Tag Archives | Apiary Fund

We Appreciate Our Traders

We’re dedicating this post to everybody who is currently learning how to trade. We really appreciate the effort our traders and team put into making this hive work.

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When I was in third grade, our class had a career day; our homework was to go home and talk to our parents about what they did for work and share with the class the next day. That night, I climbed up on my parent’s bed where my dad was focused on his laptop.

“Dad? What do I tell my class you do for a career?”

He faced me with a serious expression on his face,

“Tell them I catch invisible numbers from the air and turn them into money.”

My father? He probably thought he was so funny sending his innocent daughter to face her teacher on career day with that explanation of his job. I was still young enough to have complete faith in whatever my dad told me: that he caught invisible numbers and he was a leprechaun. It wasn’t until years later that I actually knew what that explanation meant…and that he wasn’t really a leprechaun (but if you’ve seen Shawn, you can understand why believed him for all those years).

Most of the time, as people, what we don’t understand intimidates us. For example, the first time you saw a trading chart you might have thought it was overwhelmingly confusing and impossible to understand (you guys are probably smarter than me though, please say I wasn’t the only one!). One thing that I’ve found to help me is to look at it as simple parts; I like to view it as a math problem where I learn little things that add up to the whole: Trading. If we follow the old adage to learn something new everyday then hard things can become easy.

Don’t forget to take a moment to look back and appreciate how far you’ve come. The great thing about a lot of us is that we come from non-financial specialized backgrounds. We’re changing the image of traders! We have a firm belief that anyone who has the desire and discipline can become a successful trader, and you guys are proving it. Please take a moment to feel good about what you’re doing before you get back into understanding pips and stop losses.

Happy Trading!

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Indecision In The Markets

One thing I’ve struggled with is indecision. While it is good to want to the best decision, sometimes indecision has the ability to freeze us – which is not so good while trading. Feeling stuck between two choices while trading can lead to lost opportunity and money. My father recognized my reluctance to make choices when I was still pretty young and has tried to help me recognize the value in making correct choices quickly.

When I was little my dad introduced me to what seemed, in my childish world, a sort of heaven on earth: Cold Stone Creamery, an American ice cream parlor chain. Never before had my small mind even imagined the array of toppings and ice cream flavors presented before me.

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If it had been a simple choice of chocolate and vanilla, my decision would have been clear: a twist. My dad’s brilliant idea to walk in for a quick sweet treat didn’t follow through as I promptly asked to sample every possible kind (except for mint chocolate chip, I know it’s a classic but I’ve never appreciated toothpaste flavored ice cream). While I was still debating between cotton candy and birthday cake 15 minutes later my dad in exasperation just ordered me a vanilla cup. I was indignant! However, young as I was, I was able to recognize from his mood that it was not the moment to throw a tantrum.

We all know the frustration–whether it stems from others or ourselves–of somebody who cannot make a decision. Choosing between option  A or option B is a painful  process, not to mention the agony of adding an option C. Being hung up with indecision is worse than making a wrong choice. If you make a wrong choice, then at least you are moving somewhere, and you have the opportunity to correct it and move the right direction (probably all in the time you would have wasted debating over and over again which choice to make). Making choices becomes much simpler when you have a goal and a plan, because

We all know the frustration–whether it stems from others or ourselves–of somebody who cannot make a decision. Choosing between option  A or option B is a painful  process, not to mention the agony of adding an option C. Being hung up with indecision is worse than making a wrong choice. If you make a wrong choice, then at least you are moving somewhere, and you have the opportunity to correct it and move the right direction (probably all in the time you would have wasted debating over and over again which choice to make). Making choices becomes much simpler when you have a goal and a plan, because then choices become clear. We know what to do [what will take you to your goal] and what to do not [destructive or distractive choices that take away from what needs to happen].

Entering the right trade is a great deal more important than choosing the right ice cream flavor; being able to weigh between options and pick the best one quickly can be harder than it looks. At first glance, one might assume it’s a simple choice between two options: buy or sell. However, we know that there is a lot more planning and thought involved. Sometimes the seemingly complicated life of the stock market can be confusing or overwhelming, hindering your ability to make choices. This is one reason why taking the time to establish your trading goals are so important. A trading goal can act as a sign that points you in the direction that’s best for you.

Happy Trading!

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Yoda Quote #1, “Much to learn…”

This is our final quote in our series, “Trading Words of Wisdom by Yoda.”

“Much to learn you still have, my old padawan, this is only the beginning”

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Count Dooku grew strong in the dark side and wasn’t afraid to show it either. Yoda, however, understood something that Dooku didn’t grasp–the dark side may be powerful, but when a sith lord believes that they can control the dark side then it controls them. Yoda spent hundreds of years learning and mastering his control of the force, but I bet he would never think for one minute that he knows all there is to know about the ultimate power that flows through the universe.

When the Pedals and Profits team was doing their cross-country bike trip, Aspen decided she was grown up enough to learn how to use clip-in pedals. Clip-in pedals require special shoes that actually latch into the pedal. It takes a lot of practice and a special foot movement to disconnect the shoe from the pedal, so if the biker doesn’t disconnect their shoes properly and they come to a stop it’s an embarrassing (and sometimes painful) tumble to the ground. She was very cautious all day, and with every successful stop, she grew more confident. She finished her first day free of the disgraceful meeting with the concrete (much to the surprise of Shawn). It was a perfect ride until she pulled up to the hotel and spotted her younger sister watching in the parking lot. Pride did, as they always say, come before the fall. She claims not to remember her egotistical words of praise, only the shock of ending up on the ground with the bike on top. Confidence is good, cockiness is bad.

Just when you think you know it all, that’s usually when you get the biggest wake-up call. It’s important to recognize that we have the skill, knowledge, and potential to pursue our dreams; whether we succeed or not, it’s what we learn in the journey–not the end–that enlightens us. We should never assume that we know everything, but don’t let what you don’t know stop you from new experiences. We’d like to encourage you all to seek for new insights every day to help you improve your trading.

Happy Trading, and May The Force Be With You!

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Yoda Quote #2, “There Is No Try…”

This is a continuation of the Trading Words of Wisdom By Yoda, for Quote #3 click here.

“Do or do not, there is no try” -The Empire Strikes Back

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When Yoda hears Luke’s uncertain remark about trying to get his ship out of the swamp, he is quick to reprimand Luke with what has almost become a trademark phrase for him: “Do or do not, there is no try.” He knows that if Luke “tries” then he will fail because he has already doubted his abilities.

Try” has a slightly negative connotation that goes with it. Have you ever asked someone to do something and gotten the half-hearted, “okay…I’ll try.” As if that leaves you with inspired confidence in their desire to succeed. The secret is in the mindset; if you’re convinced in your ability to accomplish something, then you do it. If a small part of yourself doesn’t think you have it in you or you don’t want to, then you try it and who knows whether you’ll succeed or not, but I’d rather not leave success up to chance.

We’ve heard that saying, especially in sports, that 80% of success if mental. What does this mean? This means that while the fundamentals and technique are important, the way you think about them is even more important. Your drive, mindset, and how you handle successes and setbacks contribute to that 80% of success. Michael Jordan, who may not be identified as a trader (though his successful investment in the Charlotte Hornets boosted him up to billionaire status), has said that “some people want it to happen, some wish it would happen, others make it happen.” There’s the difference between trying and doing. Now, I would like to point out sometimes failure is a step towards success; Michael Jordan didn’t make all of his shots, Luke didn’t defeat Darth Vader the first time he faced him, and Yoda was 900 years old before we truly appreciated him for the Jedi Master he was. However, if you make up your mind to do instead of try you’ll find more fulfillment in failing and joy in your inevitable success.

Happy Trading, and May The Force Be With You!

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Traders See Success at Apiary Summit

Apiary Summits offer something unique.  Attendee’s of the Orlando Apiary Summit received a $1000 funded account to manage during the 3-days event.  Moreover, they were able to keep 60% of any profits.  Summits are an important part of the Trader Development process because it gives people a sense of reality.  What’s possible and what’s not – you get to see real folks, making real money, in real life.  It’s a tremendous boost to your motivation.

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And in terms of success, this Apiary Summit was a huge hit.  82 traders with laptops en toe, converged on a simple conference room in Orlando, Florida where they managed a collective portfolio of $82,000.  These traders represent all walks of life from an ice cream maker in Chicago to a young entrepreneur from Mexico to a NASA engineer from Florida.  It is truly a unique gathering of traders!

But as impressive as the group is, it’s even more impressive to see what they were able to accomplish.  You may think from reading the annual report of your favorite mutual fund that numbers like 12-15% annual return is acceptable performance.  Which to most of the world it is.  Nobody walks away from numbers like that.

However, by the end of trading on the third day of the conference the portfolio had grown to $84, 788 – a 3.28% return.  You read that correct – in just 3-days this rag-tag team of traders yielded a 3.28% return!  Take that Fidelity.

The feedback we get from the Summit is overwhelmingly great.  It’s educational, it’s experiential, it motivational – and by the numbers – it’s successful!  The next Apiary Summit is scheduled for September 19-21 in Salt Lake City.  We hope to trade with you then!

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Yoda Quote #3 “Always In Motion Is The Future”

This is a continuation of the Trading Words of Wisdom By Yoda, for Quote #4 click here.

“Difficult to see. Always in motion is the future” -The Empire Strikes Back

While Yoda is training Luke on Dagobah, Luke is troubled by a Force vision of his friends, Han, Leia, and Chewie, in trouble in Cloud City. Luke, clearly worried, asks Yoda if his friends will die. For a moment, it appeared that they would, but we’ve seen the movies. We know that they are rescued.

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People, it seems, always look towards the future. We try to predict and plan ahead, and our predictions are based on our experiences. In the markets, we try to forecast. Forecasting is an important function while trading because creating a forecast based on past data can indicate how your trades will do.

We naturally look for patterns in life; I remember as a little kid I’d time my strides so that I would step on every blue tile on my elementary school’s patterned floor. With my eyes glued to the ground, I knew my foot would need to pass over one white and one gray tile to land on the next blue one. I kept this pattern for a while until I set my foot down expecting a blue tile only to find I was on a smaller checkered white tile. Disoriented and confused, I looked up and realized that I turned the wrong way and had entered the lunchroom. We trade based on our forecasts, so when we see the market straying from where we’ve predicted it to go it’s an indication that something might have changed or been wrong with our trading plan. By recognizing this early on, we have time to get out of the trade and review our strategy without major losses. Just like how seeing the smaller white tile instead of the blue one that I forecasted got me to look up and realize I was lost, your forecast can indicate how well your trading plan is reflecting what’s really happening in the market. Yoda is right, the future is difficult to see; that’s why forecasting and being flexible is a meaningful operation to help you in the markets.

Good Luck, and May The Force Be With You!

For the next quote click here.

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Yoda Quote #4, “Fear…leads to suffering”

This is a continuation of the Trading Words of Wisdom By Yoda, for Quote #5 click here.

“Fear is the path to the dark side…fear leads to anger…anger leads to hate…hate leads to suffering.” -The Phantom Menace

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When young Anakin Skywalker is standing before the Jedi Council, we have no idea the of the dark, bitter creature he will become. Yoda does, though. Yoda senses something in Anakin that worries him: Anakin’s fear. Yoda’s early prediction came true as Anakin’s fears are realized and he becomes angry and hateful. In the end, though, we see that Anakin doesn’t have anger and hate to lift him anymore, he is just suffering.

As Traders, we can relate to Anakin’s fear of losses; we should always be aware of two dominating emotions: fear and greed.

Fear is a crucial response in humans to preserve both emotional and physical well-being. It works as a warning in our brain to show when something is dangerous or threatening. Most of us, however, fear uselessly and that fear holds us back. It’s natural for a trader’s fear to spike with the drop of a stock, or stomach clench when bad news comes from the market. Marie Curie, a physicist/chemist who was known for her pioneering research on radioactivity, adequately stated that “nothing in life is to be feared, it is only to be understood.” And explains, “Now is the time to understand more, so that we may fear less.” As traders, when we understand our fear and what causes it then we can either prevent it, prepare for it, or isolate it.

Greed can be just a devastating to traders. If you are too greedy then you will, as the old Wall Street saying goes, get slaughtered. None of us want to experience the humiliation of trying to squeeze every last tick out of winning position and getting blown out or whipsawed. For most of us, greed comes from an internal drive to get more and do better. Yet, success in the markets is based on a well-thought and calculated business plan, not those emotional impulses demanding more from yourself.

Take the time to develop a good trading plan that you trust enough that when these emotions rise, you are willing to stick to it. In the end, it feels a lot better to stand by your trading plan than to jump into destructive emotions like fear and greed. Eventually, fear and greed leave you, and your left to suffer the losses like the sad figure of Anakin Skywalker at the end of Return of The Jedi.

Happy Trading, and May The Force Be With You!

For Quote #3 click here.

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Yoda Quote #8 “Excitement…Jedi Crave Not These Things”

This is a continuation of the Trading Words of Wisdom By Yoda, for Quote #9 click here.

8. “Adventure. Excitement. A Jedi craves not these things.” The Empire Strikes Back

star-wars-character-yoda-handout-651712929Some might say that the word Investor replaces the word Jedi quite well in this sentence; for some reason, the glamorous life of investing just doesn’t pull to some people. However, being a boring investor can equal some exciting returns when it’s time to retire.

Consider the life of a Jedi: flying through space, fighting bounty hunters, saving a planet. It sounds like the life of adventure dreamed of by little boys, so why would Yoda say that a Jedi ‘craves not these things?’ It is because a Jedi’s role is to serve and protect, not seek the adrenaline rush of fighting for your life. It also takes many years of dedicated training to be master the force. Given the choice between fighting enemy droids or establishing peace in the galaxy, my bet is that Yoda would choose peace.

It’s a common question, ‘What would you do with a million dollars?’ The exciting answers are skydiving, buying a mansion, or an African safari. Yet, most millionaires follow ‘boring’ investment strategies. We want a balanced portfolio that will maximize our returns–without a lot of active participation and stress. Our role is to grow and protect our portfolio, not to enjoy the temporary power rush of a shopping spree. Just like training to be a Jedi (ok, maybe not just like), it takes years of discipline and repetition (boring) to achieve the status of successful investor (cha-ching!). As we’re completing our ‘training’ it’s important not to be sidetracked by ‘hot’ or ‘exotic’ trades–stick to your trading strategy that you’ve developed, trust, and know.

Happy Trading, and May The Force Be With You!

For Quote #7 click here.

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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

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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

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Positions, Risk, and Buffets

You don’t want to have too many active positions open; it’s like eating too much food at your favorite buffet. Buffets can be good. Buffets can be very good. However, you almost always–or at least I do–walk (if you still can) away from a buffet in pain–sometimes in a great deal of pain. I like the illusion that I have control over myself around food, but that disappears as soon as I see a soft serve ice cream machine paired with caramel and hot fudge pumps. There’s this mode that I enter when I’m in a buffet. I become this mindless food eating machine that inhales plate after plate of mediocre greasy food just because I can. Forget the fact that I’ve been working on not eating carbs for the past three weeks, I’m have four or five rolls with honey butter.

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Did you know that Apiary limits the number of open or pending trades you can have? This isn’t an all-you-can-position buffet, and for good reason! Apiary limits the number of open trades or pending orders in an account for risk management purposes. Mainly because during extreme market conditions, slippage is of serious concern; a lack of liquidity on either the buy or sell side means orders may not be filled before slipping far beyond any stops. By limiting the number of pending or open positions, Apiary can better manage risk across the entire portfolio. Mitigating risk is beneficial for us as a company, and for you as a client.

In addition to Apiary’s risk management model, limiting the number of open positions is a good practice at the personal level. One argument for multiple positions is the benefit of diversification.  However, after about 8-12 open positions, the benefit can become incrementally smaller and can actually turn negative.  For example, a trader actively managing 100 open positions is far less effective than a person managing 10. In fact, this is one of the ideas that helped found Apiary! It’s far better to have a group of ten traders individually managing ten positions than to have one person managing 100. In the end, the same number of active positions are being managed, but with far less risk.

Happy Trading!

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