Learning from WD Gann – Trend Line Indicator

Many novice traders really like to complicate their trading.

At first, they usually trade on tips from friends or co-workers, or on something they hear or read on the news.

If they survive the blow they are likely to take to their capital, they may soon come to discover technical analysis as a better way to get a reading about price action.

However, often the beginning of their entry into technical analysis is to install some popular chart indicators such as the Stochastic and believe that they have found the Holy Grail of wealth. Unfortunately, this bubble will soon burst when they realize that this and any other indicator only works during certain times and with some parameter modification.

If this just happened to sound like you, and you’re still in the game (I know, this isn’t a game. It’s a speech character), then there’s hope for you yet. Let me introduce you to WD Gann’s “Trend Line Indicator”, which today may be referred to as a swing chart.

No matter what market you want to trade, there will be a series of swing bottoms and swing tops that form trends of varying degrees. These swing patterns occur on any time frame, and are the key components in determining whether a market is in an uptrend or downtrend.

A trend line indicator or swing chart comes in several types. You can create a 1 bar, 2 bar, or 3 bar swing (I wouldn’t bother going beyond this).

This single bar swing chart is very short term and good for setting entry. However, for the purpose of determining the direction of any outcome, a 2 bar swing would be my recommendation. Additionally, it wouldn’t hurt to get a bigger trend picture by creating a three-column swing chart as well.

Creating a two-bar swing diagram is very simple. Starting at a clearly defined bottom or top, you can draw your swing line (trend line indicator) either up for each new high (starting at the second high in a row) or down for each new low (starting at the second in a row – few). To illustrate, let’s start from a clearly defined bottom to plot the line of the two-column swing chart.

With a two-bar swing chart, we need at least two higher highs in order to push our line to a new high on the chart. Let’s say the starting bar (with a lower bottom) is bar #1. The next bar (#2) makes a higher high but not a lower low. Our higher high is only one, so we haven’t moved yet on our swing (trend) line. Now, bar #3 is also making a higher high and the low of bar #1 is still holding. Therefore, we can move our line up to the new top of bar No. 3.

As each new column makes a higher peak, we can continue to move our streak up to that new height. If the next bar makes a lower high and a lower high, our streak does not move up and our countdown is one. If the price resumes the upward movement and makes another top higher than the current high (it would be bar #3 in this example), our line would continue up to that new high, and each top higher until we actually get two lower-lows to change the direction of the line.

Let’s say that after we move our swing line to each new high we get a low-low bar instead. Let’s call this bar number 5. If we move the line up to every new high before this new low, the low count starts at one. If we get bar (#6) that makes the lowest low of bar #5 before it makes another bar and higher of bar #4 (which was the last high bar high where the line moved up to), then our minimum low count becomes two and we’ll move The line is down from the last higher high (bar #4) to the low of bar #6. Now for each bar making the lowest trough where our line is currently sitting (bar #6 currently), we will move the line down to that new lower low.

The bottom line here (no pun intended) is that we need to count two highs to start moving up or two lows to start moving down. Once the number is met, we can then continue in that direction for every bar above the price where the line is currently located.

There are times when the bar isn’t higher-high or lower-low (called the inside bar, or “inside the bar” by W.D. Gann). Since they don’t make any of the high – high or low – do nothing. The line remains.

There are also times when the bar is higher – high – low – low (remember that we compare each price bar to the previous bar to determine if it is higher – high or lower – low). This bar is called an external bar. To deal with these columns depends on the current direction in which the line is moving. If the line is moving to each new higher peak, then you can push the line back to the new top of that outer bar. On the other hand, if the line is moving down with each new lower low, you can move the line down to a new lower lower for that outer bar.

The thing to note about the outer bars is that although you will be presenting your line up or down (depending on the current direction of your line drawing), you must count the other side of the outer bar as a single number in the corresponding direction. Thus, if the price then goes in the opposite direction and crosses the other side of the outer bar, the counting becomes two in the opposite direction and the line must then move from the outside (where it is currently sitting) to the bar that counted. of two.

For example, let’s say we move the line down to each new lower low (so the trend is currently down). Then the outer bar forms making both a lower-low (lower where our line is currently sitting) and higher-high (higher than the previous bar). Since our trend to this outer bar was down, we are moving our line down to the lowest level of the outer bar (since it is actually a lower low). We also want to set the highest height of this outer bar to a single number. Now if the next bar is higher than our outer bar, the count goes to two and the line moves from the lowest level of the outer bar to the new higher high.

After doing this with your price chart, you will see tops representing swing tops and bottoms. You will use these tops to determine the current direction of the market.

For example, an uptrend is a pattern of higher swing lows. As long as the market forms each swing high/lower than the previous one, the uptrend is in effect. On the other hand, a bearish trend pattern consists of lower swing highs and lower swing lows. So by not having anything where these swing lows or tops are forming compared to previous lows, you can identify the current trend right away.

WD Gann stated that when the top of the two-bar swing is crossed, it is an indication of higher prices. He also mentioned that when the two-column swing low is removed, it is an indication of lower prices.

Not only should the trader focus on trading in the direction of the trend, but these fluctuations can also help determine where to set stop loss orders. For example, if you are in a long position due to an uptrend, moving your stop loss below each higher swing low will protect your position in the event of a swing low being taken out (as this is an indication of lower prices in the future).

Of course these days it can leave a lot on the table to use these two-column swings for stop loss orders. Consider this a guideline for a start. One option I might use is to draw a trendline below two or more swing lows (when they are long) or across two or more swing tops (when they are short) and use the slope of this trendline as a guide to set my stop loss.

Learning how to spot swing tops and bottoms is a valuable tool for any trader who wants to get a good read on the market. It’s mentioned in many tutorials by WD Gann because it’s really important. In my business, it’s all about the ups and downs.

Why Price is King

Price is key when it comes to the market. Of course, there are many different ways to evaluate a company and all the different methods have their advantages, but the company’s pricing patterns still give you the most accurate signals to buy and sell.

More than any oscillator, any fundamental ratio or any price on a probability chart is still the king of the world stock market. Growing stocks will continue to grow until people panic and start selling. Shares in a downward trend will continue the downward trend until something happens.

In addition, patterns that have historically occurred in company prices, such as chart patterns and candlesticks, will continue to reappear over and over again. However, people behave in a predictable way. They have behaved in the same predictable way since there is such a thing as a stock market. Price trading patterns allow you to take advantage of this.

It also allows you to reduce your losses. Looking at the price, you can find key levels of support and resistance that if they break through can mean a big move. This makes it easier to find stopping places and targets.

Now I’m not saying that price is the only thing to pay attention to when trading stocks. There are many other indicators that are also worth looking at. The volume tells you how many people traded during the day. A strong upward trend with a small volume may indicate that the trend is not so strong.

Other indicators such as oscillators and financial indicators may be good secondary indicators. Looking at a few different things about a given security usually works best. But at the end of the day, price is what matters. You don’t make money based on how much debt a company has or what the oscillator does; you make money based on where you sold stocks and where you bought them. The market is that simple use of price patterns is easy, it is a perfect combination.

Best Investment Guide for 2020 հետո After – Pharmacy և more

Are you interested in investing but do not know which markets and areas to look for? You are not alone. There are many novice and casual investors who also need a lot of advice. Never mind diversifying your portfolio, but you probably already know that. Never put all your money into one investment. So what are some of the best investment opportunities right now? What are some of them that you should definitely look into?

Here are some industries և markets that have the potential to pay huge sums over the next few years.


Japanese stock markets have long been shunned. However, they are currently one of the cheapest in the world. There is evidence that Abenomics (Shinzo Abe’s policy) seems to be making slow but real improvements in the country’s underlying economy. Besides, it is no secret that Japan is a leader in technology, it has been for several decades. For international investors, medium-sized companies can offer attractive opportunities for long-term stability, as larger companies have to deal with a loss of market share, and “fast-growing” companies are more vulnerable to accidents.

Drones և robots

With so many people investing in drone companies, you can invest better in the parts manufacturers. This is due to the fact that the technology of unmanned aerial vehicles is still in its early stages to some extent. Like all electronic products, drones will only evolve over time and become more advanced. To diversify your portfolio a bit, consider investing in stores և companies that now use drones և are financially stable enough to continue them in the future (Amazon).


ULTA Beauty has experienced great growth over the last 5 years, despite the failures of the retail industry. The chain of stores continues to expand significantly. There are strong indications that this beauty / spa shop provides the best investment opportunities in the retail industry. ULTA is not only an online retail giant, but also has a chain of 1,100+ stores, and that number is expected to grow to 2,000 over the next decade. Shares of ULTA Beauty rose 42% (NASDAQ) և 17% in the S&P 500 in the first half of 2019.

Aerie Pharma (AERI)

Why not add pharmaceuticals to your portfolio? This particular company has paid considerable attention to the development of treatments for eye diseases such as glaucoma. AERI has been successfully developing two glaucoma drugs for the first MoA (Mechanism of Action) for nearly two decades. With the strong release of the first product, limited competition in the field of glaucoma treatment, strong management performance, everything shows that this company is worth investing in.

These are just some of the goal setting shareware that you can use. Always consider the best investment opportunities before making a decision. Capital Exploits is the best place to educate yourself. All the resources and tools are simple և easy, even for complete beginners.

A short history of bitcoin

Bitcoin is the world’s number one cryptocurrency. It is a peer-to-peer currency and transaction system based on a consensus-based decentralized public ledger called a blockchain that records all transactions.

Now Bitcoin was conceived in 2008 by Satoshi Nakamoto, but it was the product of many decades of research into crypto and blockchain and not just the work of one person. It has been the utopian dream of crypto designers and free-trade advocates to have a decentralized, borderless currency based on the blockchain. Their dream has now become a reality with the increasing popularity of Bitcoin and other digital currencies around the world.

Now the cryptocurrency was first published on the consensus-based blockchain in 2009 and in the same year it was first traded. In July 2010, the price of bitcoin was only 8 cents and the number of miners and nodes was much lower compared to the tens of thousands today.

Within a year, the new altcoin rose to $1 and became an interesting prospect for the future. Mining was relatively easy and people were making good money by making deals and even paying with them in some cases.

Within six months, the coin had doubled again to $2. While the price of Bitcoin is not stable at a certain price point, it has shown this pattern of crazy growth for quite some time. In July 2011, at one point the coin went crazy and a record price point of $31 was achieved, but the market soon realized that it was overpriced compared to the gains on the ground and corrected it back to $2.

December 2012 saw a healthy increase to $13, but soon the price was exploding. In the four months to April 2013, the price had risen to $266. It later corrected itself back to $100, but this astronomical increase in price increased its stardom for the first time and people started discussing a real-world scenario with Bitcoin.

It was around this time that I was introduced to the new currency. I had my doubts but the more I read about it, it became clear that currency was the future because it had no one to manipulate or impose itself on it. Everything had to be done with complete unanimity and this made it strong and free.

So 2013 was the breakthrough year for the currency. Big companies are starting to prefer accepting bitcoin openly and blockchain has become a popular topic for computer science programs. Many people then believed that Bitcoin had served its purpose and now it will stabilize.

But, the currency is becoming more and more popular, with Bitcoin ATMs set up all over the world and other competitors starting to flex their muscles in different corners of the market. Ethereum developed the first programmable blockchain and launched Litecoin and Ripple as cheaper and faster alternatives to Bitcoin.

The $1,000 magic number was first hacked in January 2017 and since then has quadrupled until September. It really is an amazing achievement for a coin that was only worth 8 cents just seven years ago.

Bitcoin even escaped the hard fork on August 1, 2017, and has gone up nearly 70% since then while even Bitcoin Cash has managed to find some success. It all comes down to the allure of the coin and the stellar blockchain technology behind it.

While traditional economists argue that it is a bubble and that the entire crypto world will collapse, this is not the case. There is no such bubble because it is an observable fact that, in fact, the shares of fiat currencies and financial transaction companies have eroded.

The future is very bright for Bitcoin and it is not too late to invest in it, either in the short or long term.

Stock market average

The art of averaging

Average is a term that can sometimes be found in markets; this refers to the average price paid for a particular stock that you bought shares in that particular company.

To calculate the average price paid for a particular share, you add up the total amount you paid for the shares and divide that by the number of shares you bought at that company.

The answer is the average amount you paid per share.

Try this math question:

There are five numbers 10, 20, 30, 40, 50

What is the average number?


Add five numbers: 10 + 20 + 30 + 40 + 50 = 150

Divide the total number of five numbers (150) by 5

150 divided by 5 = 30 (answer)

You can easily do this with a calculator.

Today, there are so many stock trading platforms that investing directly in the stock market has never been easier for ordinary men and women.

So how does the average work?

If you buy stocks at regular intervals, you will pay different prices for each stock as stock prices go up and down. Imagine you bought something at the supermarket at full price last week, and then you bought the same item this week per share. The average price you paid for an item will be somewhere between a higher price and a lower price.

The stock market works that way. By buying a certain share at regular intervals, you will be able to pick up part of the shares in it when the price is lower. This is the advantage of regular savings.

In fact, I think there is a reason to buy more stocks when the price is low. The average price paid per share is determined by budgets as explained earlier.

An averaging strategy can also be used to invest in cryptocurrencies.

Bitcoin is more volatile than the stock market, so a discerning investor who has an eye for cheap can invest when the price falls.

There are so many stock trading platforms available that gaming in the markets is available to everyone. I joined two of them in New Zealand. Most countries have stock trading platforms available. Easy to apply for them; you need some form of identification. Just follow the instructions and everything is ready.


Playing in the market requires a positive mindset and a cool head. If you have them, you can profit from falling markets. Averaging is a method that takes advantage of a falling market.

Hedging Is NOT a Four Letter Word

OK. Be honest. As soon as you hear the term “hedge funds” nowadays, you cringe. But, do you really understand what hedging is? It’s been in the news so much over the past three years, but few people really understand the concept.

What is Hedging

Hedging, in its basic form, is simply insurance. Given the uncertainties of the marketplace, hedging is a means to insure that one does not lose his or her shirt, if the price of an item were to fall. At the same time, hedging also limits the potential gains, should the price skyrocket. One “hedges” the investment or event by making yet another investment to protect the gain and preclude some of the losses. Hedging has no effect on whether the price of the item rises or falls; it does not stop the negative event (the drop in price of the item) from occurring, it just mitigates the potential losses (while attenuating the potential profits) of such price changes. There is a cost to exercising the hedge (either the cost of buying a contract or the lost profits if one is on the losing side); this non-avoidable sum is the price paid to avoid the uncertainty and risk of the situation. Moreover, hedging is less precise than insurance. Insurance (less a deductible) provides compensation in full for one’s losses. Hedging may provide more or less compensation than the loss involved. The entity making the hedge hopes to protect against losses that result from price changes by transferring the pricing risk to a “speculator” who relies upon their skill to forecasting such price movements.

Hedging, as a concept, has been practiced by astute farmers for years, as a means to protect themselves from terrible losses. The wheat farmer buys seed, fertilizer, and equipment, all with the hope to reap a great crop and make a profit. However, the price for the wheat is a function of supply and demand; there is no guaranteed price for the crop. If the price of the harvested wheat is high, the farmer makes a profit. If the price of wheat is low, the farmer may break even- or even worse, lose money. And, that’s before accounting for the labor put into growing this crop.

Let’s put some numbers to these concepts. The farmer spends $ 1000 on supplies (seed, fertilizer, etc.) to grow 200 bushels of wheat in four months. The price of wheat right now is $7.50 per bushel, which means the farmer will make $ 500 to cover his labor and profit (assuming no other expenses). If the price of wheat rises to $ 9, the profit rises to $800. Should the price of wheat tumble to $ 6, there only will be $200 for profit and labor. (Taxes are assumed to be zero in all these scenarios.)

As such, farmers purchase wheat “futures” to cover the size of the crop they planted. (A “future” is a contract to buy or sell an asset [commodity or product] at a guaranteed price for some date in the future; hence the term “future”. ) This transaction is governed by a clearing house. (We will discuss this concept more fully below.) This contract guarantees the farmer a set price for the crop in the future. Buying futures for $8 means the farmer is assured to sell his 200 bushels of wheat for $1600, but the futures contract itself costs $ 100, yielding $ 500 for labor and profit. If the price of wheat were to rise to $ 9, the farmer would lose out on that extra $ 200; but had the price fallen to $6, the farmer still be paid the $8 (his “futures” price), thereby guaranteeing a higher return overall, given the price decline.

This example describes one kind of hedging (“commodity risk” hedging). Another place where commodity price hedging has been crucial has been within the aviation industry. The price of aviation (jet) fuel is one of the biggest headaches for the airlines. The industry sells tickets for travel in the future, without knowing what the price of fuel will be on that day in the future. With fuel being such a large component of their costs, airlines have been buying oil futures for a while. Should the price of fuel go up, the airlines will pay more for their fuel, but make money on their futures, thereby mitigating their higher costs. Should the price of fuel drop, the airlines save money on their fuel (lowering their costs), but lose money on the oil future contracts they bought. For years, this was one of the methods by which Southwest Airlines was able to maintain a high degree of profitability. Prior to 2008, their ability make a profit was legendary. But, in 2009, the price of future contracts they purchased cost them more than their ability to maximize profits from operations. As such, this instance of hedging cost Southwest Airlines significant profits, where before this time, it was a significant revenue enhancer.

The same hedging concept also applies to the buying and selling of stocks. Generally, stocks do very well when the annual inflation rate ranges from 2 to 5%. When inflation is much greater than 5%, stock performance is not as great. Hedging against risks in such inflationary environments is not beneficial because the interest rates are spiked by the inflation rate.

Other kids of risks that can be protected by hedging include interest rate risks (the price of a bond or loan will worse as interest rates rise), equity risks (protection against stock market price rises and falls) currency (or Foreign Exchange) risks (protecting against the rise and fall of currency values when selling products to a foreign country at a set price). For example, firms selling medical products abroad when the value of the dollar is plummeting against other currencies often purchase currency futures to protect against losses in the exchange rate, since they have already signed set price contracts to provide their products over 24 months.

Types of Derivative Products

Hedging involves the sales of derivatives, a financial product whose value is a function of other variables. Oftentimes, these variables can be the price of the underlying asset (the price of an object- but NOT the object itself), interest rates or indices. The most common derivative products are futures, options, and swaps.

As we said earlier, a “future” is a contract to buy or sell an asset [commodity or product] at a guaranteed price for some date in the future; hence the term “future”. When a hedge is made selling futures, the process is called making a “short” hedge. On the other hand, buying futures is called making a “long” hedge. As opposed to “futures”, a “forward”, while also an arrangement to buy or sell an asset at some price in the future, involves a contract is written by the two parties involved in the exchange directly, and has no third party involvement or guarantee.

An option (another type of derivative) is simply a contract between two parties that provide the right, but not the obligation, to buy (a “call” option) or sell (a “put” option) an asset. The agreed-to-valuation is known as the strike price, and it is fixed at a specific date and time that the parties determined by their contract. American options afford the owner of the option the right to require the sale at any time up until the maturity date. European options, on the other hand, provide the owner the right to effect the sale or buy on (but not prior to) the maturity date.

There can be combinations of the option strategies, as well. Combining a buy and sell at set prices (the “call” and “put” option can straddle a desired price range (“collar” the goal). These collars provide protection from steep price declines, while they reduce the potential profits should the prices rise. However, these collar hedges afford protection against either or both potentialities.

The third derivative is an agreement to exchange cash (flows) on or before a specified future date based on the underlying value of currencies/exchange rates, bonds/interest rates, commodities, stocks or other assets. These are called “swaps” and are used to protect against the risk that a customer demands more or less of an asset than expected. However, one must recognize that swaps are the riskiest of the derivatives- one party wins and the other loses- in a swap.

Derivative Marketplaces

There are two basic types of derivative contract markets – over the counter (OTC) and exchange traded derivatives (ETD). OTC contracts are negotiated and traded directly between two parties. Often these trades occur in private between “sophisticated” parties (entities that are used to dealing with large sums of money and risk). Without a central authority, each of the two parties is relying upon its counterpart to perform.

Exchange-traded derivatives (ETD) involve similar contracts, but are sold via third party intermediaries, which take a margin (a fee) from both parties and insure the trade as part of its efforts. Typically, these ETD are traded on the Eurex (European markets), the CME (the Chicago Mercantile Exchange, which incorporated the Chicago Board of Trade and the New York Mercantile Exchange), and the Korea Exchange. These public exchanges provide access to the risk/reward hedges.

Hedge Funds

Now that we understand hedging as a concept, let’s examine how hedge funds themselves operate. Over the course of their 60+ year history, hedge funds were similar to mutual funds in that investors “gang up” or pool their money, with the common goal of making a profit. However, the hedge funds differ from mutual funds in that there was no Securities Exchange Commission (SEC) registration or regulation required for these asset pools. Hedge funds were considered private offerings, only available to “qualified investors” (also known as “accredited” or “sophisticated” investors), to institutions, or to pension funds. To be considered as an accredited investor, one needs an income exceeding $ 200,000 or joint income exceeding $ 300,00 for the previous two years, have a net worth exceeding $ 1 million (solely or jointly with spouse), or be an officer, director, or partner of the entity issuing the security. Obviously, institutions and pension funds were considered to be sophisticated investors and had no means testing involved in their qualification.

Many of the hedge funds operated using a “2 and 20” structure. This meant that the hedge fund managers received management fees from the investors equal to 2% of the value of their positions, plus the funds retained 20% of the gains (performance fees), in addition to their basic management fees

Because of the long nature of their investments, hedge funds also required investors to agree to “lock-up” periods. A lock up period is the duration of time that investors are unable to withdraw funds after making their investments, since the investments being made on their behalf were considered to be “long-term”. The investor’s funds were used to purchase assets that were involved with futures of forward contracts. The lock-up periods ranged in length from a single month, to a quarter, or to a semi-annual waiting period; the longer lock-up periods were associated with those funds that imposed lower fees (1.75% management and 17.5% of profits). This lock-up problem became acute during the 2008 stock market failure, when investors demanded the ability to liquidate the value of their hedge funds. (There were some $ 782 billion in redemptions demanded; the hedge fund industry was unable, due to the “long” nature of their investments, to process these redemptions in a timely fashion.)

Hedge Fund Profitability

Up until 2008, the hedge funds were universally touted as “absolute return” vehicles, because of their ability to seemingly generate profits, regardless of the stock market cycle. The managers of said funds were hailed as the “Masters of the Universe”. (Some of them even believed the moniker). It was thought that hedge funds could consistently generate positive returns and were virtually immune to problems. However, while the industry’s problems actually began to be noticed in 2006, these were considered to be aberrations, until the overall stock market collapse in 2008.

What is often forgotten by many who examine this massive hedge fund market failure, is that the hedge funds, as a class, actually did not fall as much as the rest of the stock market- and, except for this short time span, have generally outperformed the market. In the bear market of 2000-2, hedge funds still managed to earn profits, compared to the rest of the market. In 2009, after the fall, with the stock market barely performing, the hedge funds also outperformed the market.

The failure in 2008-9 was that manage hedge fund managers had bought assets (debt vehicles) that were totally bogus, in their desire for growth and fee income. The desperation of hedge fund managers to amass more assets with upon they could asses management fees let them skim over their need to perform due diligence and insure they were making good decisions.

One of the prime examples of this situation (as well as an example of insider information trading) was the case of Marc Drier, who headed a 250 person law firm, Drier LLP. Drier’s firm sold promissory notes that were forgeries, backed by financial statements that were bogus and bolstered by falsified audit opinions. Since there was no central authority involved to arbitrate and insure the veracity of the transactions, one had to rely upon the other party to perform as promised. In these cases, one of the parties has already perpetrated fraud; as such, the transaction was doomed. This situation also prevailed in the Bernie Madoff Ponzi scheme (where investors receive funds that are not related to actual profits earned by the organization; instead they are derived from their own money or money paid into the fund by subsequent investors). At one time, it was thought that Madoff’s firm was managing some $ 17 billion in assets (and, in actuality, had virtually no assets under management).

But, back in 2008, these were the problems that were first being recognized. The hedge funds private arrangements and their lock-up periods (restricting withdrawals for a set time period) created ill will as the investors began to panic at the size of their potential or actual losses. Then, it became clear that the derivatives at the basis of the hedge fund were not based upon true hedging (“insurance”)- but the concept of speculating (or “bets”). The fund managers were banking on the price of a stock to plummet or credit to rise, so they sold futures based upon very low prices for the stock or high prices for the credit vehicle. Risk managers were not being responsible; they were not buying corresponding futures to protect the other side of the equation. This left the funds and their investors exposed to potentially unlimited losses. By not including both sides of the equation (sharing the gains while protecting against terrible losses), it became obvious to investors and the public that the funds were no longer operating as a true hedge, but simply as a bet.

This is how the hedge fund mortgage fiasco resulted, as well.. The mortgages had been combined together in large pools. Many risk managers felt this protected the pool; they could not believe that large numbers of the mortgagees would simply default. No downside futures were included in the investment equation, which would have made this an example of “credit risk” hedging, covering the risk that the borrower may not pay its obligations (which the prudent investor employs to insure against said risk). As the underlying mortgage investments were losing value, the funds for new mortgages (due to the failing economy) was also drying up (which might have afforded the possible refinancing of the problem mortgages) and the process of mortgage failure escalated.

Hedge Fund Firm Failures

One of the first big failures among the hedge fund industry giants was Bear Stearns, which was eventually bailed out by JP Morgan Chase (as opposed to terminating its operations in bankruptcy, as happened to Lehman Brothers). Many of Bear Stearns’ sub-prime mortgage investments were based upon fraud, coupled with misstatements of income and document forgeries. There were inflated appraisals for the mortgaged properties, many of which also were not the homeowners’ primary residences. (It is generally believed that payers are more likely to default in times of trouble when the mortgage is not protecting their primary residence.) As further investigation into the situation was effected, it was found that many of the sub-prime mortgages were provided to people with less than ideal credit and at “teaser” interest rates that skyrocketed after a few years, rendering the mortgage repayment virtually impossible. Coupling such situations with the fact that many hedge funds were desperately seeking deals and failed to perform due diligence on their investments is exactly what led to the massive failure of the mortgage funds.

By December of 2008, the world was reeling from the failures of hedge funds. With the failure of Lehman Brothers, and the knowledge that from 2004 through 2007, these funds had leveraged their assets by 20 to 30 times (meaning that the value of the assets underlying their cash positions was between 3 and 5%), it is not surprising that the stock market manifested its worst failure since the 1929 crash. The hedge funds had some $2.1 trillion under management at its peak in 2007 (it is now down to $ 1 trillion) and suffered losses that were approaching 60% of their cash values (also meaning there were no assets to back up these cash losses).

Hedge funds no longer appeal to the high net-worth investors; these investors crave liquidity ever since the credit crisis. As such, institutional and pension funds comprise the bulk of the investors in hedge funds now.

Future Regulation

Because of the 2008 failures, new laws were imposed to try to regulate against similar devastating failures in the future. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Public Law 111-203, previously HR Bill 4173, enacted in 2010) was written to insure that hedge funds provide more information to their investors and provide controls on the operations of these funds. In addition, leverage ratios will be kept more modestly, closer to 1 (meaning the cash values in the funds will match those of the underlying assets).

One should not consider that this period marked the end of the hedge funds. At least one firm routinely advertises about the ease by which one can start a fund- in one’s basement (Eze Castle Integration, which has been around 15 years, even posts a PowerPoint presentation providing instructions and links so this can be done). Moreover, not all hedge funds are criminal or are tainted. It’s just that the ability or potential for abuse is great and the regulations can be skirted (even Dodd-Frank). There needs to be additional restrictions and prosecutions of insider trading (directors of the fund obtain non-public knowledge not available to other investors), front-running trades (the ability to employ supercomputers, with or without illegal machinations, and effect transactions prior to the ability of the rest of the market to accomplish same), late trading (when transactions are booked after the market is closed, when announcements that move the market have been made), and Ponzi schemes.

Regardless of the future of the hedge funds themselves, the process of hedging will continue. It is part of the critical business considerations necessary to mitigate risk when planning and operating in environments where the future is unknown- in other words, at all times.

Investment Strategies – Top Secrets Revealed

Investment strategies don’t have to be complicated. Oftentimes, the simpler your approach to wealth creation plans, the better the outcome. Although mathematical equations are useful in predicting how much money you will earn over time, these are not the only things you need to prepare yourself when it comes to stock market strategies and decisions. Sometimes attitude and common sense are two more important guides that lead you down the path of wealth building and personal development. Here are some of the things you need to follow if getting rich is your ultimate goal.

The first step to successful wealth creation is to have a set of goals for your investment. Before embarking on any investment strategies that you plan to use, you first need to look inside and identify your reasons for investing, for example, in the stock market. You need to know how much profit is required to keep you satisfied and what are your plans for the money you are going to earn. Also, you should ascertain whether you are planning to be a long-term or short-term investor. Believe it or not, your stock market strategies and decisions will be influenced by how long you plan to put your money in the market.

One of the most important investment strategies you should remember is to constantly seek knowledge about investing, especially if you plan to plunge your hands into the stock market. You need to keep up with the vocabulary and concepts of investing. Even if you are going to hire a broker or have someone to do the investment for you, it is still essential that you know and understand what you are getting into so that you are not easily deceived or scammed. It is also helpful to read business news and listen to stock market ratings provided by reputable television programs and organizations. These things may help you decide where to put your money next.

Many people view the stock market, options, or other investment vehicles as a way to get rich quick. There’s really nothing wrong with looking up at the sun and moon when you’re investing, but you should also know how to limit your exposure to a level that works for you. Don’t be tempted to invest your whole life savings into money-making schemes, no matter how attractive they are. Make sure the money you invest is coming from your own excess money and not from a retirement fund or money for your son’s college education. If your exposure is only limited to your excess money, you will not end up getting anything even if your investment strategies fail. Moreover, with this move, you still have room to try other things and invest in other things in the future. Finally, you have to remember not to put all your eggs in one basket. Try to diversify your investment portfolio so that if you encounter a problem with an investment, you have other means to help you make up for what you lost.

Review of Decision Bar Trader

Decision Bar Trader is my favorite trading method and I have used it personally. Decision Bar was created by the real trader Les Schwartz, whom many of the so-called gurus call for help.

Les has developed what I believe is the most sophisticated (and easy to use) trading software ever available to the public. Even if you are a beginner, it will only take you a few hours to master it.

Les has been in business since 1988 and really knows his stuff. Les’s theory says it all comes down to price. You can only make money by buying less than you sell. (Or, if you sell for a short time, you sell more than you buy.) Les has built his system to take advantage of natural entry points for almost every trading instrument. His method makes perfect sense.

It sounds almost easy and someone may be tempted to walk away from the system. If you follow his system and software as he teaches, it will be hard to lose money. The system and software can be used in Daily trading, long term trading and options trading.

It is very easy to learn the system and methodology. You can actually stay awake and trade the same day you receive his package.

Les offers a FREE 30-day trial. Postage is of course not refundable. Decision Bar Trader works for stocks, futures and Forex markets.

As mentioned above, the Decision Bar is applicable to all time frames as well as to option traders.

Decision Bar requires that you have live data transfer if you trade daily. I highly recommend using a live data feed even if you are not a daily trader. Several live sources are given that also have a free trial that comes with the system.

Deciding on a decision requires a little thought on your part. This is not a black box. Your decision to trade or not to trade becomes easy when you understand the system.

There is a low monthly fee associated with the system, but it pays off if you are a somewhat active trader. Conclusion:

I highly recommend Les and Decision Bar Trading. With its 30-day free trial, you have nothing to lose, because you can trade the system on paper.

What are the best day markets?

There are many different futures markets in which you can trade as a day trader. The most popular is the E-mini S&P. It’s one of the most prestigious contracts in the world, trading almost 24 hours a day, 5 days a week. The day-to-day margin of the E-mini S&P can be as high as $ 300, which is insane. However, there are many other day trading futures contracts. There are US Treasury bond futures 30 securities, 30 year bonds և 10 years. There are currency futures – Japanese Yen, Euro Currency – Austrian Dollar. The products also have large enough daily intervals that you can get the right amount of ticks during the trading day. Crude oil can easily be in the $ 2 range, giving you a decent profit. Even grains, like wheat, have good trends today. One teaspoon of wheat equals one teaspoon of E-mini S&P, you will not have to spend all day fighting HFT boxes trying to fool the market. Where there is 1500 lots on the application և 2500 lots on the offer. Then the offer is reduced to 250 lots and 2500 lots are bought.

As a day trader, keep in mind that you go in and out for a few teasers or even a few handles during the day if you have a good runner, so you need a market that has the potential to move well during the day. ություն Enough liquidity to make it easy to get out. The reality is that most futures markets are liquid enough to trade on a day-to-day basis. You just have to be more discriminating with the help you render toward other people. Grains can cross the border. Stock indexes can have flashes where they move 10 handles in the blink of an eye, like Twitter crashing when fake news from the AP’s broken Twitter page says the capital has been bombed. Energy can be exposed to news that you will not have access to within minutes of being absorbed by the market. You will not know if there is a pipeline explosion until the merchants know. Of course, these are not everyday events, but each market has its own holes to remember when trading.

Another thing to keep in mind when choosing a market for daytime trading is the number of hours you trade. If we go back to the time when there was an open grievance tax, then every trading day had a set opening and closing time. Now they are open 24 hours a day in all electronic markets. However, markets do have times of day when most of the trading takes place. This is commonly known as cash hours. For stocks, these are trading hours when the stock market is open. For currencies, metals and bonds, it is a little different, as these markets have cash hours in Asia, Europe and the United States. But, in general, traders will use the time zone from 08:00 to 14:00 as the most liquid hours of the respective time zone. Grains are a little different. Traders use old floor clocks as the most liquid clocks in the grain trade.

If I were to make a list of the best daytime futures markets, it would be (in no particular order). notes: crude oil, corn, wheat, soybeans, gold և silver.

Buying investment properties on a budget using crowdfunding

What is crowdfunding?

If you’re tired of low returns from certificates of deposit, savings plan, and other stock investments, check out crowdfunding for double-digit returns. Crowdfunding is gaining popularity as an investment strategy for many investors. It is a unique process of raising capital through family, friends, potential clients and individual investors looking for different investment venues. To promote crowdfunding, advertising is a focused approach that uses social media, real estate investor forums, and associated networks.

What is the right platform for me?

My preference is crowdfunding with real estate investments that I will discuss here. There are many different strategies and models for crowdfunding platforms, so you want to make sure that the platform you choose is right for you. Ask the question: Am I comfortable with the amount I will invest? Do we share the same values? Do you agree with their investment strategies such as flipping houses or buying and holding for long-term passive income? The amount required to invest will vary from place to place, so shop until you find one that works for your investment portfolio.

Do your homework

Do your homework before investing. Historical performance is a good indicator of future performance. Get to know the management team and see what they’re doing on social media. How transparent they are and how willing they are to talk to you and answer your questions, including tough ones. Those who are more willing to share beliefs, management, and goals tend to do better for themselves and their clients in the long run. Also reach out to other investors to get their input and endorsement.


I’ve seen many attractive returns advertised knowing that they were more accurate pricing to get you to contact them. Do your homework to see if the numbers are realistic. Ask how much detail is available about the work? How do I access my investment and returns after committing? How and when are investment returns distributed? What type of reports (personal and legal) are submitted to the investor? Make sure you are comfortable with the management team and the security of your investment before taking this first step.

Example of crowdfunding

Personally, I invest with Holdfolio. Their buy and own platform consists of 10 homes for rent under one portfolio. These homes are purchased, rebuilt for rental use and then leased out. 60% of the ownership is provided to investors (the crowd) with a minimum investment of $10,000. 40% of the ownership is owned by the Holdfolio management team. The reported returns when I invested over a year ago were between 10%-14% and I am currently making 11% returns annually. With each new portfolio, 10 additional homes are offered to investors with an average crowdfunding amount of $320,000 that usually gets filled within 4 to 5 days. Holdfolio just finished Portfolio 10 and will launch Portfolio 11 soon. This is just one example of many crowdfunding platforms.


Real estate crowdfunding is rapidly becoming more and more popular today as investors are turning away from stocks to look for greater returns in other markets. Make sure you do your homework and narrow your search to the top three. If this is your first time, once you start your choice with a lower amount so your comfort factor will allow you to do more.