Tag Archives | risk management

Trading Shouldn’t Be All Or Nothing

What would life be like if the gym were an all-or-nothing commitment? I’d bet that given a choice between spending all day at the gym and not going at all, most of us would either burn out from overactivity or succumb to total inactivity. In the end, a healthy balance will keep you actively engaged and yield the best results!

Just as I balance my time at work and home, I’ve also learned that maintaining balance in my trading is important. Your experience with Apiary shouldn’t be all or nothing! You don’t need to spend all day trading—in fact, we discourage it!

We at the Apiary Fund recommend that our traders participate in the markets regularly and consistently, at the same time cautioning them to not overtrade. Find a way to balance your time in the coursework, the live discussions, and trading.

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3 Reasons Apiary is a Company You Can Trust

The financial industry can be a sketchy place, and if you’re not careful you could fall victim to the multitudes of scams that prey on the unsuspecting newbie. We at the Apiary Fund, however, want to be a light in darkness. We want to lead by example as we do our part to change this industry’s reputation. As such, we want to emphasize the top 3 reasons Apiary is a company you can trust:

1. We Don’t Hide Our Names

There are two reasons someone should conceal their identity: 1) You’re a superhero, or 2) you’re a scam artist. Because we at the Apiary Fund are neither of these, we are not afraid to associate our names with our company.

We not only give out our names, but we even have pictures and links to connect with us on other platforms! Meet the team here!

2. The Apiary Promise

We have not only attached our names to the company, but we, the company and the individuals that comprise the company, have made a promise to our associates. We developed the promise to ensure transparency and confidence in the company. You can trust our promise — no scams, no investment, no risk. Read the company promise here!

3. Our Forums Are Open to the Public

If you look around hard enough, you’re bound to find a lot of people who have a lot of ideas about what the Apiary Fund is and how the company operates. But the truth is that most of these opinions are pure conjecture. Very few people who publish their opinions online have ever been a part of the fund. Going to these sources to do your due diligence is like reading a review for Red Lobster written by someone who hates seafood!

If you want to hear what our traders say, check out Apiary’s forums. Only our traders and associates can contribute posts, but the forum is open to the public to read. This is a much more reliable source, as all of the contributors have first-hand experience with the company. You’ll even get a good idea of what to expect as far as atmosphere and social support! See what our traders are saying here!

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Traders Trade — Money Managers Get Funded

At any other fund in the world, you’d find a bunch of traders being managed by a single fund manager. This fund manager’s single directive is “Don’t lose money.” The traders aren’t money managers; it’s the fund manager’s job to make sure the fund only grows bigger—never smaller.

At the Apiary Fund, we have a risk manager over the fund, but we also believe that every trader should really be a money manager who manages their own risk. We’ve put together such a thorough curriculum because Apiary Fund traders have to be money managers. On top of the principles of risk management that we teach, we also have risk management software that monitors our traders and makes sure that our risk management parameters are never exceeded.

For some coming into the fund, even those with some experience under their belt, this can feel oppressive and controlling. But in reality, Apiary’s risk management parameters are on par with industry standards for money management companies.

Like we’ve said before, the Apiary Fund has a vested interest in its traders. Because we are taking 100% of the risk, we have to manage that risk. And because we have to manage that risk, we try to teach and encourage all our traders to operate withing the risk management parameters!

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Top 3 Features Apiary Offers for Free

We at the Apiary Fund are very proud of the great products we’ve created to help our traders succeed. So proud, in fact, that we have offer some of them to the public for free! In this blog post, we’ve listed our top three free features:

1. The Investor Profile
The Investor Profile is a personality assessment we launched last year to help traders recognize character traits in themselves that will affect how they trade. Because every trader is different, identifying and understanding your strengths and weaknesses is crucial to finding success in the markets. How can you play to your strengths if you don’t know them?

2. The Sessions Clock
The sessions clock is a tool the Apiary Fund developed to help traders keep time. Because the forex market is a 24-hour market, there is always at least one market open. Knowing when each market opens and closes will help you avoid any unexpected jumps in volatility. So, whether you’re on the road or just experimenting with trading at different times of the day, the sessions clock can help you keep things straight!

3. The Trader Development Preview
The Trader Development Program is Apiary’s training curriculum, developed to help our traders learn the ins and outs of the market in the most effective way. As a preview, The Apiary Fund offers the first course to the public for free! Just enter your name and email on the Apiary Fund’s homepage!

While we do offer some great features free of cost, we don’t just put our best stuff in the window. We have a wealth of knowledge and resources to help make Apiary Fund traders successful!

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3 Ways to Full Utilize Apiary’s Trading Education

For new traders, we at the Apiary Fund understand there’s a lot to take in. So much, in fact, that you may find yourself initially disoriented, need direction. Allow me to stress the top three ways you can start taking advantage of the Apiary Fund’s trading education resources:

1. Follow the Curriculum

We at the Apiary Fund have put a lot of time and effort into making a highly-structured education curriculum. So it always surprises me to hear when people don’t take full advantage of it. Because people learn at their own pace and in their own way, we’ve designed the courses to keep our students engaged! Some sections will be presented as ebooks, and others as video clips and modules. Throw in some accountability in the form of quizzes and you’ve got a very valuable resource at your fingertips. Don’t waste any of it!

2. Attend Live Classes & Discussions

While the live classes and discussions are offered as a purely supplementary resource for your trading education, I’d be lying if I said they weren’t one of the most beneficial aspects of your trading education. There are usually at least a couple discussions and classes per day, all at various levels of difficulty. There are two common mistakes I have observed in regard to the live trainings, though:

  • You should not feel obligated to attend ALL of them. Remember, these are supplementary to the core Trader Development curriculum, so burn yourself out by thinking you need to be at every live event!
  •  Be honest with yourself about your experience level. If you’ve only been trading for three weeks, you probably shouldn’t attend live classes rated Hard. You’re not going to do anybody any good by going to a class that’s completely over your head.

3. Trade!

As they say, practice makes perfect. If you want to swim in the deep end someday, you’re going to have to jump in the pool sooner or later. So you might as well get started now! If you’re new to trading, don’t worry–we’ve got your back! We know that the first couple months are usually rough, so our risk managers won’t hold it against you when it comes time to talk about funded accounts. But the risk managers will want to see that you’ve made lots of trades, so use what you’re learning in the trading education and start trading!

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Tips for Managing Position Size

Large position sizeAt the heart of money management is the decision of increasing or decreasing your investment. To illustrate this, imagine you own a store that sells athletic equipment. Because no sport lasts all year, you’d find yourself changing your floor inventory based on which sports are approaching, which are in full swing, and which are ending soon.

When it comes to changing position size, the rule is to increase your position size during favorable market conditions for your product. In your store, you’d have more football equipment on the sales floor during the fall when you know conditions are favorable for that sport. The other side of this rule is to decrease position size during unfavorable conditions. As football season winds down and basketball season begins, the products in your store would decrease inventory to reflect the new season.

Small position sizeFortunately, in the market there are two seasons: highly predictive and less predictive. You’ll want to increase your position size in highly predictive conditions and decrease your position size in less predictive conditions. Controlling your investment size is key to keeping your losses to a minimum. This, in combination with other elements of money management as emphasized by the Apiary Investment Fund, will ultimately lead to profitable trading!

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Don’t Be the Jack of All Trading Systems

Have you met my friend, Jack? He’s fairly good at lots of things, but I wouldn’t say he’s really great at anything. And I think I may have figured out why.

At the Apiary Fund, we not only offer a very thorough education curriculum, which we call the Trader Development Program, but we also conduct live discussions. Now don’t get these confused – the live discussions are there to supplement the core education. Think of it as added value!

Too often I see new traders get lost jumping between the Trader Development course material and the live instruction. If you’re new to the world of foreign exchange, then this might be problematic in your efforts to learn. While our established course material is aimed at the very newest of beginners, our supplementary live instruction is not. The difficulty of the live material varies greatly, with much of it aimed at more experienced traders.

So, if you’re struggling to find a foothold between the Trader Development courses and the live instruction, you could be spreading yourself too thin! If you’re keeping busy in the Trader Development material and attending all the various live classes and discussions, then hats off to you! We love to see our traders enthusiastic and committed! However, this could be unnecessary, or worse, detrimental to your development as a trader.

We at the Apiary Fund stress finding a trading system that works for you. That’s why we’ve developed the Investor Profile! Once you find an effective trading system, strive to develop different strategies within that system and stick with it! If you’re bouncing around system to system from one day to the next, how are you ever going to master one?

Just remember what Brent always says: “Don’t mistake activity for achievement.”

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Eight Expectations to Becoming a Successful Trader

As head trader of the Apiary Fund, I get a lot of emails from people describing the various challenges they’re having as they learn to trade. There are a lot of obstacles people face, but it’s generally been my experience that the biggest challenge is learning to properly frame the definition of success.

It’s a sad fact that most people go about learning to trade with flawed with self-destructive expectations. If you don’t approach learning with the right expectations, then success will always remain beyond your reach – irrespective of your desire, how hard you work, or what other resources you bring to the table.

If you want to become a successful trader and realize the wealth and freedom you desire and deserve, then you are going to have to adjust your expectations! Trading is a profession – plain and simple – and just like any other profession the road to mastery is marked by incremental achievements based on realistic expectations.

Here are eight expectations that are self-building and will empower you with a framework for success in the Apiary Fund.

1. Expect to learn from yourself.
No two traders are alike. Each has a unique personality, experience, and background that will influence their decisions and strategy. The great thing about learning to trade with the Apiary Fund is that you can learn from others, which is why our community and professional traders are so important to the success of the program. However, the false expectation some of our traders have is that others will teach you everything you need to know. You must learn to extract the lessons others give you and learn how to apply it to your own personality, knowledge and experience. The Investor Profile is a great tool to help you in this process since it helps you learn which of your personality traits support and hinder your progress.

2. Expect to study strategy.
There are thousands of profitable trading strategies out there. With over 1000 hours of strategy-focused trainings, the challenge in the Apiary Fund isn’t a lack of information but finding one that works for you. The false expectation is that you have to make decisions that fit the strategy when the real objective is finding the strategy that fits you.

When you go to the shoe store, you spend a lot of time trying on different shoes to find one that fits your goals, shape, and personality. Choosing a strategy is similar – you have to try out several strategies to find the one that fits! If you fail to find the strategy that fits, then you’ll never have the discipline to follow the rules of the strategy.

3. Expect to study time.
Time is important to traders. Not only because you need to dedicate time to learning and practice, but it’s also a critical component in performance and strategy.

Performance is time based. Sometimes it doesn’t matter how right you are in forecasting direction if you’re wrong in your timing.

Strategy is also time based. Swing trading strategies require more time than scalping strategies. The underlying patterns might be the same, but the time needed to mature is different.

The Apiary Fund operates in a global timescale. We have traders working every time frame in every timezone holding positions for any time cycle. Time is important so make sure you spend some it learning how it works in the market.

4. Expect to focus on money management.
In the same way you have to be right on direction and timing, you have to be right in how you manage your money. Traders learn quickly through the structure of the Apiary Funds risk management system that money management is critical to success.

The risk management system enforces good money management in the same way a concrete barrier keeps cars on the right side of freeway – it doesn’t prevent an accident but it helps minimizes the impact. The correct expectation for money management is to monitor yourself and don’t rely on the median to keep you safe.

5. Expect to practice and test your strategy.
There is a reason why the Apiary Fund suggests 3 months of simulated trading. I like to tell new traders, that you should be quick to choose a strategy but prolonged in testing it. There are three objectives when testing out a strategy:

  1. Understand the rules so you can execute the strategy.
  2. Execute the strategy with “natural” ease.
  3. Evaluate your personal profit potential with the strategy.

Please note that profit potential is the last of your objectives. If you cannot understand how to execute with ease, then performance will not be consistent enough to be adequately evaluated.

6. Expect to learn through observation.
There are precious few “laws” that govern the market. It’s important that you practice your chart reading skills to easily identify whether the market is expanding or contracting, whether it’s trending higher or lower, whether it’s volatile or consistent. There are certain lessons that can only be learned through observation and experience.

For example, you can attempt teach someone how to drive through exceptional instruction, but they will not really learn to drive until they start driving. Through observation and experience a person is able to take instruction and gain a greater understanding of driving – or trading!

The traders who succeed at the Apiary Fund are focused on learning through observation. Every mistake is designed to teach a lesson. Every success is designed to do the same. Good traders are constantly learning from the market – and I am no exception to this rule!

7. Expect to transition into real money gradually.
Start small – grow big! That is the philosophy behind the different levels of the Trader Development Program. We are not so naïve as to think you can create a Wall Street income at our first level of funding. You are still learning. It is a transition stage. Trading real money is different than trading in the simulation account. The road to success in the Apiary Fund is marked by several transitions. With each transition comes a responsibility to make sure your performance and strategy execution stays consistent.

You should also remember that if you want to become a trader and make a living trading the Apiary Fund (or any account), then you have to progress to bigger and bigger lot sizes. You need set an expectation to work and push yourself forward through the different funding levels.

8. Do NOT expect shortcuts.
It’s not easy to become a trader. It’s hard work, and I’m glad for that. If it were easy, then everyone would be doing it. So think of trading as a profession. It requires hard work, lots of practice, but above all else it requires a proper framework for expectations.

Shortcuts are not allowed.

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How Does Leverage Work in Forex?

Traders new to the world of foreign exchange often don’t understand the very tool that makes their trading possible: Leverage. Though the concept of leverage has gotten some negative heat in recent years,  it’s one that makes the markets accesible to new traders with little funds!

Leverage is like a short-term loan a broker gives a trader to allow for more buying power. Laws vary around the world, but in the Unites States, brokers are allowed to give traders fifty-to-one leverage. This means that whenever a trader puts $1 into an investment, a broker will match it with $49. This leverage is a great advantage afforded to currencies traders, as it can significantly expand a trader’s profit potential.

Let’s take a quick look at how leverage works:

You see indications that the US dollar is going up in comparison to the Japanese Yen. So you want to purchase 1 regular lot, which is going to cost you $100,000. Your broker, however, has given you 100 to 1 leverage. This means that you can borrow $99,000 from your broker as long as you have at least 1% of the lot size in your account.

Since you were buying at a 1% margin, $1000 US dollars are set aside so that you can open up the trade. You now control $100,000 US dollars worth of Japanese Yen. Let’s assume the exchange rate does indeed rise one cent and you close your position. At first glance this might sound like just a slight increase, but that seemingly insignificant climb earned you a cent for every dollar you had leveraged. You made roughly $1,000 US dollars.

We can simplify this idea by thinking about a home loan. I don’t have the money to buy a $200,000 home outright, but I do have $20,000. I can use that $20,000, or 10%, as a down payment, and the mortgage lender will match it with the remaining 90%. Then, if the house’s value has appreciated in five years, I can claim a profit! However, if the house depreciates to $150,000, not only do I have to take the loss, I still have to pay back my loan.

Amplifying a movement’s effect works two ways; with greater profit potential comes greater risk, so losses can be very large as well. With this in mind, it’s not hard to understand why Apiary teaches strict risk management methods!

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A Tip on Trading Systems

With Thanksgiving just a couple days away, we’d like to not only encourage a balance in your diet that will leave you feeling healthy and proud, but we’d also encourage a balance between risk and reward in your trading system!

Here’s an example of risk vs reward: If you go to a casino and bet everything you have on red, then you have a 49% chance of doubling your money and a 51% chance of losing everything. The same applies to trading; you can make a lot of money if you’re risking a lot, but then risk of ruin is very high. You need to find a healthy balance between risk and reward.

Let’s say you define ruin as losing 20% of your account and success as making 20% profit. Having a trading system with past performance results lets you calculate your risk of ruin and your chance of success.

Your risk of ruin should be always less than 5%, and your chance of success should be 5-10 times higher. So, if your risk of ruin is 4%, then your chance of success should be 40% or higher.

This is just a little trading system tip to keep in mind over the holiday! We at the Apiary Fund are sure thankful for all of you that make this community so great! Have a happy Thanksgiving, and if you’re traveling, be safe!

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