What your Forex Broker Doesn’t Want You To Know

When it comes to trading foreign currency, most investors have at least heard of the two main camps that most forex brokers fall into. There are Electronic Communications Networks (ECNs) and Market Makers. Let me begin by first introducing each of these.

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Market Makers behave pretty much as you’d expect from their name – they “make” the market. They have the ability to internally set both the bid and ask price of the quotes they provide and they can do this because of the actual liquidity that a typical Market Maker brings to market. In other words, they have to take the opposite side of your trade. So order fills can be a bit better with a Market Maker, as long as you understand that the “fill” you are getting begins and ends with your broker. Another important point with a Market Maker is they will usually have smoother spreads. What I mean by smoother is that the spread they offer is usually more predictable. Because they aren’t making money through commissions (usually), they make most of their money by offering a spread that they set. So as you might imagine, if you were a Market Maker you might think the same way – “This is my money that I’m using to fill your order, so I’m going to give you the price that works best for me.”

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ECNs operate a bit differently. A true ECN will aggregate prices from multiple providers (like banks and even Market Makers) and offer you the best bid and the best ask. Their philosophy is very different from a Market Maker, because they will not manipulate the quotes nearly as much. They offer this because their money isn’t made in the spread, they make their money in charging you a commission on every trade. A fill on an ECN is not always guaranteed, which can make some traders miss their ideal price. Because ECNs offer quotes from many different sources, their prices are often more volatile which, depending on your style, can make it very difficult to be profitable. A common limitation that an ECN will have is on their servers. Due to the fact that they pull in multiple quotes from different sources, when those are aggregated they are also throttled. It wouldn’t be possible for them to provide every quote they receive to each of their traders. That would be very difficult, or at the very least it would be fiscally detrimental. Now that we have introduced both, let me explain how the Apiary Fund works.

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Apiary Fund operates like a hybrid of each of these camps. Lets just say we made our own camp. We have an interest in adjusting the spread like a Market Maker, except we don’t want to widen it for our profit. We want to tighten it so that the trader can profit. Also, we don’t take a dime of commission on any trade because we don’t want to add burden to any order regardless of direction. Like ECNs, Apiary works to negotiate with multiple liquidity providers to offer the best bid and ask with every quote. Unlike ECNs, Apiary works very hard to ensure that every quote we receive makes it to our Alveo trading platform. This is evident by watching a quote screen on Alveo compared to a quote screen on other platforms. When getting a new quote means the difference between your trade being profitable or not, wouldn’t you like to get them from a fire hose instead of a garden hose? We certainly think so.

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Bottom line, where in the world does the Apiary Fund make money if this is true? The answer is simple. When our traders make money. We want to make that very clear. When one of our TRADERS MAKE MONEY then APIARY MAKES MONEY. It’s that simple. Our goal is to create as many profitable traders as we possibly can. So as you can see, our incentives are aligned with that of our traders. Just like in a beehive (aka apiary), the more honey each bee makes, the more sustainable life is for everyone. That’s our philosophy.

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A Constructive Review

Silas shares his story on how he got involved with Apiary fund.

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How

I started working for Apiary Fund in 2013. Before I got involved, I had never traded before; I don’t think I had even used a computer. I had been a union worker out of Local 27 for ten years. I never had enough money to even think about trading, or learn what forex was. If it wasn’t for Shawn, I know I wouldn’t be here…

 

I was injured in a construction job, which led me to find a new home, and meet an awesome man.  He introduced me to his company, the Apiary Fund. He offered me a job-something I had no experience in.

Since I started last year, I have worked my way into a funded account. Trading is something that I can do for the rest of my life. I enjoy that fact that can work from my home and spend time with my family, but no matter where I am, as long as I have a computer, I can trade.

I am very grateful for the turn of events in my life: the support I receive from my now close friend Shawn, the opportunity to come to his Apiary family, my amazing co-workers, and the many, many great people I get to meet on the phone daily.

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One Million Reasons Apiary’s Alveo Trading Platform Is Set To Succeed

It happened sometime during the wee hours of the morning on January 26th 2015…

Since it’s official launch in October 2014, Apiary’s new trading platform – Alveo – has officially processed 1,021,602 trades.

Processing 1 million trades is a major development for Alveo and Apiary.  It represents a significant milestone in a project that is over two years in the making.

While MT4 is the industry standard trading platform in the forex market, we realized long ago that the risk of building Apiary’s trading tools on top of a platform that is notorious for changing the rules of the game on a whim was not in our best interest.

During a 6-month period last year, MT4 conjured up over 80 updates to its server or client software. It caused Apiary to be in a constant state of “fixing” broken tools.  The sheer number of hours dedicated to keeping Apiary working on MT4 quickly crossed the line of diminishing returns; couple that with an ever increasing cost structure in both software and hardware resources, and we realized that we needed to make a change – fast!

And so in October 2014, amid pressure from hardware providers, Apiary launched the Alveo trading platform.  However, squaring up with the MT4 Goliath has not been easy.  In fact, the first couple of months were down right rocky.  We found ourselves fighting both a battle of stability (trying to keep the platform stable) and perceptions (trying to maintain confidence in the platform). All while we worked out a major connectivity issue with our liquidity providers.  These issues are not new to financial software, but they are wrinkles that a 10-year head start seems to smooth out.

Undaunted, we’ve trudged forward – fixing bugs, stomping out errors and putting in countless hours to develop stability and connectivity.  However, this time they were hours well spent – hours we know we won’t have to repeat with every new version or update.

While processing 1 million trades is certainly a drop compared to the ocean of trades being processed by MT4, it does illustrate the progress being made by Alveo.

Like a breakout trade that builds confidence, speed, and momentum, Alveo is experiencing a breakout moment. We want to share with the world a million reasons why Alveo is positioned to be a great trading platform, but for now we’ll just stick with the speed, liquidity, slippage, and income earning advantages of Alveo. We are very excited with this milestone that we’ve hit, and can’t wait to see what else Alveo can accomplish.

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How To Take On The Market And Come Out On Top

Sometimes it seems like the market is out to get you; every trade you make goes against you like some sniper waiting to shoot you down.  Rest assured that you are not alone in feeling this way. In fact, it is a common feeling among both seasoned and novice traders.

However, what I’m going to tell you may poke at your ego a bit so brace for impact! :) The truth of the matter is that the forex market really doesn’t care who you are or where your trades are placed. Some may say that the broker has it out for them-which is also incorrect because if you lose your money and close your account they miss out on future commissions. The market can seem cold and callous. It can also seem happy and spritely. How can the same market have such extremes? The answer is simple, psychology.

In addition to supply and demand, the major factors that move the market are fear and greed. When you give into these feelings, regardless of who you are, the market will swallow you whole, chew you up, and spit you out. Sometimes it seems like you can’t get a straight answer out of the market-like a scene straight out of the Notebook. It feels like you’re pulling teeth just to make a pip. This is all part of psychology.

We all fall victim to these traps every now and then, but the best way that I have found to overcome getting discouraged and/or giving up is to write down my trading plan again. I write down the specific patterns I need to look for. Then, I write down what I am feeling when I place a trade. Finally, I try to follow the old adage, “plan your trade and trade your plan.”

Most errors come in the form of adjusting your trades outside of your trading plan when faced with a candle or trade that goes against you, but if you develop a solid system you won’t have to worry about the ups, the downs, the sideways, or the spikes. You can trust your lifejacket of a trading plan, and as long as you follow it all will be ok.

Keep in mind that trading is not always just a+b=c, and when a=%^& instead of c… then we have a tendency to freak out and ask why. Sometimes accidents happen, and sometimes the market does what it wants. As long as we keep that in mind we can smile when it shoots up, grin when it climbs down, and learn to go with the flow. Remember, those who give up on something will never be successful at it.

Keep calm and put your stoploss on. :)

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Will The Dollar Continue To Strengthen Through 2015?

From it’s low in May of 2014, the dollar has posted 32 weekly highs against the Euro.  With such an impressive rally, most experts are predicting the strong dollar rally to continue through 2015, but are those predictions right?

Reasons for the dollar rally to continue

The dollar is currently the only major currency with improving growth prospects:

  • The Commerce Department has revised the estimate for GDP growth to 5% – the highest rate in 11 years!
  • The growth is coming from personal consumption and business investment, which are the largest and most influential components of GDP.
  • The consumer is happy – recording the highest level of consumer sentiment since 2007.
  • Lower gas prices are giving the consumer a shot of financial caffeine by freeing up more cash that is being spent in other sectors of the economy.
  • The current unemployment rate is 5.6% and trending lower.
  • The Fed has implied they might begin to raise interest rates as early as April 2015.  Higher rates in the US mean more demand and higher prices for the dollar.
  • Most major economies are stagnant, slowing, or both.  Europe is on the brink of another recession. Japan continues trying to jump-start its economy with more stimuli.  China shows signs of slowing growth. Britain is mired in stagnant growth.

These signs are real, and investors across the world are buying dollars at an extraordinary scale.  With such a strong case for buying dollars, you may be wondering, ‘why is Shawn writing this article?’

Reasons why the dollar rally may not continue in 2015

Well, in reality, the dollar may not be as sure a bet as most pundits are pedaling.

  • The strong economic projections have already been priced into the market.  The dollar index has strengthened over 9% since May of 2014.
  • Sequentially stronger economic reports in the form of “stronger than expected” data will be needed to keep the trend alive. With data coming in as expected, the dollar is just as likely to drop as it is to go up. Reports that are worse than expected will surely have a negative impact on the dollar.
  • It is not certain whether the Fed will raise rates this year. The Fed will only raise interest rates when the economy nears full capacity and inflation starts heating up.  Currently, the five-year forward projection for inflation is the lowest it’s been since 2011.
  • Unemployment numbers have been dropping partly because a large number of workers between the ages 25-50 are leaving the workforce. There is evidence that that trend cannot continue, and those people will be re-entering the job market-putting greater pressure on wage growth.
  • Financial turmoil in the global economy could flare at any moment.  Any financial problems abroad could put downward pressure on the dollar as governments that hold US treasury debt start dumping bonds to support their domestic currency and stabilize their financial system (a flood of selling in the bond market would drive up yields, and put the brakes on growth in the US).

With all the uncertainty in the global financial system, it is difficult to project over long time frames. This is an argument for a good short-term analysis with nimble response. Try not to let your opinion be swayed by the experts.  If you are quick to recognize momentum shifts, you should be able to weather the storms that are sure to happen!

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The Convenience of Trading From Your Own Home

“I had no idea that people could trade at the convenience of being in their own home…”

When you think stock market, do you imagine high rise buildings and the Chicago Stock Exchange? What about a giant screen with numbers flashing while men in suits yell ‘buy’ or ‘sell’? You probably don’t imagine your own bedroom, or even your La-Z-Boy recliner. Allisa shares her story on how she got involved with Apiary Fund.

“I started at the Apiary Fund almost a year ago. Until that point I had no idea that people could trade at their convenience of being in their own home. When I pictured the trading market I thought of people going Wall Street in New York. Little did I know.

I started working at Apiary in February, and since then I have gone through the process to get into a funded account. I didn’t even download the platform until April. It was around July that I started to take it seriously-placing trades on a daily basis. Soon it was the end of August, and I got into a pre-funded account! Before I knew it, I was funded by September. I was proud of myself for making a goal, and reaching it, but I was also proud because I was now the only girl in the office that was funded.

I am thankful for Apiary because it provides me with opportunities that I would have never thought I had.”

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The Money Illusion and Your Wealth

Money illusion is slowly pushing you to the poor house.

Imagine a frog basking in a pot of water that is heating up ever so slowly.  If the water heats up too quickly, the frog will sense danger and jump out of the pot.  If the water heats up slowly, the frog will remain in the pot through the ever-increasing temperatures until it is too late.

The money illusion works the same way with your personal wealth.  A sneaky trick used by central banks and financial engineers is to mask economic growth by slowly introducing inflation into an economy.  The inflation is advertised in media headlines as economic growth, but in reality it has the opposite effect of growth by slowly eroding your wealth without raising the specter of financial ruin.

Inherently, we know that inflation is bad, but inflation of 2-3% is also hardly noticeable.  Like the frog in the hot water, we get comfortable with it.  In fact we’re so accustomed to it that the Federal Reserve has publicly stated that they target inflation of 2-3% per year for a healthy economy.  However, the results are devastating – effectively turning a $100,000 into $85,000 in 5 short years!  The illusion exists because after 5 years you still see $100,000 in your account.

Studies by behavioral economists show that people will overwhelmingly choose a 2% pay raise with a 4% inflation rate versus a 2% pay cut with a 0% inflation rate.  When in reality both scenarios have exactly the same economic result.  It is just an illusion that more money is better!

The illusion exists because people fail to understand the difference between real and nominal value. The nominal value of a good is measured by its price quoted in terms of dollars. Whereas the real value is measured by how much its worth compared to another good or service.

Given this definition of real versus nominal value, we can start to understand how the illusion of money tends to erase real wealth through the illusion of economic growth through inflation.  Inflation increases the nominal value of the economy – so we all remain happy – while at the same time destroying our real value.

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A Message From Support

     The Apiary Fund’s support team is busy answering phone calls and emails from our traders, right now, as this post is being written. They are constantly helping our traders receive answers to their questions, and helping them learn and develop their trading abilities. We love our Support Team, the work they do, and the help they provide each day. We also love hearing from our traders about their experience with our Support Team, and what we can do to improve. The following is an email we recently received from one of our traders named Jeff, and his experience with our Support Team:

“Apiary Support Team,

I know you guys could use some good news, some acknowledgement for the good work you are doing under extraordinary circumstances, helping us with ALVEO.

When ever I call in the team is great, I feel taken care of and more and more the feeling of family grows.

I can only imagine how challenging the past few months have been while ALVEO is being built, the one thing I know is that the team is doing their best and I feel it every time I call in.

You guys ROCK! I truly appreciate all your CAN-DO-ATTITUDE during this transition time…I am looking forward to being funded and to the good…great times ahead for all of us.

Keep up the good work….remember the more challenging the adventure…the better the Success Story…and I have some great stories….how about you?

Keep up the good work,

Jeff “

We thank Jeff, and all the other traders we hear from that enjoy the support we provide, and the ways we are helping them develop.

We love our traders and get excited when we see them succeed, move into funded accounts, and become excellent investors! The Apiary Fund is here for anyone wanting to get away from the typical, stuffy financial companies, and become part of a “family” growing together in the markets.

Thanks to Jeff, and everyone else here in the fund.
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MWCN Emerging Elite Award

Wednesday was a big day for Apiary Fund. MountainWest Capital Network announced the list for the Utah 100, which is an awards program that recognizes the top growing companies-and emerging elite companies-for 2014. Imagine our surprise to find Apiary Fund listed as one of the Emerging Elite for the second year in a row. This award is given to companies that have been operating for 2-5 years, and show promise for significant growth in the future.EmergingElite Unfortunately, Shawn was biking (and trading) his way across the country during the awards ceremony, but Mountain West Capital was kind enough to send some representatives over to present Apiary Fund with the award. Here are some pictures from the 2013 awards ceremony.

Shawn Lucas and Nate Allred of the Apiary Fund hold the Emerging Elite award

Head Trader Shawn Lucas and Recruiting Director Nate Allred of the Apiary Fund accept the award for Emerging Elite company of 2013.

Shawn Lucas accepts the award

Shawn Lucas, Head Trader of the Apiary Fund accepts the Emerging Elite award from the Mountain West Capital Network. Behind him is Nate Allred, the fund’s Recruiting Director.

Shawn Lucas holds the Emerging Elite award amidst coworkers from the Apiary Fund headquarters

Some of the office team was able to attend the award ceremony: Read about our office staff at apiaryfund.com/about/our-team

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Dinosaurs and Stock Charts

Vernal, Utah is world famous. Seriously it is. It is world famous for dinosaur bones. There is the highest concentration of dinosaur bones there than in any other place in the world. A few years back I took my 5 and 3 year old at the time to the dinosaur quarry to see some dinosaur bones. It is needless to say quite an amazing site. You can’t put your hand on the quarry with out touching two dinosaur bones. There is also a small nature hike that you can take and see dinosaur bones that are jutting out of the mountains that are there. After chasing the kids around the visitor center for a while I decided that they needed to burn off some energy. So I decided to take them on the hike.

So the guide was telling me before the hike that you can see bones all over the place on this hike. Now along this hike we were getting near the end, and up to this point I was not able to point out to my son a single dinosaur bone. I was looking and looking but for the life of me I could not find a single one. Finally,­ in my frustration I turned to the guide and asked him where all of these so called “dino bones” were. He laughed a good laugh, said they are everywhere, and pointed to the ground, and not two feet from where I was standing was a dinosaur bone embedded in the rock.

I have since thought back on the at experience and have wondered how was it he could spot a bone so easily? It wasn’t until one day where I was showing a trader a head and shoulders pattern. I was seeing the turning points in the market that formed the pattern. I surely knew what was coming next, but the trader could not see it. Then it dawned on me. The guide on the hike had trained his eye. He knew the patterns in the rock. He had trained his eye that when the pattern of the rock went from speckled to smooth, he knew he was seeing a dinosaur bone. We also as traders have to train ourselves to see the pivot points, the turning points in the market. As you train your eye you will be able to see the opportunities that are all around you. If you don’t train your eye to see you may be the person who goes on a hike with dinosaur bones all around you and never see one!

Happy Trading,

Nate Allred

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