use simulated trading to start learning with minimal risk.
- Avoid the Iraqi Dinar (IQD), the Viet Nam Dong (VND), the Mexican Peso (MXN) and the Brazilian Real (BRL) as weak currencies.
- Use a long term trend following and swing reversal pure technical approach in Forex and futures — you will be far better off.
- Clarify your thinking by never personalizing the market.
- Surf the markets as a free rider
- Basic math skills and reading comprehension of a fifth grader.
[True Story] How Michael Marcus multiplied his account 2,500 fold in 10 years!
Updated Monday, January 2, 2017, 12:13 P.M.
Michael Marcus is a great currency trader. He started his career as a commodity research analyst.
He eventually became a highly successful professional trader. Much of his profits came from investing in currencies also called Forex or Fx.
Michael Marcus entered naive to investing. His friend John claimed to understand commodities.
But the man wiped out Michael's first $1,000 saved.
Michael decided to try again. This time his trading capital came from a $3,000 life insurance policy his father had left him.
His mom complained loudly when Michael cashed it in.
He built three thousand into $30,000 after applying what he learned from Chester Keltner in the book "How to Make Money in Commodities." The Keltner band system is based on bullish and bearish channel breakouts.
The cross-country portfolio system you will master inside this Udemy course utilizes channel breakouts.
[True Story] How Michael Marcus multiplied his account 2,500 fold in 10 years!
Michael almost lost it all again when he made a big bet on grain fundamentals. The futures market locked limit down after Michael took long positions.
He believed so much in the position that he borrowed another $20,000 from his mother. He lost a crushing amount as a result of his all-or-nothing bet. He ended the trade with just $8,000 left of his total $50,000.
This started a dark period in his life where he fell into a cycle of borrowing money and consistently losing it.
Then Michael met Ed …
Marcus met a trading wizard who would become his mentor — MIT trained engineer Ed Seykota.
Even so Michael kept losing. He wasn't patient enough to wait for a clearly defined situation.
But he kept at it.
He met his second mentor, Amos Hofstetter. Amos' wisdom mirrored Ed's market truths.
This created a positive reinforcing learning loop.
Getting the same things pounded into his head by two different mentors gradually changed the thinking of Michael Marcus. He became more patient in his trading.
He grew $700 into $12,000 in just a few months trading plywood. But he was still trading all-or-none positions.
The market collapsed and his $12,000 shrunk to under $4,000. That was the last time he bet everything on one trade. Nonetheless the emotional pain drove him to take Thorazine.
Learn how trade Forex without emotional pain for very small risk. Enroll now!
How to Make Money When Markets Go Down!
In this course you'll discover a series of steps that will protect your money yet stand to possibly grow your trading capital into a fortune in the process. You'll learn how pros take a small amount of money and grow it into a large pile.
Then you will see how they shave it back to pay for their lifestyle. Then they build it up again.
This super simple system is backed by extremely complex academic research by thousands of “rocket scientists" with Ph.D.s in finance.
Introduction - Clarifying Your Fortune Building intent
- Why you must stop bad habits such as overspending to ever have any hope of lasting wealth.
- How to focus on the luxuries you want in life with a single minded definite major purpose backed with a burning desire to succeed.
- Learn the powerful philosophy of lasting wealth that is a secret to most families today.
- How your tomorrow depends on your choice of habits today.
- Develop and protect your most precious resource - your unbiased power to reason for yourself.
- Become less fearful.
- Employ The Power of Three in a way clinical studies have shown to extend your life and improve your health.
- Laser focus your cosmic habit force on acheiving the things you want out of life.
- Stand and lead those you care for through our modern financial apocalypse.
Section 1 - Connecting your daily habits to your future wealth.
- Identify and change your money crushing stinking thinking.
- Discover how having lots of capital with little skill is dangerous to your financial health.
- Discern your universe of investing possibilities.
- Recognize how bonds can secure your lifestyle and how to calculate the boatloads of cash needed to do it.
- See real estate as a time consuming business rather than as a passive investment.
- Ask yourself if you really want to start a complicated business that requires a lot of risk capital.
- Know how to minimize your biggest cost — taxes!
- Avoid the massive financial and time risk of the typical startup.
- Never employ price targets for a subtle reason secret to most.
Section 2 - Harness the life transforming power of compounding.
- Learn how to leverage your time, hard work and money to enrich you and yours.
- Avoid multi-level marketing schemes that suck away your time and money.
- Grasp the importance of being in a business of your own.
- Make your old and new money make more money with compounding.
- See why the really big money is in the basic goods and services.
- See a better way of doing business with little capital at risk.
- How to plug into the money machine Mark Zuckerberg invented.
- Learn how to find the silver lining in any disaster you face in life.
- Harness the potential to make money from a climate controlled home office in the Caribbean.
Section 3 - Pay Yourself First by Making Great Investments!
- Why supplying basic needs is the most sure fired way to get rich.
- Avoid unstable currencies.
- Master controlled leverage trading.
- Marvel how major currencies flow back and forth across the Atlantic and Pacific electronically.
- Give yourself the same shot at riches as any top banker.
- Focus your business on the 7 strongest currencies in the world.
- Know why European households on vacation in Disney World were smiling ear to ear in 2009.
- Use the PIP to allow you to measure how much you have at risk.
Section 4 - Going Global From a Kitchen Table, Your Spare Bedroom or Home Office
- Focus your investments on the 7 lowest risk currencies in the world today.
- Discover why bet (position) size also dictates risk.
- Understand why George Soros needed to hold large currency positions.
- Hedge your salary with a side line business as a Forex trader from a laptop anywhere.
- Diversify away from your job.
- Put both swing and momentum Forex trading to your advantage.
- Discover why it is so important to cash out your house..
- Be cautious investing in currency, stock or bonds from a Romance language country.
Section 5 - Profiting As the Unexpected Always Happens or as History Repeats Itself!
- Use this crystal clear currency guide of which countries are safest for owning an overseas vacation property.
- Learn this simple trick to make your thinking more positive and healthier!
- Use buying and selling campaigns with stop losses to scale into and out of the market.
- Shut out anybody who does not believe you have the ability to trade.
- Put an intellectual currency trading system in place
- Discover why Mojo Nixon should win next year's Nobel Prize in economics.
- Develop the courage to back your best ideas with your own money.
- Your personal experience will become your best guide to trading over time.
Section 6 - Three Little Moving Lines Chart Out the Currency Seas High and Lows!
- See momentum and reversal as a common theme in our natural world.
- Retain sufficient discipline to never step over safe boundaries when trading through the screen — a big part of how is by forcing focus on no more than three currency pairs.
- Why I refuse to trade the Norwegian Krone (NOK) also known as "the Knockie" and the Swedish Krona (SEK) fondly nicknamed “the Stockie."
- Discover the reasons I only invest in The United States Dollar (USD), the Euro currency (EUR), the Great Britain Pound (GBP), the Japanese Yen (JPY), the Canadian dollar (CAD), the Australian dollar (AUD) and the New Zealand dollar (NZD).
- See a portfolio as nothing more than a data matrix.
- Focus first on downside risk.
- Avoid the EUR/CHF now known as the zombie
- How this secret instrument shows you all of the Forex bets on and off the table.
Section 7 - Sensible Account Funding for Favorable Odds for Forex Success!
- Discover why you want to avoid financial sales people.
- Why a dual income is actually dangerous for your family.
- Incorporate the concentrated wisdom of Andrew Carnegie into your trading.
Section 8 - You are what you Eat & How a Big Mac Index Makes You Better at Fx!
- Learn how the Big Mac hamburger could help you trade Forex like David Ricardo!
- Get x-ray vision to gradual change through ultra-long term currency price charts.
- Use this indicator to spot undervalued and overvalued currencies in the very long term.
Section 9 - Mastering The World's Most Powerful Indicator - The Moving Averages!
- Employ this simple strategy shown to produce an eye-popping 18.81% alpha.
- Thinking this way helps you wait patiently for opportunity.
- Put the bulls and the bears moving average cross-over software system to work for you.
Section 10 - Trading Forex in a 401(k) or Fx in a Roth via Currency ETF Options!
- Learn this hard and fast rule of currency futures options.
- Why you should engage in one kind of business only.
Section 11 - Learning to Drive a Car is a Lot like Trading Forex for a Beginner!
- Avoid clever marketers and hedge fund operators in charade as caring mentors at money shows.
- Develop a system that will harvest profits automatically.
- Focus your efforts on few rather than (too) many profit opportunities.
- Trade Forex in simulation with no cash at risk.
Section 12 - “The Secret" To Success — On Better Life Focus and Perseverance!
- Discover this secret way of thinking that could dramatically improve your life fast!
Section 14 - Take the First Steps Into Your New World of Positive Thinking!
- Share what you learn with others.
Conclusion - An Important Question Only You Can Answer About the Rest of Your Life!
- Toe-the-line for your family by taking action and applying what you learn.
Platform Training - No or Low Risk Fx Forex Trading Through Your Laptop Screen!
- A detailed introduction to the chart of the majestic EUR/USD.
- A close look at the tricky to trade GBP/USD.
- Understand the chart patterns of the low interest rate paying Japanese yen major – the USD/JPY.
- Discover why professional traders now associate the sovereign currency of the Swiss Central Bank with The Walking Dead — this major is the USD/CHF.
- Embrace the crosses as important stabilization pairs to macro-trend diversify your core portfolio.
- Visualize to help you form your cross-country portfolio with this training.
- A specific step by step example of how to set up a cross-country portfolio.
- How to read the Commitment of Traders (COT) for the EUR/USD.
- Add Forex to your Roth or 401(k) with ETFs.
- Clarify your grasp of value and momentum as the only anomalies that can be traded in Forex for positive Jensen's Alpha.
[LIVE] World Currency – Forex Live Video and Text Fx Investment Examples!
- Monday through Friday updated daily!
- Pick up the nuances of actual trading with little or no money at risk.
- This unique circadian investment newsletter carries you through specific currencies and other key factors regarding trading forex through the screen in real money in real time.
Does this have you thinking? “SURE, SCOTT! MY LIFE SAVINGS AND LIFESTYLE ARE IMPORTANT ENOUGH TO PROTECT!"
Just hit the blue, rectangular button up there to the right that says “Take This Course." Use some of your PayPal slush fund money for a chance to grow!
See you inside now!
Dr. Scott Brown, Associate Professor of Finance of the AACSB Accredited Graduate School of Business of the University of Puerto Rico
P.S. This is a risk free offer. Udemy offers you a 30 day money back guarantee.
* This course is updated every week except for when Doc Brown goes on holiday.
- Anybody interested in long term controlled leverage currency trading should take this course.
- Investors seeking to get a feel for leverage with less risk than equity options or futures can use this course as prep school.
Many people around us and even near and dear to us lack clarity in what they want to achieve in life. This does not have to happen to you. When you have a crystal clear vision of what you want out of life you have dramatically higher probabilities of achieving what you desire.
I remember when I wanted to become wealthy.
I had not just lost my father but also any form of social network willing to teach me about making and managing money. For most of us it is exactly as Robert Kiyosaki explains in his book, “Rich Dad, Poor Dad.”
As homework I recommend that you order this book from amazon as excellent background study.
Most of us come from the poor dad kind of a family environment.
We learn bad money habits from our parents. Two are particularly bad.
The first bad money habit is that of overspending. The second is wanting luxuries without being willing to put in the thought required to get them.
This is the point of the classic philosophy of “Think and Grow Rich” by Napoleon Hill.
Make sure you read this book too.
The Pittsburgh Post-Gazette wrote an article entitled “The wretched, venal life of Rev. Ike.” This was published in the year of the death of this ecclesiastical master who was falsely accused as son of Mammon.
That was 2009.
I chuckled at the insistence of the author to spiritually criminalize a man who correctly taught psychological thought patterns now known to elicit positive improvements in money management. “As a man thinks in his heart, so is he. Down there in that deeper subconscious, that's why you gotta clean it out” says Ike in his classic sermon captured in the YouTube video entitled 'Rev. Ike: "Sanctify your mind for money!"'
He continues with “…the second commandment of money tells us that money has ears. And if you say the wrong thing about money, money will FLEE from thee!” in still another YouTube classic entitled Rev. Ike: "Stop being your own enemy!"
Finally he emphasizes that “If you want to experience the very best in life, you must believe that you deserve the best!” Reverend Ike taught us a philosophy that will make you wealth if you clarify your dreams, back those dreams with a burning desire and set out on your definite major purpose!
I find the perspective that such healthy thinking combined with positive visualizations is wretched to be in itself wretched. And I have just one response.
Let's get wretched!
You may not like your current job. I understand that. But imagine putting your mind toward clear positive goals that enrich everybody involved. What would happen if you did that? What would your life be like 5, 10 or even 20 years from now? Substantial changes in your life come from substantial changes in your habitual thinking.
You are more of a creature of habit than you probably realize. The concept of the Cosmic Habit force says that you will succeed in your chosen path to the degree to which you consciously (and unconsciously) align your daily action with habitual tasks that most effectively get you to your definite major purpose.
I know of no other method by which to achieve great success in life.
And you will either decide to toe-the-line. Or you will continue to let the line be toed for you.
That is what most people do. They let others think for them.
If you want to make a fortune for yourself and your loved ones you must recognize the power of your daily havits.
These habits can carry you to the White House or to the Jail house. But in the end it is your choice, and hour alone.
How will it go for you? Your tomorrow depends on your choice of habits today!
There are many ways to earn a living. Most people trade their time for money.
Others try to harness the efforts of friends and family as employees.
Yet the wisest harness their money and enslave it painlessly to the task of enriching their households. These capitalists live a far different lifestyle than the truck driver, judge or airline pilot.
This Forex trading program opens a magical door to a new horizon. This path opens possibilities of mastery in currency trading for you and the household you steward.
But to do this you must become a maverick.
An example is George Soros who shows his independent thinking in writing, “Once we realize that imperfect understanding is the human condition there is no shame in being wrong, only in failing to correct our mistakes.”
But employing this means becoming the rock.
Since so few people in our society actually think this way — no matter what they profess. You won't have any shoulder to cry on when the evil days hit.
They won't understand. In fact, if you become a pro you will be careful not to bother you wife or husband when you have bad trading days.
You must cultivate your private garden.
But you do it in your mind. It becomes you place of solace on hard losing days. Envision the classical 9 by 24 meter Zen garden. As Nitschke writes,
"The garden at Ryōan-ji does not symbolize. It does not have the value of representing any natural beauty that can be found in the world, real or mythical. I consider it as an abstract composition of 'natural' objects in space, a composition whose function is to incite mediation."
Perhaps the biggest danger to your fortune is that you have been taught to be nice to people. Your desire to be nice to strangers who come to you through proper family channels opens you to the most villainous of financial criminals.
The desire to be liked and belong also exposes you to the danger of listening to the market opinions of others. That is why the best policy to adopt is to muzzle any conversation of stock investing outside of those who absolutely need to know.
Modesty in conversation regarding your investing and trading will force you to be an independent thinker.
To be successful as an investor in currency markets you must grow a stainless steel spine. And most importantly you must dedicate yourself carefully to the study of the trend of each market.
Then and only then can you withstand the onslaught of market opinions that rain down from family, friends and the media. Be pleasant with others but learn to never discuss your investing with anybody except under an extreme need to know basis.
This will help you protect your most precious resource - your unbiased power to reason for yourself.
My dad died when I was 19. And that really shook me up.
My mom died when I was 50. That completely shattered any pretenses I had that time on earth mattered much.
That is when I really decided to trade and invest with intensity. The more willing you are to give up your false pretenses about life the wealthier you will grow.
That is because you will become less fearful. You will become less clinging to things and more attentive to people you truly care for.
You will eventually find your true wealth in those you love. Making lots of money will cheer you as you see it cheer others.
The movie inception is a take on a thousands of year old theme that Buddha was no different than any other human. He never said he was enlightened.
He simply said, “I am awake.”
Part of being awake meant that he (supposedly) remembered all of his past lives. He said that any one of us have had so many past lives that we could stack all of our former bodies higher than the Himalayas.
So what if Guatama Buddha was right? That would sure put a different twist on watching the movie “Inception!”
The Power of Three
Did you know that research has shown that you can extend your life by simply writing down three good things that happened to you during the day and why? It turns out that your mind may not — at least as it stands now — be able to magically transport you. Imagine putting yourself into a mansion and the fortune you would need to run it with the snap of your fingers.
But even as it stands now your mind can do so given enough time.
Of course, Gary Renard was instantly transported all over the place with his mind (in the bigger sense). And it happened various times in his fantastically bizarre and absolutely delightfully fun to read book, “The Disappearance of the Universe.” Much if not all of the content in the book jibes well with Buddhism.
Gary's mentors from Brahma, Arten and Pursah go through a number of compelling and well known to be true facts about the power of the mind.
I write down three things that were good in my day. And go a lot further. Marisol and I have a very clear list of common goals in the near and long term.
We started our list over a decade ago!
We spend great time each day planning the next day's efforts toward our goals. And this process has paid off.
Make sure you watch the hit CNBC TV Show “The Profit” with Marcus Lemonis to get an understanding of what process means in terms of making money. This course is teaching you a special process to help you improve your odds in the Forex currency markets where you can start with very little capital at risk.
J. Paul Getty almost went broke wildcatting for oil. He knew the business like the back of his hand.
But even so he almost went belly up.
Yet he admits that he never would have succeeded without substantial expertise in the oil industry.
His habit of doing the right things every day led to breakthroughs. The rest is history.
He became one of the richest men in the world.
Getty gives us a clear example of a man who harnessed the power that Think and Grow Rich termed “the cosmic habit force.” ... This is not some kind of voodoo.
If you can focus your mind on practicing the right market concepts in your daily activities you can have similar results in global capital markets.
What's you back? Others have done it before you!
And I am not going to dribble out lies that becoming wealthy is not achieved without work, concern, or planning.
But you can accomplish far more than you think you can.
Just plan to shoot the arrow higher. It will have odds of traveling further!
Rick Grimes is a Sherriff who wakes up after a shoot-out in a zombie apocalypse. If you are not a fan of the show I understand.
But the way in which Rick leads a group of people he protects through grave danger is a fitting allegory of the markets of today in the mega hit AMC Television show “Walking Dead.”
Buy and hold worked for some people in the 80s who retired at the end of the 90s.
But the stock market collapses at the beginning of this century have left many households as destitute as if they lived through a zombie apocalypse.
This course asks something unique of you. It asks you to stand and lead those you care for through our modern financial apocalypse.
And you will face zombies. They will come in the form of people trying to sell you things you don't need.
Or they will be financial predators. Others will simply be inept and thus cause financial problems in your life.
This zombie apocalypse of Wall Street cab have a different ending for you and yours. The difference is that if you play your cards right here you could end up making it to 7th Heaven!
As it stands right now you probably have no idea how powerful your daily habits are in Forex trading. Habits arise from your thinking.
Do the wrong things and your wealth declines over time. If you do the right habitual behaviors you gradually, or perhaps even quickly, become the wealthiest household on your block.
Your training as a currency investor starts with changing your habitual thinking. Why?
Habitual action (or lack thereof) is due to habitual thinking. If you want to change your habitual action all you have to do is change your habitual thinking.
Is this easy?
No. Of course not!
But if you don't start now working to change your stinking thinking then you never will. One drop of water started the Grand Canyon millions of years ago.
It won't take you millions of years to change your thinking.
But it will take one drop one day. How about today?
Goal setting is something many people simply do not do. Others do not do it well.
But goal setting in itself sounds like a pretty boring task. That is why I re-frame it as dream clarification or dream list formation.
We completed ours when we were wed 23 years ago. It took months working on it daily between us.
Today we have accomplished nearly everything on that list.
The intention of this activity is to get you clear on what you want. The reality is that if you do not know what you want that is exactly what you will get.
My experience is that healthy people of reasonable intelligence do not have opportunity problems.
They have life clarity problems. The fact is that if you know exactly what you want you are far more likely to get it.
Just knowing what you want puts you in a different social-class without realizing so initially.
Think about your experience in high school. If your team spent the most time practicing and clarifying its game plan prior to each skirmish you usually won.
To realize your dreams you have to clarify what you want out of your life. Building a bucket list of every dream you want to achieve focuses your unconscious to attune with your conscious mind. Amazing accomplishments can happen over time.
But nothing will happen if you don't know where you want to go.
The actions we take today change our life experience tomorrow. By defining what we want most out of life we consciously choosing our path in the future.
If you know you want a specific amount of money to retire on you are a lot more likely to attain it. Why?
As you go through your day you are more likely to spot tools that will help you get what you want.
You do this all the time. Whenever you fix something at your work or at home you stew over the solution.
You ask co-workers, friends and family for advice. Then you go to professionals for advice.
Finally if the professionals can't answer your questions you go pro yourself. I did when I decided to pursue my Ph.D. in finance.
Let's discuss what happens in the opposite situation of having lots of capital but no skill!
I've discussed the problems that arise when a person has an excellent idea that he or she can back with great skill and proper implementation but lacks adequate capital.
Now I want to discuss the flip-side. Large inheritances and big winning lottery tickets.
Whenever someone within my social network has a large windfall in the form of a lottery or massive inheritance I cringe. Statistics show that six out of ten children who inherit highly profitable businesses will run them into the ground.
Bear with me and you will surely come to conclude that you need a business that is reasonably simple to learn with little capital but offers lottery-like payoffs.
If you can master making money from money you will never be expendable. This takes daily dedication but you can do it!
For most of my life I followed a yellow brick road of interviewing (or interrogating) people I thought might actually know how to invest. That did not work.
So I started reading every book I could find on the subject.
That did not work. I decided to get a Ph.D. in finance.
That did not work. I began trading investing newsletters and that did not work.
So I went back to work on my research as a professor at a major state school: The University of Puerto Rico's AACSB accredited Graduate School of Business.
That did work. The research process forced me to read all the investing literature I could find.
Over time it became clear to me which readings in my past would most likely work in my investing and trading. This course is a distillation of learning about what works and what doesn't in the markets.
Let me walk you through my museum of the good, bad, and ugly “opportunities' of your investment universe of possibilities.
As we explore your diverse investment possibilities we start with the excellent alternative of fixed income. A 5% average return on corporate bonds is reasonable.
That generates $50,000 a year per million of retirement capital.
If you have a lifestyle that requires $125,000 per year in income you must build $2,500,000 in retirement capital.
I know that you were probably not born with a silver spoon in your mouth. Most who did would not be studying this course.
You would be lounging at one of your family villas. Or you would be on the corporate yacht.
If you don't have a massive nest egg you will have to build it with controlled leverage techniques such as those I am teaching you now in in this course on trading Forex.
I am not saying that there is anything wrong with being born into money. Maybe next lifetime.
But for now it is time to do the hard work to secure your fortune the hard way — trading it up!
Real estate is an excellent business but it is not an investment.
Professor Bob Shiller of Yale University won the Nobel Prize in part for showing that real estate investments have generated zero real return over history.
Think of real estate as a business that pays off land and structures. As the land and structures increase in value (as a weak investment) the equity that builds up is not taxed.
In this regard real estate is a potentially important part of your portfolio. But this is so only if you have a truly profitable business that can pay it off.
I have seen more investors hit the rocks in real estate than in any other area. Great precision and skill is required as in any other business or investment.
Make sure you watch the T.V. show the Profit by Marcus Lemonis to understand this process better.
The show is "homework" for this course!
I come from a small town in Northern California. Investing for some of the town folk there involves buying and selling within an inventory of less than 50 commercial structures.
Marion, a close friend of mine is an outstanding cook.
She created a highly successful pizza parlor. But it burned to the ground.
The building was not insured.
A pizza parlor is actually a lot more complicated business than a currency operation. Such a restaurant is a lot more risky because of the cost to set up and run.
Think about your dreams of entrepreneurship. Are they realistic when you think about how much of your savings, credit and reputation you would have to risk just to find out if you are good?
A currency business can be started for less than a thousand or two U.S. dollars. A McDonald's restaurant franchise runs over a million.
And franchise prices have dropped in the past for these purveyors of the American culinary classic called the Big Mac. Ask owners in 2000.
Which risk would you rather shoulder?!
I have not discussed tax and retirement planning. If you hit it big and grew a chain of pizza parlors do you know how to minimize your biggest cost – taxes?
Probably not since you would be so busy running your highly complicated pizza restaurant chain.
You also would not have time to set up your retirement accounts and fund them properly. How do I know?
Wealthy people seek me out for help with this. This is what my Ph.D.in finance trains me to do.
The best business for Main Street America is simple to learn and requires very little capital but offers potentially stellar rewards.
This is what the this Forex Trading program is all about.
Not many people know that "Hell's Kitchen" TV show Chef Gordon Ramsey lost a restaurant to bankruptcy. This happened in his home town in England.
What was surely a personally painful experience honed his skill and ability as a restaurateur. But his losses did not count in the hundreds of pounds sterling's.
The typical business bankruptcy results in the loss of thousands to millions for the founding household.
This problem can be easily avoided by choosing to start a business that is simple to learn and has low initial capital requirements.
The reality is that controlled leverage trading is as scale-able as any other business.
The big difference is that it doesn't take much to trade Fx. In fact I have never found a lower cost business to start.
I have seen so many people over the years lose so much money on high capital businesses. These poor folks, literally, come to me for advice after the fact.
I have to explain to them that good investing from independent thinking is done before money ever changes hands!
I have presented a very long list of problems you will face starting your own business that provides a consumer good or service to the market. And hopefully you have watched the hit CNBC show “The Profit” with Marcus Lemonis.
If you have you can list even more typical business problems than I have shown you here.
If you've ever desired working on your own the way 99% of people envision owning a business, this summary of concerns has probably squashed your dream!
I know that you have dreamed of owning your own business. Anybody who has ever sought to learn forex automatically has the pioneering spirit of an entrepreneur.
That said all of the evidence I have given you says that your risk is high starting any of these businesses. And these are those that come to mind for 99% of people with the same animal spirited healthy desire to get rich.
But hopefully I have you thinking of the massive financial and time risk involved with the typical start up.
A Forex business has very low initial financial risk the way I teach you to trade. Your skill and capital will either grow or it will not.
Either way you quickly know if this path is right for you.
Not everybody can become a skilled Forex trader for the same reasons that not everybody can become a skilled video poker player or derivatives trader.
But I am giving you the simplest and safest system right here and right now.
This is also the first system I have seen in Forex that teaches diversification in a way never disclosed before. By diversifying first in a concentrated 3 pair portfolio you can clearly see the trends safely at a distance.
When a pair looks like it is going into a good run you carefully scale up. Eventually you will let yourself be stopped out.
In this system you will never use any form of price target since you do not command the market to rise or fall. You will learn to trade the markets like a surfer for your best odds of success.
Interested? Continued inside...
You are far more a product of your past thoughts than you realize. All of your decisions stem from your mental condition at key points in the past.
At these key temporal junctures you were presented an opportunity. You either embraced it or not.
Most people really do think that there is a dark cloud following them around.
They really do think they are cursed.
The reality is that all families, wealthy and successful as well as poor and struggling families alike have unexpected tragedies. A big part of the path to great success is recognizing that picking the right habits is the way to achieve what you want.
But just because you become a millionaire or billionaire does not mean that you will be free of tragedy and frustration. Just look at the Kennedy family.
This course asks you to grow up and take responsibility. I will teach you how to manage your money better.
But you are best to treat this is as a profession. I call my profession that of “family financial steward."
Compounding allows capitalists to make money from money. The only way you will grow a fortune from modest savings is through compounding.
But most investors and traders are too focused on getting rich fast.
These rabbits are too fast to increase leverage and blow up. It is the turtles who win the investing race.
Turtles understand the truth behind the quote, “Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.” ― Albert Einstein
This lesson carries you through the simple truth behind compounding.
The UK News and World News site The Independent reports in a 2005 article entitled “Einstein's relatively secret fortune” that Einstein turned a few thousand dollars into more than a quarter of a million in less than twenty years.
He purchased sixty shares of May Department Store common stock for instance at half value six years before it's rise. That money is worth a lot more today when adjusted for inflation.
That $250,000 in 1995 when Einstein passed is worth a cool $2,226,100.75 today!
The vast majority of routine methods heads of households use to get ahead involves exchanging time for money.
And the methods those heads of households employ usually involves a skill that allows for the offering of a new good or service for the market.
I walk you through the example of a family bread business. Dave's Killer Bread is an excellent example of a way that one family has leveraged their time and hard work.
Product based business can kick off hefty incomes for those involved if the firm is well managed. But what if you don't want to engage in a product based business?
What if you have a more introverted lifestyle like us? My favorite activity is creating courses to help others manage their money better.
I don't want to bake bread. I would rather buy it.
I don't recommend multi-level marketing as a business for the vast majority of people.
Don't get me wrong. I have known multi-level marketing superstars.
And I have seen countless thousands of hours of time wasted by households caught in fruitless MLM schemes.
The reality is that there is a specific personality type who can grow and hold together a large down-line. That personality is not much different than a charismatic reverend of a large church.
Ike was a good example.
But what do you do if you are not naturally geared to this sort of business? One idea would be to turn your savings into an army of workers.
Just a thought.
Reverend Ike was criticized as a modern day Mammon. The truth is that he preached the cleanest sort of money mentality.
I don't know exactly who it was that decided that being poor resulted in being more spiritual. Mohammad was already a rich business operator when he had his insights.
There is no archaeological record of Jesus shunning money for that matter either.
Instead of criticizing Reverend Ike's ideas as blasphemous investors should pay attention. Watch his classic sermons on YouTube if you are serious about money!
You don't need to join the church. Just watch!
The most important advice John Paul Getty gave to young people is the importance of being in a business of your own. This forex business offers the opportunity for households of even the most modest income to try out the process of controlled leverage investing in currency lots.
The starting cost of a forex business is far less than the typical start-up cost in a multi-level marketing business.
I personally lost a lot of friends with MLM schemes I pushed onto folks around me over the years. This course is my opportunity to offer you a glimpse into something else.
You may be the worst currency trader in the world. So what?
I will show you how to test your skill with very little money at risk.
You may be the best currency trader in the world. But you won't know if you never try.
Contemplate the fantastic power of compounding. This is where both old and new money make more new money.
Individuals and households in our society most skilled at this most essential task of pure capitalism live at the highest levels. Take Larry Page, the co-founder of Google.
He made over 4 billion on his stake in Google in just one day in July of 2015.
Do you think he thought he would make that much money when he was younger in life? No.
His fortune flowed in from many little residuals because he constantly put himself in the path of success.
Many people know what I just explained to you. Nonetheless they refuse to face the fact that they tenaciously adhere to careers where the exchange their time for money.
This is not a problem if income is strong enough. It is a problem if such a family has no secondary plan for reaching net worth goals that allow them to retire into a leisure class — no matter how modest.
Two million in bonds will kick out $100,000 each year with no decline in principal.
Our own biases direct our expectations of wealth. So does our upbringing.
The really big money is in the basic goods and services that households have to consume to maintain their standard of living. Some of these businesses are profitable but not tasteful.
Hauling garbage and treating sewage have made millionaires from individuals willing to do the work. These are the same folks who find better industrial solutions that make our lives so much less stinky.
The businesses that have formed from these enterprising men and women continue to kick off cash to generations of heirs.
If you don't take vitamins you probably don't find vitamins to be an interesting business. Yet companies like Shacklee have made multiple millionaires over the decades in vitamins.
You may not find cosmetics to be an interesting business. Yet Avon and Mary Kay have converted a number of households into millionaires by the woman in the family.
Shake up your pre-conceptions of what makes for a good business. Do so and you will see things differently.
You will begin to see a better way.
Slim to none!
No offense. I am sure you do have good ideas.
It just is not very likely that you or I will hit it out of the park with some new fad idea. But we can make money through the markets off the ideas of others.
We can piggy-back the greatest thinkers of our time in the markets. You may not invent the cabbage patch doll but you could invest in the company that makes it.
But cabbage patch dolls are not consumables. People have to buy consumable vegetables such as cabbage every week but not cabbage patch dolls.
When the fad collapsed so did the market for the Cabbage Patch Doll brand.
You may not invent have invented FaceBook but you can buy shares of the company. This allows you to plug into the money machine Mark Zuckerberg invented.
But that is stock investing. This is forex trading.
Here you learn how to make money with money.
But to do so you must first look at your life and your future prospects. You must choose whether you see the glass half full or half empty.
It was the Greek philosopher Epictetus who wrote these wise words. And no truer words have been written since.
Your future has not yet occurred. Your beliefs about yourself and everything you sense will dictate how tomorrow will unfold for you.
Fixating your desires on just three or fewer major purposes concentrates your daily energy and activities on that which is most meaningful to you.
When we are in our twenties the definite major purpose of most young adults revolves around mating and family formation. The formation of a wide social network helps spread the work of child rearing.
But these same social ties cut into our time and energy.
Particularly dangerous are the favors asked upon us by others. Small favors can sometimes grow into big hassles.
This problem is particularly acute the more successful we become as well as with additional responsibility. That said we can decide to change today and make lemonade from lemons!
The 911 collapse of the Twin Towers in New York evoked shock and horror for most of the world. It was bad enough watching two planes filled with ordinary people explode into bits..
Watching people jump to their deaths rather than burn above was worse than any horror movie I have ever seen.
And now nightly news dishes up the individual murders by the Islamic State (IS) in cinematographic quality rivaling Hollywood. Who's side is our media on anyway!
Our newscasters should refuse to show us IS videos. That would take away a lot of the evil power of IS.
It was hard to remember to look for the silver lining in even that very worst of global tragedies. Yet today the city of New York is one of the most peaceful.
This because of the explosive collapse of two major pieces of one of the most prized skylines on earth.
You may encounter days of absolute darkness and despair in your investing and trading. But you must remember to always look for the silver lining.
Every time I have remembered to do this I have found a solution to the problem I was facing.
Currency transactions are the most basic dealings among human beings on planet earth. These allow for the free flow of goods and services on routes that traverse our globe.
Currency is the blood of our financial system. And although it is true that these transactions glue our global economy together some currencies are more stable than others.
And to deal in the strongest is to earn a living dealing in the most basic of all household consumables — purchasing power. The United States dollar is the strongest.
The owner of Driscoll Strawberries showed me how wealthy a family earning U.S. dollars can become dealing in such a basic commodity as strawberries. He had to slave it out in a field and died of insecticide induced (probably) cancer.
I am able to make money from an air-conditioned home office in the Caribbean. I'll take my currency business any day!
I think I know you because you probably follow a similar path as mine. And that means that you have a strong desire to become wealthy.
But you also likely have a tendency to cut corners. That is because you want to get rich not just fast. You want it yesterday.
And that means throwing money at bad investments. Unworthy placements of your money come from many sources.
The worst are family members with multi-level marketing “opportunities.”
Then come the bad real estate investments. You have likely already lost money on these types of investments.
The good news is that if you have been working on your list of dreams you wish to accomplish you have taken a big step. By clarifying what you want out of life you have increased your probability of achieving what you want.
Just remember that major change usually (but not always) take years.
Normally it takes years to build a million dollars and keep it. But that doesn't mean that you can't do it faster.
Supplying basic needs is the most sure fired way to get rich. Currency can buy any basic need.
This makes currency the most basic need of all.
A simple business of supplying currency can be started with a very small investment. Such a business can allow you to take advantage of world events in ways that is impossible for most of your coworkers.
An excellent example has been the crisis among the PIGS. The PIGS are represented by the countries of Portugal, Italy, Greece and Spain.
Journalist love to live be the creed “if it bleeds, it leads.”
This means that they are going to put the goriest, saddest and scariest news about the PIGS they can on the nightly news. And when the Greek debt problem hit they really fanned the flames.
There were many nutty stories of how this would affect the EUR/USD exchange rate from the journalists. By applying what you are learning in this course now you will be able to cut through the lies and see where rates are really going.
NOTE - I do not want to give you the impression that I am guaranteed to make any amount of money over any period of time I try to do so. This course, nor any other, can guarantee your profits. Forex profits come from skills built over time. And not everybody who tries develops those skills.
One of the primary findings of empirical finance is that unexpected news does indeed drive the market. But the impact is restricted to the short term.
Smart traders know that the big money is in the long term.
And making big money in the long term often means shutting out the unexpected news. By shutting out the news you can develop the conviction required to stick with large positions.
The easiest way to shut unexpected news out of your mind is to tenaciously focus your attention on the price chart. At the end of the day it is the price rather than the news that is most important to you.
On any given day you can find as many journalists and analysts for as against a particular investment idea in currencies. And I have never met a more arrogant group of people than analysts.
They are arrogant in their callous lack of concern for your financial well being.
An analyst is a person who is paid to recommend stocks to others. If somebody made enough money off their own ideas they would not have any incentive to recommend stocks.
And in fact they would know it is futile. Profits are made by the trader not the tip.
For that reason I never trust the news or the analysts and journalists who produce it. Nor should you.
There is a very real Game of Thrones operating right now in the global currency trading arena. Countries vie back and forth for exports.
Take the devaluation of the Chinese Yuan (CNY) on August 11 of 2015. No prior announcement on the first day of devaluation.
Then they said they would not devalue again. And the next day they devalued.
China wants to stimulate exports. But every time they “manage” their currency this way they decrease the trust that business managers around the world have in the currency and its central bankers.
This is yet another reason you should avoid unstable currencies.
Three other mis-behaving currencies include
- the Iraqi Dinar (IQD)
- the Vietnamese Dong (VND)
- the Swiss Franc (CHF).
And currency exchange rates rise and fall as export figures rise and fall.
The surest way to track fluctuations in supply and demand is to watch the price on a chart. But most currency traders do not do this.
Most want to out-think the market. They do this by inventing complicated macro-economic scenarios in their minds.
When they do this their thinking is focused on a mythical mind model rather than how the price is actually reacting in the market.
I cannot over emphasize that your success in these markets will be dictated by your ability to focus on the facts. A price on a chart is a fact.
The relationship between GDP or non-farm employment is not a fact unless it moves the price in some way. Which brings us back to the price as your primary fact for analysis!
If you know that the U.S. Dollar has been beaten down to the lowest value in decades why do you hesitate? The difference between the profitable and the unprofitable investor or trader is the ability to turn intuitions into actions.
And the best way to build intuition is through careful study and practice of the endeavor you wish to master.
In this case you are learning controlled leveraged investing. The skills you are building now also carry over to futures, stocks and options.
But this is the kiddo sand-box.
That's because you can start with a small amount of money to get started in Forex. All other investments require a great deal more capital.
Micro and mini lot Forex trading lets you wheel around on a tricycle before you hop onto a hog.
This is because you can start trading in simulation. This will give you a real feel of game play without actual money at risk!
For attorneys, real doctors (MDs) and real estate brokers the BMW and the Mercedes Benz is the ultimate symbol of financial success. Few who buy them think of the twists and turns their U.S. Dollars have to make to convert into Euros.
Rivers of these two currencies flow back and forth across the vast Atlantic by internet transaction in less than a second.
Banks quickly realized that they are uniquely positioned to profit from exchange rate fluctuations that occurred with sufficient predictability. The two most predictable phenomenon being price momentum followed by reversal.
Trading desks held an edge until the internet broke the ice for small Main Street controlled leverage investors like you and me.
Just make sure that you always remember that you have to show up every day to make money in these markets. Profits do not come to those who willingly submit to the urges that lead to attention deficit disorder.
Focus on what counts and discipline yourself to work with the markets every day.
Bankers are among the most spoiled and pampered financial criminals in our society today. They actively mismanaged billions of dollars knowing that the United States Federal Government would bail them out.
So you could become uber-rich just by becoming an upper management banker.
If you wanted to get rich as a banker you could not start at the bottom today. Tellers do not become CEOs like back in the day when operational experience was valued in upper management.
You would have to get into a top business school like Wharton at the University of Pennsylvania or Harvard Business School.
To do that you would have to have stellar grades and placement exam scores.
Every American serf (think “We Are The 99”) has to jump through stainless steel razor edged hoops to get into a top business school in finance to get recruited to the upper management of banking.
Banking has become so regulated today that it would be difficult for you to start a bank in your local community. So breaking into the currency business will not likely come into your future as a banker.
You could gain special privilege at the top of massive international banks. You could dine in the finest restaurants worldwide on a whim.
You would just have your Jeeves call up the jet.
These banks allow enormous multi-national companies to buy and sell currencies to facilitate imports and exports. This gives households worldwide access to the best products and services of each first world country.
This also gives a positive role model for mismanaged 3rd world countries to aspire to. If politicians illegally tamper with their currency as is the case with the Mexican Peso it become worthless.
Political inefficiencies such as those in India and China hold those currencies back as well.
Over time you will come to see that you only need focus your business on the 7 strongest currencies in the world:
- The United States Dollar
- The Japanese Yen
- The Euro Currency
- The Great Britain Pound Sterling
- The Australian Dollar
- The Canadian Dollar
- The New Zealand Dollar
Let's discuss the very big move the Euro Currency made in 2009. This caught most American investors by surprise.
But European households on vacation in Disney World were smiling ear to ear.
Everything was very cheap to them. Their sodas, burgers and fries were cheaper at the concessionaire inside the Animal Kingdom as compared to what they would have paid in Europe.
Their tickets to get inside were cheap too. That's because their Euros were able to buy a lot of United States dollars.
But their savings did not stop there. They also paid less on hotels, a lot less.
And if they took a Caribbean cruise out of Fort Lauderdale they paid a lot less too.
Very few Americans think to plan their vacations around the 7 safest monetary regions in the world with the most vigorous currency trading. These travel choices include Canada, Great Britain, Anywhere in Western Europe including Scandinavia. Then there is Australia, New Zealand and Japan.
At any given point in time any of these countries is a bargain if you include vacationing in America when the U.S. dollar is weak!
The trader jargon for a minimum move is price in points. The acronym Forex folks use for this is the PIP.
A PIP allows you to know to the penny your profits moving forward on a trade. The concept is scale-able because it measures the profit on the smallest unit you can trade – a lot.
As you add lots to scale your position up the PIP allows you to know without looking at your account how much money you are ahead.
The converse is true as well. The PIP also allows you to measure how much you have lost or are losing.
Always remember the sage words of Paul Tudor Jones, “I'm always thinking about losing money. Don't focus on making money, focus on protecting what you have.”
Very few investors and traders focus on protecting what they have first. They are easily “sold” on the investing and trading ideas of others.
If you will first focus inward on your account. If you will then shut off any input from anybody.
If you will learn to listen to yourself you will begin to create a learning feedback loop.
This practice of independent thinking will carry you to great heights of financial success.
NOTE: The first transatlantic cable stretched from Nova Scotia to Ireland!
Not every medical doctor is arrogant or prone to engage in malpractice on your body. But when medical doctors turn into financial experts with no specialized training their advice should be avoided at all costs.
Take the case of former politico-physician Dr. Ron Paul, M.D. who recommended the gold standard as way of stabilizing prices.
When a country pegs to gold it has to increase interest rates regardless of economic conditions. The gold standard forced governments worldwide to tighten monetary policy at the exact time it was least advised in the early part of the last century.
Central banks could not print money when they had too.
Basing monetary policy on gold was a major contributor to the Great Depression.This forced countries to abandon the gold standard throughout the 1930s and into WWII.
This led to the creation of a managed peg called the Bretton Woods Monetary System in 1944. By 1972 the pressure of balance of payments deficits from the Vietnam War had pressured to the U.S. Federal Government to lower interest rates pushing dollar holdings overseas.
The current free floating monetary system operates as a Euro, Pound and Yen periphery around a U.S. dollar core. For this reason you may hear it referred to as Bretton Woods II.
Becoming as skilled at spotting profits as an old horse trader is your only objective at the beginning as a trader. This will allow you to find money in the market others unaware do not see at first.
Warren Buffet flatly admits that the skill most lacking in corporate America is capital budgeting. The reason that this skill is so lacking is because it is so rare.
There are very few people who can make money from money.
Most people squander rather than focus resources. This is so despite important sounding MBAs from place like Harvard.
Marcus Lemonis does the best job I have seen showing how this works.
Make sure you know what you want out of life. That will give you the best chances of making it.
If you really desire to become a controlled leverage investor back your dreams with burning desire and as your definite major purpose.
A mini lot in the EUR/USD allows you to control 10,000 Euros at the prevailing rate. A micro lot controls one tenth that at just 1,000 Euros.
My advice to anybody starting this business is to start as small as you can. The less money you put in the less you will have at risk.
Then you can buy or sell Euros with less stress. That allows you to learn, act, review results and come up with a constantly evolving plan for building your currency business.
Either way you will have to trade in both simulation and cash to build your skill.
Over time you will come to see the wisdom of trading ideas you know are your lowest risk choices based on what you know. You will then be able to test ideas you think might work in no-risk simulation.
In this way you will be able to stay true to the wisdom of trading great Paul Tudor Jones,
“Where you want to be is always in control, never wishing, always trading, and always first and foremost protecting your ass. That's why most people lose money as individual investors or traders because they're not focusing on losing money. They need to focus on the money that they have at risk and how much capital is at risk in any single investment they have. If everyone spent 90 percent of their time on that, not 90 percent of the time on pie-in-the-sky ideas on how much money they're going to make, then they will be incredibly successful investors.”
The first time I experienced a Hyper-market was in Brazil. The concept started in France.
You probably shop in a hyper-market owned and operated by Wal-Mart today.
They are common in the United States now but not back in the eighties. In a hyper market you can buy sundries, pharmaceuticals, hardware, and software all under one big roof.
The largest financial institutions in our economies are termed international banks.
These allow you to invest in the 7 lowest risk currencies in the world today. These currencies operate in the areas of the world most favorable to live in.
The first is the United States. The second is the Euro zone.
The third is England.
After that comes Japan. Then Canada, Australia, and New Zealand fall onto the list of trade-able currencies.
I don't invest in the currencies of Switzerland, Sweden, or Norway.
You don't need to purchase 1,000 or 10,000 Euros to invest. You can put a minuscule down payment on the trade called margin.
This is a lot like a minimum bet on a black-jack table in Las Vegas.
The minimum bet size is your initial risk on any hand. Imagine two tables in a casino. Look at the minimum bet.
One has a $5 minimum bet size. The other is a $25 minimum bet table.
Which table is riskier?
The $25 table is five times riskier than the $5 table. A mini lot of the EUR/USD requires $200 in initial margin.
A micro lot of the EUR/USD requires just $20. Which is the least risky?
The micro lot is clearly the lower risk choice.
Now that you understand this I want you to reflect on these additional words from legendary trader Paul Tudor Jones,
“The most important rule is to play great defense, not great offense. Every day I assume every position I have is wrong. I know where my stop risk points are going to be. I do that so I can define my maximum draw-down. Hopefully, I spend the rest of the day enjoying my positions that are going in my direction. If they are going against me, then I have a game plan for getting out.”
George Soros is clearly the best known of all currency traders. When WWII broke out his father successfully paid a German Nazi officer to “adopt” the young Jew disguised as his German Christian son.
The German officer was charged with running teams picking through belongings left behind by Jewish families carted off to concentration camps.
The experience must have taught Soros a lot.
Imagine seeing all these material things the Germans valued. But the only thing ever of value was gone: beloved family members.
I would imagine that experience profoundly impacted the value Soros assigns to material possessions.
Soros was known for his iron will as an investor. He was able to hold very large positions that scared the daylights out of others.
His son notes that the main reason Soros would exit a position was not due to prolonged analysis. George Soros exited positions when his back pain would show up!
This makes sense when you think of driving a car. You don't stop and pull out a calculator when you are about to hit a bad curve.
Your experience and skill pushes you to act in an often unconscious manner.
Right now I have tenure at the University of Puerto Rico. This gives me the free time to teach you. It also gives me a secure salary.
Or does it?
Puerto Rican politicians have wasted so much money that the local municipal bonds have become the next looming financial disaster for the United States. This could result in the closing of the University of Puerto Rico.
Hence, even my job “security” could be elusive despite the protection of tenure.
That is why I dedicate myself so thoroughly to trading the financial markets. In the shifting sands of our planetary existence no job is safe.
Hence I am constantly building my forex business as a partial hedge to the insecurities in the Puerto Rican municipal capital system. In this way I am able to better complete my job as a finance professor.
This is a healthy approach to your currency business. Look at it as a hedge against unforeseen financial disaster in your household.
Have you heard a line from your supervisor lately that goes something like this?
“You should be grateful just to have a job.”
That sounds like something a dungeon guard in Game of Throne might remark while tossing rotten food to dwarf hero Tyrion Lancaster. This is not what you want to hear when it comes to your livelihood.
As if it wasn't degrading enough for friends of ours to lose their homes to foreclosure. Then they had to watch the wealthiest banks in the world get bailed out by Congress.
I guess those folks should be lucky to be alive.
Since bankers rule our country who knows what sort of death penalty awaits those who can no longer pay their credit cards or mortgages for any reason? I feel a lot safer financially hiding out in Blackbeard's old stomping grounds of Puerto Rico.
The reality is that CNN Money recently reported that people don't just work for less pay. They also work more hours since America's biggest banks have been bailed out.
Now if that doesn't sound like a council of Darth Vaders and Sith lords in IBM blue aren't pulling the strings from behind the scenes in Washington; then I don't know what does!
W.D. Gann, the greatest individual investor of the last century wrote, “The most money is made by swing trading, or in long pull trades, that is following a definite trend as long as the trend is up or down, but you must learn by rules to wait until the market gets out of a rut or a trading range.”
This sentence would get Gann an “F” in an English prose class. His run-on sentences are epic!
But William Delbert Gann's economic intuition would earn him the respect of the top of finance today.
Recent research at the top of finance has verified Gann's wisdom in the forex markets. Currency markets are full of value reversals that are best swing traded for maximum profit.
This same research verifies the existence of momentum trends that are best traded with long pull trades.
You can see clear examples of reversals and trends in the chart of the EUR/USD in the video for this lesson. Notice how each unfolds over days, weeks, months and years.
This course essentially teaches you to swing trade reversals and long pull trade momentum trends. This is the most effective way to capture value (swings) and momentum (long pulls) in the currency markets.
Just ask anybody who bought real estate in 05' at the top of the market. Many of these people are now forced to rent and pay cash for everything.
Foreclosure hit them hard.
But what was the real culprit? It was the fact that they owed borrowed money for their house.
Borrowed money has a lot of names in my field of finance. We call it debt.
We also call it leverage. And a lot of people learned the hard way that leverage can push your home off of a financial cliff.
If their house was cashed out they would not have faced foreclosure.
A powerful aspect of your currency business is that you can cash out your position at any time when the market goes against you. You aren't stuck as you are with a mortgage.
In fact, learning to shift between cash and leverage is a skill you will apply to all other financial aspects of your life.
Waves in the ocean can support fifty surfers as easily as one. That is because the wave is an extension of a vast body of water.
The surfers are specks on the wave.
They wave does not notice them. The surfers cannot influence the wave in any way.
I explain this to my investment students who think I am pointing out the obvious. I change topics as soon as I notice such a response.
You are not ready for trading until you understand that any form of emotional attachment to the markets is futile. The market does not destroy your investment any more than the wave destroys a surf board.
Both the wave and the market are aggregate forces of nature.
The wave is an extension of physical nature. The market is a beast born from human nature.
Either way neither the wave nor the market knows you are here.
If you can learn to follow the rules and ride the market like a surfer you will be far better off in the long run. And if you can keep your temper out of it you will be far healthier and wealthier!
The Roman Empire collapsed with two squabbling brats arguing over who would become emperor.
One heir apparent wanted the capital of the empire to be in Rome. The other wanted it to be in Constantinople which is now modern day Turkey.
Italian politicians still squabble today a little more than most other countries at their level of first world development.
So do those of Turkey.
The conflict created a civil war that officially killed the now corrupt and rotten civil code system. Scientific studies from the Harvard Business School (HBS) have concluded that any currency, stock or bond from any country speaking any of the five romance languages from the former Roman Empire are less stable.
English common law currencies are more stable.
That is because the Roman Civil Code a.k.a. Napoleonic Law Is weaker in protecting your property rights as compared to English Common Law.
Napoleonic Code is also inferior to Scandinavian and Germanic civil codes when it comes to property protection and crime.
A simple rule to follow is to never trade a currency arising from a Napoleonic Code country. Don't own a house there either.
Just say "no" to a bad vacation home investment in Mexico, the Dominican Republic, Brazil or anywhere else south of the United States border.
buy a home in Puerto Rico if you desire Hispanic flair and culture. The island territory is protected by American Common Law derived from the English.
That means that your beach house is protected from expropriation and a score of other bad overseas real estate problems.
The most powerful lesson you must learn is that leverage will cut you to pieces as fast as it will grow your fortune. For that reason one of the trading greats, Paul Tudor Jones, says that you should focus 95% of your mental efforts on controlling risk.
There is so much opportunity in these markets that you don't need to spend more than 5% of your time on market analysis.
This is especially so in light of academic findings that simple technical rules designed to capture value reversals or long-pull momentum. These rules are based on either support (or resistance) below and above of major consolidation zones or moving average crossover.
Both of these technical systems have been shown to offer up market beating returns (positive Jensen's alpha).
Finally, remember that the trading records of John Maynard Keynes show that although he was a very profitable fundamental stock investor he neither profited with this knowledge in futures nor forex. He was not privy to recent research that shows that all the money in forex is in market timing on channel breaks or moving average cross-over! Go cautious with that “funny-mental” stuff… LOL!
All markets are in constant flux. As prices move from peak to trough patterns form.
The most powerful to watch for are reversals and trends.
International banks have been making extra cash trading free floating currencies since as far back as 1972. This is a new breed on the international financial scene.
They are the cousin of the futures trader. International banking currency traders are free from the fetters of the NFA and CFTC.
President Nixon gave birth to the free floating system that naturally evolved from the Bretton Woods arrangement before it.
Nixon was no monetary pioneer. He was trying to hold an economy together that was badly damaged by Viet Nam.
War hurts both sides.
And the French warned us to stay out of it. Nonetheless the debt pushed our economists to do things that distorted the Bretton Woods system beyond the point of repair.
From the rubble arose the free floating system like a phoenix. It is a true modern marvel.
Have you ever tried futures trading? If so are you trading it now?
If you answered "yes" then "no."
I have a simple question. How much did you lose?
I lost over twenty thousand dollars in the first four years of my trading. I thought it was the end of our world.
But the experience I gained helped me understand stock options.
And it gave me a knowledge base from which to ground my doctoral dissertation in finance. There is no doubt in my mind today that I have recovered my initial losses many times over.
In those days we had no internet.
Everything was done over the phone. Charting was done by hand or mailed in by print service.
A simulator consisted of a rule, pencil, calculator and a paper chart graphing historical changes in price and volume. The advent of the internet allowed for the creation of trading simulators that allow you to practice with no margin at risk.
Scientific research shows that you can improve your health and prolong your life just by writing down three things that went well and why. This technique is particularly powerful for controlled leverage investors like us.
I might have a bad day in stocks but be surprised to find Forex going my way. Or the opposite can happen.
We can't control every aspect of our lives. We are taught by necessity to focus our full faculty on solving problems.
Sometimes this can hold us back when we make mountains out of mole hills.
This is not to say that we should become complacent. Prudent investing and trading calls for you to be aware and to take occasional decisive action.
But your interventions in your portfolio should be minimal. Otherwise you will not capture the big money on the long pull moves.
So always look for the silver lining, see the glass as half full, and write down three things that went well today and why!
The hardest lesson for me to learn as a controlled leverage investor was the power of simplicity. The more things we believe we need to do in any process the more room for disaster.
Trading is just that simple.
At that very last moment before you trade you have decided to either buy or sell a lot. Or you have decided to set contingent orders around price consolidations to wait for the market to get out of a rut.
Either way you have selected one of four choices that you face on every idea. The first choice is to do nothing.
The second choice is to buy which means that you are strongly convinced that the market is going rise. The third choice is to sell. This indicates that you forcefully believe the market will fall.
The final choice is to set snares for a rise or for a fall. In this case you do not forecast the market.
Buying and selling campaigns allow you to start with small capital. Then you scale and trail a pre-established stop-loss.
This is how the pros trade the Fx markets.
When I started trading I would feel sorry for whomever was on the other side of the trade when I would win. This was a severe distortion of reality that I eventually corrected with my own financial training.
Don't ever personalize the market.
There is nobody on the other side of your trade. You couldn't do anything even if you wanted to find out who lost when you won.
Part of the way the markets are structured is designed to give you anonymity in your trading. Ditto for the person or firm on the other side of your trade.
I like to envision the revered Catholic monk Nacho Libre as counter party to my trade. That reminds me that Mr. Market is not a person.
The market is impersonal and does not suffer or hurt. So I am wisest in not allowing the market to make me or my family suffer or hurt.
Viva Padre Nacho!
I was stunned by these words from a well-known speaker who is nationally recognized in investments. Unfortunately I understand the sentiment.
The typical person to attend an investment show has a background outside of finance.
They most frequently come from engineering or medicine. They are all smart.
But they are not trained to understand the peculiar endeavor of pure capitalism that is controlled leverage investing.
These men and women are experts in their field. They know how to dodge the minefield in their field.
And it was their practice or business that made them rich.
It was not the markets themselves.
I have a unique perspective since I teach so many MBA students. I am always stunned at the unprofitable approaches to markets.
My MBA students find them all in simulation.
The reality is that success in the market comes from an intense focus on controlling downside risk. This can best be done with stop-loss orders and later rather than sooner derivative expiration.
The Mirriam-Webster dictionary defines a system as,
“a group of devices or artificial objects or an organization forming a network especially for distributing something or serving a common purpose <a telephone system> <a heating system> <a highway system> <a computer system>.”
I would certainly agree with this. The Forex trading platform I use would certainly fall under this category of a system.
And the same dictionary defines system in another way like this,
“an organized set of doctrines, ideas, or principles usually intended to explain the arrangement or working of a systematic whole <the Newtonian system of mechanics>.”
My cross-country portfolio approach would fall under this second more intellectual type of system.
Most people stumble into these markets wide eyed with get-rich-quick fever and a handful of cash. They focus far too much on putting money behind whatever smart sounding idea they have read or heard from someone else that week … usually a well-known financial commentator or newsletter editor.
Hence they lack a system that allows them to not just trade but also monitor and grow from experience.
Hero of the common man, Mojo Nixon croons out his rock tune,
“I hate banks...
I just can't stand 'em.
Gimme a shovel & man I'll plant 'em.
Six feet under that's where they belong...
I hate banks is the name of this song.
I think I'll rob myself one or two...
Yeah I hate banks, yeah, how 'bout you?”
This tune comes to my mind whenever I see a bank advertising a certificate of deposit. These bad ideas for your fortune were dreamed up by the biggest haters the banks could hire.
Banks hate you. But they have to live with you because you represent the most basic level of consumption and savings in our society - the household.
You are the plankton in the United States financial system. We all are!
They certainly don't want to lend you on fair terms for a house.
Their reticence led to the Great Depression. The United States Federal government had to bribe banks to make long term mortgage loans.
They did so by creating mortgage guarantees by forming Fannie and Freddie. The banks blew that system up recently.
Which is why Mojo Nixon should win next year's Nobel Prize in economics. Q.E.D.
The most powerful concept I learned to guide my controlled leverage investing is the value of staying focused on just a few of my very best ideas. Over the years I noticed that I had a good feel of the market.
Many times I would spot a bottom or a top.
I just wouldn't act on it. I finally had enough when a student thanked me for profits in Ford.
I forgot I had told him about it way back in 2009 at the bottom of the equity market.
I asked myself why I was so afraid to put our savings behind my ideas. When I discussed this with my wife I discovered that she was not holding me back.
Hence I began to gingerly test my ideas. This resulted in dramatic improvements in my results over the years.
And it also resulted in my completion of a Ph.D. in finance from an excellent school, The University of South Carolina.
P.S. I hear that their state is now flag-less! LOL
The most experienced and wealthy business owners I know got that way by paying close attention to the rules of their business and industry. They usually learned these rules from a master in the area.
Then they went for it. They dove in.
They gave it a shot.
And they ran into all sorts of problems. But over time they worked all of their problems out.
They even made it through times they did not think that they would survive.
The rare ingredients of determination and planning are what will define you from losing Forex traders. To do so you must carefully form your plan based on your independent thinking.
You can follow me for a time.
But in the end you will be far better off if you craft your personal course through your currency business with independent thought. That will ensure that you learn from you.
Your personal experience will become your best guide to trading over time.
Profiting on unexpected reversals into a long extended trend — momentum. The more things change the more things stay the same is as true as the day is long. And what goes up in forex eventually comes back down!
This means that you have to develop a system from your own independent thinking that can extract profit from the facts above.
Each year of experience I gain the more convinced I am of the profit extracting power of the Capital Asset Pricing (CAPM) anomaly variables of value and momentum.
There will never be a better time than right now for you to get started trading. And the reality is that the longer you wait the less you will learn.
The less you learn the less you profit in these markets. Don't take the path of those who wish to Occupy Wall Street.
We are the 99 for most is just another way of saying, “we are too lazy to learn about the markets.” Don't try and give up.
Try and win!
Momentum and reversal is a common theme in our natural world. Our seasons abide by it.
Our planets abide by it.
Our endocrine system abides by it. The ebb and flow of things is our nature.
The problem is that our attention is fixed at one point in the time line. This is so despite the insistence of Einstein that our time perspective is arbitrary.
Charts allow us to instantly see past levels and change over time. We use this time tracking trick to solve a number of problems humans face.
We track the progress of recovery and cure with time charts. And in finance we track the change in currency exchange rates over time.
This can give you a unique perspective into spotting trends most likely to continue for a long pull. The exact same chart will also give you eagle-eyes for catching long term trend breaks.
This is the first and surest sign of reversal.
Lopez on Access Hollywood. Mr. Lopez is my favorite English joking Hispanic comedian. But I am not sure too many would actually move.
Mexico has lost its luster of the Madrid years for American tourists. Stories of ever worsening lawlessness come over the border from the south.
And our Mexican friends don't help. They actually warn us not to visit because of the “narcos” and kidnappers.
Mexico is not the only emerging economy to suffer deeply tragic inefficiencies. Viet Nam also has wide disparities in the distribution of wealth and justice.
Yet I have friends who continue to insist that their $5,000 investment in the Viet Nam Dong s going to magically turn into millions over-night.
I will continue to bombard you with this message over and over avoid fad currencies issued by weaker political economies. A short list of primary currencies to avoid as investments include the Iraq Dinar (IQD), the Viet Nam Dong (VND), the Mexican Peso (MXN) and the Brazilian Real (BRL).
Do, however, feel free to bring them home as vacation mementos!
The stop-loss allows you to follow the life enhancing advice of legendary trader Paul Tudor Jones,
“I spend my day trying to make myself as happy and relaxed as I can be. If I have positions going against me, I get right out; if they are going for me, I keep them.”
You can set a stop-losses on a Forex contract as easily as clicking a button. This is called trading through the screen.
It requires a lot of patience and discipline. But it can be done from a home office for profit.
This opportunity comes to you now through the modern communication miracle that is the internet.
But you also have to be careful when trading through the screen. A professional currency trader once warned me that a Forex trading platform is like having a slot-machine on your desk.
Most people pop out hundreds of trades in a month. And their account drops month after month.
In a few months most are wiped out!
That is why I developed my cross-country portfolio. It forces me to retain sufficient discipline to never step over safe boundaries when trading through the screen.
A big part of how it does this is by forcing my focus on no more than three currency pairs.
The fact that Switzerland no longer lets the sovereign currency float freely bodes ill for forex traders. Expect more unexpected central bank announcements.
Great differences in purchasing power between the Swiss Franc (CHF) and all of the Euro Currency denominated countries around it have been pushing it over the brink. The next step I foresee is that it will sooner or later join the Euro currency.
I also believe that the same disparities in purchasing power will also eventually force the Norwegian Krone (NOK) a.k.a. ”the Knockie” and the Swedish Krona (SEK) a.k.a. “the Stockie” to join the Euro currency as well.
For this reason I do not trade these currencies. This whittles the strict universe of currencies I am willing to invest in down to just seven.
The United States Dollar (USD), the Euro currency (EUR), the Great Britain Pound (GBP), the Japanese Yen (JPY), the Canadian dollar (CAD), the Australian dollar (AUD) and the New Zealand dollar (NZD).
The majors combine into a lot of cross combinations outside of the United States dollar. These justly termed cross-pairs allow you to trade exchange rates between two countries outside of our American hegemony.
This is a very good thing. I don't expect particularly similar export patterns between New Zealand and Europe.
I also don't expect similar interest rates between Japanese sovereign and Australian government bonds. All of these factors influence how much currency flows out of one country and into another.
This reasoning leads people to engage in complicated fundamental analysis of currencies.
Genius economist John Maynard Keynes refused to employ technical analysis when trading Forex, futures, options and stocks. Keynes became rich in stocks.
But this just out from King's College in Cambridge. He never turned a profit in other capital markets.
W.D. Gann on the other hand was not of high education. Yet his judicious use of technical analysis allowed him to extract profits in all of the markets in which professor Keynes lost.
Use a long term trend following and swing reversal pure technical approach in Forex and futures and you will be far better off. But pay attention to firm profitability in stocks. Q.E.D.
Bruce Kovner made a fortune in currencies. He revealed in the 1990s that,
"I study the correlation of my trades to reduce my exposure. We do a daily computer analysis to see how correlated our positions are. Through bitter experience, I have learned that a mistake in position correlation is the root of some of the most serious problems in trading. If you have eight highly correlated positions, then you are really trading on position that is eight times as large."
Well, I have no interest in running and reading complicated correlation matrices.
This would be a backward looking measure anyway. I am as well trained as anybody Kovner had.
So I set myself to thinking. And I thought for a while about how I could most tractably reduce to a minimum correlations in a data matrix.
A portfolio is really nothing more than a data matrix. That is why we have the doctoral students study linear algebra.
Many traders do not know that options on Forex are available. These option contracts trade on a futures exchange in Chicago.
Futures exchanges are highly regulated in comparison with the Forex markets.
Currency options allow you to take advantage of price movements that occur in 3 months or less. Hence they require fast entry before the movement exhausts.
Always remember that time is an additional form of safety. This is different than the price dimension where stops are your most secure safety nets in the market.
These markets are very much like flying on the high trapeze.
When we slip and fall stop-losses and longer rather than shorter option expiration protecting us from the market Punji sticks below.
I have seen so many bright investors and traders wipe out in stocks in the 2000, 2003, and 2008 crashes. Many never recovered.
Those that invested and worked in the real estate market went from wealth to dead-broke in a year. I cannot over emphasize how important it is for you to first focus on downside risk.
Only the eleven most active currency pairs trade as futures contracts on the Chicago Mercantile Exchange (CME). This includes the six majors of the Cross-Country Portfolio.
The CME planners recognized public interest in key cross-pairs. Hence they also added the…
This generates a universe of nine options, puts and calls, that can be traded in a futures account. The futures trading account acts as an offset to the Forex account.
And the futures account offers tax benefits above and beyond the Forex account.
Options are also available on the crosses involving the CHF …
The EUR/CHF is now known as the zombie. The reason for this is the policy of pegging to the EUR by the CHF central bank.
This effectively flat-lined the pair. This is also the reason I don't trade any pair involving the CHF.
Nonetheless currency futures options are an intriguing possibility you should at least store in the back of your mind.
The government was really annoyed when the bankers collapsed the economy into the Great Depression. They formed the Security Exchange Commission (SEC) and gave it teeth to prosecute financial criminals.
The SEC formed the Commodity Futures Trading Commission (CFTC) to watchdog over the commodity markets.
Over time financial futures were introduced. Then in 1972 currency futures afforded the public an opportunity to trade parallel to the massive international banks.
A big part of regulation involves data compliance.
Currency futures traders are organized into three categories by the futures brokerage: small, large, and commercial traders. The brokerage is required to transmit the positions of each group in its book to the clearing firm.
The clearing firm aggregates the figures from all of the brokerages it underwrites. It then transmits this data directly to the CFTC.
The CFTC aggregates all data across all clearing firms. It reports this data as the Commitment of Traders (COT).
The COT shows you all of the bets on the table.
These are the words of Paul Tudor Jones who became fantastically wealthy as a controlled leverage investor. He emphasized that his heavy handedness on the throttle was his Achilles heel.
He goes on to say,
“My major problem was not the number of points I lost on the trade, but that I was trading far too many contracts relative to the equity in the accounts that I handled.”
The fastest way to over-trade is to pyramid. In this betting scheme you double your position each time you make enough money to internally finance more lots.
The portfolio starts with just one lot. Then it doubles to two.
The two double to four. And so on.
A safer strategy that forces you to adhere more closely to Tudor Jones sage advice is to pillar. In this bet size system the portfolio increase from one to two to three lots. Here sufficient profits allow you to safely internally finance the expansion of your portfolio.
This challenge is designed to reinforce the idea that three lines can describe the entire price movement of one day in Fx. A simple high, low, close (HLC) bar-chart gives you the clearest view of the true trend.
The momentum trend rising into new highs has been shown in numerous studies to be the most effective tool for generating positive Jensen's Alpha.
If you are seeking alpha you will find it here the way I teach you in this revolutionary currency course.
A HLC bar-chart can also help you capture value in the forex markets. Value here is defined as a price reversal.
In the 1970s, 80s and even into the 90s finance professor worldwide preached ubiquitous efficiency. Today we know that the opposite is also true.
Ubiquitous inefficiency shows up as value and momentum everywhere.
Placing OTO limit stop orders allows you capture the excess abnormal return from these two key variables in the Carhart four factor model.
I can't tell you how many times I have felt the judgmental stare of a private placement salesman when I ask the question,
“What is my minimum investment?” Some of the financial sales people are the lowest on the rung on Wall Street.
Some can be callous, pushy and arrogant. Just watch the Wolf of Wall Street.
And they know that the more money they can suck out of a mark, the more profit they will make. So don't ever be afraid to be as cheap as heck when it comes to minimizing the risk you have in an investment.
The best way to do that is to minimize the amount of your savings you put into the deal in the first place.
As you can imagine I extended this thinking into my currency trading long ago.
Technically you can trade with as little as $100 in a micro account. I have recovered from as little as $50.
I wouldn't start with less than a hundred.
Three hundred is safer in a micro. And I would not start with less than $1,000 in a mini lot account.
Elizabeth Warren was the dean of Harvard Law. She became the lead researcher for a study commissioned by the U.S. Federal Government.
The research looked at factors that impact rates of household bankruptcy.
The most surprising statistically significant finding in the study was that dual wage couples are far more likely to go bankrupt than single wage spousal environments. And households run by a Ph.D. like mine were the least to go to the poor house.
Dr. Warren found that the non-working spouse operates like a safety valve.
When there is a crisis that needs solving the non-working spouse can run out and fix it while the other drives to work. If the primary wage earner loses their income the non-working spouse can find a job more easily. A dual income family would be forced to pick up a second shift or job.
The credit card laws that were passed recently are heavily slanted against single mothers. For that reason Elizabeth entered politics.
She wants to help. Elizabeth Warren is an excellent candidate for first woman democratic president!
One of the greatest business leaders of the last century wrote an essay entitled “How to Succeed in Life” in The Pittsburgh Bulletin. It was published under the authorship of Andrew Carnegie on December 19th of 1903.
“Having entered upon work, continue in that line of work. Fight it out on that line (except in extreme cases), for it matters little what avenue a young man finds first. Success can be attained in any branch of human labor. There is always room at the top in every pursuit. Concentrate all your thought and energy upon the performance of your duties. Put all your eggs into one basket and then watch that basket, do not scatter your shot. The man who is director in a half dozen railroads and three or four manufacturing companies, or who tries at one and the same time to work a farm, a factory, a line of street cars, a political party and a store, rarely amounts to much. He may be concerned in the management of more than one business enterprise, but they should all be of the one kind, which he understands. The great successes of life are made by concentration.”
I could not agree more. I have learned the hard way that over diversified portfolios don't perform.
You only need three pairs to achieve full diversification in Forex. The cross-country Forex approach is designed to help you follow the sage advice of the man who gave birth to our modern glodbal steel industry!
Using a three bin approach for the uses of your salary are the most powerful way to create fast and lasting changes in your family finances. The first bin represents the base money you need to cover your basic needs expenses.
Needs expenses are those uses of money that you cannot reduce, cancel or dodge. Car payments, multi-year cellular phone contracts, rent and mortgage payments are the most common of these.
These impossible to cancel expenses should never be allowed to increase above 50% of your net monthly after tax take-home pay.
It is also important that you do things that you find psychologically restful. Maybe you like to cruise. Maybe you like to ski.
Perhaps you build model planes in your spare time.
Regardless, these expenses are best classified as wants. Your wants expenses represent uses of your salary that help you rest and enjoy life.
Wants should never grow above 30% of your net monthly after tax pay.
The finally category for your expenses is tagged for savings.
This should be at least 20%. If you focus on controlling your needs and wants you will find it much easier to save 20% each year in and year out!
The whole thing started as a joke in the offices of the economist.
British Financier David Ricardo had worked out that countries with high inflation would face eroding exchange rates. This reduction in purchasing power would be strongest against currencies issued by the highest inflation political economies.
The problem with the actual calculation is finding a product that is exactly the same in any country. The big joke was that the Big Mac hamburger was the answer.
Hence the article about creating a Big Mac index was a tongue and cheek piece that was never intended to have a follow up.
Currency traders didn't see the pun. They began to use the information to guide their long term trading.
Today the Economist publishes the Big Mac Index on about a quarterly basis. That's because differing levels of Purchasing Power Parity (PPP) don't change very fast.
And since these levels don't change fast they are perfect for long term currency traders.
The Big Mac Index tracks relative values of hamburgers against the six most important currencies:
The United States Dollar (USD)
The Euro Currency (EUR)
The Great Britain Pound (GBP)
The Japanese Yen (JPY)
The Canadian Dollar (CAD)
The Australian Dollar (AUD)
The New Zealand Dollar (NZD)
I used to have to chart Big Mac Index fluctuations by hand in Excel. Now the Economist has an interactive online tool that allows you to see time series charts of Big Mac Index values for the Chinese Yuan, Euro, Japanese Yen, Sterling, or US dollar as base currencies.
The tool allows you to see relative under and over pricing of any of these five base currencies against more than thirty other world fiats.
This uber-nifty interactive tool from the Economist allows you to see that The Turkish Lira (TRY) has crossed the PPP neutral line 4 times in this century. The Euro currency has crossed the neutral purchasing power line just twice in that same time period.
The New Zealand dollar (NZD) crossed the zero line on the Big Mac Index an amazing 10 times in the last 15 years.
I am sure you have heard the clichés,
- What goes up must come down.
- A change is as good as a rest.
- A rising tide lifts all boats.
- All good things must come to an end.
- All roads lead to Rome.
- All good things come to those who wait.
- All things must pass.
Each of these proverbs has a commonality. That is gradual change.
It is hard to see gradual change in currencies. To do so you must consult an ultra-long term currency price chart.
That will allow you to see fluctuations over decades or more. These long term fluctuations in currency exchange rates generate equivalent scenarios for different trader skill levels and approaches.
Regardless, traders succeed only when they are well calibrated to swing trade value reversals or long pull trade momentum trends.
The reality is that currency exchange rates fluctuate around a long term equilibrium band.
The Big Mac hamburger is a globally ubiquitous product. McDonald's is in 91 of 121 countries.
I am more hesitant to visit a country without a McDonald's. I know that the soda and burgers probably won't make us sick if the food is to strange for somebody in the group.
That said I am nuts about foreign food. So usually it is somebody traveling with me who wants McDonald's
This means that a Big Mac in Guantanamo Bay is exactly the same as the one bought in Roswell.
Ditto for a Big Mac in Prague or the Negev Desert in Israel!
The Big Mac is almost everywhere.
This makes it the perfect tool for measuring price distortions based on the concept of purchasing power parity. This was first described in the writings of English financier David Ricardo hundreds of years ago.
Ricardo became a rich man with his knowledge of finance. He made a fortune in the stock market in a few short years.
He mastered stock investing under the tutelage of his father - a Sephardic Jewish man. But he was ostracized by his family for marrying a gentile Quaker woman.
He joined the Unitarian church.
Ricardo was one of the first monetarists. He died worth a hundred million U.S. Dollars in today's terms.
David became fascinated by economics after reading “The Wealth of Nations" by Adam Smith.
He articulated the law of diminishing returns. This says that a fixed resource will cause output to diminish as more labor and machinery are used.
A fixed amount of land in a small country is a good example.
Simple moving average crossovers can be constructed using a short and a long price series average. The 5 and the 20 day moving averages are obvious candidates.
A five day period covers one trading week. 20 days covers a month.
Recent research in the fourth ranked academic journal covering financial findings shows that a simple 10 day moving average yields an eye-popping 18.81% alpha. See,
- Yufeng Han, Ke Yang and Guofu Zhou. A New Anomaly: The Cross-Sectional Profitability of Technical Analysis. Journal of Financial and Quantitative Analysis 48(5). 1433-1461.
These equity findings can easily be extended into Forex.
Why is this simple moving average strategy so effective? These crossovers mathematically identify the inception of market reversals.
Reversals are a way to trade value in the currency market.
So next time you are kicking around for a core indicator to slap into your Forex trading system give a gander to the moving averages. You'll be glad you did!
The bulls and the bears is a moving average cross-over software system invented by Lan Turner. Lan is also the founder of Gecko Software.
His ninja staff of a dozen or so programmers keep the system running like a top.
The Bulls and the Bears allow you to not just time your entries with moving averages but it also allows you to set your stops. And it will automatically trail stops using the Bulls and the Bears blue light system.
This is the best way to get a feel for entering the market with a pre-planned exit route.
Very few traders think this way. The Bulls and the Bears allow you to precisely follow the sage advice of currency trading legend Michael Marcus,
“I think the secret is cutting down the number of trades you make. The best trades are the ones in which you have all three things going for you: fundamentals, technicals, and market tone. First, the fundamentals should suggest that there is an imbalance of supply and demand, which could result in a major move. Second, the chart must show that the market is moving in the direction that the fundamentals suggest. Third, when news comes out, the market should act in a way that reflects the right psychological tone.”
This challenge will measure your understanding of moving averages.
Recently a study from top B-schools revealed that a simple 10 day moving average is shown to yield up an eye popping 18.81% alpha for traders.
- Han Yufeng, Ke Yang and Guofu Zhou. 2013. A New Anomaly: The Cross-Sectional Profitability of Technical Analysis. Journal of Financial and Quantitative Analysis 48(5). 1433-1461.
This is not the first evidence of the usefulness of this technical tool. Moving Averages have been shown to predict the Dow Jones Industrial Average (DJIA).
- Brock, W.; J. Lakonishok: and B. Lebaron. 1992. "Simple Technical Trading Rules and the Stochastic Properties of Stock Returns." Journal of Finance 47(5), 1731-1764.
Moving averages are equally as powerful as channel resistance and support in trapping reversals and momentum in the forex market. It is very important that you open mindedly and with independence of thought seek out technical tools that offer you positive alpha.
This is the best way to ensure that you have better odds than a coin flip on each and every trade you undertake!