Tag Archives | investment risk

Taking Risks

There is a quote that I like from an old movie, Point Break:

“… fear causes hesitation. And hesitation will cause your worst fears to come true. So it’s simple: You project strength to avoid conflict.” — Bodhi (Point Break, 1991).

We all know that the market is driven by fear and greed. The biggest influence in trading is emotion. I also experienced fear until now. Every time I place a position in the market, negative thoughts pop up:
“What if the market never hits my TAKE PROFIT?”
“What if the market hits my STOP LOSS first before my TAKE PROFIT price?”
“What if the market is going nowhere / sideways? I have to pay the swap rate”
“What if the market suddenly becomes highly volatile against my position?”
“What if my profit never overcomes my loss? I am wasting my time and effort”
and so on and so forth.

If I listen to all those negative thoughts, I am going nowhere. Not only would I never trade, but I would also never do anything in my life, because there is risk in everything.

Shawn explains this idea here:

Therefore, I need to find the way to manage risks. I do research prior trading with real money, plan my trades, follow my trading rules, and re-evaluate my trades. I also continue to learn from others to improve my trading skills. By doing those steps repeatedly, I reduce my fear and find my own trading style with risks that I feel comfortable to take.

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3 Advantages of the Forex Market

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Lots of investors prefer different markets for lots of reasons. There’s not really a single answer for why any market is better than another, but today I thought I’d share three advantages of the forex market:

1. Volatility

The volatility of the forex market is sometimes cited as its biggest risk–and I won’t try to tell you that’s not true. Volatility comes with inherent risk.  But just like any other investments, securities with the highest risk also come with the highest yield.

I remember my early days of trading when I’d place an order and go to sleep, only to wake in the morning and find that my hopes and dreams had been crushed overnight. Naturally, I blamed the market when I should have blamed myself. I now know that with proper risk management, as taught in Apiary’s curriculum, you can make the market volatility work in your favor!

 2. Volume

So how does the increased volume of the forex market afford you an advantage? If you’ve had any experience trading other securities, you no doubt are familiar with placing an order and waiting hours, or even days, for that order to be filled. With fewer buyers and sellers in a certain market, you might not always have someone looking to fill an order–so you wait.

But forex is by far the largest market, so volume isn’t an issue. With so many buyers and sellers out there actively trading, you’ll find that you never have to wait for an order to be filled.

 3. Leverage

I’ve written a bit on leverage before, but if you haven’t heard of it before, here’s a simple explanation: Think of leverage as money a broker lends to a trader to increase the trader’s buying power. In the United States, brokers can give traders fifty-to-one leverage. This means that for every dollar a trader puts into an investment, a broker will match it with forty-nine.

Leverage is a huge advantage to the forex market because it gives you more weight to throw around. Because Apiary works through a broker in New Zealand, our traders actually get 100:1 leverage. That means when a newly-funded trader starts working with a $2500 account, they’re really working with $250,000 worth!

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Apiary Fund CEO Shawn Lucas Interviewed on Mountain Money

This past Monday I had the pleasure of spending the morning with Doug Wells and Larry Warren from Mountain Money on KPCW in Park City. We had a great discussion on the Apiary Fund, the Investor Profile, and how to invest right for your personality type.  I’ve listed some of the discussion points that I thought might be of interest for Apiary Fund traders and potential traders to hear:

Do you run a training component with Apiary Fund?
Yes, you can kind of think of it like a sports development camp. You’ve got a lot of athletes that come in and they try to learn the game through different drills, talking with professional athletes, and getting a feel for how it works. That’s the same thing we do here: create an environment where people can come in, learn how to manage money at a professional level, interact with professional traders, go through trading classes and simulations, and learn how to manage money by experiencing it.

How does trading differ from long term investing?
The primary difference is how long you are holding your assets. We teach an active management process at Apiary Fund instead of long-term investments where you are looking for value investments. With the Apiary Fund, we are actively looking to move money around and catch short-term movements in the market.

How are you able to trust people to trade Apiary Fund’s capital?
We make sure that we provide sufficient training mechanisms so that people can come in and go through different classes. We work with them and they have the opportunity to participate in over 25 hours worth of classroom discussion and trainings with our professional traders. Then we are able to put them into a simulation environment where they learn and develop a track record. As they progress through that simulation we put them in front of real money and let them start to trade.

Where do people have to go to learn the trading techniques you teach?
Actually they don’t have to go anywhere, they log in from their homes. We have traders from all over the world, even Japan, China, and Malawi. They are able to log in to training webinars from the convenience of their own home.

How do you split the profits and losses with the traders?
Any profits that are generated through a trader’s activity, 60-80% of the profits go to that trader. On the risk side, there is no risk to the trader, we assume 100% of the risk.

How long do Apiary Fund traders spend trading each day?
Traders typically spend no more than a couple of hours per day. We focus a lot on people that want to learn to manage money in retirement and have the kind of time to learn foreign currency trading techniques.

You can listen to the interview in its entirety at: http://kpcw.org/2013/02/mountain-money-feb-4th-2013/

 

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Seven 2013 New Year Resolutions to Avoid Your Personal Fiscal Cliff

With Christmas 2012 now behind us, most people turn their attention to the new year. Many will make New Year resolutions to better themselves and their families. If one or more of your New Year resolutions for 2013 are financial related, we encourage you to consider seven possible resolutions to help you avoid your own personal fiscal cliff.

 

  1. Resolve to diversify your income. You can diversify your money by taking a small portion of your income and putting it to work for you in other investments. Doing so will put your money to work and give you additional forms of income in addition to your job earnings. Even $50 – $100 more per week in earned income can have a significant impact on your personal finance situation. It allows you to trade money for money instead of just time for money.
  2. Resolve to use leverage. Like any industry that uses tools, leverage is the tool of choice in the financial world. Using small amounts of collateral or money deposits to control larger amounts of investment gives your money a bigger bang for your buck. A lot of people don’t understand what leverage is or how to use it. If you resolve to learn how to use it properly, it can become a powerful tool to allow you to do things with your personal investments that you couldn’t do before.
  3. Resolve to diversify your risk. Risk diversification is key to financial success, but most people fail to diversify risk correctly by forgetting most of their assets are in U.S. dollars. Diversifying some of your assets in foreign denominated currency can add that last bit of safety you need in case of a deterioration of the U.S. dollar.
  4. Resolve to invest in yourself. You don’t need to eat the entire financial elephant in one sitting, instead commit to investing a small amount of time each week learning new financial strategies and concepts. In just a few short weeks, your new found knowledge can sharpen your financial skills and senses.
  5. Resolve to follow your personal investing style. Just as certain physical traits are more conducive to different sports or certain personality traits are helpful in different professions, each person has financial traits conducive to different styles of financial management – financial traits that are good for success. Learn what makes you tick and invest based on your personal financial trait.
  6. Resolve to always pre-calculate your risk of loss. Any time you put money to work, there is a risk of loss. Risk of loss should not be a problem if you correctly calculate the risk before you invest and are financially willing to accept some predicted loss. A good investment is one where the potential gain is greater than the pre-calculated loss.
  7. Resolve to mix-up your markets. There are more markets than just the stock market – or the mutual fund market. There are five separate and independent financial markets: stocks, bonds, derivatives, commodities, and currency. Not all markets move the same way at the same time. This opens up new opportunities for profit as well as protection. Learning what the other markets are and their structure and advantages can give you a leg up in your financial future.


Apiary Fund is a great source for you to use in achieving these and many other resolutions in 2013 that can help you shore up your finances and supplement your income. If nothing else, it provides great training and education on how to successfully trade currency. Once training is complete, you can supplement your income by becoming an Apiary trader. There is no risk, no investment required – you are given an account to trade Apiary’s funds and share in the profits of your successful trades.

We wish everyone a very happy and prosperous 2013!

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