Tag Archives | Apiary

Trading During Scheduled News Events

Last week, The U.S. Department of Labor presented the monthly update on nonfarm payrolls. This would be an example of a scheduled news event. This may come as a surprise to some of you, but did you know that Apiary usually discourages trading during scheduled news events? It’s not necessarily bad to trade during these events, but here is a couple of reasons behind our thinking:

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  1.     Spreads widen:  The cost of trading in the form of spreads increase during scheduled news events due to the expectation of volatility and risk; liquidity providers will widen the spread to mitigate risk.
  2.     Slippage increases:  It takes time for a quote to be sent from the liquidity provider, received by Alveo, and then have a trade sent back to the liquidity provider. The chances of slippage increase even more with the volatility of a news event.
  3.     Frequent whipsaws:  The initial reaction to a news announcement is not always right–we’ve all been warned about the consequences of first impressions– and markets can change direction many times before the full meaning of the news is digested.
  4.     Lack of liquidity:  Sometimes trades may not trigger due to a lack of liquidity during scheduled news events.
  5.     Hardware issues:  The volatility, along with the pace of data, during news events can put extra strain on your hardware–leading to a slowdown in performance or even malfunctions during a news event.

If you choose to trade during scheduled news events, it’s important for you to recognize the challenges associated with this type of trading and be willing to adjust for the probability of increased risk. Keep these points in mind, and as always…
Happy Trading!

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What An Old Fisherman Taught Me About The Markets

One of the greatest investors of all time had to be Noah…  They say Noah was able to float his stock while the rest of the world was in liquidation.  Impressive, eh!  While he may have been a good investor, he couldn’t have been much of a fisherman.  Why?  He only had two worms.

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If you’ve spent much time with a rod and reel, you might be quick to recognize the many lessons the sport teaches us about money in the market

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Here’s a short story about what an old fisherman – not Noah — taught me about the markets!

Link to Short Story:

http://issuu.com/apiaryfund/docs/apiary-fund-old-fisherman

Enjoy, and Happy Trading!

-Shawn

 

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How Running Has Helped Me Become a Better Trader

Ever been stuck in the slumps? Yeah, me too.

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For the past couple of months I’ve felt like the man in this picture. When I ran, I was just going through the motions-just trying to finish my work out. Sure, there were some good days here and there, but I knew that I wasn’t reaching my potential as a runner. I also wasn’t feeling the happiness and energy I usually felt after a good run. I approached my coach, and he gave me some steps to help me out of this rut I’d gotten myself into. However, I realized that these steps wouldn’t just help me in my running; they could help me with my profession, my social life, and (of course) my trading.

  1. Set my sights higher than just the next race

I know you’ve all probably heard more than your fair share of motivational speeches centered on goal setting, but honestly there is something about a goal that just helps you focus on improvement. When I stopped and focused on what I was going to accomplish the racing season, I saw each race as a step to reaching my personal record. When trading, you have to look further down the road than your next trade.   What do you want to accomplish today?  This week?  This month? You have to set your sights higher than a single trade and discover what you can do to accomplish your personal best.

  1. Stop running so much

What? To improve running you need to stop running? To a degree, yes. Running daily is very important, but I always reserve one day of the week to resting and recovery. Without this break, I would end up running less during the week because my legs would become overworked. Sometimes, you need a little break from trading. Don’t spend all day with your eyes glued to the candles on your screen-go for a run or something 😉

  1. Track your mileage

I always track my mileage – along with how much sleep I get, and the food I eat. This not only helps me feel good throughout the season, but I can look back and see when I was struggling or doing good. By tracking my progress this way I can see what made me sick or tired and what made me feel good and energized. Track your trades. Notice what setups work for you, and what triggers an unwanted emotional response. Besides, whether your profitable or not, it always feels good to look back and see the progress you’re making.

  1. Mix it up

Contrary to what some may imagine of a typical cross country runner, I actually lift a lot weights. My core and upper body strength is just as important as having strong legs when I run. Sometimes, at the end of a race, if your legs feel like they don’t have the energy you can pump your arms, and ,crazily enough, your legs will follow! When you’re trading you need to be prepared for different market events. Learn to trade in long summer doldrums, as well as high votility markets.

  1. Change your attitude

One of my pet peeves is when I go to a race, and hear runners complain that they have to run. Don’t you run because you like it? If you don’t like it, then why are you here running?! I like feeling strong, the runner’s high, and swelling accomplishment that fills you up and makes you feel like floating. What do you like about trading? If you can’t answer this question, then you need to find out why you’re trading. Identifying why you’re trading will help get you through the slumps.

I hope if you’re feeling a little bit stuck in a rut in your trading, that you can try these out. Make trading enjoyable again, and go make some pips.

Happy Trading!

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Demo Accounts Hold You Responsible

“Genius is one percent inspiration and ninety-nine percent perspiration.” -Thomas Edison

Hello Traders,

Take a look at this equity curve from one of Apiary’s demo accounts:

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What do you see?

I see someone with a mental block. However, I also see that they kept trying. Go back and take a look at that quote I’m sure most of you just skimmed over. Perspiration (i.e. hard work) is the key to becoming “genius.” This definitely applies to trading. Apiary Fund’s demo accounts offer a chance to become a genius at trading.  It gives you real life trading scenarios and demands without any of the pressure of trading real money. This teaches you to think and develop strategy instead of relying on luck. Luck will run out eventually, and it will be necessary to develop a strategy.

If you haven’t guessed by now, this is one of my demo accounts. Personally, I like to use a consolidation breakout strategy, and when I use it right it produces a nice equity curve. Using this, or any strategy, requires discipline and hard work. A friend gave me 7 steps to consider before placing any trade.

  1. Proper preparation
  2. Hard Work
  3. Patience
  4. A detailed plan before every trade
  5. Discipline
  6. Communication
  7. Replaying important trades

While each of these steps may mean something different to each of you, everyone could benefit by considering them before entering a trade.  With each of my big losing trades, I missed applying at least one of these seven steps.  My rebounding wins happened because I chose to follow these steps. I’ve learned that I can’t control what happens with a trade after I’ve placed it, but I can control what I do before placing it. My 6 biggest losing trades in this account are responsible for over half of the total equity lost. That’s out of 50 losing trades! Whether I wasn’t patient enough to wait for the right setup, or I didn’t have an exit plan, some step was overlooked. That is something I CAN fix. There is nothing wrong with losing a trade, that’s just part of the game. What’s important is that I follow my trade plan and stick to it-no matter the temptation to jump into a trade without proper preparation. I can handle the other 44 losses. They wouldn’t amount to much because I followed an exit strategy in each of them.

I’ll end with one of my favorite quotes, and hopefully you can all apply it to your trading:

Let me tell you something you already know. The world ain’t all sunshine and rainbows. It’s a very mean and nasty place, and I don’t care how tough you are, it will beat you to your knees and keep you there permanently if you let it. You, me, or nobody is gonna hit as hard as life. But it ain’t about how hard you hit. It’s about how hard you can get hit and keep moving forward; how much you can take and keep moving forward. That’s how winning is done! Now, if you know what you’re worth, then go out and get what you’re worth. But you gotta be willing to take the hits, and not pointing fingers saying you ain’t where you wanna be because of him, or her, or anybody. Cowards do that and that ain’t you. You’re better than that!” -Rocky Balboa

Happy Trading!

Jacob Johnson

Trader Support

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What Makes a Trader Successful?

How would you answer this question?  What is it that makes a trader successful? Is there one special quality they need, one bit of knowledge they need to learn, one tool that they could use to make them successful?  Or maybe, it’s just luck.  They are lucky, and now they are successful!

Well, the truth is, there is no one simple thing that can be given to immediately make a trader successful.  Luck may help sometimes, but it’s not a reliable process that we can count on.  The only consistent and proven way that makes a trader successful is by the process of hard work.  Nothing will be given to you without you putting the time and effort into your trading, and even then it may still take a while.  Time and hard work will eventually place you in a position where you can be successful.  The question is – are you willing to put in the time and effort needed to become a successful trader?

Successful traders have spent the time to learn how to trade, and then used that knowledge to create a trading plan.  Most have written their rules down, so they know exactly what to do to enter a trade and to exit a trade.  If I asked everyone to send me their written trading plan (please don’t, I don’t have enough time to read them), most traders couldn’t because they either don’t have one or haven’t taken the time to make it real by putting it down on paper.  If you don’t have a well-defined and written trading plan, then you are not ready to become a successful trader.  This is something that takes time and hard work.  Again, I ask – are you willing to put the time and effort to become successful?

The development of a trading plan does not need to be complicated. In fact, it should be as simple as possible.  Let me suggest a few things that you should begin to develop your trading plan.

  1. Define the “why” for your trading.  I know you want to make money but the “why” is more than just money, it is the reason behind your need for money.
  2. Define your risk rules.  You need to identify your “sweet spot” for how much you are willing to risk.  If you risk too much you will become fearful and if you don’t risk enough you will feel unsatisfied.  This should include how much risk you want to take in each trade, as well as how to calculate your position size.
  3. Define your entry and exit rules.  I will put this into two categories.  Setups and triggers.  The setup is what you see on the chart to know a trade is about to happen while a trigger is what you see on the chart that tells you it’s time to buy or sell.
  4. Define your analysis process. This is what you are going to do to analyze your trades after they are done.  Do this on a daily, weekly, and monthly basis to make sure your trading plan is working the way you want.

Ok, so that’s it! (Well, at least some of it) If you want to be successful then create a well-defined and written trading plan.  Do not leave your success to luck or chance or anything else.  It’s up to you – now go and put the time and effort into your success!  Be that successful trader you want to be!

Happy Trading!

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20 Pips Equals Your Success

Ever dream of being that one investor? The one who predicts market events before anybody else knows they’re coming, and gets away with millions of dollars fitting nicely in your pocket? Well, it might be hard to stuff that much money your pockets… but I’m sure you would have no trouble finding a nice safe place to store your millions. Wouldn’t it feel great to make it on the list of legendary traders known for their cunning and incredible returns?

1929: Jesse Livermore shorted the stock market (predicting the crash) and made $100 million.

1987: Paul Tudor Jones shorted the stock market (predicting Black Monday), making an estimated $100 million.

The 1980s (after Black Monday): Andy Krieger shorted the Kiwi (predicting it was highly overvalued) and made $300 million.

1992: George Soros shorted the British pound, making $1 billion dollars (meanwhile Stanley Druckenmiller invested in the german mark and made an additional $1 billion for Soro’s Quantum fund)

2000: John Templeton made $80 million in a week shorting the Dot-Com bubble.

2003: Andrew Hall went long (like, 5 years long) on oil and made enough to land a $100 million dollar bonus.

2007: John Paulson and Kyle Bass both made $3-4 billion shorting subprime mortgages and mortgage-backed securities.

2009: David Tepper went long on banks (predicting they would recover from the financial crisis) and made $7 billion.

Of course, while some take opportunities in the market to make millions, you have to realize the enormous risk behind these trades. As investor Spidey-man would say, ‘With great returns comes risk of great losses.’ For example: Yasuo Hamanaka lost $2.5 billion shorting copper, Brian Hunter lost $6.5 billion in natural gas futures, and Jerome Kerviel lost an incredible $7.1 billion in European futures. Just this last May, China’s richest man lost $15 billion when his company shares plummeted. Ouch – somebody didn’t have their stops on!

The difference between us and them is as simple as a couple of zero’s. Say you make 20 pips with one lot, while somebody else makes 20 pips with 100 lots. You both made 20 pips, but the one with 100 lots made a lot more money. Honestly, it all depends on how much money you put into the trade. The more you practice hitting your 20 pips a day, the more comfortable you’ll become trading in the market. The more comfortable you become in the market, the more money you’ll invest in it. The more money you invest, the more money you’ll make (as long as you’re smart about it). Then, you’ll be hitting your daily 20 pips with 100 lots and making a lot more zeros.

Happy Trading!

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The Traffic Laws of Trading

 Awww yeah, that would be life. Cruising down the highway in your sleek new ferrari… or maybe not.

ferrari-458_lA few years ago, a driver of a candy red Ferrari Testarossa managed to nail a $290,000 speeding fine while driving 85 mph through a village in Switzerland. In Switzerland, they base their speeding fines off of income, and since this was a repeat offense they were not messing around. After reviewing the case, the court said, “the accused ignored elementary traffic rules with a powerful vehicle out of a pure desire for speed.” That’s a high price to pay because you forgot one of the most basic traffic laws. speed_limit_25_sign

We can all relate to the pit that drops to your stomach when you look in the mirror and see those blue lights flashing. And while most traffic fines aren’t that hefty, just in the United States they generate between $3.8 billion to $5.4 billion a year in revenue.  Now, relate this to your trading. How many times do we let our emotions, or our pure desire to make the trade work, cause us to forget one of the most elementary trading rules-get out of a losing trade. When we get emotionally involved in a losing trade, we get caught-and you’ll end up with a ‘ticket.’ Just like the driver of that candy red Ferrari let his desire to go fast cloud out the danger (and high price) of speeding, we can forget that taking a small loss is better than big one. So just slow down, follow the traffic rules of trading, and have a good day in the market!

Happy Trading!

One way to not get caught in a losing trade is to have  trading plan or a set of rules you follow when you trade. Here’s the link to a couple of our blog posts about having a trading plan.

http://www.apiaryfundblog.com/how-to-form-a-trading-strategy/

http://www.apiaryfundblog.com/take-market-come-top/

http://www.apiaryfundblog.com/our-philosophy-on-success/

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Good “Luck” Trading

If good trading is all about luck, then Apiary has sown the seeds for success…  quite literally!  About a year ago, Shawn had a vision of turning an ordinary fescue lawn into a factory of four leaf clovers!  While most gardeners might balk at the idea of purposefully growing clover, (clover is considered a weed in most places) at the Apiary Fund we find it quite delicious. With thousands of hungry bees working at the office (mostly real bees, and a couple of human bee-ings) nobody balks at a fresh batch of clover honey – or a fresh batch of clover juice – to keep the trading session lively!

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We got a new juicer for the office Monday and tested it out with a frothy glass of  “Luck O’ the Irish”  clover juice – straight from the lawn!  Disclaimer. We don’t actually know if drinking freshly juiced four leaf clovers will give you luck in the market but we figured, hey, it couldn’t hurt!

Obviously, there are other great ways to find success in trading that don’t depend on ‘good luck’ charms.  Trading forex isn’t about magic tricks or superstitious rituals and it’s definitely not based on luck like the slot machines in Vegas.  Instead it’s honest, consistent effort and discipline that will bring home the green in the currency market!

Here’s some links to a couple blog posts about being a successful trader.

http://www.apiaryfundblog.com/our-philosophy-on-success/

www.apiaryfundblog.com/8-expectations/

Happy Trading!

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Greece Financial Crisis Explained

With all the financial news focused on a looming Greek debt default and the pundit’s myriad forecasts of apocalyptic consequence, it might be easy to forget that Greece is celebrating it’s 6th anniversary of this current debt crisis.Parthenon

In this post, I’d like peel back the layers of hype about the Greece financial crisis, and look at the root of the gridlock problem.

 

The question on everyone’s mind is, will Greece will exit the European Union? I personally feel that a Greek exit is a highly unlikely scenario, since there are no clear advantages to either the EU or Greece to separate.  Let me explain.

For the European Union, a Greek exit would be a political nightmare that opens a floodgate of financial problems.  You might think that Greece is relatively inconsequential in terms of its financial contributions to the EU, and that a Greek exit would not have much of an influence on its overall financial welfare.  So big deal, let Greece leave, write off the debt and focus on things that matter most!

The challenge for the EU is contagion.

Allowing the Greek domino to tip starts a chain of reactions in Spain, Italy, Portugal, Ireland and other debt laden members of the EU.  The fight in Greece is a fight for the European Union itself.  While the demands for some level of austerity from Greece seem unfair, it is the only way to keep the EU in tact.  IF the EU softens debt terms for Greece, then it has to soften debt terms for other economically strained countries – putting an enormous burden on the already weak economic union.  A Greek exit is no better.  The EU could probably absorb Greek default, but defaults don’t happen in a vacuum.  The financial burden is not removed – it’s just transferred to other parties and you have no idea where the burden will manifest itself.  Clearly, the EU is stuck between a rock and a hard spot.

For Greece an exit is equally dire.  To exit the EU would mean austerity for the Greek people of the worst kind.  Some people are arguing that Greece should exit the EU, wipe their debt clean,  and start over printing it’s own currency – the New Greek Drachma.  The problem is that if Greece exits, then foreign investment money will be non-existent.  This puts the strain of finance on the Greek Central Bank to issue bonds, buy the bonds themselves, and print money to pay the bonds.  In short – inflation and taxation.  The inflation will destroy pensions and any semblance of wealth for Greek citizens.  In other words, a Greek exit will guarantee the austerity they are trying to avoid by renegotiating debt structure.  Greece’s argument that the debt demands from the EU are too burdensome for their citizens is a weak argument, because its only other option is worse austerity.  Clearly, Greece is stuck between a rock and a hard spot.

So what is most likely to happen next is exactly what has happened for the past six years.  Rescue funding may be given at the last moment to allow Greece to limp along for a few more months while political posturing continues to play out for the media.  Perhaps Greece will default on a payment – just like it did a couple years ago and just like Cyprus did in 2013.  Other political players such as Russia and the US will try to steer the outcome to their favor – possibly offering assistance in one form or another.  Meanwhile, you’ll have a group of bankers and lawyers working behind closed doors to restructure and renegotiate terms in hopes that time and inflation, or better yet, real economic growth will sweep all their problems away.

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All About Apiary VPS

June 2015 Apiary launched a new service called VPS.

VPS is designed to help people with Apple Mac, and increase trader mobility.

A fast computer with a fast internet connection is a necessity for a trader. It’s crucial in order to execute trades for the prices you want. However, a fast computer is costly, and not everybody is computer savvy and knows how to maintain their computer. No matter how fast a computer is, without proper maintenance it will slow down eventually. In the last few years, it’s become a trend to use VPS (Virtual Private Server) to increase trading performance.

Virtual Private Server acts like a computer, but in the cloud. A trader installs their trading platform (such as Alveo) and all of their trading activities are executed through the VPS. The trader’s computer or laptop only acts as a ‘keyboard’ to control the VPS.

The benefit of using VPS are :

  1. VPS works faster in transmitting the orders then an ordinary computer or laptop. This may reduce slippage.
  2. Trader can trade from anywhere with different machines (computer,laptop,iPad, tablets, etc). Say a trader’s laptop is broken, the trader doesn’t need to worry about his/her trading because all of the trades are in the VPS. The trader just needs to find/borrow a laptop with an internet connection then login to the VPS to secure his/her trading positions. In the past, traders have needed to reinstall all software and equipment again in order to access the trades.
  3. Save money because trader does not have to buy ‘high end’ computers to get fast trade execution.
  4. In case of power failure event,  VPS will keep the trading position (including Take Profit and Stop Loss), so all strategy and pending orders will proceed as normal until the trader has access to VPS.
  5. A trader will not need to waste time maintaining their computer, since VPS usually already has their own IT team to make sure it runs 24/7 without problem.
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