Das neue Jahr 2022 begann mit einem frischen Allzeithoch im amerikanischen Dow Jones Index:

Jan 04, 2022

36,636.00

36,934.84

36,636.00

36,799.65

36,799.65

435,080,000

Quelle: https://finance.yahoo.com/quote/%5EDJI/history?p=%5EDJI geladen am 22.01.2022

Einige Autoren warnen seit Längerem vor einem finalen Börsenrun 2021/2022, bevor es zu einem großen Crash an den Aktienmärkten kommen werde:

Harry S. Dent warnt vor 90 % Crash am Aktienmarkt 2022

Harry Dent: Stock Market Crash Coming in Early 2022

David Hunter predicts stock market crash by 80 %

Was ist ein Melt-Up?

Von Ralph Pöhner am 02.05.2019

Der heißeste Wirtschafts-Begriff dieser Tage lässt sich schwer auf Deutsch übersetzen: «Melt-up». Man könnte ja vielleicht von einem Börsen-Run reden. Oder von Panikkäufen. Aber das unterschlägt, dass ein «Melt-up» irgendwie das Gegenteil eines Börsen-Crashs darstellt.

Und dass dieses Gegenteil auch gefährlich ist.

Vor solch einem «Melt-up» warnte nun Larry Fink, der Gründer und Chef von Blackrock, also einer der wichtigsten Geldmanager der Welt. Den Börsen drohte derzeit weniger ein Einbruch, sagte Fink in einem TV-Auftritt, der auch bei uns intensiv beachtet wurde. Vielmehr könnten sie sogar nach oben durchdrehen.

Quelle: https://www.handelszeitung.ch/invest/die-melt-these-wenn-die-borsen-nach-oben-durchdrehen geladen am 22.01.2022

Are We Heading Towards A Meltup Or Meltdown? Here Is How To Prepare

Mar. 20, 2021 9:30 AM

Summary

• Let’s say you are fully invested in the stock market, be they individual stocks or indexes.
• The S&P 500 and Dow Jones Industrial have been up nearly 80% since bottoming in March 2020, exactly a year ago.
• Are we heading into a new and prolonged bull-market, or are we heading blind-folded towards a cliff?
• We provide a strategy to prepare now to capture most of the future gains while preserving the capital in the event of a correction.
• Looking for a portfolio of ideas like this one? Members of High Income DIY Portfolios get exclusive access to our model portfolio.

Quelle: https://seekingalpha.com/article/4414856-meltup-meltdown-how-to-prepare geladen am 22.01.2022

Der Super-GAU in Zahlen

Wenn das 36 800 Allzeithoch vom 04.01.2022 das letzte Hoch vor dem großen Chrash war, sieht die Rechnung so aus:

80 % Crash: neues Tief 7 360

90 % Crash: neues Tief 3 680

Mein Szenario war immer, dass das langfristige Bild immer steigender Aktienkurse intakt ist wenn der Dow Jones Index nicht unter sein Tief aus dem Jahr 2009 bei 6 666 Punkten fällt.

Auch bei einem großen Crash oder einer jahrelangen Seitwärtsbewegung der Aktienmärkte kann Schmitt Trading Ltd Lösungen für private Investoren anbieten.

The new year 2022 started with a fresh All-Time High (ATH) in the Dow Jones:

Jan 04, 2022

36,636.00

36,934.84

36,636.00

36,799.65

36,799.65

435,080,000

Source: https://finance.yahoo.com/quote/%5EDJI/history?p=%5EDJI loaded 22.01.2022

Some authors keep warning of a final Melt Up in 2021/2022 before a severe turnaround:

Harry Dent: Stock Market Crash Coming in Early 2022

David Hunter predicts stock market crash by 80 %

What Is a Melt-Up?

A melt-up is a sustained and often unexpected improvement in the investment performance of an asset or asset class, driven partly by a stampede of investors who don’t want to miss out on its rise, rather than by fundamental improvements in the economy.

Gains that a melt-up creates are considered to be unreliable indications of the direction the market is ultimately headed. Melt ups often precede meltdowns.

Source: https://www.investopedia.com/terms/m/melt-up.asp loaded 22.01.2022

Are We Heading Towards A Meltup Or Meltdown? Here Is How To Prepare

Mar. 20, 2021 9:30 AM

Summary

• Let’s say you are fully invested in the stock market, be they individual stocks or indexes.
• The S&P 500 and Dow Jones Industrial have been up nearly 80% since bottoming in March 2020, exactly a year ago.
• Are we heading into a new and prolonged bull-market, or are we heading blind-folded towards a cliff?
• We provide a strategy to prepare now to capture most of the future gains while preserving the capital in the event of a correction.
• Looking for a portfolio of ideas like this one? Members of High Income DIY Portfolios get exclusive access to our model portfolio.

Source: https://seekingalpha.com/article/4414856-meltup-meltdown-how-to-prepare loaded 22.01.2022

Meltdown in Numbers

If the 36 800 ATH of 04.01.2022 was the last high before the big crash, the calculation goes like this:

80 % drop: new low 7 360

90 % drop: new low 3 680

My scenario has always been that if the Dow Jones does not drop below the 2009 low at 6 666 points, the long-term story of always rising stock markets remains intact.

Schmitt Trading Ltd invented several trading robots that can also make profit in a huge stockmarket crash or long-term side movement.

FTMO Review – My Experience, Pros, Cons

Written by Kyle Townsend in Uncategorized

Are you thinking about signing up with FTMO and taking a $200,000 challenge? There are a good few forex prop funds out there online right now and some have very shady reputations so it can be really hard to know who to trust. I have extensively tested FTMO personally and looked into hundreds of reviews of FTMO users all over the world to compile a really in-depth review of the platform. Is FTMO legit? Let’s find out…

Is FTMO Legit?

FTMO is verified to be legitimate. They have a flawless reputation and there is proof in various forums and YouTube of traders receiving payouts.

How Much Money Will I Make?

You will keep 90% of whatever profits you make on your funded account. FTMO keeps 10%!

How Much Does FTMO Cost?

The price depends on which challenge you are looking to take, ranging from $180 to $1300.

What Payment Options Are There?

FTMO accepts bank transfer, debit/credit card or Skrill.

Are The Conditions Strict?

The FTMO trading requirements are not too strict compared to other prop funds – you are allowed up to 10% drawdown for instance. 20% drawdown is allowed on an account with the aggressive risk mode.

Can You Hold FTMO Trades Over The Weekend?

With the standard FTMO challenges you aren’t allowed to be holding trades over the weekend, without permission granted earlier in the week. HOWEVER, there is a new Swing Challenge that allows traders to trade with a maximum of 1:30 leverage and hold all trades overnight with no permission needed!

What’s The Most Money They Will Fund Me?

You can have up to 2, $200,000 trading accounts, making the maximum $400,000.

Who Are FTMO?

FTMO are a prop trading firm based out of Czech Republic, mainly based in the Forex trading sector. In short, they provide up to $200,000 of trading capital to traders that can pass a fairly simple challenge. The challenge is to prove you are a consistently profitable trader and if you are, in return, you are given capital, of which you keep up to 90% of the profits and FTMO keep 10%. The company essentially looks for profitable traders that just need funding and then gives them the tools and money they need. They’re no doubt the largest prop fund in our Top Prop Firms List and have been my personal first choice for months now.

In premise, this sounds like an absolutely amazing idea. You’re trading someone else’s capital and keeping 90% of the profits made with absolutely no risk to yourself or your capital. Is it really as good as it sounds? 

The FTMO Challenge

This is what you’re here for – the famous challenge. This is all that stands between you and a $200,000 funded trading account. So how does the challenge actually work and what’s the point? 

The challenge is essentially a 2 step process to evaluate your trading ability. The first stage is the challenge, then the second stage is verification, to prove that the first time wasn’t just a stroke of luck. 

The challenge and verification is taken on a demo account, the details of which will be emailed to you after purchasing a challenge from FTMO. You will be able to see your account statistics in your client portal and be able to track every aspect of the challenge until you ultimately pass or fail. 

You may be wondering why they have a challenge? And why you have to pay for it? Well, frankly you have to pay for it because if people got an unlimited amount of trials, eventually they would win a $200,000 trading account even if they previously failed 100 times, just from pure luck. The challenge is to prove they are giving $200,000 capital to a profitable trader, instead of wasting it on a trader that is just going to hit the maximum $20,000 drawdown in the first day and waste the companies money. 

Choosing Your FTMO Challenge

When you sign up to FTMO and think about starting your challenge, you need to think of a few different options as it’s not just a default challenge. 

• Your funding size, this can range between $10,000 and $200,000. The $10,000 challenge is much cheaper to take so this could be a good idea for beginner traders. 
• The account currency, I would advise choosing EUR if you’re in Europe, or US if you are anywhere else in the world. 
• Accounts have an aggressive or normal option. Essentially aggressive account challenges cost more money but allow you to have more drawdown on your account without losing the account. It doubles the max drawdown from 10% to 20%. 
• Until August 2020, FTMO was partnered with a range of forex brokers like Blueberry Markets (click here for my full review). However, they have since removed all third party retail brokers and decided to offer their own trading solution, directly connecting traders to LPs which is considerably faster, cheaper and better than the majority of best choices in the market, as far as brokers are concerned.

The New FTMO Challenge For Swing Traders

FTMO has answered all of swing traders prayers in the new update. There is now a new FTMO Swing challenge where you are allowed to hold traders overnight and over the weekend without asking for permission, which used to be the meta. The leverage is reduced down to 1:30, which is still absolutely plenty for swing traders. Previously all swing traders had to work with 5%ers instead, so this is a great move for FTMO and I’ll certainly be using this service myself!

The Profit Split – 90% To You, 10% To FTMO

FTMO has been known for having a 70% profit split since the birth of the online prop firm industry. Other competitors in the industry have modelled their offering on this number too. To stay ahead of the game, they are now offering up to 90% profit share for traders, keeping just 10% of your profits. They are also now offering a capital scaling program, meaning you can increase the balance of your funded account by 25% once the criteria has been met.

This is by far the largest profit split in the industry and I’m very happy to see FTMO continually going above and beyond and smashing the boundaries they have set in this space.

Is This Realistic?

You may be wondering, is it actually possible to pass these challenges to get funded. Then even if you manage to get funded, is it possible to stay funded? The answer is, frankly, it’s very much possible but it can be very hard for 95% of traders. 

Most traders fundamentally lack emotional strength and discipline, along with a solid risk to reward and risk management plan. For this reason, the majority of forex traders are going to fail over the long term, sadly.

However, if you are consistently profitable trading your small account – there is absolutely no reason that the FTMO challenge won’t work for you! 
In fact I would actually argue that FTMO can make you a better forex trader, as you are forced to abide by the rules of the account like drawdown etc, which force you to only take high quality trades. 

The ONLY real downside of the strict rules is that you aren’t able to hold traders over the market weekend close, unless you use the new swing trader challenge. During the standard challenge, you are allowed to hold trades over the weekend market close with absolutely no problem at all. Once you are funded, by Wednesday night you must write to FTMO asking for permission to hold over the weekend, so they are able to assess the risk and any hedges needed. https://www.youtube.com/embed/jpKlrwhJGcU?feature=oembed

To prove how realistic the rules and funding options offered actually are, a trader has just received a $70,000 payout from the company – this is by far the largest I’ve ever seen!

The Free FTMO Challenge

Thinking of trying you luck in the FTMO Challenge? Well, if you are on the fence, they now offer a FREE challenge for you to take part in! This challenge is a shortened version of the real challenge, but completely free. The point of this is to perfect your trading and make sure you’re actually able to pass the challenge, before paying for the real thing. If you fail this challenge, you don’t lose anything. If you pass this challenge, you sadly don’t get any funding as it’s only the free challenge but it sets you up with the confidence to take the real thing.

Whenever I have finished backtesting a new forex trading strategy I actually take a free FTMO challenge, to test the strategy. If I fail the challenge because of the drawdown or violating the maximum loss restrictions, I know I’m not ready to pay for the real $100,000 account. To get involved, all you need to do is sign up, create an account on the website and await your email to come through! When you get sent through the account details, log in to your new MT4 account and get trading. With every trade taken, you’ll see your trading account results in your client portal in the Metrix.

If nothing else, the free challenge is a great fun way to test yourself and have real in-depth statistics about your trading!

Reputation & Reviews

The issue with prop firms are the fact that there have been a lot of scams over the years. Firms promising to give you a £500,000 account if you pass a challenge that costs £1000. The rules are extremely tight, you never pass that challenge and this is how the company makes all of its money. For this reason it’s crucial to look at the reputation and reviews within the trading community so you can make a decision as to whether you think the funding company is worth the risk.

What does FTMO’s reputation online look like? Frankly, amazing. On Trustpilot they currently have over 1200 independent reviews with an average rating of 4.7/5. On Forexpeacearmy the company has over 400 reviews with an average rating of 4.55/5. Take a look through the reviews and you’ll see that the large majority of traders are absolutely thrilled with the company, they’re getting funded, getting paid and better off than they were without FTMO! Many traders have actually taken multiple $200,000 challenges and built up very large portfolios with the company over the last few months. 

Alongside the usual trading review websites there is a huge amount of content about this prop firm on YouTube. Many well known forex traders like Hannah Forex for example have shown the whole process of signing up, taking a challenge, doing the invoices and actually getting paid from FTMO. It’s really nice to see a lot of traders getting paid on social media and being able to earn a full time wage from their part time hobby. In this video Hannah shows her first withdrawal ever from FTMO, definitely give it a watch if you’re skeptical!  https://www.youtube.com/embed/evkhcPugJbU?feature=oembed

Leaderboard

FTMO has a new ‘Leaderboard’ feature, which is relatively uninteresting for most traders but it does make for a very interested feature in my opinion. You’re able to see the equity and profit amounts from traders all around the world, separated in different regions. I think this feature is amazing for newer traders seeking funding, to inspire them to keep plugging away at the forex industry as it really showcases the amazing profits that are actually obtainable.

Payment Proof – My Withdrawals From FTMO

When choosing a prop firm, it’s important to trade with a company that is proven to be paying traders. I have had multiple payouts from FTMO and the process has always been extremely simple and quick compared to some other firms on our top prop firms list. In my experience, payouts are always processed same day and the support team were there to assist me with any questions I had during the withdrawal process.

To date, I have had 4 withdrawals from FTMO, all of which came with no hassle. Payouts were processed extremely fast and the finance team even reached out to me, to offer any assistance if needed!

Custom Withdrawals

FTMO are a bit of a thought leader in this space. Whereas most prop firms allow a withdrawal at the end of the month, providing the threshold has been met, FTMO are now offering payments on demand. You are able to setup exactly when you want to get paid every month. This isn’t going to make a huge difference to a lot of traders but it’s just proof of the company, once again, going above and beyond to provide a real partnership with traders, rather than just a prop firm.

The New FTMO Capital Scaling Plan

In recent months, the scaling plan offered by industry leading prop firms has been becoming more of a talking point. With companies like DT4X offering a huge scaling plan, it was time for FTMO to show the industry what they could do!

FTMO has released a new capital scaling program offering growth of 25% every 4 months. In order to be eligible for the capital scaling, traders must reach 10% profit in 4 consecutive months. There has to be profit made monthly on your side, which may look like 2% on month 1, 3% on month 2, 4% on month 3 and 1% on month 4.

It’s important to note that the account balance must also be above the original starting balance in order to request capital scaling. With this incentive, every 16 months (depending on how you compound your profits), your trading account will double in size! This is capped at a maximum of $2,000,000 per trader.

This scaling plan is so effective because FTMO use demo accounts and a proprietary algorithm to manage risk and place trades in the live markets, meaning you won’t actually be exposed to the live markets on your trading accounts! This makes absolutely no difference on our side, as the traders, but allows FTMO to trust traders with larger amounts of capital.

If we compare this to the other forex prop firms, the offering is extremely competitive. As previously mentioned, DT4X Trader does offer a more aggressive scaling plan but this may be more sustainable!

Support

Since you are actually using FTMO as your trading account, if you get funded of course, you want to know that you are able to get in touch with them whenever you need. Luckily FTMO has loads of potential ways to get in touch. I have personally used this prop firm and used multiple of the support options during this time.

• Email: support@ftmo.com
• Phone: +44 2033222983

If you are based in Prague, they also have an office address and welcome traders to setup an appointment and go down to meet in person. It’s really great to see such transparency from a prop firm! The company also has 24/7 live chat support on the website, that I have found extremely useful over the last few months. It’s also worth noting that this support is offered in 13 languages.

I actually had a free second attempt at one of my challenges as I nearly hit the profit target but was just slightly short on the last day. I contacted the live chat and the email support team and within less than 2 hours they had reset my account, sent me over some new MT4 details and I was back trading the challenge again! If you look through all of the various forum and Youtube videos about FTMO you’ll see that this wasn’t just my experience, the support team is really good! 

Education & Tools

FTMO wants you to succeed, when you’re making money, they’re making money too. For this reason they offer a great amount of tools and education for traders to succeed and get profitable in the forex markets. To be completely honest the majority of forex content can be found online for free this day and age, most people don’t tend to pay for content, but that’s not the point! So what do they actually offer, let’s find out…

Tools For Traders

More importantly than the education, FTMO offers a range of complex tools that have helped my trading tremendously. These tools are all accessible in the client portal of the website once you have started a paid challenge and they are all free to use! These include…

• Metrix – This looks at every trade taken, drawdown, profit, loss, times of trades, pairs and compiles all of the stats. Much like MyFxbook but, well, good. 
• Statistical App – This app looks at the probabilities of different scenarios happening on different pairs, to help you build out a profitable trading edge.
• Account Analysis – Much like the Metric app, but in a lot more detail! This can definitely help you understand your trading, behaviours and level up your profitability in the markets. 
• Trading Journal – This is as it sounds, a trading journal where you can upload images to the trades you’ve taken. This really helps understand the setups, refine your edge and bring you closer to that $100,000 funded trading account. 
• Mentor App – This app works on MT4 and MT5 and forces you to follow your trading plan and rule set, with a clever EA on the screen. It’s not the most useful tool for disciplined or professional traders but for your new traders just starting out, this is a really great idea! 
• Equity Simulator – Much like it sounds, this lets you test different win rates and risk to reward averages to find out how equities on your accounts would grow and be effected. Definitely a really useful tool to have at your disposal. 

Education

Strictly speaking FTMO don’t offer their own education, but they do offer discounts and partnerships on some of the most popular forex education in the industry. These include…

• Ben Barker – BsAppsFx
• Etienne Crete – Desire To Trade
• Financial Source
• Tom Franklin – Spring Board Your Trading – Partnership removed
• VLADIMIR RIBAKOV – Divergence University – Partnership removed
• OTTO SCHLECHTER – 3MBO – Partnership removed
• RÜDIGER BORN – Partnership removed

I cannot personally vouch for any of these mentors as I’m not familiar with over half of them. None the less, feel free to check them out if you’re signed up with FTMO for one of the challenges as they can offer you quite a nice sized discount! Click here to see all of the educators they are partnered with. 

Conclusion – Is FTMO a scam?

In summary, if you’re looking for the opportunity for the legitimate and reputable company to give you $200,000 to trade with, FTMO is the company for you. They have an amazing reputation within the industry for actually paying out and honouring their word, alongside great customer support and functionality. 

This isn’t some miracle way to get rich though – the FTMO challenge is no joke and it certainly is hard to pass and hard to maintain once funded. If you’re a serious trader, give it a go now! If you’re new to forex and not yet consistent, I would recommend taking one of the free trials to gage your ability and start working towards your $200,000 account. 

If you have any experience with FTMO please do let me know in the comments below, I’d love to hear about it! 

Kyle Townsend

I’ve been trading forex full-time since 2016. Over the last few years I have tried and tested all of the most popular forex brokers after being scammed by an unregulated broker back in 2017. I post my reviews to help others stay away from potentially high risk brokers!

Source: https://forexbrokerreport.com/ftmo-review loaded 20.01.2022

For most people, financial freedom is a vague goal or destination. They may not know exactly what financial freedom means to them, they just know that it is some place they would rather be.

But what does financial freedom really mean and how do you achieve it?

What is Financial Freedom?

Financial freedom is the freedom to live the lifestyle you want even if you aren’t bringing in a regular paycheck.

Think about that for a second. Not bringing in a paycheck but still living the lifestyle you want? That’s a dream life and doesn’t seem very realistic, right?

Wrong!

Before most of us even have a chance to think about financial freedom, we are locked into a lifetime of debt from education and housing, and forced to work at one or more jobs for most of our waking hours just to stay above water.

From this position financial freedom seems like some distant, impossible dream.

It doesn’t need to be this way.

The first step on the road to financial freedom is to fully visualize the life that you want to lead and the steps that you need to take to get there.

According to a recent study by GOBanking Rates, they found these three items as American’s biggest financial fears:

1.) Never being able to retire

2.) Always living paycheck to paycheck

3.) Living in debt forever

These are definitely some reasons to worry about, but what can you do to avoid this?

By visualizing your path to financial freedom, you can see how these essential steps can take you from where you are now to where you want to be. Below we will go over the different types of financial fears and freedoms along with how you can work to obtain them.

Freedom From Fear

For most people, an unexpected bill or expense is an event that can cause physical symptoms from the stress and worry. With finances already running as tight as they can, any added expense risks pushing your finances into an unmanageable mess.

Nobody enjoys paying bills but nothing is worse when you don’t have the money to make the payment. Then you have debt collectors calling you and next thing you know your credit score starts taking a hit.

When most people imagine the road to financial freedom, their first stop is a freedom from this kind of fear.

Freedom To Work

Another common point on the road to financial freedom is the freedom for people to spend their time working how they would like.

Many people still accept that they will need to work for a living, but they want to spend their time working at jobs they want to do.

The freedom to work means the freedom to choose exactly how you make a living, whether this means working less hours or for lower pay at a preferred job or being able to afford to take risks to achieve your dream career.

Freedom From Work

The freedom from work may seem like a distant dream to most people, but it is actually easier to achieve than most people believe. The freedom from work means never having to do anything that you don’t want to do because you need the money.

This level of financial freedom means that all your time is yours to spend how you like, and you never need to worry about making ends meet.

Luxurious Freedom

A dream home in a beautiful neighborhood and a few small vacation homes dotted around the world? All the cars, clothes, toys and other things that make life sweet at the tip of your fingers?

Visiting exotic, beautiful and exclusive locations and events whenever you feel like it?

Luxurious freedom may seem like nothing more than fantasy, but people do live like that, and many of them were not born into wealth. Your path to financial freedom can end here if you make the right decisions and work hard at it.

Your Path to Financial Freedom

So how do you go from where you are now to where you want to be?

There are many important steps involved on the road to financial freedom, from smart money management to debt consolidation, but the key part of any road is smart investing and allowing your money to work for you.

Learning to trade is one of the more popular ways to achieve financial freedom, because it is a path that will also lead to being your own boss and having the ability to work from anywhere in the world.

We currently have one of our own traders, Roberto, who is living his dream as a traveling trader. He is traveling all over Europe AND making money at the same time.

Below you can check out his latest episode in London where he meets new friends, experiences new food and cultures all while making money!

This is just one example of what investing and trading can do for your life. Having financial freedom is one of the most liberating ways you can live!

Final Thoughts

Very few people achieve financial freedom as a result of their income, they do it by using that income wisely to increase their wealth many times over.

Learning how to invest wisely and trade effectively is a simple supplement to your life that will allow you to build wealth at a rate that would otherwise be impossible.

You can start this simple step on your road to financial freedom today. Now is the time to begin.

Let us know what financial freedom means to you in the comments below!

Source: https://www.warriortrading.com/what-does-financial-freedom-mean loaded 13.01.2022

October 8, 2019

The Forex market has attracted a lot of investors over the years. More people are acknowledging the profitability potential of trading Forex and are tapping into the opportunities available here. If you’ve recently considered enlarging your portfolio of investments and are contemplating on whether to go in a Forex direction or not, learning a few things on the subject will help you reach a decision.

What does the Forex market actually have to offer investors? What are the main benefits that make these types of trades financially advantageous? And what steps should you take to become a successful Forex trader?

While the topic is vast, there are a few insights that might put things in a clearer perspective for you. Here are some of the whys and hows of Forex trading:

The pros of investing in Forex

You should first go over the benefits of becoming a Forex trader. Analyzing the potential positive outcomes here will allow you to correctly decide whether this is the type of market that you should explore at the moment.

Availability and flexibility

Including Forex trades in an already busy schedule is possible thanks to the market’s availability and flexibility. Being open 24 hours a day means you won’t deal with any limitations and you can choose your own trading schedule. This is an important factor for investors who want to trade Forex but still keep their regular full-time job. It’s up to you to decide when it best suits you to actually engage in trades, in the morning, mid-day, or at night.

Leverage

Controlling a large amount of money even with less of your own capital is another aspect that drives interest to the Forex market. In terms of leverage, the Forex market maintains a winning position. Getting even up to 500:1 leverage is possible in Forex, depending on the broker you choose to work with and on the currencies you are interested in. Comparative with stocks, Forex trades allow you to get started even if you don’t have that much money in your account. Of course, choosing the right broker is essential here, and that’s why you should document yourself on the topic properly. As you’ll be able to read in a RoboForex review or a review on any other broker, there are different account types available, as well as leverage possibilities.

Size and liquidity

Even if the entire subject of Forex is rather unfamiliar to you, it’s probably not new information that Forex is in fact the largest and most liquid market on a global scale. Due to its size, you can have peace of mind knowing you won’t get stuck in a particular trade, and you can always switch positions as you find best. The size makes it impossible for someone to corner the market, so no single entity can control the market price – this means extra transaction safety for traders.

Important guidelines to remember

Now that you know a few of the most relevant benefits granted by Forex investment, you should also learn a few basic guidelines on how to correctly enter the market. Managing to reach the gains you desire could take time, but you will need to follow a few steps to get there:

Learn the terminology

Being familiar with the terms used in Forex trades is essential. You need to understand the terminology before you actually place your first investment. Spend some time researching common phrases and words used by Forex traders. From ‘spread’ to ‘pip’ and ‘cross rate’, look into the most popular terms and jargon found in any Forex trader’s vocabulary.

Choose a broker

As mentioned above, to get started with Forex, you will need to find a reliable broker that can provide you with the tools you need to benefit from an optimal trading experience. The main factor to pay attention to when you are comparing your options is if the broker is regulated. Make sure the broker is tied to a reliable institution and registered with the right authorities. Find out more details about their trading platform and the data and news supporting it. Look into spread info, leverage options, and customer service specifics. Go over compressive reviews before making your final choice. Look into spread info, leverage options, and customer service specifics. You can see an example here with AvaTrade spreads and leverage.

Set up a demo account first

To minimize your risks, it’s best if you set up a demo account first and begin with a trial version of Forex trading. A demo account allows you to experience real trades without actually putting any of your own capital at risk. You can get used to the entire process see how things develop, and familiarize yourself with everything Forex-related before you invest real money. Some of the best Forex brokers out there give you the possibility to access free trials and free forex signals, so you should make the most of them.

Set up a strategy

To avoid dealing with scenarios where you are trading with emotion, set up a strategy from the start. You can either focus on a particular study or calculation, or use broad spectrum analysis to decide your position. Whatever works for you, find a strategy and maintain it, preferably one that encompasses a combination of both technical and fundamental analysis.

Define your goals – set a budget

You can easily get tempted to invest more money than you would actually afford to lose, just because a particular trade seems promising. Try to avoid making rushed decisions, define your goals from the start, set a trade limit and stick to it.

Bottom line

Forex trading can provide you with the opportunity you’ve been waiting for to reach financial freedom and accumulate wealth. As you are able to figure out after looking ingot the topic more in-depth, trading Forex is advantageous for several strong reasons. Many investors have directed their attention towards this type of activity over the last few years, and financial gains have been obtained by those with a solid and researched trading methodology. Make sure to understand the basics of the Forex market when starting out and to adopt promising strategies that can increase your success odds.

Source: https://www.europeanbusinessreview.com/trading-your-way-to-financial-freedom-the-whys-and-hows-of-forex-trades loaded 13.01.2021

CMC Markets plc ist ein 1989 gegründeter Market-Maker für Contracts for Difference (CFDs) mit Sitz in London (CMC steht für Currency Management Consulting). Das Unternehmen zählt mit Kunden in über 100 Ländern auf vier Kontinenten zu einem der weltweit führenden Anbieter im Online-Derivatehandel.

Im Geschäftsjahr 2013 wickelte CMC Markets weltweit über 31,8 Millionen Transaktionen mit einem Handelsvolumen von knapp 1,287 Billionen US-Dollar und erzielte einen Erlös von 129,1 Millionen Pfund Sterling.^[2]

Die deutsche Niederlassung von CMC Markets hat ihren Sitz in Frankfurt am Main. Das Angebot umfasst mehrere tausend CFDs auf Werte aus diversen Märkten, beispielsweise Aktien, Indizes, Rohstoffe, Anleihen und Währungen sowie Futures.

Unternehmensgeschichte

Historisches Logo

1989 gründete Peter Cruddas das Unternehmen in London, seit 1992 wird CMC Markets durch die Börsenaufsichtsbehörde FSA reguliert.^[3] 1996 startete das Unternehmen weltweit die erste Devisen-Handelsplattform im Internet, 2000 begann der Handel mit CFDs. In den Jahren darauf eröffnete CMC Markets dann Filialen in Sydney, New York, Peking, Hong Kong und Toronto. Seit 2005 ist das Unternehmen durch Niederlassungen auch in den Städten Frankfurt am Main, Stockholm, San Francisco, Tokio und Wien vertreten.

Standorte

CMC Markets betreibt und unterhält Büros in Großbritannien, Österreich, Frankreich, Deutschland, Italien, Norwegen, Polen, Spanien, Schweden, Kanada, China, Singapur, Australien und Neuseeland.^[4]

Wettbewerb

Mit 9 % Marktanteil im Jahr 2009 war CMC Markets einer der größten Market-Maker für CFDs. Da over-the-counter CFD-Anbieter keiner Meldungspflicht bezüglich Handelsvolumen oder der Menge an Transaktionen unterliegen, sind derartige Zahlen jedoch schwer zu bestätigen.^[5]

Kritik und Ermittlungen

Laut einem Bericht der Wirtschaftswoche^[6] wurden Ende 2013 Ermittlungen gegen den Gründer von CMC Markets, Peter Cruddas, eingeleitet. Dies geht aus einem Brief der Staatsanwaltschaft Frankfurt hervor. In dem Prozess gab das Landgericht Frankfurt dem Kläger Recht. Der Broker musste 16.200 Euro Schadensersatz leisten.

Weblinks

• Website der CMC Markets plc (englisch)
• Website von CMC Markets für Deutschland

Einzelnachweise

CMC Markets plc: Geschäftsbericht 2018. (PDF) Abgerufen am 9. April 2019. CMC Markets plc: Geschäftsbericht 2013. (PDF) Abgerufen am 9. Juni 2014. Was ist CMC Markets?, abgerufen am 5. Juni 2021. Standorte., abgerufen am 27. Mai 2016. Alice Ross: Investors switch between spread betting providers. In: ft.com/personalfinance, 10. November 2009, abgerufen am 4. Februar 2013. Wirtschaftswoche: “Ermittlungen gegen Broker”, abgerufen am 12. März 2014

Quelle: Seite „CMC Markets“. In: Wikipedia – Die freie Enzyklopädie. Bearbeitungsstand: 13. August 2021, 10:57 UTC. URL: https://de.wikipedia.org/w/index.php?title=CMC_Markets&oldid=214728131 (Abgerufen: 12. Januar 2022, 19:07 UTC)

CMC Markets is a UK-based financial services company that offers online trading in shares, spread betting, contracts for difference (CFDs) and foreign exchange across world markets. CMC is headquartered in London, with hubs in Sydney and Singapore. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index.

History

1989-2000: Early years

The company was founded in 1989 by Peter Cruddas as a Foreign Exchange market maker under the name Currency Management Corporation.^[3] The name was later abbreviated to CMC and then changed to CMC Markets in September 2005.^[4]

In 1992, CMC Markets became authorised and regulated in the UK by the AFBD which later became the Financial Services Authority (FSA).^[5]

In 1996, the company launched a real-time FX trading platform and has made claims to have done the first FX deal on-line over the internet. Although not verifiable, CMC Markets was certainly one of the first companies to offer on-line trading over the internet. The company pioneered internet trading technology with its MarketMaker software platform.^[6]

From 1996 to 2000, Information Internet Limited, as well as supplying CMC Markets, sold the software to a small number of banks. In 2000, Peter Cruddas bought out the other owners, made the software exclusive to CMC Markets and the remaining parts of Information Internet Limited became the internal IT function of CMC Markets.^[7]

2000: Introduction of CFDs and Financial Spread Betting

In 2000, CMC Markets began to offer contracts for difference (CFDs)^[8] and the following year it introduced online spread betting on financial markets. These two products would become the bulk of the business for CMC Markets.^[9]

2000-2006: Global expansion

In 2002, the company began embarking on a major global expansion drive. It expanded quickly between 2002 and 2007 and opened offices in a large number of countries, as well as growing the spread betting business in the UK and the CFD business internationally. This began with its first overseas office in Sydney, Australia headed by Goran Drapac^[10] and David Trew.^[11]

The first North American office was opened in 2003 in New York headed by Josh Levy.^[12] This was followed by the acquisition of Canadian broker Shorcan Index, which became its Toronto office in 2005 headed by Simon Grayson.^[13][14]

From 2001-2005, CMC Markets also operated the brand name deal4free.com. This brand was designed to promote the zero commission charge service, used primarily for its UK-based spread betting business. Commissions were later re-introduced and this brand was dropped as part of the re-branding in September 2005.^[15]

In 2006, the company planned to become a public company via an initial public offering; however, the IPO was cancelled at the last minute due to market conditions.^[16][17]

2007: M&A activity

In 2007, CMC Markets acquired financial media and technology company Digital Look which ran the financial information site Digitallook.com and sold financial data to third party sites. The company was merged into CMC Markets’ main operations in London, but continued to run the website and data services for third parties.^[18]

Subsequently, CMC Markets bought the Australian stock broker, Andrew West. This was merged with the CMC Markets Australian operation and renamed CMC Markets StockBroking. It continued to offer physical share broking services in Australia.^[19]

Later in 2007, Goldman Sachs bought a 10% stake in the company for £140m, effectively valuing the company at £1.4bn.^[20]

2008-2013: Global financial crisis

In 2008 and 2009, CMC Markets saw profits decline with the global financial crisis. In response, Peter Cruddas changed his management team and closed seven offices and reduced the company headcount from a high of 1,100 employees.^[21]

In 2010, CMC Markets launched its Next Generation trading platform to the UK market. The new trading software improved on previous MarketMaker software; amongst other things being able to quote market prices to additional decimal points and provide trade execution without re-quotes.^[22]

In 2011, the Digital Look business unit was sold to Spanish-based Web Financial Group.^[23]

2014-present

After a return to profits in 2014, speculation emerged that CMC Markets was again looking at an IPO.^[24][25]

In July 2015, CMC Markets started to offer binary options and launched a particular binary option product known as a Countdown.^[26]

On 5 February 2016, CMC Markets was first listed on the main market of the London Stock Exchange at 240p equating to an initial market capitalisation of £691 million.^[27] On 25 April 2016, CMC Markets launched a range of binary products specifically designed for mobile, tablet and desktop.^[28] On 2 June 2016, it was confirmed that from 20 June 2016, CMC Markets would be included as a constituent of the FTSE 250 Index.^[29] On 15 November 2016, CMC Markets was awarded “Best CFD Broker” at the Finance Magnates London Summit.^[30]

On 6 February 2017, Norwegian Central Bank Norges took 3% stake in CMC Markets.^[31]

On 25 September 2018, CMC Markets issued a profit warning^[32] which was followed, on 21 November 2018, by an announcement that CMC Markets had suffered a 76% drop in profits.^[33]

In April 2019, CMC Markets announced that its CFO & COO, Grant Foley, would leave the business after the shares hit a record low following a profit warning.^[34]

Operations

No reliable data exists for the over-the-counter CFD and spread betting industry. However, in 2009, some industry participants commissioned a survey to look at the UK market and results indicated that CMC Markets’ market share in 2008 was lower than its main competitor.^[35]

References

“Final results for the year ended 31 March 2020” (PDF). CMC Markets. Retrieved 11 June 2020. “CMC Markets”. www.bloomberg.com. “Brexit backer Peter Cruddas to sell £200m-plus of CMC Markets shares”. The Guardian. 13 January 2016. Retrieved 25 August 2017. “Branding: No such thing as a free deal”. 1 November 2005. Retrieved 26 August 2017. “CMC Markets UK plc”. Financial Conduct Authority. Retrieved 26 August 2017. Davey, Catherine (2011). Making Money From CFD Trading: How I Turned $13K Into $30K in 3 Months. John Wiley & Sons. ISBN9781118303917. “Reflecting on a true rags-to-riches story”. FT. 13 May 2006. Retrieved 26 August 2017.^{[permanent dead link]}“How The CMC Markets Help For Traders?”. Digital Connect Magazine. Retrieved 26 August 2017. “Capital spreads”. Spread Betting Bible. Archived from the original on 27 August 2017. Retrieved 26 August 2017. “smh.com.au – The Sydney Morning Herald”. www.smh.com.au. Retrieved 2017-08-24. “Amid latest FX Solutions rumors – an interview with the new CEO David Trew | Finance Magnates”. Finance Magnates | Financial and business news. 2011-06-02. Retrieved 2017-08-24. “CMC to launch in N America – FX Week”. FX Week. 2003-06-23. Retrieved 2017-08-24. “London-based CMC Group acquires Canada’s Shorcan Index – Article – investmentexecutive.com”. investmentexecutive.com. Retrieved 2017-08-24. “Web-based platform brings CFD trading to Canada – Back Issue”. investmentexecutive.com. Retrieved 2017-08-24. “CMC Group announces rebranding”. Internet Business News. 16 September 2005. Archived from the original on 11 September 2016. “Volatile market conditions force CMC to pull float”. The Independent. 24 May 2006. Quinn, James (13 August 2009). “Peter Cruddas prepares for CMC flotation”. The Daily Telegraph. Quinn, James (19 February 2008). “Cruddas’ appointments bolster CMC board”. The Daily Telegraph. “CMC Markets grows bigger in Australia, set to service 500,000 ANZ retail stockbroking clients”. Finance Feeds. 8 March 2017. Retrieved 26 August 2017. “Goldman takes 10% stake in CMC”. Financial Times. 22 November 2007. Quinn, James (14 August 2009). “Peter Cruddas has taken CMC Markets back to basics”. The Daily Telegraph. “CMC Markets announces Revamped trading platform”. Financial Spread Betting. 12 August 2010. “Digital Look Acquired by Web Financial Group”. Web Financial Group. 10 February 2011. “Peter Cruddas eyes £1bn float for CMC Markets”. The Daily Telegraph. 5 September 2014. “Peter Cruddas flags up £1bn float after CMC storms into profit”. 5 September 2014. “CMC Markets Launches Binary Options Offering Called Countdowns”. Finance Magnates. 20 July 2015. “CMC Markets defies volatility with £691 million listing”. London Stock Exchange. Archived from the original on 2016-02-05. Retrieved 2016-02-05. “The new era for binary trading has arrived as CMC Markets launches new product”. CMC Markets group site. Archived from the original on 2016-04-25. Retrieved 2016-04-25. “Inclusion in FTSE 250 Index from 20 June 2016”. CMC Markets. 2 June 2016. Archived from the original on 16 April 2017. Retrieved 5 May 2017. Patterson, Jeff (15 November 2016). “Winners of the 2016 Finance Magnates London Summit Awards Just Announced!”. Finance Magnates. “Norwegian central bank Norges takes 3% position in CMC Markets”. “CMC lays bare impact of investment crackdown with profit warning”. The Daily Telegraph. 25 September 2018. “Profits collapse 76% at CMC Markets as regulation bites”. The Financial Times. 21 November 2018. “CMC shares hit record low on profit warning as finance chief plans exit”. Reuters. 3 April 2019. Retrieved 4 June 2019.

1. Ross, Alice (10 November 2009). “Investors switch between spread betting providers”. Financial Times.

External links

• CMC Group

Source: CMC Markets, https://en.wikipedia.org/w/index.php?title=CMC_Markets&oldid=1060377591 (last visited Jan. 12, 2022).

Posted September 21, 2021 by Nick Maggiulli

Previously I’ve written about why buying the dip can’t beat dollar cost averaging, even if you were God. However, I feel like that article was a bit too extreme. Buy the Dip was defeated in one fell swoop. It never had a fighting chance. There was no last meal, no departing words, and no funeral procession that followed.

But today, I’m going to change all that. Because today I’m going to give Buy the Dip the proper burial that it deserves and demonstrate without a reasonable doubt why it is a terrible investment strategy.

To start, let’s imagine that you are dropped somewhere in history between 1920 and 2000 and you have to invest in the U.S. stock market for the next 20 years.  You have 2 investment strategies to choose from:

1. Dollar-cost averaging (DCA):  You invest $100 every month for all 20 years.
2. Buy the Dip: You save $100 each month in cash until the market dips below a certain amount from its all time high (i.e., 10%, 20%, etc.) Once the market dips enough, you invest all of your saved up cash and continue investing $100 each month until the market hits another all-time high. At that point you go back to stockpiling cash until the next dip of the same size occurs. Rinse and repeat throughout the entire 20 year period.

The only other rule in this game is that you cannot move in and out of stocks.  Once you make a purchase, you hold those stocks until the end of the time period. So what would you choose? DCA or Buy the Dip?

Before you answer that question, let’s review how Buy the Dip works so you can see it in action.

How Buy the Dip Works

To visualize how the Buy the Dip strategy works, consider following it from 1970-1990 with a drawdown threshold of 40%. What this means is that you will save up cash and only buy once the market is 40% below an all-time high. After this 40% dip occurs, you then keep buying each month until a new all-time high is reached. At the new all-time high, you repeat the process and start saving cash once again, waiting for the next 40% dip to occur.

You can see this in the chart below which shows the Buy the Dip cash balance over time (green line) and when it makes purchases (red dots):

What this shows is that from 1970-1974 you are saving cash until the market is 40% below its all time highs. It’s at this point when you finally invest that cash following the 1974 crash. You then keep investing $100 every month (just like DCA) until 1984. It’s at this point when the market eclipses its all-time high from December 1972 and you go back to saving up cash again.

If we were to visualize how Buy the Dip compares to DCA (i.e. buying every month) over this time period, we would see that Buy the Dip portfolio would win out over time:

As you can see, Buy the Dip starts outperforming DCA as the market starts to decline in the early 1970s. Buy the Dip then gets invested after the 1974 crash and retains that lead for the rest of the time period.

Why Buy the Dip Wins By A Little and Loses by A Lot

As good as the 1970-1990 time period was for Buy the Dip, it’s best performance relative to DCA occurred from 1963-1983. It was during this period when Buy the Dip outperformed DCA by 29% in total, as shown in the chart below:

Similar to our previous chart, Buy the Dip starts saving cash in 1963 and only gets invested in the market during the decline of 1974. It’s at this point when Buy the Dip takes a lead over DCA that it never gives up. While this might seem like I am arguing for the Buy the Dip strategy, I’m not. This just happens to be one period where that strategy would have performed quite well.

Unfortunately, there are many more periods where Buy the Dip doesn’t perform quite so well. For example, if you had followed Buy the Dip from 1980-2000 with a 50% drawdown threshold, you would have sat in cash for the entire 20 years while the market ripped upward:

Why does Buy the Dip sit in cash for the entire 20 years? Because there are no 50% dips to buy during this time period! As a result, Buy the Dip never gets invested. And because it never gets invested, DCA ends up outperforming it by 5x ($120,000 vs. $24,000) over 20 years! That’s a massive amount of underperformance.

While this is an extreme example, it highlights the primary issue with Buy the Dip—it sits in cash for far too long.

And while it sits in cash, the market tends to go higher. As a result, you end up buying at much higher prices than if you just bought from the outset.

For example, imagine deciding not to buy until there is a 20% dip in the market. Now imagine that the market doubles without any such dip. Even if the market were to immediately dip 20%, prices would still be 60% above where they were when you started investing. Therefore, when you buy the dip, you end up buying not at a 20% discount, but at a 60% premium!

This is why Buy the Dip is such a terrible investment strategy. Because when it wins, it tends to win by a little, but when it loses, it can lose by a lot.

This asymmetric performance profile is what makes it such a subpar investment strategy. And if we look across a variety of dip buying thresholds, we can see why.

Does Dip Size Matter?

Given what I have discussed thus far, you might be wondering whether the size of the dip you wait for matters for this strategy. For example, is waiting for a 50% dip better or worse than waiting for a 10% dip? Well, it depends on what you mean by better.

Technically, you are less likely to outperform DCA in the long run by waiting for smaller dips than by waiting for larger dips. As the table below shows, the larger your dip threshold, the more likely you are to outperform DCA over some random 20-year period between 1920-2020:

This chart shows that there is roughly a one in four chance of beating DCA when using a Buy the Dip strategy with a 10%-20% dip threshold. If you were to use a 50% dip threshold, the chance of outperforming DCA increases to nearly 40%. But this doesn’t come without a cost. Because while you are more likely to outperform DCA when using a bigger dip threshold, you also underperform by more (on average) as well.

As the table below illustrates, the median amount of outperformance when using Buy the Dip for 20 years ranges from -5% to -13% depending on which dip threshold you use (Note: negative outperformance is the same as underperformance):

What this means is that if you looked at all 20 year periods from 1920-2020 and followed Buy the Dip with a 10% dip threshold, you would likely underperform DCA by about 5% in total (i.e. the median outcome). If you used a 50% dip threshold, you would likely underperform DCA by about 13% in total.

If you look at the distribution of relative performance by dip threshold, we can get better view of what is going on. The chart below shows how much Buy the Dip outperforms DCA (in total) for each dip threshold specified across all 20 year periods in the data.

So imagine we compare Buy the Dip to DCA from 1920-1940 using a 10% dip threshold. Then we do this for 1921-1941, 1922-1942, and so forth through 2000-2020. After that, we do all of those simulations again for a 20% dip threshold, 30% dip threshold, and so forth up to a 50% dip threshold.

Finally, we plot the distribution of the performance of Buy the Dip compared to DCA over all these simulations:

As you will see, while a smaller dip threshold is less likely to outperform compared to a larger dip threshold, the size of its underperformance will usually be smaller as well.

What this chart illustrates is that what dip threshold you use determines the likelihood and the size of your outperformance (or underperformance) relative to DCA. As the dip threshold gets bigger, the outperformance curve flattens with the middle of the distribution moving leftward (i.e. more negative on average). This means that, when your dip threshold increases, the outperformance is more extreme, but the underperformance is also more extreme as well.

From this plot you can see why it can be worth it to wait for larger dips, but only if you get lucky. Because if you don’t get lucky, be prepared to lose a lot relative to DCA.

The Bottom Line

While it can be intriguing to stockpile cash to buy the dip, the data above suggests that this strategy is unlikely to win out in the long run. If you happened to successfully buy the dip once, take your victory lap then get back to investing as soon as you can. Though you might think you have the ability to market time, I suggest attributing your trade to good luck and then moving on.

The reason why Buy the Dip usually fails is simply because market dips, especially larger dips, are rare. Without dips to buy, Buy the Dip is just an 100% cash strategy, which is a terrible way to invest for the long term. More importantly, while large dips can generate larger returns, predicting them beforehand is near impossible. So be careful before waiting for one because your portfolio is likely to miss out.

Lastly, while the analysis shown here was done on U.S. stocks, you can generalize it to any asset class that is expected to have a positive long-term return. If you want to argue that Buy the Dip beats DCA for some asset class that dips a lot more than U.S. stocks, then have at it. Because, I don’t know about you, but I like to buy assets that tend to go up.

This concludes our memorial service for Buy the Dip today. Happy investing and thank you for reading!

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This is post 260. Any code I have related to this post can be found here with the same numbering: https://github.com/nmaggiulli/of-dollars-and-data

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Source: https://ofdollarsanddata.com/why-buying-the-dip-is-a-terrible-investment-strategy loaded 10.01.2022