Archive | Uncategorized RSS feed for this section

Yoda Quote #9 “Use Your Feelings”

This is a continuation of the Trading Words of Wisdom By Yoda, for Quote #10 click here.

9. “Use your feelings, Obi-Wan, and find him you will.” Revenge Of The Sith

image_update_dbd162580cda702b_1360229793_9j-4aaqsk

I know what you might be thinking, “but Master Yoda, we were told never to let our emotions control our trading!” And it’s true, you shouldn’t. We are told over and over again, DO NOT let your emotions control your trading; however, there’s an important difference between emotions and feelings.

*There is a lot of scientific controversy around this topic. If you would like to learn more, you can look up the science behind neuroplasticity and emotions/feelings. For this article, we are stating that there is a difference between emotion and feeling.

Emotions are universal feelings like happy, sad, anger, or frustration, and happen on the physical level (your heart rate increases or fist tightens). Feelings are a reaction or association in your brain to your emotions, and you can learn to master them. Think about the moment when your emotions are triggered. There’s a small gap of time before they translate into actions, within that gap you have the opportunity to discipline your feelings–in turn, directing your actions. Practice training your brain to recognize certain emotional triggers so you have command over what you’re feeling (Master Yoda wasn’t so crazy after all!). Now, when you find yourself in emotional or high-risk situations you can trust what you are feeling, consequently acting instead of reacting.

Happy Trading, and May The Force Be With You!

For Quote #8 click here

Comments { 0 }

Orlando, Florida Summit Highlights

The Apiary Fund would like to thank everybody for making the Orlando, Florida Summit a success last week! As always, we really enjoy the opportunity we have to meet our traders in person and watch them develop throughout the week. Besides enjoying the sunny Florida weather, here are a couple of highlights from the week.

The Shark Tank

DCIM100MEDIADJI_0009.JPG

Our own little version of the popular TV show, Shark Tank, is quickly becoming one of our favorite events at the summit. First, we have all of the traders break off into groups of four. Then, they work together in their groups to form a trading strategy which they will use for the next couple of hours. Finally, the top four teams will then go on to present their trading plan to the ‘sharks:’ Shawn, Nate, Todd, and Jeff. Each shark will choose a strategy to trade over the next hour, revealing which shark, or trading strategy, will rise victorious. It was close, but Shawn squeaked by with a win by a couple pips.

The $1,000 Accounts

Traders knew heading into the summit that they would be given $1,000 (of real money) to trade with during week; we were pleased to see most traders turning out a profit. However, we were all in for a surprise when Shawn let them keep the account until the end of the month! Everybody seemed excited to be able to go home and continue strengthening the skills they learned the past week.

DCIM100MEDIADJI_0017.JPG

The Apiary Orlando, Florida Summit Traders

We really appreciate everybody who was able to make it to this summit. These events help teach us just as much as they teach you, and most of the time it’s because we are lucky to have such great traders. If you weren’t able to make it to the Orlando, Florida Summit, we hope that we’ll be able to meet, and trade, with you at the next one!

Happy Trading!

Comments { 0 }

Currency and Your Wealth

Eastern Europe and the old Soviet bloc during the early 90’s is a perfect example of what happens with extreme fluctuation in currency valuation.

Hungarian ForintDuring that time, there was a great interest in the value of currency.  Everyone, from the butcher to the beggar, was talking about money. I recall walking down the streets of Budapest when a beggar asked for some money to buy bread.  Having been taught by a mom who insisted I help a person in need, I reached in my pocket, pulled out some Hungarian forint, and placed them it in her hand.

I will always remember what happened next.

She looked at the coins, and in complete disgust, spat in her hand and tossed the coins in the street while she murmured some vulgarity about the “worthless” government.

At the time, Hungary was suffering from hyperinflation – a condition where the price of goods and service steadily increased while the value of the Hungarian forint dropped. Nobody wanted Forint because the longer you held it the less it was worth!

There is a great lesson in this…  Storing wealth in currency is a risk.  Yes, you’re parents always taught you to open a bank account and save your money.  While most of the time that is a good practice, there are times when a currency’s value changes.

Wealth is something we’d all like to build.  It is something that we’d like to save once we acquire it.  Wealth is stored in different ways, such as a savings account at the bank, but how you store wealth is just as important as acquiring it because contrary to popular belief, money is not free from risk.

In Hungary, the value of the currency dropped – nobody wanted forint – and so any wealth stored in the form of savings in a bank account was destroyed.

There was an alternative, however; German marks.  While the Hungarian Forint was dropping the German Mark was going up!  Anyone who stored their wealth in German Marks, not only preserved their wealth but expanded it!

Hopefully with this example, you can see how important an understanding of currency is to your wealth.  If you want to be wealthy, you have a couple of hurdles you have to overcome…  First is how to create it, and second is how to store it.  Both are easy to overcome if you understand how currency works and the Apiary Fund is here to help you get over those hurdles!

Comments { 0 }

Trading the Summer Doldrums

I am sitting here remembering how much I loathe trading the summer doldrums.  A few minutes ago I received a text from the Apiary Fund development team asking me to place a few live execution trades through one of our new liquidity providers.  It is about 4:46pm Mountain Time and there is nothing happening.  The chart is so flat it makes the Utah Bonneville Salt Flats look like mountains!  And trading is so slow that I’ve started keeping track of which comes first; a new tic or a new minute.  So far the minutes are in the lead!

Welcome to trading the summer doldrums.  The doldrums are the period of time between close of the US market and the open of the Asian market when even sleep takes a nap and nothing happens in the currency markets.  And if you thought the doldrums were bad, then the summer doldrums take it a notch slower!  Summer is notoriously slow as traders take a break from trading and head out on vacation!

While most internet company’s in the world look at midnight to perform maintenance on servers and so forth, in the currency markets we use the doldrums.  Its a time when many brokers perform some of the mundane tasks such as calculating your carry interest.

When you trade currencies you borrow money in one currency to buy a different currency.   You have to pay interest on the money that you borrow.  Fortunately, you get paid interest on the currency that you buy.

If the interest rate of currency you borrow is greater than the interest rate of the currency you bought, then you’ll end up paying the broker a little bit of interest.  If the opposite is true and the interest rate of the currency you bought is greater than the interest rate of the currency that you borrowed, then instead of paying the broker, the broker will pay you!  Which is good, because sometimes that’s the only money you’ll make during the summer doldrums!

As for me right now, I suppose I’ll just have to wait for Aussie’s to stir things up a bit!

Happy Trading,

-Shawn

 

Comments { 0 }

What Are The Costs To Trading Forex?

While there are many costs to trading forex, most costs are categorized in three ways:

Explicit Costs, Implicit Costs and Optional Costs

choices opportunity cost decision

Explicit costs: are the fees your broker charges. Examples of explicit costs include commission, spread, margin costs, account and management fees, software fees, and data fees.

Implicit costs: are costs that are not charged by the broker, but by the market. For example, a losing trade could be considered an implicit cost. Other implicit costs include slippage, gaps, opportunity costs, etc.

Optional costs: are just that – they’re optional – they are services that may help you make better trading decisions. Optional trading costs include education, better technology, newsletters, trading systems, or advisory services.

As with anything, trading costs can get expensive. However, it’s not necessary to pay high costs while trading.

For example, to beat the high explicit costs of trading, take time selecting a good broker: be selective and do your homework. Brokers can be tricky at masking fees, so there is no better way to understand the true cost than by opening a small account and testing them out.

Implicit costs are kept in check by improving your knowledge and trading skills. Take time to develop your skills: observe, practice, and learn.  Companies like the Apiary Fund provide excellent education and skill development training to mitigate your risk and costs while you’re developing your skills.

It’s important to know that there will always be costs to trading forex. These costs should not discourage you from trading, but encourage you to be a better trader. The benefits can far out-weigh the expense if you’re willing to be careful, and understand the costs before you dive in!

Comments { 0 }

Meet Our New Support Member

profilreunion

Hi! Meet our new Support Staff Member, Jacob! He’s excited to be here, and excited to get to share a little bit about himself with you…

“I am so happy to be working here at The Apiary Fund. This is a company with a mission that will improve the lives of everyone who joins. The people here are kind and considerate, and always looking to do what’s best for you… SO be sure to call the Support Hotline so we can help you out!”

My name is Jacob Johnson, and we can talk through the support line. I’ve been trading for some time now, though I began mainly in stocks. My dad is a Financial Advisor, managing millions of dollars, so growing up I always knew that investing would be a part of my life. I’ve always been good at math, and I’m quick to notice a trend and see what’s happening. Eventually, I want to be able to see what happens BEFORE it happens 😉 After not feeling fulfilled with an engineering degree, I decided to follow my heart and trade. With all the guidance and direction that Apiary has to offer, anyone can be a successful trader!

The FOREX market is the best market to trade in. The whole world is involved! I’ve worked with people from Sweden to South Africa, New York to LA, and everywhere in between.

I am here to help, so feel free to call the hotline!

Best,

Jacob

Comments { 0 }

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.

unnamed-2

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.”

unnamed

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.

unnamed-1

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.

unnamed

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.

Comments { 0 }

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.  Most experts are predicting the strong dollar rally to continue through 2015, but can the dollar continue it’s impressive rally?

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!

Comments { 0 }

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.”

Comments { 0 }

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.

Comments { 0 }