I want to make sure you understand the difference between an ETF, ETN and a Unit Trust. You want to know what you are investing in right? ETF stands for Exchange Traded Fund (the first ETF was launched in November 2000). ETN stands for Exchange Traded Note. The first Unit Trust was launched in June 1965 (this investment product is so old there is no abbreviation for it lol).                                                                                                                                                             

Many of you are still struggling to find out if you are a short-term trader or a long-term investor? It is important to identify that beforehand because from a technical perspective the graphs can look a whole lot different. The other wisdom around investing is that a short-term trade should never become a long-term investment, especially if they are on CFD’s, as the interest might hurt you over some time!

I want to highlight some key differences on technical graphs one would use if you were a short-term trader vs a long-term investor.

Short-term traders look at daily or hourly graphs. I don’t care what justification you have, if you trade on a 5-minute graph, please, make an appointment to see your doctor. Using a 5-minute graph is trying to hit a 10cm target while on a speed boat at 220 miles an hour.

Long-term investors use weekly graphs. In other words, you will have to wait for the Friday close to have the complete graph for the week. I know the textbooks say wait...

The quick answer? Never at the top. Never at the record high!

It’s a rookie mistake when starting to invest, buying a share because the news reported “Mr So-and-So bought another R1m worth of shares…” or because “my friends have made an 80% return on a share and now, I want to make the same.”

This is not a sustainable strategy, and keep in mind for every buyer in the market there has to be a seller, so If Mr So-and-So bought R1m worth of shares that means someone will have to sell that stock in order for the next buyer to buy the stock. If there are more buyers, yes, the price goes up but if there are more sellers the share price starts to decline.

The other mistake newbies often make is to invest based on the idea of “good results”. Nobody knows how investors will react after the financial results are reported. Sometime the results are fantastic, and one would think that the share price would rise, but some investors might think...

Many of you know that there are MANY different investment and trading strategies and to be honest there is no such thing as the perfect model. Different things work for different people. Investment strategies depend on things like your age, risk profile, debt level, capital amount, emotional capital and the type of person you are. And if you are a trader, your strategy will be different to that of a long-term investor.

Keep in mind that as a trader you must first determine your stop loss before you get into the position, so that you can determine your position size for that trade. The stop loss will determine how many contracts/CFD’s you will be trading. Make sure you know how to determine your risk/reward ratio, to ensure the trade is worth your effort.

Keep in mind that the stop loss is used as a line in the sand which will reasonably indicate that the trade might be wrong, and NOT necessarily at the point of where you will be comfortable with the maximum loss on the...

How do I know where to take profit?

This is like asking when do you think one should get married? The answer is so varied and wide that it is almost unanswerable but maybe just maybe I can give you some relationship and trading advice.

The big myth beginners believe is that they are always going to buy a share at the very bottom and sell it at the very top for maximum profit. We are going to date in university, get married and live happily ever after. They look at the history of the graph and buy into the illusion of “what if”. What if, in a perfect world, that they could have bought Apple (or any other share for that matter) at $145 in 2018 and sold it at $324 in 2020. What if, every Romcom out there is true and “happily ever after” really is that easy. If Julia Roberts can do it, then surely, we can as well. However, those who have been in the market long enough know, that is it is a very different dynamic when you are in the position and you need to decide...

Through the years we have heard many stories from clients sharing their insight and pain on what they wish they knew about money and trading when they started. I am going to share some of them with you today. I don’t want you to make the same mistakes, I want you to be successful.

1. Position size.

I know. I know. Some of you are already rolling your eyes because I repeat it so often, but I speak from personal experience as someone who has trained beginners in trading CFD’s and equities successfully. Many beginners don’t know how to determine their position size when trading CFD’s or futures. They don’t know whether they should use a teaspoon, a tablespoon or a shovel. Position size is crucial. A 20% decline of your capital means you will need a return of 25% to be where you started. A 50% decline means you need a 100% return to be where you started. There is also a different calculation that should be used when you determine your position size for long...

It is like asking whether are you a hiker or a mountaineer? The terrain might be the same, but the risks and skills needed differ vastly in more ways than one. Many dream of climbing Mount Everest but only a few have and will ever succeed at it. Some even paid the price with their lives to be able to attempt it.

Firstly. When you invest for the long term you might want to look at your portfolio once a week; you will look at weekly graphs and you will look at 10, 20 or 40 week moving averages; you will phase yourself into a position or you will use stop losses to protect capital. As a trader you must look at your positions daily to take profit or adjust stop losses; your time frame on graphs will also be daily or maybe hourly graphs.

But then you get 80-year-olds that have a long-term view of 3 months when they invest in shares. In theory, long term means longer than 6 months, but for some, can mean longer than 3 years, and for others how quickly they can make money and move on.

Long...

Looking for scented candles? Sorry, wrong site. All these green and red blocks? Also known as candles and used as an illustration method to summarize the price action of any listed instrument that are listed on the financial markets. Clever yes?

The Candlestick technique has been used since the 18th century and is one of the earliest known forms of technical analysis. Munehisa Homma from Sakata Japan was a rice trader who was credited with laying the foundation for the development of this charting technique.  One of the greatest innovations that Homma developed was the communication network comprised of men standing on roof tops every 4km from Osaka (rice exchange) to Sakata (port for rice market), a distance of some 644km. These men would send signals to each other up and down by using flags. This was an early method of sending real-time data. He recognized the effect of the price movements on the psychology of the traders.

Today we don’t use flags anymore to signal a...

My 5 favourite indicators for long term investors.

I know we are not supposed to have a favourite pet or child, but I think if we are allowed to be honest with ourselves, we all do. Today I want to share my 5 most favourite indicators with you, that have treated me so well over the years.

1. A golden cross formation. A golden cross formation appears when a shorter moving average breaks upwards through a longer moving average. This signals a buy opportunity for long term investors. Keep in mind the shorter moving average will move faster than the longer moving average since it is a lot closer to the latest price action of the instrument. A 20 and 40 week moving average works very well but sometimes they are too slow depending on the volatility of the share. I have found that a 10 and 20 week moving average moves fast enough and confirms not too late. Moving averages follow similar laws to most things in life, sometimes you have to play around with them and look at the history of the...

What is a lie?

According to the Cambridge Dictionary it can mean to be in or move into a horizontal position on a surface but it can also mean to say or write something that is not true.

There are so many lies about money. Some are based on self-limiting beliefs you might have arrived at from personal experience and for all sorts of personal reasons. But some are real lies fabricated by others and the world around us to limit the way we respond to money and it is these lies I want to look at today.

We need to change the way we think about money so that we can start to think differently about how we respond to it. As soon as you think differently about it, you will start to act differently towards it.

10 lies you might believe about money:

1. You will only be happy when you earn enough money.

Sorry to bust your bubble but more money won’t make you happier! If you can’t manage your current paycheck you won’t be able to handle a bigger one. It is the habits and...