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    🔴 What the Fed Rate Cut Means & How to Play It (w/Tony Greer) | Stock Trade Ideas
    Articles, Blog

    🔴 What the Fed Rate Cut Means & How to Play It (w/Tony Greer) | Stock Trade Ideas

    August 22, 2019


    Welcome to trade ideas I’m Jake Merle sitting down with Tony Greer Editor of the morning navigator Tony great to have you back on the show for having me man So we just saw the first rate cut in over a decade Powell. Just got done giving a speech and Personally, this is the first rate cut. I’ve seen. Yeah, I know I’m a student of the markets Just getting into the markets and I want to get your thoughts. Is this a good thing a bad thing? What’s going on? Yeah We should I guess we should set it up with some history since you’re student of the market right last time the Fed cut rates We were addressing The housing crisis, right? So we started off with Fed Funds at five and a quarter and wound up lowering that them to zero Over the course of I think just over a year and during that time the market got shellacked Right because the stock market was then can falling into the mortgage crisis. We were dealing with Excuse me. We’re dealing with Bear Stearns. We were dealing with Lehman Brothers going bankrupt the whole thing We had a much different economic background as well. You know, we had higher oil prices. We had oil prices up in 95 So we had higher interest rates at around four percent in the ten year. So things were much different, right? We were we were addressing then what was coming out of a crisis right now. We’re not coming out of any crisis, right? What seems It seems like a sort of smartly prudent rate cut to me believe it or not And this is a little bit of a change of opinion for me, right? I originally thought that Powell was 100% beholden to Trump for this rate cut, right? I mean he literally seemed optically like he was just Caving to the president pointing around the world saying being a complete baby the way he knows to be everybody else gets lower rates Why we have such high interest rates President Obama got zero interest rates for his whole ten-year Why do I have to have 3% interest rates, you know? So he conflates these stories out of nothing and starts putting pressure on the Fed Chairman and that’s when you know We saw even more of a dovish pivot but we saw that goal the dovish pivot go around the world and it was really in a reaction to a collapse in the Manufacturing sector, which was really evident like you can see them right go right around the world for Europe to China, you know We saw PMI stick down from either the mid 50s to high 50s To the low 50s and then some into the 40s now as you know that you know p.m Eyes, we judge economic expansion and contraction as being either north of south of 50 So we’ve seen Europe already go into economic contraction due to the trade wars right at this point We’ve seen the market falter right when we have fears of trade wars tipping Equity earnings over and having a negative effect on the economy. So what do we have every time we see that? The u.s. Gov to the rescue, right? Like we saw Steve minuchin back in December The government comes to the rescue says there’s going to be plenty of liquidity at all the banks and the market was manages to recover so the mat market gets back on its own feet and We go into earnings season and earnings start coming out positively and then the SP can continue to run from there So while it seems completely absurd that we are cutting rates with the stock market at an all-time high and with unemployment at 3.7 percent and with PMI, even at 51.7 indicating expansion and no sign of inflation. It does seem like preemptively a smart idea considering the ECB just turned full dove right after in response to their PMI is coming off if There’s no pivot by the Fed then we wind up with a you know widen the interest rate differential with us over a several other countries and probably a strengthening dollar right and in a really Super strong dollar is gonna hurt our exporters something that the president doesn’t want to me we can’t be the outstanding hawk on the planet right now because it would just Topple too much within the system which seems to be going along with just fine right now one of the things that’s interesting that Powell Said was that they’re not gonna change They’re not gonna cut the balance sheet down any more from here right to me that that’s directly addressing the fact That’s that’s for Trump. Right? That’s to say that okay Look, we’re gonna leave the balance sheet right where it is So that it doesn’t mess with the stock market the 25 basis point cut seems like it’s rational in response to p.m Eyes around the world coming down and US PMI coming back. So if we Fall below 50 and start seeing drag on economic data. They will look smart and have said, okay we’re a little bit ahead of this and As you would have expected He left the door open for another rate cut And the reason that he has to do that in my opinion There’s no way that the Fed can almost never anymore signal that they’re done for good cutting rates because then their risk is They say that they’re done cutting rates the economics of the u.s. Stay sideways too firm and the stock market backs off Now, what do you think? They’re gonna have to do if the stock market backs off? They’re gonna have to cut rates Are they gonna have to go there do something? So to me, it makes sense for them to say yeah that you know We will address as time goes by we’ll make it data dependent, but they definitely didn’t rule out another rate cut So it seems to me now as the markets go It seems like the equity market is probably gonna go by business as usual, right? I mean there’s a little bit of a dip today in response to It’s probably sell the fact type of response where we were expecting a quarter of a point We got a quarter of a point. Nobody knows really what’s gonna happen next So let’s probably take profits on the stocks that we’ve bought in the last three to six weeks at least right? So that move doesn’t scare me And nor it is it I’m not gonna be one of those guys that’s out there saying, okay Here comes the big tumble right rather I would be looking to posture myself to buy a dip in this environment if we get an SMP pullback – it’s moving averages I would certainly take a chance and look for the stocks that I want to get long and buy them Will that be the 50-day moving average 200-day? Yeah somewhere in there depending on how fast it gets there right rate of change is everything so if we fall down there and the next You know two sessions. I might be a little hesitant if it takes us two weeks To sort of back and fill into that area then I think it’s a good idea to you know Sort of do some shopping and get a little bit longer the stocks that you want to buy or put a new length on In stocks that you’ve been looking at and and have you had on your radar So I think that’s the way that I’m gonna play it. I’ve still got a fairly outsized bond short position on for me And I’m trafficking right now in IEF. That’s the seven to 10-year Treasury ETF My premise for the bond short was that interest rates had fallen too far? given the strength of the economy Right all of a sudden it seemed to me like the Fed was on hold and then they said okay we’re gonna respond to changes in market and we saw some economic weakness abroad and Bonds just went on a run and absolutely, you know knocked interest rates much lower across the curve But we’re still sort of being sensitive and I think that the Fed is also being sensitive to that curve Right because the big alarm that everybody watches is the three-month ten-year spread Three-month ten-year spread touched down at zero in March of this year When that spread touches zero agos inverted a recession has followed more often than not right So I think the Fed is saying, you know, we’re seeing numbers come off abroad. We’ve got this three months ten months three month ten-year spread as a little bit of an alarm going off in the office saying there’s usually Recession that follows this and so maybe they’re being prudent and following along with that narrative in their rate cut So the bond market to me This is going to be another test I mean since I’m in the 10-year part of the curve, I’m gonna talk about that But to me, this is gonna be the ultimate test of 2% in the 10-year I’ve been calling it the Battle of two percent right rates came from a high of about three and a quarter or so Came tanking down to 2% in the 10-year and so far we’ve been sideways, right? So I’m looking for more and more data in the US to sort of hold steady or Maybe even improve and to catch the bond market which has gotten overly overly optimistic and bullish off Sides to a point where the bond market has to sell-off and 10-year yields have to trade up higher So this isn’t a generational trade, right? This is just a feeling that the bond market is overbought Sentiment is overly bullish Everybody is positioned long And so let’s take a chance at fading that and seeing if the US economy stays sideways and we have a chance at rates Retracing to where they came from. So that’s basically the way I’m playing it It feels like stocks can probably hold the dip and go on rallying business as usual, right the Fang complex is still Driving the markets and you know performing fairly well So would that be a short-term trade or you bullish on the markets in general for more of a longer-term picture as well? Yeah, I mean You know my timeframes Jake are usually somewhere from you know Trading timeframes or a week to two months and investment timeframes are sort of three months to a year Maybe a little bit beyond kind of thing You know if you get lucky and something really continues to perform but for a bond trade This is something that’s very tactical right where I am, right? I You know yields fell to 2% I put the trade on at this level and Sort of when they break if bonds rally and break through 2% That’s where I get out So I’m not risking a large amount of money at all I just kind of waited for them to get to this level I sold Treasuries via the ETF and I’m gonna see what happens now, but Most importantly. Like I said, I think that the equity market can probably sustain this I feel like no matter What if there is another steep pullback in equities that we’re gonna hear from Steve minuchin again? I mean, they’re not gonna change the game plan at the White House or at the Treasury, you know The goal is the stock market to continue up into the right and it seems like President Trump continues to get his way So that’s my wrap-up. I mean as long as I Originally thought it was really Trump induced rate cut and now I feel like it might be just the prudent thing to do for markets and The thing about the balance sheet to me that’s saying that they don’t want to do anything. That’s gonna Cause anything to raise rates in any way? Which the balance sheet tapering could do and I think that’s sort of another throw in for Trump so that he can know that they’re not going to tamper with the balance sheet And so that’s where we are now I think it might be business as usual for stocks and I’m gonna keep fighting this bond short for as long as I can so we just saw Powell speak and actually the Dow fell about 400 points during his press conference as he was talking about This may be a one and done type of a rate cut and during a mid cycle But let’s say the data does stabilize and we don’t get more rate cuts Is it back to you know bad is good good is bad. How do you see it playing out then? It goes back to listening to what Trump wants quite honestly if you ask me I mean, I think it’s I think that the sort of bounce off of the lows You know when there was some iteration of Powell saying that we may be being a one-and-done rate cut situation I think that may have been coincident sold type of thing I’m really all about where the market closes on the day. And I think that once all is said and done today It will look just like a sell the fact sell-off in stocks where it’s nothing fatal But it proves to be a reason for stocks to pull back off the all-time highs, right? It’s not like we’re having a pullback from mid. It’s not like we’re plunging to lower levels We are simply having a pullback from the all-time high so You know in as much as the president wants to keep that going Say that it that the situation stabilizes the economy stabilizes and there’s no rate move in either direction If central banks around the world continue on their dovish path and lowering interest rates, you will hear from the president Pressuring the Fed right? And we’ve also got to see what happens with trade wars, right? Because the tariff war does not look like it’s gonna end anytime soon We just spent about a half of a year in a positive feedback loop in the stock market where the stock market rallied every time there was a sniff of talks about Trade tariffs and coming to any kind of a you know negotiation situation That turned out to be completely false, right? Like there are no there is no imminent solution to the rate talk. So in as much as this is something that continues on It continues to put pressure on European and perhaps the Chinese economy They continue to lower rates in response It would not be outrageous to watch the Federal Reserve have to pivot back dovish again and say you know what? We don’t want to be the outlier here because that’s what it’s become. You know, that’s what it’s become There’s no longer a the US economy is fine we don’t need to change rates right in the FOMC statement Powell actually mentioned things like the brexit and The debt ceiling as reasons for concern and that’s when I want to you know Grab the television screen and go are you kidding me? You know, that kind of thing is that rages to me? So we’re not managing our own economy with our own interest rates or our own currency within our own borders So it seemed like we should be most attentive to what’s going on here That’s not the case anymore so that’s why you’ve got to watch and see what’s going on around the world because it seems like the Powers that be or the central banks have done a pretty masterful job at managing Coordinated currency destruction, right? We’re all lowering rates around the world at the same time and it’s everybody in the boat so the dollar has been sort of the stock absorber, that’s right in the middle and sort of does it really rally meanwhile this and Existential battle going on on fin 2 it every day about whether the dollar remains a reserve currency or not You know, so to me the central banks are making it pretty clear that it’s gonna stay exactly where it is Especially if you have you know countries like Japan pinning rates to zero, etc, etc So that’s my view from here Jake And so there is a weak global growth. We’ve seen in Europe if you across the globe Are you worried about a recession here in the United States? Yeah only because I don’t want to blow off the bond market, right? That’s that’s my thing. I don’t know. I will never know. I am NOT capable of predicting All I can do is read the signals and look at history and decide if I want to trade on them, rhyming or not Right, so I’m really I don’t look out my window and feel a recession or I don’t see one, you know It’s still tough to get a steak reservation in New York City on a Tuesday night So maybe this isn’t a good place to look for a recession, etc But I don’t really see us slipping into one The way corporate earnings have been the way you know, it feels like the economy is hanging in there It feels like the technology side of the economy is really booming And now the transport side of the economy is starting to boom again while other sides of the economy are slowing down As long as the consumer remains strong which we’ve been and we’ve got exceedingly high consumer confidence across the board I don’t see it yet. I don’t see it yet I’m not gonna say that it’s not gonna happen and my eyes are wide open and I’m ready to trade it But I don’t see evidence of it yet I really don’t so we have to watch the spread and see if the bond market stays where it is with the three-month ten Ten-year spread either flat or inverted and to see if that’s proven the same as the last two times whereas after 2000 and 2007 where a nominal tea GDP took a tumble right after that But it doesn’t seem like we’re set up for the same situation because we don’t have two crises to put us out of anymore. So Unless there’s one that I’m not catching yet. All right, Cody. Thanks for breaking it down for us We’ll see how it plays out in months to come. Thanks so much for joining us. You’re welcome Jake. That was great you You

    Top 5 Stock Trading Books You Must Read
    Articles, Blog

    Top 5 Stock Trading Books You Must Read

    August 22, 2019


    – To be successful in trading, you need to absorb as much
    information as you can and take advantage of
    every educational resource. I think books are a great way to hone your skills and improve, and in today’s video,
    we’re gonna talk about my top five favorite
    trading-related books. (upbeat rock music) Hey, everyone, lead
    trainer with StocksToTrade, Tim Bohen, here. Gonna talk to you about my top
    five favorite trading books. I think books are a great way to really build your skills, grow over time, take advantage
    of that dead time, you know. Everybody has time where they’re waiting at the doctor’s office. They’re waiting for the Uber. They’re waiting for an airplane. They’re sitting on an airplane. Maybe waiting for that next class or commuting, whatever. Take advantage of that dead time. To really get better, you’re gonna have to maximize your time, and books are a great way to do that. My first favorite trading book, and it is my all-time favorite, is The Daily Trading Coach
    by Brett Steenbarger. One of the reasons I love it so much is number one, the content is great. Brett Steenbarger is a
    trading psychologist, really sharp guy, and the book is very well-written, but the best part is especially if you’re not
    necessarily an avid reader, what’s great about The
    Daily Trading Coach is it’s 101 chapters. All of them are probably
    five-minute reads, some less, maybe some a few minutes more. Even if you’re not a person that likes to read for hours a day, you can grab that book, again, while you’re sitting
    there waiting for a ride, waiting for the next appointment, and you can read one of these lessons. I think it’s probably the
    best trading book out there. Oddly enough, I had it on my Kindle, and Amazon would not let me
    highlight any more passages as I read that book. It maxed me out with
    the number of passages. So, definitely check it out. It’s one of the great ones, and read a lesson each day, and just keep repeating. My second favorite
    trading-related book is a, it’s a great book because it’s historic. The ending is a little sad, but it’s pretty wild to read and realize that something 80, maybe even 90 or 100 years ago still works today in 2018, and that is trading
    these fast-moving stocks. So, Reminiscences of a Stock Operator is a story of Jesse Livermore. He was a, probably the most
    successful momentum trader ever. I think again, it was in
    the early 20th century. He made millions, lost millions, ultimately ended up committing suicide. That’s the sad part of the story, but the great part about it is he tells his journey
    through the bucket shops and really details what we do today. He would locate hot trends, you know, whether that be in cotton or grains, I mean some of these commodities that we necessarily don’t trade, well, they are still traded today, but in momentum lane, we don’t trade them, but the charts are there. The patterns are there. He would recognize hot sectors. I certainly believe if Jesse
    Livermore was around today, he’d be trading cannabis stocks. He’d be trading cryptocurrencies because he had his ear to the ground and knew what was hot, and it’s just really neat to see from a historical standpoint. Great book. You might not learn trading techniques, but it gives you great in-depth into the mind of a momentum stock trader. The third favorite book of
    mine is by Michael Covel. He’s a friend of mine. It’s Trend Following. This is a book that
    really helps and shapes a lot of my swing trading-type style. When I talk about swing trading, it’s more trading over multiple days and multiple weeks. Be sure to check out our other videos. We kind of talk about the difference between day trading and
    swing trading a lot, but it’s really that different mindset of instead of trying to be
    in and out the same day, you’re holding stocks
    multiple days, weeks, maybe months, or even years, and what Michael Covel
    talks about in this book is isolating those charts. It’s a great charting book, you know, if you’re looking, you know, if people talk about looking at charts, and you’re like, “Well,
    how do I read a chart?” It’s a great way to get started there and learn that knowledge. You know, the common mistake
    a lot of new traders make is they’re out too early. They take profits too early. You know, the old adage is, you know, the biggest mistake a lot
    of new traders make is they let their losses run, and they cut their profits early. Sounds funny, you know, you might think, “Who
    would let their losses run “and take profits too quickly?” I see it every day in day trading land and swing trading land. People let their losses grow, grow, grow, and the instant they see
    green, they take profits, and Trend Following is a great book to get you in that mindset of as long as you’re green on a trade, let it work. If you’re red on a trade, cut that loss quickly,
    and you’ll be, you know, that’s the way to be
    maximize your success. Small losses, big wins. Trend Following’s one of my favorites. Also, check out TurtleTraders
    by Michael Covel as a bonus. My fourth favorite trading-related book is The Psychology of Trading
    by Brett Steenbarger again. For sure, check out Brett, Google him He’s got a great blog. All of his books are great. The Trading Psychology, as
    well as Trading Psychology 2.0, where he did an updated version, it’s another one of those books where especially if you’ve got
    a little bit of experience. I recommend these books if
    you’ve been trading a while. I’m sure you could read
    them if you’re totally new, but when you’re really new, you’ve kind of gotta make the mistakes. It’s kind of like a baby learning to walk, and you realize when you run into things, you make these mistakes, and then you see that baby kind of learn from those mistakes, Trading Psychology reminds me of that, where as I was reading it, I’m like, “Oh, I’ve done that.” “Oh, I’ve done that.” And then he talks about
    solutions to those problems, so again, I say buy it
    today, both of them. They’re both great. Trading Psychology 2.0
    was the updated version, but for sure, if you’re a couple months or a couple years into this journey, and you’ve never read it, check it out, and you’ll be amazed at how it’s almost like as I read it, I’m like, “He wrote this book for me.” And I have a feeling a lot of traders ’cause again, trading is
    a business of mistakes. It’s a lot like baseball. You strike out a lot in trading, and there’s so many lessons in this book that can potentially be a-ha-type moments. The fifth book I think
    every day trader should have and swing trader, for that fact, is Japanese Candlestick
    Charting Techniques by Steve Nison. It is a, I would call it a little more of a textbook-y type book. Daily Trading Coach, very
    easy, very quick read, bite-size chapters. Japanese Candlestick Charting
    Techniques is a little dense. I consider it more of
    like a reference material, but I really think you should have it to recognize these chart patterns, to understand candlesticks. If you’re new to trading, you might be like, “Candlesticks. “What’s he talking about?” Those are the charts, the types of charts we look
    at as short-term traders. We don’t look at the
    traditional line chart you might see in the
    newspaper or something because we’re trading volatility. Candlesticks charts show
    you the high of the day, the low of the day,
    how far the stock went, where it opened, where it closed. It’s amazing the amount of information you can garner from a candlestick chart. Seasoned veterans like
    me and other day traders can look at a candlestick chart and instantly recognize
    that’s a bullish pattern. That’s a bearish pattern. That stock’s breaking out. That stock’s breaking down. It’s consolidating. So, it is a dense read. It is kind of expensive. Last I checked, it might
    be $70, $80 on Amazon, but I think it’s a reference material that needs to be on your shelf, accessible to pull out
    when you need a reference. And then as a bonus, I know it’s the top five favorite books, but the sixth favorite, as a bonus, is American Hedge Fund by Timothy Sykes. You know, I look back at my history, if you’ve read some of where my journey in trading, I was always interested in finance, literally since elementary school. Never made any money until I found Tim Sykes’ American Hedge Fund on Amazon roughly right when it
    came out about 2007, 2008. That’s when I discovered day trading these low-price stocks. That’s when I discovered short selling. I didn’t think you could even
    short sell low-price stocks until I read Tim’s book, and it’s an amazing journey. Tim’s got a pretty crazy story. This book details his starting out with $12,000 in high school, turning that into $1.65 million, trading on a boat back in the early 2000s when the internet access was
    nothing like it is today. He was traveling the world. He was still successful, and primarily shorting
    these low-price stocks. So, definitely check it out. It’s a great read. It’s a fun read, and it’s a great deal. The American Hedge Fund by Timothy Sykes. Thanks for watching our video. Be sure to comment below with any trading-related question. We love answering your questions. Also, like and share with your friends, and be sure to subscribe to be notified as soon
    as our next video hits, and if you’re looking to
    expand your trading knowledge, don’t forget to check out
    all of our other videos, and be sure to click the trial below. Check out StocksToTrade. I think it is one of the best, most rapidly advancing
    softwares out there. Be sure to check out our trial. (upbeat music)

    Did you take the other side of Mark Cuban’s trade?  FB (June 18, 2012)
    Articles, Blog

    Did you take the other side of Mark Cuban’s trade? FB (June 18, 2012)

    August 21, 2019


    I’m Dan Fitzpatrick at StockMarketMentor.com on Monday, June 18th. I’ve been talking about
    Facebook ( $FB ) from time to time but you can forget about Facebook ( $FB ) per se. Let’s just look at the
    chart. In another words forget about the ticker, just look at the chart. There’s not enough information, there’s
    not enough data on this chart to really trade it responsibly or effectively, I
    should say using the daily chart. With that said though, and I have mentioned this before in this issue of the free Chart of the Day. This was the low, the intraday low,
    you’ve gotta watch the intraday lows. Since this time on the 6th, every single
    one has been higher than the last. What
    does that tell you? It tells you that with each day that goes by sellers become less and less aggressive relative
    to buyers. In other words the maximum selling pressure that they’re exerting during the day is not as great as it was yesterday. This
    is what an uptrend looks like. I’m no real fan of Facebook ( $FB ) though
    you are more then welcome to friend me if you’d like. I’ll confirm you all. But look, this is a chart pattern that works one thing on this chart. So how do you
    know when the trend at least this short term you know the short trend here the
    near term trend. How do you know when it’s in trouble? Well when we get the
    lower intraday low. It’s not to say that the up trend is
    going to end. Just means that you’ve got more selling
    pressure relative to what’s happened here. So you want to keep track of the
    daily chart. Here’s another chart that you should be looking at. The hourly chart, the sixty minute chart.
    You knew if you’re looking at this you know whenever you’ve got a new issue you need to break it down into intraday
    time frames. You find one that works. I’ve talked about the fifteen minute chart before. It shows a clear uptrend there. Now we’re looking at the hourly chart. You can look and see exactly where
    the buy point was on this thing. Right there volume was only about
    average, but it was certainly there. You would have picked it up if you’d just
    been looking at the daily chart. However this was a very, very clear
    signal. So now where do we go from here? Well, typical Bollinger band analysis says okay,
    this hook, opposite the price, reflects a decline or decrease in
    volatility. When you see the hook you can expect, at best, sideways trading
    for a bit. Not to say that we’re gonna get a big pullback. We may in fact get a move higher but for the time being we can expect this stock to pause for a
    little bit. So I would suggest just relaxing. If you’ve got stock hold
    onto it. Though I would want to keep a pretty tight stop here particularly if you have
    options. If you’re waiting for the next buy point you think, oh you’ve missed the boat. No
    you haven’t. Watch this moving average. Watch the twenty period moving average. It’s
    the twenty hour moving average, the middle Bollinger band. When the stock gets close to this level,
    that’s when you want to pull the trigger and take some stock. By the way a lot
    of times we can see this, we’ll see breakout from of
    volatility squeeze and then a more substantial pullback and
    then finally a bounce. So I don’t know which way it’s going to go if we’re just
    getting this little thing and then we move higher or if we get a more
    substantial pullback. You don’t have to really know. You
    just manage risk and that is you want to be long, but you gotta have some kind of stop on
    a new position. If the stock pulls back further great, you get stopped out bummer.
    Too bad so sad you wait for the stock to bottom out then as it starts rallying,
    gives you any kind a sense that the selling has given way to buying, that’s
    when you take the stock and you’re off to the races, but ultimately I think Facebook ( $FB ) is going to move
    higher. I’ll know I’m wrong when we get a lower intraday low. Okay members get over the Strategy Session I’ve got some
    stocks that are kind of giving us a right here right now moment.

    🔴 Defensive Investing & the History of Recession (w/ Victor Sperandeo) | Real Vision Classics
    Articles, Blog

    🔴 Defensive Investing & the History of Recession (w/ Victor Sperandeo) | Real Vision Classics

    August 19, 2019


    Victor Thanks, it’s great to sit down to people that are you know dallas-based Maybe I’ll even start just by saying that there are a lot of people that have been on real vision lately that are talking purely about the markets in kind of a broad sense full market bear market Credit bubble not credit bubble. Whereas maybe you have some kind of more nuanced views, but if we take a step back, Maybe somebody watching the interview which would say that we could possibly be from different investing generations but I think from what I know about you, we might look at markets the same way so Here, you know maybe 10 years or so into a, you know monetary experiment Just generally what do you think about markets now? And and and where we are maybe in the market cycle the economic cycle, etc. Okay. Well these two integrated parts To everything you do in Wall Street, and that’s the fundamental and the technical simple There’s also the psychological and the emotional side of it, but set up just for the point of your question We’re in a bear market it’s a hundred percent Now why do I say that perhaps a background to people listening would be important because it’s a it’s a very Solid statement so I want to give you the background Now I’ve been I started in Wall Street in 66 and I started trading in 68 Now I probably read three plus thousand books one of the books Was a book by by a fella named William Gordon Who was the CEO of indicator digests now? That’s before your time? They were a major force in The technical end of the business in the 60s and they took the ten major Indicators at the time though. They had a lot theory things that nobody even knows what that means so they and they trace that back to 1910 different indicators and then many permutations of those indicators so the one that came in first was the simplicity of using a 200-day moving average trading days and When the price? Whether you use SP the Dow was popular at the time closes below that and the moving average is Sloping downwards. It’s night and day if it’s sloping out upwards doesn’t count Sloping down which you sell and then you would buy in the reverse that concept from from 1900 to 1966 book came out sixty-eight yielded you eighteen and a half percent compounded I Took it forward. We have a trading staff research firm and We we have three PhD math professors etc. And we ran it forward and they were similar now the second the second best Technical indicator was Dow Theory came in at 18% again similar results Compounded at eighteen now The one thing that I did that that Bill Gordon didn’t do was that using real money as such? When you sold you put the money in one-year bills He didn’t add that dimension. So mine. Perhaps was a little less Than the eighteen and a half because I added to it by getting yield when I was in cash So now these two Indicators gave bear market signals one in October the 200-day moving average was the first and then lot later in early December dal theory confirmed so you’re in a bear market and as far as I’m concerned unless Something changes now, they’re not a nothing is infallible. But but I leaned very heavily that these are accurate the other Part would be the fundamentals now. You heard the expression that you know The the market is predicted 14 out of the last recessions that a lot of people use that well, that’s a very naive statement by anybody who uses that particular Phrase, why is because the market doesn’t only predict recessions it predicts Things that can occur that would make the market go down like war it predicts war it predicts Political change for example in 62 and I was young lad. I was a teenager then but I was following the markets and and JFK who’s a very well respected president at the time He attacked The steel companies for raising prices. No different than Trump today on many different aspects He attacked them well in those days it was looked at as socialism and socialism then was not accepted as even a consideration because we were fighting with the Soviet Union cold war so to speak so The market dropped 26% in less than three months But no recession followed The reason was that JFK realized he blundered and he backed off He dropped it. So he didn’t attack the steel companies anymore for raising prices and The markets reversed. So like I say there there are many instances of that over the over the years It doesn’t mean the markets wrong. It means the market predicts many things now when you have the Fed raising rates as Jerome Powell did in September and recently on December 19th. That is a fundamental event everybody knows that’s why everybody follows the Fed that if they’re raising rates markets don’t like this and You usually you know, you’re taking away the punchbowl as the old expression and and basically you You you go into recession every time the Fed does this now? Let me just preface that I think Powell and the other nine members Voted to raise rates the extra quarter even though it was very well discounted Was a major error. This is going to go down in history as one of the worst errors the Fed has ever made including the the 29-32 debacle. So I look at that that as long as they keep on track now They’re already talking down the other cuts Kaplan from from Dallas is already saying well Maybe we should wait til after the second quarter and I mean they’re already backing off But if you change the fundamentals you change the outcomes so if they back off from right now selling QT and the rice the two more increases in interest rates You you have to consider that and that may change the trends of the markets Because the fundamentals are changing but the key is that right now it’s going to be very hard to do that and the reason is the world is Heading into recession Europe, Japan China the virtual world We were the strongest economy in the world And now this psychological switch like turning off light Changed everything. So we are weakening. The data is weakened if you looked at the Richmond Fed And you looked at the Dallas Fed results The economy is already weakening So this was this was because of in my opinion ego and perhaps even some politics Jerome Powell was adamant about what he did and There were many other people besides obviously Trump that didn’t want him to do that that it was the wrong move. So We’re in a bear market bear markets by the way, you go back to 1899 The market once it proclaims a bear market Six months is the average you’re in a recession So what the markets are saying now all things being equal in July? You’re gonna be in a recession in the United States. So from what I know about you you’ve been kind of skeptical maybe of the post global financial crisis monetary policy regime and that Maybe the manipulation of prices interest rates being the most important, you know would eventually have consequences on the other hand. We’re talking now about Powell and the Fed Making a mistake in raising at this point So again, maybe a case that our central bankers our timing cycles incorrectly But how do you square the two? Okay Originally when we had the 208 crash You what the Fed did was sort of natural and no one can critique them although pure The purest would okay But let’s let’s assume that that was the right move but to keep zero interest rates For seven years and to do three qyz, and I believe there was at least one operation twist maybe there was to you that was a again an a huge error now if they were normal and you know you May have heard this you’re a young guy the four-year cycle, right? So you go up three years into an election usually the first year is when you do all the damage because people forget So it would have been natural to raise rates in two thirteen to some degree now even think of it this way into ten when we were in a recovery the Recovery ended in June the recovery began in June of 209 So let’s say in 210. You raised rates fifty basis points a year For seven years, you know one in June one in December small steady You know, you could change your mind If you want to you you’d be at neutral rates, which is what the Fed uses Is there being a talking point these days so they didn’t do that. They didn’t raise rates in 213 They can anything the recovery would have continued whether it was a market recovery or economic recovery speakers because you remember you’re adding now Cuties to this scale qyz, so you got to put that in conjunction if you were doing QE Why not raise rates slowly and maybe in one year race at 25 basis points? And then I’m not trying to you look back and program. What should be done I’m only saying that you can’t all of a sudden Trump wins They raise rates eight times. They raise rate once under Obama to 15 December and Then they raise rates in December of 2 to 16 after Trump won and seven other times so eight times I mean not that two percent means anything it means something psychologically and it means that if you’re you’re on a almost the Heroin addict of interest rate and low interest rates and you do too much you you you pop the psychology and Pease are psychological right? There’s no I Come from what’s called the Austrian School of Economics What they would say is all value is subjective so when people start talking about value and Pease It’s subjective In the in the in the 20 in the 30s Laura lied which was a tobacco company traded at six times dividend Now that’s you can pay that to to Amazon today, there’s a big spread. So what is the difference in that spread? It’s what people think and you know a market is valid and what people think is what it is but the key is it’s Subjective. It’s not objects. Not two and two so the bottom line is is that you were They they did too much and when I can tell you because I was playing this and Everybody knew they were gonna raise rates At least that was the prediction as soon as they raised rates a market collapsed which meant they shouldn’t have done it Because even though people expected it it was the wrong thing to do and this was outlined very well by Stan Druckenmiller And and Kevin wash in The Wall Street Journal Wall Street, Journal had editorials as well But those are two prominent people and there were many other pros that that understood this So it was a very bad move. So he so III hear what you’re saying. I also like Austrian economics and another cornerstone, is that the the manipulation of prices inevitably leads to miss allocation of capital and so if if we’ve been in a decade maybe of the the most abusive or the period where we have most abused the price of money is all of this a big reckoning based on violation of those cornerstone tenants of Austrian economics yeah without a doubt and and what the what the central banks of the world 23 major ones they have abused the the mat the Wizards wand They have taken it to where if you wanted to let’s say measure Austrian school versus Milton Friedman who I loved But he was wrong about The the increasing the money supply the steady rate because politicians don’t do that So this is living proof what’s happened? You know since he died, unfortunately But the key is the Austrian school said no politicians will never do the right thing They will always use whatever power you give them to benefit themselves so The key is they they abuse the wizard’s wand here by Too many qyz, and like I said if you wanted interest rates to be a little normalized During those qyz, they should have raised rates very slowly But shrinking the balance sheet and raising rates, too. Yeah. Sure. Yeah. It’s it’s too much catastrophic. This is catastrophic Okay, so you said something that maybe leads to a good segue we talked about? politicians and their ability to use power abuse power I Think another topic that you’ve written elegantly about and that is of interest to you is how power shifts globally Are going to be an increasingly important factor in various markets, right? What what the most important thing to me is aside from as a trader. It’s what the Fed is doing Alright, but but as an investor I will look at political Trends now you very rarely heat people talking about political trends but political trends dictate what central bank’s eventually do Because they change the power structure of those central banks now Trump didn’t do that Probably his if I had to pick his worst fault. He doesn’t have a higher people I mean, he doesn’t understand ideology of who he’s hiring. So he picked pal who was chosen by by Obama He’s environmentalist you were in environmental fund. He’s an establishment guy He by nature doesn’t like Trump so That was the wrong choice. Kevin. Walsh would have been the best but needy in there he chose him and he’s chosen many other people that he Ideologically don’t fit his bill but getting back to your point the political trends around the world of moving to the term that’s used as nationalist populist and its center-right and to give you an example of the power of this if you look at Europe night to 2017 there were 946 elections within the European community 28 countries, so They lost 94% of them 94% of the center-left lost in 217 now that’s obviously we’re moving to the to the right now. What is right stand for here? less regulation low taxes less government dictates smaller government all of those have Fundamental consequences to what happens to interest rates and what happens to the economy? Trump was successful to a larger degree Because he basically put forth some of those policies and you’ll notice that Europe will never increase taxes there They’re a socialist nation. If you want to include the people who run it, but then you look at the European leaders Well any day Macron With this yellow vest protest. He’s got an 18 percent approval rate. He’s a dead man walking. He’s never gonna win another election He might be ousted at any time. This is his popularity is so low He’s he’s angered the people and you you know you France has a history of when you anger them. They revoked Theresa May same thing. She’s a globalist. She’s a New World Order globalist. She doesn’t want to do what the people voted for So she’s trying to get around it. She could get a no-confidence vote. She should be out And Allah Merkel, perhaps the the most powerful person in the world After well during the Obama administration And she’s gone she’s now just staying in her place but she says she’s not gonna run again and she may get housed that early so you see these trends are really what you have to watch because The monetary policy will follow those trends. So that’s a that’s an interesting point, or maybe it raises an interesting question So we have monetary policy under let’s call them more centrist or center-left policies globally coming out of the global financial crisis and They chose or some people would say we’re forced into aggressive monetary policy We just finished talking a little bit about the US and maybe the finger trap that we’re in here Which is to say that the economy looked good? We didn’t raise it’s we start raising rates were late cycle and maybe we’re doing at all at the wrong time What does some of these what options to some of these other countries these other economies have given that you’re at? extremely low historical interest rates already Asset purchase programs and the liquidity that They have given and to the markets and supported the markets are already out Even if we have populist movements if we move to the right Do you think that the influence you mentioned on this on? The central banks will have any effect? well the the answer to getting growth Is the same as what what Trump did? You you know, look you got a lower taxes Ideally, you got a slow spending. See you never hear of Japan Who by the way has a tax increase coming in October of to nineteen? And the European Union Doesn’t even talk about tax Decreases, but its harm the people the people are basically serfs and many people in the United States are serfs they Work to survive. They get a little piece of the action. That’s what a serf does and They can’t make it anymore. And that’s why when when when macron raised the gas tax To seven and a half dollars a gallon The people revolt abyss that can’t afford it. They can’t pay it. And therefore you you know you had this Happen if you’ve seen the yellow vest movements and you know the fires of burning the cars and things that people are voting So the point is the way that you know now I’m being an economist side of me I’m saying well Why don’t you lower taxes? less regulation less spending Ideally less spending Trump didn’t do that so much spending and and you get growth and then you get interest rates I mean, you know the three-year the 2-year bond is Is yielding I think it’s – 30 basis points could be more and inflation 3% now She’s gonna drop but the point is how do you buy how do you but I think it’s excuse me It’s the 10-year. They’re too many numbers. The 10-year is minus sixty With a three percent inflation right now again As I say inflation will decline this oil is declined and that’s why again pal made a mistake in any central bank that is right, you know trying to raise rates now is the wrong move the key is they Kept that policy in Europe because they didn’t want to lower taxes They’re Global’s they want to keep the people working for the people who you know Steve bangin would call them the Davos party. So that’s who they want It’s easy to solve. It’s the ideology that’s very difficult to get over the heads of the people in power So tying this back to markets and central banks, etc It sounds to me parsing through what you’re saying that at least when we’re talking about the developed world and developed world central bank’s who who have perhaps been the most aggressive in their monetary response to Really the crisis ten years ago now might just be hamstrung even if the politics shift in the direction of Attempted market friendly behavior at least from a policy standpoint their options might be limited They are Europe is Extremely limited so is Japan because they didn’t raise rates. They should have raised rates. They were afraid now They’re in a corner. How do you can’t lower rates when you have negative rates, right? And So they’re they’re they’re toast They’ve killed themselves and I sort of mean that literally the European Union cannot survive now predicting when a You know when a son of a nation ends is a very bad thing for traders to do But you could see you know, you look at the Soviet Union they lasted 72 years So you can’t you can’t they always have tricks, you know that they put forth So, I don’t know when the European Union will break up But it will and right now it’s probably in a more precarious state than it’s ever been because the the three top countries of Germany England and France in that order and they’re all in trouble, I mean the leaders are Out already to get to be thrown out. So if we step back and take, you know view at the whole world, is there anywhere? Maybe in the emerging markets Where you think the combination of political change? less central bank Division s today leads to opportunity right now. You’re you’re in in my view What what would be the cold defense or? Preserving principle unless you want to play the short side The short side is a difficult thing to play at this level because there’s an incentive for Trump and She Xin pinned to do a deal they do a deal on trade. The markets are gonna rally. I mean, there’s gonna be a psychological Big move up, that would be the time to short but you know Not the first day of the first week of the even maybe after three weeks, but the key is that’s coming so you’re really at this stage very difficult unless you’re a trader to Put on a short position and and you know sort of go away But the bottom line is is is that the the the world is in a precarious position? So you’re gonna be on the defense we had to put your money. I mean if you’re talking about a nation right now Brazil I would look for investments in Brazil. I would do the Jimmy Rogers game, you know, I mean this guy Boston ro is gonna do good things in my opinion and Switzerland because Switzerland is is is basically a place that is neutral all the time They have negative rates because they don’t they wanted to stop people from putting their money in the Swiss franc So, you know that let’s put this way that if I were And I’m not recommending a trade but just in theory I’d be long in Swiss franc short the euro, right? That would be a trade. I’d be long The Brazilian reality short the Mexican peso although the Mexican peso technically looks very good So I’m not saying P do this now. I’m saying from a fundamental pocket Yeah, you’re just looking at the backpack. But the chart on the Mexican peso looks very good So you can’t shut the Mexican peso here the key. Is that right? now you want to look for nations that are gonna do what Trump did in theory and You want to avoid the nations that are fighting it France? Until McCrone goes is in turmoil. Yeah, right Interesting. Well, so if we bring it back then to the US because you just now you have point back to what Trump did He obviously was very vocal about his impact on the markets while they were rising and as recently I think is Yesterday I’ve talked about the correction as a glitch and really a misunderstanding by the American people Is there anything to comment on that in terms of your world, you know his weakness is? basically his insecurity he has to tell you that he’s the greatest, you know, I mean I Kind of laugh at him. It doesn’t bother me. Whatever. He says it’s his personality I don’t care about his personality. I care about his policies but the point is his weakness is He he speaks too much and to take the credit while the market was going up Obviously he called it right he said don’t raise rates the markets down because the Fed did raise rates too much too fast So he’s right but there’s been times where he’s been made very much in favor of raising rates He seems to have two views. Yes who wants a strong dollar maybe because of the psychological I Think Larry Kudlow was influential in that. I don’t know if he ever wanted really as strong. He wanted a stable now Let me see. He understands dollar goes lower. Your goods are cheaper. You sell more, but but yes he he is all over the place because He doesn’t he doesn’t have What I’ll call conscious to tional principles that never change, you know, for example, you should never Employ price controls right? That’s a principle And not that he’s for them. I’m just using that as an example the point is is that he has now gotten himself in some soup because he’s taking credit for the market increase and now it’s gonna be political because it’s not his fault that the Fed raised rates, but he’s gonna get the blame so he politically harms himself Far more than he would if he just shut up because people would would attribute What’s happening to the economy if you lower taxes and cut regulations and the market goes up? You don’t have to say well I did it, right so he hurts himself in many ways and I repeat his worst mistake is How he hires people he hires people because he thinks they’re smart Vladimir Lenin is very smart is the smartest dictator they’ve lived Would you hire would you I don’t know his ideology is Opposite yours so the key is he makes these mistakes. Then he winds up learning about the people that they’re different He fires them and he looks bad right then. There’s no continuity, right? so if we if we maybe shift back to Politics and power politics in the globe. You know, how do you as a traitor? As an investor as an advisor You know, how do you think about the next few years? Is it very much? You said you use the word defense earlier in the interview, but are your time horizons shrinking? In terms of how you look at at the markets or investments. Are you trying to be more tactical? Or is it? You know are we just waiting for the signal for a bigger trend again? Well, let’s examine two points to answer that question, but I can only do this You know by looking at the past the the the experience of the path helps guide you to the future in 1854 the Nber has a Bureau of Economic Research Started to classify recoveries and recessions and They’ve been doing it ever since now from 1854 to 209 The the average recovery Was thirty eight point seven months thirty eight point six months since 82 It’s a hundred months What’s happened is the Fed? Got this magic wand this the Wizards wand and they said, you know Why should we let them are this is a greenspan concept being too smart for zone good how extend these say I put in the Greenspan put will keep the markets going will keep the recovery going and so when you do that, however when the game ends for whatever reason You get far greater downsides. I mean the the declines from 1854 there were a couple of depressions one in the 1870s in 1929 thirty-two, but you had 2000 – OH – there were three years of decline. The only other time that happened was in 1929 – 30 – 29 30 31 32 actually wound up being up here not him than June and The the point is that you had to await so now You’re kind of in a difficult spot because even though we’ve raised rates of two and a half percent You’re not gonna get much Vig by dropping rates 200% you know Although it would it would definitely cause a rally but the key is is that the Fed is is in trouble because it hasn’t It hasn’t budget itself properly like Europe is in worse trouble. Japan is in worse trouble but you know, we’re the with the best of the bunch, but the key is Is that you you really have to expect? All things being equal meaning no change you can have a Horrendous bear market here horrendous because you’re starting from a high plateau of ten years up the longest bull market in history 3,000 and almost 500 days And you have two thousand five thousand year old interest rates in Europe and since America was developed Let’s call it two hundred and thirty years ago. These are the lowest interest rates in two hundred years And by the way, just for your your audience when the Fed started to raise rates December 16th 2015 from zero to a little corner. The thirty-year was 3% exactly on that day It was 297 last night so you see the long end is is having Seeing the problems. The bond market is a great for teller of future economic news So you really have an issue where? You’ve raised rates nine times, but the long end of the market is lower than when you started So now you the real curve is inverting in some respects last night that the one year was 260 and the ten year was 265 I mean, yeah You are dropping can see that the Fed is never gonna be able to complete what it said it was going to do That’s not gonna help the key is what does it do with its balance sheet? Because that is where the rubber meets the road if they continue to sell then Then we’re we’re gonna see something in the order of a thirty seven or a twenty-nine thirty now to what extent you look at, you know different parts of the market because Despite it not you know being my day job exactly never really been us focused and probably have less of a technical Bend then you have I think you’d have to have your head in the sand to not realize that we’ve had a very concentrated leadership in the US markets for a long time maybe being Tech tech heavy I think all of our all the people watching know the names and the breath has maybe been absent and Even though we look at the December that we just have we’re filming, you know now here in January We look at the worst December since the Great Depression And we might say my goodness. The markets are just falling apart You’ve had these miniature blow ups and major bear markets in different sectors in the US markets and in many global markets over the last several years perhaps foreshadowing that Ultimately the the last shoe would drop being big US tech maybe healthcare But to what extent are you looking at? The the Sub industries of the S P. And is there anything that you that you take from the price action? You know there or between them tech versus maybe the resource sector okay, first a little background the Early the late sixties early seventies. We had the conglomerate craze There were these Conkle on everybody loved conglomerates. There were many of them then in the late 70s we had the nifty 50 a von Polaroid I was a block trader for we I sold my firm to Whedon and company and they made me a block trailer as an options Expert and I used the options to hedge The block trading I did in the nifty 50 That was kind of my the glamour stocks They call them it so they all have they all get nailed if the if the market is going to come down 73 74 conglomerates died 50 50 80 81. They got killed I mean Everything when the markets go down Everything goes down. So the fang stocks are you know, the tech stocks are over bees they’re overpriced Relatively speaking. And don’t forget all these. I mean not people talk about this the Facebook’s Google’s of the world make their money from advertising right? So if you have a recession, which we haven’t seen since 208 What’s the first thing you cut? Advertiser is nobody’s buying anything So there’s a fundamental. Let’s say behind the scenes obvious to me that if you own these Internet stocks, let’s call them there They’re gonna get sold aggressively for fundamental reasons. Now if you want to call tech, you know, let’s call Microsoft and some of the some of the semiconductor stocks Let’s call that tech most of them have moved offshore South Korea, Taiwan, China Build those things so we don’t really have a big tech industry per se In the United States all those jobs are moved offshore for the same reason the manufacturing jobs are just cheaper labor So all I can say is is that you can’t hide behind? Any group and now because you have so many of these ETF indices and so many stock indices You’re really trading stocks are stocks and Being a stock picker. There are some excellent stock pickers like Lee Koopman who recently is a man I know very well and friend of mine. I would say and and he’s excellent But he’s best in bull market space a outperform But if you’re long stocks in the bear market, nobody wins, you know bees although stocks are gonna go down. Yeah Yeah, it certainly looks precarious You mentioned obviously how low rates are historical historically speaking can go back thousands of years and Europe hundreds of years in the u.s The the debt role for u.s. Corporates looks pretty Scary at the moment Particularly in this rate environment, you know, you took incorporates to talking corporates. Yeah. Sorry true He’s another you know, I’m a man. That is a researcher So I have a lot of facts and I’m losing my memory in many areas, but not in these years if you from 61 to 208 The end of to a beginning to all nine if you took the thirty-year at the 30-day t bill and the 30-year long bond you add them together you divide by 2 you compound that? From from from 26 to 19 to 2008 the interest, excuse me, in this case from 61, not from 2016 16 1961 to 208 The average interest rate adding a t-bill to the long bond divided by 2 is five nine nines. Let’s say 6% Yesterday The average was 269 That’s 2.2 times to get to six now. What does this mean? There’s not a price in the world That’s accurate Coca-cola in India is not priced correctly now I don’t know. It should be higher or lower but there is no price correctness in the world. So all prices are going to be Adjusted once interest rates go back up And that is kind of obvious. But when you say it the way I’m saying it. I want to make people pause There has been nothing but a huge distortion of real-estate prices of stock prices of paintings a painting sold for 450 million dollars I mean, I’m not in the in the art world, but I mean, you know This is all based on the fact that stocks have been elevated and people have X, you know so much money They try to diversify. So this gets back to your Austrian economics better. Right? The old value is subjective the key here is is that you you must understand that this is Going to be reset One way or another it’s going to be reset again Timing is hard to predict here when like for example, if I said well interest rate it’s gonna be 6% again on average I mean, I can’t predict that I can’t predict when but someday well the the conclusion to that is that Anything with paper money? Will not protect you so if you own if you’re wealthy and you own stocks, or you own real estate in paper-money terms They’re gonna they’re gonna be depreciated The most unvalued thing and me and many of the other people on on Your you’re the sponsor here real vision TVs gold and silver are the most the cheapest things in the world Relative to other products in the world or other objects in the world. So, you know, I’m an investor in gold I’m an investor in silver in the physical and basically I’m comfortable and you know, I’ve been an investor a long time. It’s just question of Proportions, so to me, I that’s a place to invest that’s not a place to Train very hard trading Gold and silver very hard, so I wouldn’t recommend that but you know where you put your money we talked about, you know Maybe places like Switzerland and now maybe Brazil but the key is also from from from a sector point of view The mining stocks, which if gold goes up They actually are leveraged up because costs stay the same and the price goes up so they have higher margins So mining stocks are actually better than the physical Unless the world has real problems and then the physical is better than the miner stocks I should point out that Homestake mining which was the biggest mining gold mining company in the world in 1929 was eight dollars in 1936 traded at $70 so you see mining stocks can go up button and you couldn’t own gold in those days because Roosevelt had confiscated the gutter. Have we missed anything? Well, yeah, let me let me mentioned it and I’ve been a huge researcher on debt. Everybody talks about debt and I Believe And with all due respect and great deference To mr. Dahle. Oh Maybe see he’s recently done some videos and he put out a new book I think and What most people are not aware of is that starting in 2:14? The rules were changed That have a huge Benefit to the US government when they sell debt now, we all know they got a trillion dollar deficit and you got 22 trillion on balance sheet and You got 10 trillion off balance sheet, which very few people talk about forget the unfunded liabilities If you want to know what the real deficit is you got to look at the gap way of figuring the deficit because you got to take into account on funded liabilities you Wouldn’t have a deficit of a trillion. You have a deficit of six trillion So you could see you know, there’s lots of games that are played But the key is most people are just not aware of these rules now If you buy debt as a bank This applies the banks and my let me give you the the bottom line before I explain why the government can the US government could sell all of that at once there is no Debt deficits and debt does not matter at all Now it will Sunday But it doesn’t if you want to sell debt in other words The government will always be able to fund itself has nothing to do with overseas most commentators You know who went to school got master’s degrees that they’re not up on the x? So what do I mean by this Basel three? You have no capital hits to a bank they’re exempt sovereign debt is exempt this goes for you know, ECB and Japan There’s no harm done there You buy government debt you don’t have you haven’t put aside anywhere Erbs So there’s no reserve hit You buy government debt they have an account now, and this was in 214 where it’s called whole to maturity HTM accounts The other account is available for sales. If you’re a bank and you want to buy a hundred billion of US debt 30 years, which is what you want Because you get the interest on that debt You have no risk, there’s no mark-to-market Because you put it in your yet Okay, so I know enough about this to be dangerous, but I want to make sure everybody’s following you so far So we’re talking about the US government and its ability to fund itself the US government sells government bonds on the spectrum of maturities some people would sit out there saying well at some point they’ll be Absent a buyer, but what you’re explaining now Is that because of rule changes in a closed system? where our banks or global banks are able to buy sovereign debt without putting aside any capital meaning that there’s no Hit to their capital ratio owning it you’re saying there’s essentially an unlimited demand, especially given that there’s no mark to market So there’s no earnings risk, etc. Correct, and they will always be the bidder for these outside of maybe It’s a real Rothschild arbitrage The banks have put themselves in a position to purely arbitrage the interest Nothing can happen to them and a matter of fact, they didn’t get the last point but they print the money right so they come in they just write a check to the to the Treasury if They if they’re bidding in the auction is one of the primary dealers and they print the money just like banking 101 Where you print money to people, of course, there’s a reserve when you make normal loans in this case. There’s no reserve because The government will print the money and give it to you. I mean there is some logic behind it. That is not prudent, but if there is logic if if you can’t lose because The Treasury will give you the money there if you if you’re buying bonds below par You have no risk, right? So I only say that because Again, I’m not suggesting that You should buy bonds and you can’t lose I’m saying that a bank can buy bonds and it can fund something without without the normal process taking place now, by the way, if you call a central bank and you ask them about this It’s not easy to get information and they won’t talk to you. They don’t really want this Let’s say you can research it and you can find these rules about what you know what the what the reserve requirement would be if you buy a a 2-year US government bond or a note in this case and You’ll find it, but but they don’t want to Let’s say tell you easily. So if you call they’ll say well email this department. You’ll email that department. You’ll never hear from them I tried it So they really want to confirm they want you to confirm, but they don’t want to tell you so we started down this line of Talk was debt generally and we started now and we started by saying, you know, let’s talk about government debt I think that’s essentially where we’re going and our ability to fund ourselves in perpetuity and there Based on what you just explained there might be good reason to believe that as long as our banks are on board Which maybe they would be strong-armed to be at all times that in a closed system We could perpetually fund our deficits as long as everybody continued to be Incentivized to do they’re incentivized to do it now if the only question I’d have for you again, since you brought up Austrian economics, you know ends up being the definition of inflation which Often times can prick problems and deficits and in bonds and we look at or I think the market looks at Silly measures like CPI, and we believe that that’s inflation. But if you are true Austrian economists you’d say that the increase in the money supply and the growth and money supply is actually inflation, so when the government our government or any other one prints money and Whatever money aggregate you want to use starts expanding? That’s the true inflation number. Yeah, it’s it’s it’s how you Define what inflation is you’re on the right track? And by the way, avoid corporate bonds was the point of that story because this doesn’t apply the corporates corporates They got reserves and they don’t have they don’t have the same ability To not take losses as I mean if it and we’re seeing it but yeah The markets are locked up there, right a corporate bond can go out of business. The US government doesn’t want a business It just prints more money But getting back to the inflation point here is the key question and I was wrong on this So let me put myself right out there when they were when the government was doing when the film was doing qyz you would have assumed there’d be hyperinflation and the reason there wasn’t and I give the Fed credit for this one is because they they basically Took money and they didn’t give it to the people they gave it to wealthy investors insiders banks and So let’s say you worth a hundred million dollars hundred billion dollars and I come to you and I say look I want to buy your bonds and Here’s 100 billion you give me the bonds. Well, you’re not gonna go spend, you know, you can only Bible a couple of yards So taking a step back what you’re saying. Is that the velocity of money Which is the critical part? Money in printings impact on inflation never picked up velocities. It’s at a 50-year low right because you’re giving money to the people in exchange for an asset and The people who you’re exchanging that asset for are wealthy people who are not going to spend the money But reinvest the money whether it be stocks, which most of them did or or bonds But the point is you didn’t give the money to the people now Let me just put this into its context in 1920 when Germany lost world war 1 and there was this thing called reparations they have For the expenses. Well, they bankrupt the Germany. Well Germany printed the Mont printed money, but they gave it to the people So whether people do they spent it see so if you don’t give money to the people You’re not gonna see as long as velocity is dropping. That’s your key that you know, there’s no turnover, right? I mean in the 20s in 1920 the the coming into 1922 and 3 which were the bad years you had money turnover velocity of 1.5, which is About what is today in the u.s. It went to 12 so money turned over 1 see once a month the money supply turned once a month instead of One and a half times a year so you could see that’s where you get your inflation, right? So again just to to not you know Not let’s say put in context because governments have tricky ways to do things so if they want to stimulate the economy and stimulate wealth They just give it to the wealthy people who invest it and don’t spend it and you don’t see it in the CPI You see it in the stock market the art market. The real estate market is etc I don’t want to complicate things, but I think when we talk about you know wealthy people in this case the money that was printed mainly went to banks and banks Mostly put that excess liquidity back to the Fed in excess reserves, right? So the big economic Conundrum and I’m speaking a little bit above my paygrade here But I think to synthesize what you’ve been saying All of this money was printed but as you said instead of going to the people or instead of going into the real economy it ended up really amongst the banks and Because the banks weren’t lending it we didn’t have maybe some people would say would argue We didn’t have real economic growth which would come from lending it to the people which then meant spending by the people and it ended up at the Fed in terms of excess reserves or in other places where velocity of money wouldn’t take up that liquidity again really became a manifest itself in speculative activity like the market or Frankly just on the bull fed know exactly what happened, but but some of the people did get Some of the money and they like to say they invested it not spent it and and that’s a part of it But would you says accurate 100 percent? But that’s why you didn’t get inflation because the money they paid for the one of them I think may been the first time in history, but I’m not sure they paint interest on reserves So the banks didn’t have the incentive to lend it to loan out the money. That’s right. So where does that bring us today? Because again, I don’t want to make the conversation overtly bearish it’s been a long cycle of people expecting that this you know policy eventual mistake was gonna have its reckoning in the market and we haven’t Until very recently. So again, wary of crying wolf here, but when we look at all the things that you’ve talked about You know political change but political change in places where? Monetary policies already been extreme we talk about real economic activity Waning despite again the punchbowl being in front of the economy for the last, you know, 10 years and also now turning over Now we we’ve talked about velocity of money and and and why there’s been no inflation and it’s because throughout this Apparent economic expansion that we’ve had over the last 10 years Lending has actually in real economic activity as some would measure it never really picked up and now we’re potentially going into recession and there’s even Less probability that the banks are going to use that capital if they have for lending purposes So a lot of moving pieces, but but how does this filter down into? victors view of the world going forward It’s got lots of problems and unless things change Less policies change we’re back to where we started You’re in a bear market you’re going to be in a recession and by July Statistically speaking. Maybe it’ll be August maybe September. Yes Now if this major changes you have to filter the things being in all things being equal you’re in a recession in six months And it’s begun. I mean the you look at the the Dallas Fed Manufacturing report and and and the other one that came out was Richmond. I Mean they look pretty terrible to me. Yeah, so You know the key here is survival, right Staying alive, you know Jimmy Rogers. I know him a long time every time I meet him Sometimes we meet in the men’s room in a restaurant. I mean he’s now moved to Singapore so I don’t see him as much but every time I see him he said oh you still solvent I said, yeah How you doing, Jimmy? Yeah, I’m still sobbing. So that was our favorite exchange of words Because you never know But things you know, I mean the markets can be up going up and many pros could be short. So I thank goodness I didn’t lose a lot of money on the upside being short. I’m short once or twice on a trading level. Where where I used the options and I lost a part of that but you know, I The market on the way up, but let me also say that I missed the bulk of the move Because I never believed the fed would continue to play the game as they did. So I’ve been very conservative for the last and so I You know This is all new to most of the old money managers who never seen things like this well I think that actually might be at least in my opinion one of the most interesting lead ends of the conversation so far because as I said in the beginning of the interview, but I’ll repeat we at least Externally from an age perspective are from different investing generations. I was very lucky To cut my teeth in the industry for a firm who was on the right side during the financial crisis also big believers in Austrian economics skeptics of extraordinary monetary policy, etc so I think I’ve always kind of carried that chip along with me that that That market scan can get very weird very fast And that there is a such thing as a bear market mentality versus a bull market mentality but one of the things that you know I’d say maybe keeps me up at night or certainly keeps the wheels and in my brain moving, is that most investors today? And getting to your point Really are just of the bull market generation Right and and you’ve done such a good job today of walking us through stats of statistics going back in some cases hundreds of years Which shed a lot of light on you know what happens in different parts of the cycle But one thing then makes me a little bit nervous here is that we have a lot of market participants Who aren’t really students of history? They aren’t even students of near-term history like 2008 or they certainly didn’t live at first hand so If everything that you’re saying is true we we Market as a whole might be woefully unequipped to deal with it Correct the PT Barnum line, you know the annual crop of suckers I mean, I don’t mean that if people lose money and downside that they’re suckers. I mean that they’ve been led to drink this kool-aid and The Fed would save them now the question yet. They ask is Why the ten members vote? to raise rates when To anybody who knows markets they wouldn’t have raised rates. Is it political? Are they now become a political I mean inflation is? one of their band-aids Price stability they’ve got two percent going out for three more years in their projections Unemployment is three point seven or whatever the way through foreign aid, whatever it is. I mean, so what are they targeting? They’re targeting growth? They’re targeting GDP. Why? That’s not part of their mandate The Trampas Trump is right. He just doesn’t express himself. Well Do you think That if the Fed had stayed on hold that the market would have had a positive reaction Yeah, I do. I think it would have been very pie because everybody was expecting it Like I said to raise rates But they didn’t believe they really would do it Because they said it see they guided you to what they were gonna do and then they did it But they didn’t change their the you know with all the editorials. Like I said of many in the Wall Street Journal aside from Druckenmiller And they still raise rates. So they they really made a Horrible error, they’re gonna be on par with 29. Now. How do they get out of this mess? Caplin eight hours ago it was saying well, maybe we should wait till after the first second quarter and you know they’re already trying to walk back some of it because they’re seeing this seem like Well, that’s all very interesting, you know, there are definitely some people in the market that that perhaps incorrectly Thought that a hold would be a signal that the wheels were really coming off. No, it’s not the way it works That that is it’s a great talking point. It’s a great excuse It’s 2 and 2 if you raise right, you know what I mean, people are paying and all those two credit cards Did I mean right now? If you get a statement and you know obviously pay off for my statement I don’t have any good but the key is you look at the same. It’s like 18.6 annualized rate There’s 4 trillion in credit card debt, so You’ve Majan with what’s happening to the people. So lowering interest rates would not look bad because the the point is The people would be paying less in interest. Oh sure and they’ve had more money to do other things with per se so that they should have how they should have stayed the the the excuses are just mind Boggling that’s why this company is doing so well versus CNBC because they’re losing viewership nothing against CNBC Perce ASA pit bulls and here people get to express and say What they what they believe yes, so One may be more nuanced question on this point just because I think we have a little bit of time But how do you as a veteran trader? Look at the kind of coincident news ie the Fed choosing to hike Stay stay on hold or cut in the moment versus what the market is pricing in terms of probability of these moves the reason I ask is because you talk about responses and maybe the way that either policymakers or Politicians will do an about-face to try and save the market And potentially prevent the recession that otherwise would come in in six months, but the futures markets and interest rates Are starting to price that in already that about-face? How do you reconcile the two you know what you? Kind of get in terms of future expectations in the futures market Versus what happens in the moment on decision day? Okay. Well You you you go back to technicals in fundamental. So you look at the charts And aside from the charts as a trader you buy extreme weakness because you know the feds going to come in at this point they have they don’t want really the markets to continue to go down they’ve stabilized them by I mean they You know look I’ve been buying things and selling things for 55 years if you want to buy something and it’s your stuff Do you really? Run up a hundred handles in the S&P. No, there’s no news that day that That’s the Fed saying look we don’t work. You know, we don’t want to cause a crash here. So we’re gonna stabilize the markets So if the markets are going down in an extreme fashion The later in the day the better You you buy some you don’t buy the full boat because again It can continue down you want to average in the feds gonna be there from here on in to stop any crash because they know The eyes are on them The shutdown has nothing to do with the markets, right? these are just to be clear we’re saying is that you do think that We will have the Fed or the plunge Protection team is that’s so affectionately known on extreme moves in the market participating Right, there’s one There’s one contingency of that When you’re a manipulator You do not buy on bad news like with this Apple news The Fed is not going to spend their money if this Apple news and I’m expanding if there was bad news across the board You’re wasting your money because people will sell to you so you can only buy When the markets are crashing and there’s no news, you know in this people are unwinding is a margin calls or whatever It might be sure so the key is that if there’s no news and it’s quiet and the markets are selling off That’s when you buy but if this if there’s news The GDP is gonna be revised down by the Atlanta Fed. Yeah to negative. Why fight? The markets gonna go down if they can’t stop that because people will sell to you right and so you have to be a Manipulator you have to do it when it’s quiet Then you buy it up and you know that’s the way that the game works does that’s a little bit of a trading pitch there about what I do, but Really right now the key is if you’re an investor you should be extremely conservative And you should be in in debt. You should be in the yen’s gone crazy here That’s just you mean government that you mean bonds government. Yeah not corporate it and you should be in In gold and silver and the mining shares which are on the they’re their bottom and as You see gold has been going up and silver been going up because people moving their money To to defensive positions. That’s why the yen went up Well, that is a lot of food for thought. I think it’s been a great interview. Thank you so much for your time You’re welcome. Thank you. Bye ask the right questions you did Until Roland grant. I appreciate you know their consideration to that They got a great business and it’s great to see the interviews that they have put forth So, it’s great that Victor. Thanks. Thank you for talking

    Working from a Kayak in the Philippines NEW
    Articles, Blog

    Working from a Kayak in the Philippines NEW

    August 19, 2019


    What’s up! Tim Sykes,
    Millionaire Mentor and Trader here in the Philippines. Kayaking and trading, multitasking. My laptop might have gotten a little wet, but I have to show you that
    you can work from anywhere. This is truly the laptop lifestyle. If you get a hot spot, you can
    trade stocks from anywhere. I’ve traded from over 100+ countries. I’ve made nearly five
    million dollars trading, and I travel, because I love to travel. Craft the life that you want. Whatever it is. Whatever that you love. If you love to travel, if you love sushi, if you love stocks, if you love kayaking, whatever it is, but I want to inspire you, I want to show you what’s possible, but you’re going to have to study, okay? This is why I am a teacher. Besides the five million
    dollars that I nearly have in trading profits, I also have 5,000+ video lessons. Watch them! Watch them all! I also have five
    millionaire students ready. There’s a lot of fives in my life. How many more millionaire
    students am I going to have? Is it going to be you? Leave a comment underneath if you’re going to be a dedicated student. I’m looking for more. Hey! Tim Sykes, Millionaire
    Mentor and Trader. Thank you for watching my videos. I hope that they help you. I want to share everything that I have learned over the years. You can check out more
    videos right over there. And also clicks subscribe, so that you can watch all of these videos, get that knowledge, and become my next millionaire student.

    Forex Channels – How To Draw Trade & Profit for Profitable Trading Decide Overbought Oversold Prices
    Articles, Blog

    Forex Channels – How To Draw Trade & Profit for Profitable Trading Decide Overbought Oversold Prices

    August 18, 2019


    let’s talk about channels for a minute
    here we’ve got an upward trend and as we discussed previously we can draw a
    support line which represents a diagonal which is kind of guiding the price and
    the price keeps bouncing off it in its journey to the top now what we’re going
    to do is we’re going to take this diagonal and we’re going to copy it and
    we’re going to put it above the price so there it is it’s got the same angle as
    the first one and it’s sitting on one of the highs of the price so once again as
    you can see here the price is also bouncing off this diagonal as well and
    bouncing downwards the price is kind of moving in a channel or corridor now what
    are we anticipating from the price going forward well right now we are probably
    expecting for the price to bounce off the top border and then to go back up
    this is where we would enter into a buy order so once the price has bounced off
    we would wait for it to hit this bottom border of the channel we would enter
    into buy order and if the price goes in our direction once it hits the top
    border again that’s when we would close our trade so it’s important to note here
    that in an upward channel you it is recommended to trade only buy orders and
    why is that well let’s step take a few steps back for a second at this stage
    we’re anticipating for the price to go down so we could technically conduct a
    sell order but it’s not advisable for two reasons first of all we’d be trading
    against the trend and that’s something we said we shouldn’t do we should always
    trade with the trend and second as you can see here the downward movement is
    actually smaller than the upward movement so in an upward channel if you
    create sell orders you will always earn less than if you create buy orders so
    that’s another reason why an upward channel you should only trade
    by work next we’re going to look at a downward channel so here we got a
    downward trend we can draw a resistance line if we copy that line we can see
    that very often the price will also follow the copied line so it won’t break
    through it will bounce off that line and channels are very common on the forex
    market and you’ll see this from our live training on a real account further down
    in this course so here we’re expecting the price to go up then we’ll conduct a
    sell order and we’ll close our order once the price reaches the opposite side
    of the channel so once again in a downward channel it is advised to open
    sell orders because you would be in this case you’ll be trading with the trend
    and you’ll get longer movements and so those are the two main ways of training
    channels it’s actually one way but in two different types of channels and it’s
    always trading inside the channel and more often than not the price does stay
    in the channel but sooner or later of course the price will break the channel
    and that’s why there’s an alternative strategy where in this case instead of
    opening a sell order you would open a buy order and you would expect the price
    to go somewhere out of the channel you would use this strategy when your other
    analysis is telling you that this channel is getting too old and the price
    is going to break through it so when the channel is quite new there’s more
    chances that the price will stay inside when the channels been around for a
    while the chances of the price breaking out are constantly growing both
    strategies are valid depends on the situation and what your other technical
    analysis tells you so to sum up with channels Direction trade with the
    channel stay inside the channel it’s more likely that the price will bounce
    into the channel there’s an alternative strategy which is a breakthrough
    strategy and that is used when you expect the price to break free from the
    channel all right

    SCALPING – DAY TRADING – BOURSE – PRESENTATION GENEVA TRADE CENTER
    Articles, Blog

    SCALPING – DAY TRADING – BOURSE – PRESENTATION GENEVA TRADE CENTER

    August 15, 2019


    Seul outil sur lequel un trader peut se fier à 100% et le carnet d’ordres l’ensemble des indicateurs qui vont des oscillateurs aux moyennes mobiles n’ont pas la précision de la profondeur de marché en complément le market profile est l’outil idéal pour apporter la psychologie des marchés à nos interventions bienvenue dans notre programme de formation intensive il se concentre sur l’ensemble des compétences nécessaires à la réussite notre objectif mettre en place des fondations solides au coeur de notre salle des marchés pour faire de vous un trader rentable

    Virtual Trade Season 1, Episode 2: Buying and Selling Stocks
    Articles, Blog

    Virtual Trade Season 1, Episode 2: Buying and Selling Stocks

    August 14, 2019


    Buying and selling stocks step 1 buy low
    step 2 sell high seems pretty simple right but what if you are a short-term
    trader or a long-term investor how does your investing identity help determine
    your game plan i’m Scott Connor a 30 year veteran
    trader and today i’ll be going over the basics of buying and selling stocks
    right here on virtual trade welcome to virtual trade in this episode we’re
    dissecting the differences between short-term traders and long-term
    investors later on we’ll walk through the order entry tools on thinkorswim and
    we’ll wrap up with new trader Jenny Horne building her first stock portfolio in
    paper-money when we think about the stock market there’s typically two
    mindsets one the long term investor and second the shorter term trader let’s
    focus in on what you might think about a short term trader
    oftentimes the image that comes to mind is a trader standing on a trading floor
    buying and selling back and forth trying to buy low and sell high several times
    throughout the day they’re trying to take advantage of short term market
    moves now on the other hand let’s look at a long-term investor who actually
    spends a lot of his time doing research on companies studying fundamentals and
    putting together a long term portfolio that he hopes to hold through his entire
    life and through his retirement as well now he’s spending a lot more time
    looking at these things but his hope is that his portfolio will appreciate in
    time and that he will be able to collect dividends all through his retirement to
    supplement his income now these two examples might be a little bit extreme
    but again ask yourself am i a trader or an investor when we’re looking at the difference
    between long-term investing and short-term trading I thought I’d take
    you back to a picture of my old office this is when I was a member of the
    Chicago Board of Options Exchange standing in a giant trading pit making
    hundreds of trades every day now obviously I had a very short time frame
    and was looking to take advantage of any kind of fluctuation or market move
    during the day now the focus here of course is you have to be on your toes
    and follow the markets very closely now is that for everyone obviously not it’s
    not most people start off as long-term investors and then perhaps start
    learning more about trading but what I wanted to point out is even during this
    period when I was trading actively on the trading floor I still had a long
    term portfolio so essentially I was a day trader during the day but also had a
    long term portfolio with a look towards retirement and building equity that way
    once I left the trading floor I joined our education team and had the
    opportunity to present in front of all of our different clients at TD
    Ameritrade how to learn to do both let’s take a look now at the importance of
    timing for traders let’s dissect how traders look at time frame activity and
    risk traders typically look at the market as a place to seek quick
    short-term gains their goal is to figure out how to get in and get out of a trade
    with maximum profits so that they can do it all over again
    this do it all over again attitude typically results in traders having a
    shorter time horizon for buying and holding stocks compared to investors
    second traders activity levels are different activity means trading and a
    trader needs to know when to get in and get out of a trade for many traders this
    means analyzing price charts and other signals to know when to get on and off
    of a stock’s price ride reading charts to know when to buy and sell a stock is
    often called technical analysis finally there’s risk when it comes to risk
    traders often see risk in light of the probability of success of the particular
    trade traders often use stop-loss orders or exit points and price targets to
    create trades that have defined risk which helps them calculate the
    probability of success traders deal in shorter term timeframes
    some traders rely on charting for entry and exit points and traders focus on
    probabilities to help determine strategy now that we’ve explored the trader
    perspective let’s take a look at how long-term investor approaches the market because investors want to generate
    earnings from the appreciation of the investment and from dividends their
    timeframe may be considerably longer than that of traders in fact investors
    may simply buy a stock and hold it indefinitely with no plans to sell based
    on time just like traders investors have some means to determine when to enter an
    investment often this decision is based on a company’s overall health which is
    determined by looking at its quarterly earnings report and balance sheets
    income statements and financial reports but unlike traders investors typically
    don’t have a specific plan to exit the stock at a particular price for
    investors risk management is a function of picking the correct investment in the
    first place price fluctuations are simply an
    acceptable part of a stocks life and if the stock price does drop investors tend
    to believe that it will go back up over the long haul the amount of activity
    that investors engage in is generally much less frequent than that of traders
    and is often confined to simply adding new stocks to a portfolio over time so
    to wrap up today’s trade lab there are a number of characteristics that can
    define a trader or an investor knowing which characteristics fits your
    situation and overall goals is important however there’s no reason you can’t be
    both sometimes traders are investors and investors are traders welcome back it’s
    time for tools of the trade every day we look at various tools
    within TD Ameritrade thinkorswim and mobile trader today’s tool placing
    market and limit orders on thinkorswim but we’re gonna be looking at different
    ways to actually buy stock on the thinkorswim platform and main thing
    we’ll be looking at is a difference between what we call limit and market
    orders the two most popular order types when people are purchasing or selling
    shares so well the best way to do is take the next step let’s jump right in
    and thinkorswim software and go to the trade tab and see exactly how this works
    we’re on the trade tab we actually have a stock in the symbol box already so
    we’re all set to go there you can see underneath where it says underlying
    before we start to see the information on that particular stock that we’re
    looking at what we’re concerned here is the bid in the ask price because that’s
    where we’ll be executing our order in our case let’s start off with buying a
    hundred shares and what we’ll do is we’ll look at what’s called a market
    order now how do we instigate or start any kind of buy order on the fingers
    wrong something very simple one click on the ask price so let’s go ahead and left
    click on the ask price and you can see down below it immediately populates the
    order box or the already entry toolbox with a buy order so we’re all set on
    that but what we’re doing is we’re going to change our order type right at the
    top because we’re not going to be looking at what’s traditionally or
    default which is the limit order we’re gonna start with market order market or
    is very simple in the in the terms of how it executes market order simply
    means I want my stock order my buy order to go in the market and execute and
    purchase the exact number of shares that I gave to that order now what about
    price well market orders you’re not concerned about price as much because it
    you’re more concerned about getting an immediate fill so in other words by my
    stock I’m not as much concerned about the fill I want to make sure I get my
    order all right so let’s walk through the from left to right and see exactly
    how this order is filled out of course it is stock that’s absolutely true it is
    a buy order that’s absolutely true if we wanted to switch that we could go to
    sell but we’ll stay with buy for right now now the next thing is quantity you
    have several choices here by default the fingers from software will put in the
    number of shares now I set my default to 100 shares you can set your default to
    whatever you’d like by going to the setup and application settings if you
    want that to only be 10 no problem let’s look at a couple other choices what if I
    didn’t want to use shares let’s say I want to use a certain allocation of my
    portfolio for this particular trade well click on the little symbol to the left
    and you can see portion of my portfolio do you want to
    use maybe only 10% so maybe I’ll move this down say listen I only use 10% of
    my allocation to this particular purchase and of course the software will
    figure out how many shares that is what if I wanted to use a dollar amount and
    say well for example I’ll say I want to buy five hundred dollars worth of this
    stock I’m not sure how many shares that is don’t worry if the thinkorswim
    software will do that for you it will purchase the number of shares that
    correspond with whatever that amount is let’s say five hundred dollars what
    we’re gonna do is just go back to the default setting of one hundred shares
    and leave it as that let’s move to the right of course our symbol is already in
    we’ve confirmed that yes it is stock now let’s move over to price which we
    already know is market but just to reiterate market mine price means buy it
    now at whatever price is in the market place now typically I say typically that
    will be the offer price but if the markets moving quite a bit by the time
    our goes in that market price might actually be higher and we could get
    filled at that higher price think of about being in a restaurant ordering off
    the menu where it says lobster market price well you’ll get your Lobster you
    just might not find out what the price is till till the end of the meal so
    let’s keep going to the right we’ve already chosen market but what are some
    of the other choices here well you can see market and limit that’s what we’re
    focusing on most orders fall in that there are a few others that we can look
    at at a later date now what about the time in force that’s TI f and the drop
    down the main two categories there are day and GTC good tell cancel now since
    we’re a market order as you’re probably thinking well the market order is not
    going to stay in very long because it’s immediately going to get filled whatever
    that price is and you’re absolutely right marketers are always day orders
    they’re get filled instantaneously normally during normal market hours and
    of course under normal market conditions that’s pretty much it as far as this
    goes now once we have this set up the next step confirm and send because this
    is the box where we review our order before it actually goes out to the
    market so let’s review real quick on our order confirmation it says buy 100
    shares of our stock and right now it says market so we’re not concerned about
    the price we just want to get our 100 shares and if this is exactly right and
    everything matches up our next step is just to click send and that puts it
    right out to the marketplace and where you can potentially get
    filled right away now if you get to this point you decide wait a minute there’s
    something I want to change look perhaps quantity or anything else just click
    Edit it’ll take you right back to the previous step where you can go ahead and
    make any changes you’d like I’m gonna go ahead and delete this one now and let’s
    look at the second order type which is the limit order now this is obviously
    the most popular order type that you’ll see because it guarantees your price or
    better follow me on how this works let’s go back to look at the ass price move
    our cursor over the ass price left click one time and of course that creates a
    buy order and as you can see it says buy stock yep a hundred shares that’s
    correct and you can see over here it is a limit by default now what does limit
    mean well let’s let’s look at this limit means that you or your order will get
    filled only at your limit price or better you can’t pay higher than your
    limit price and that’s the beauty of the limit order so for example let’s say you
    wanted to buy the stock not where it’s trading right now but maybe a little bit
    lower maybe 50 cents or a dollar lower only if the stock comes down to a
    certain price well that’s where you would set your limit and then if the
    stock were to come down to your limit price you would get filled at that limit
    price or better but you wouldn’t be paying a penny more than your limit
    price so everything else is the same as we looked at market order we have the
    stock exactly right we have price and we have limit now we have some options on
    the price we don’t have to use the current price well once we put in the
    stock it will give you the current ask price on the stock you can see right
    here but let’s say like our example we want to buy the stock a little bit lower
    instead of 9702 let’s say we want to buy it at ninety six ninety all right so if
    the stock were to get down to our price of eighty ninety six ninety that’s where
    we’d like to purchase the stock and again you can put in any price you’d
    like underneath the current price to do that limit order and of course day now
    what if we didn’t really mind if we got filled today or tomorrow or maybe even
    next week we just want to get our price well then we’d switch to GTC that means
    good till cancel the order will stay in until it either gets filled or you
    cancel it but it will wait until the stock gets down to your price before it
    will they ever get filled all right so that’s a very important component of
    this this particular trade limit again our price
    is important and if we choose a lower price than the current market price and
    we want to give it time to get filled perhaps a day or a week then make sure
    we change it to good tell cancel now that good to cancel or will stay in
    almost up to six months before it’s cancelled in which point you would go
    back and put that order in again let’s go to the final step confirm and
    send take a quick look at this one our order description by a hundred shares of
    the our stock at our price you can see we put in our price and of course GTC
    good tell cancel and if this order doesn’t get filled today that order will
    be working tomorrow and of course the next day hopefully until the stock comes
    down to our price and again if we want to change anything if we want to send it
    out go ahead if we want to delete it we can do that or change anything by
    hitting edit all right well that gives us a great idea on two of the most
    popular ways to buy stock on the thinkorswim platform the limit order and
    the market or remember limit means buying the stock it your price or better
    market means buying the stock right now I’m not as concerned about the price I
    just want to get filled as quickly as possible alright well that wraps it up
    for our Market & Order limits and don’t forget for more information on these
    tools and other great education visit the Education Center on TD Ameritrade
    com welcome back to virtual trade I’m joined
    today by our rookie trader Jenny horn Jenny welcome back thanks for having me
    again Scott great are you ready to take the next step I am I have a lot to learn
    I think okay Jenny last time we built your first watchlist today we’re going
    to start by building or actually buying some shares of those same stocks so you
    let’s get this whole process started yeah I’ve never bought a stock myself
    before so I’m nervous all right well let’s start from the very top which is
    what many people will be doing following we have about $100,000 portfolio now
    again this is paper money and we’re in the paper money trading platform but
    again the paper money will basically just be the same kind of steps we’ll be
    taking in the live account so this is great practice all right so we’re gonna
    do is we’re shootin dollars worth of stocks for each one of the different
    symbols okay so far so good yes alright great well let’s jump it in the software
    and see exactly how we would go ahead and do this we’re currently on the
    monitor tab I’m gonna of course move over to the trade tab and let’s go ahead
    and put in the symbol of our first stock e XC which was excellent that was the
    stock we picked in the utility sector and what we’re going to do now is go
    through the process of actually purchasing shares now as it turns out
    exelon is trading about $40 a share okay right and you’re seeing that where the
    last price yes under last price so that gives me currently now this is always
    gonna be different on different days but we’re just using where it is right now
    and if we take that stock that’s about $40 to share and we know we want to have
    $4,000 worth of those shares how many shares is that exactly 4,000 divided by
    40 the price per share and that tells us that’s about a hundred shares 100 times
    40 is 4,000 so our first one’s gonna be pretty easy let’s go through the process
    now remember to buy we move our mouse over the ask price and if you ever not
    quite sure look at the cursor the little word by pops up as soon as I move my
    mouse right over to the ask price now I’m gonna go ahead and left click on
    that one price one time down below you can see it says stock buy and it says by
    default 100 shares now it just so happens our defaults 100 shares em and
    we’re gonna be purchasing about a hundred shares of exelon so this
    works out great you can see the current price is just under $40 again this will
    be different from time to time when you’re putting a portfolio together now
    the final step of course is to click on confirm and send and Jenny I’m just
    gonna take one last look at this we’re buying about a hundred shares of exelon
    perfect if I look at the cost of this trades it’s thirty nine hundred well
    that’s pretty close to four thousand okay all right now I’m gonna go ahead
    and click send that’ll send the order out and you can see up here on the Left
    we just filled and you just bought your first hundred shares in your portfolio
    that’s scary how easy that was I think that’s a good thing actually right yes
    we want this process to be simple right well let’s let’s keep going with this
    and Jenny you kind of watch me through the walk through the first one let’s go
    to the next one which was Deere and company symbol de and I’ll let you go
    ahead and walk through the same process and let’s see how it goes well yeah
    first of all this talk is about a hundred and fifty five dollars a share
    four thousand divided by a hundred and fifty five about twenty five shares okay
    so we’ll just look at that as our target all right so there it is stock buy yes
    and I can see right now you’re already changing the quantity from a hundred
    down to twenty-five I am I do have a few questions Scotty because I understand
    the quantity but I’m not really sure what the order or the exchange means the
    others okay so when we get that let’s go ahead and put in our twenty five shares
    is that giving you the yes on the far end of the exchange you don’t have to
    really worry about worry about that because the thinkorswim software will
    send your stock to where the best offering price is and oftentimes that’s
    what’s reflected under the ask price okay
    okay so there we go 25 shares yep let’s confirm and send and we have about 25
    shares and you can see the cost of that trades about thirty-nine hundred so very
    close to four thousand again we’re not trying to be exact here just close
    enough is good for us so what are these other numbers here me that’s buying a
    power effect so how much of your account will be needed to hold that stock okay
    and again when you when your own stock there’s what’s called minimum margin
    requirements you have to have at least half of the value of that stock in your
    account to excuse me to hold that stock okay and then how about resulting buying
    power for stock and that’s how much is available in the account okay to
    purchase further to make further purchases of stock okay all right
    let’s I was gonna sit you up it’s in the right account so let’s go ahead and send
    that one out and you can see we are filled great so that’s number two that
    was easy so far so good right yes okay well let’s
    keep going with this I think each time you do one of the stocks and go through
    the process you really start to get to get a good feel for this our next one
    would be PNC so let’s go and put in that symbol and again that stock is also
    trading about a hundred and fifty dollars to share just right at this
    particular time so that would be about 25 shares as well okay let’s do the same
    thing so we’ll click on the ask price change that quantity to 25 oh I see what
    you’re doing now just back up to the plus sign 25
    let’s get confirm and send take a quick look yeah that’s about 3,700 dollars
    with a stock and again that’s close enough for us so let’s send that one out
    okay and see if we don’t get filled yes we’re filled right away we bought 25
    shares of PNC could this be easier no it could not so far
    great let’s keep going Johnson & Johnson symbol J & J okay this talks about right
    now about $125 a share that’s probably gonna give us about 30 shares but again
    let’s just be consistent well we’ll put another 25 shares in for there okay well
    keep we’ll use some round numbers hundreds 50s 25 that makes it pretty
    easy for us going forward okay so 25 shares of Johnson & Johnson
    okay now another question for you sir what is too open mean that’s in the well
    good question so on a transaction that we’re opening for the first time opening
    means this is a new transaction or a new trade that we’re opening for the first
    time okay you’ll find that once we buy these shares if we want to sell them at
    a later date we’ll be closing or taking that position away and that will be
    called a closing trade okay that means it’s no longer in your account opening
    trades brand-new trade first time we’re going from zero to actually 25 shares
    that’s exactly what I was going to okay okay listen buy this one okay all right
    we’re moving through this pretty quick let’s keep going could not be any
    simpler alright so after Johnson Johnson we talked about telefon care a telephone
    carrier verizon VZ was the symbol I remember
    okay now this stock obviously is a little bit lower in price somewhere
    around the $50 range so that’s gonna allow us to buy something closer to a
    hundred shares again okay somewhat similar that we did to X
    this is defaulting and we’re buying okay 100 shares no how come the price is
    adjustable like what if I wanted to increase the price or decrease the price
    if we wanted to buy it at a lower price we would we could put in that lower
    price and but we would not be able to buy that stock on that what’s called
    limit price so the stock actually got down there okay right now we’re just
    interested in building our portfolio and we’re willing to go ahead and pay the
    current market price which is what we’re doing right now the offer price what
    would the benefit be but lowering the price though the benefit would be to try
    to buy the stock at a lower price right right so why wouldn’t everyone do that
    it’s kind of like well the thing is what if the stock keeps going higher and it
    never comes down to your price never get you missed the boat you’re never able to
    make that investment so all right so let’s say we’re out for right now but
    that’s a great question for right now let’s we just want to build the
    portfolio so we’ll go ahead and just buy at current prices today okay all right
    that’s a great question all right Verizon now we have a couple left how
    about Activision a TVI right yes a TVI is the symbol we talked about the gaming
    company Activision Blizzard that’s about a $70 stock somewhere in that range
    so let’s round that to about 50 shares I think it really comes out to 55 or 56
    but let me get nice round at 50 shares confirm and send that one as well
    perfect send it out and filled again I think you’re getting pretty comfortable
    doing this I think I am – all right Exxon Exxon Mobil will you look at
    something in energy sector XOM enter this stock is currently trading let’s
    see again about 80 something dollars a share let’s see let’s do about 50 shares
    on this one as well just to keep things nice and round okay yep that’s fine yes
    you are well guess what we only have one left so
    let’s go ahead and get them all in Lululemon
    let’s put our last symbol lu lu lu lu lemon Athletica and the stock is trading
    about $100 shares so that’s about 40 shares will tell you what let’s round
    that one up to about 50 as well alright so 50 shares of
    Lululemon and firm and send okay see it’s a little bit more it’s closer to
    $5,000 worth but again that some others were lower so I think this will kind of
    come pretty close to our target right absolutely
    okay so we got through your whole watchlist yes we move that into an
    actual portfolio by purchasing the shares and now we’re gonna be able to
    not only just watch the stocks of the the price of the shares on a day-to-day
    basis in the watch list but let’s see we could now see how our portfolio is doing
    so where can I go check on all these trades all right so we’ll go back to the
    monitor page and I’m on our pages were able to see all of the different stocks
    you bought okay you can see the quantities in the next column and you
    can see the current price and the trade price that we can kind of see how we’re
    doing yeah they’re alphabetical and they’re alphabetical yeah in this and
    and of course if you want to see how we’re doing on the profits lost per day
    we just looked down here and if you want to see the profits and loss since we
    opened the position in this episode you’ll be able to keep a running total
    of how the portfolio’s good oh great well thanks Jenny how do you feel about
    today’s lessons I feel great I learned so much and I felt so much more
    confident by the end yep towards the end you look like a pro thank you listen
    don’t forget to watch this and previous episodes of virtual trade check out TD
    Ameritrade network.com well thanks Jenny and we’ll see you
    again next time thanks Scott trader
    versus investor remember it’s okay to be one or the other but consider being
    ultimately both because they can complement each other and keep
    practicing build a paper money portfolio of stocks and utilize the tools
    available to you to become a more confident trader and investor
    I’m Scott Conor and thanks for watching virtual trade