Wednesday, November 25, 2015

Money Show 2015 - Rehman Moledina

The next session I went to was a talk by Rehman Moledina, whose talk was called "Why Wall Street Makes Money and You Don't". The sponsor of this talk was Online Trading Academy.

There is a retail mind set and an institution mindset. The retail uses fundamental analysis and tech and mechanical analysis. We do not have market makers in Canada, because Canada is too small. Retail trades on a website. Institutions trade direct with wholesalers in Canada. It is the second highest paid job, only athletes make more.

Fundamental analysis is not worth your time. Someone a lot smarter than you has already done this. What you should do is find the smart money on a chart. Trading is not about money but about time. Are you here to make money? No. You are here to learn how not to lose money. To live or survive is about not losing money. Money makes itself.

What retail investors do wrong.
  1. They make decisions on Fundaments.
  2. They use brokers to manager money.
  3. They do not understand Retirement plans.
  4. They believe OAS/CPP will support them.
  5. They invest in Mutual Funds. These are not good investment vehicles. They have large fees and other fees. 62% of your entire account will be eaten up over 30 years.
  6. Investors do not understand fees.
  7. They have no plan for a down market.
  8. They are not properly diversified.
  9. They use Buy and Hold. Buy at any price and hold with no plan for gain or loss.
Most people never achieve their financial goals. Why? They think like and act like retail traders and investors. The financial system is made up to two groups.

Institutions and Banks Retail traders/investors
Very Profitable Struggles for profit or loss
They are selling When buying
They are buying When selling
Buy low and sell high Buy high and sell low

Both are playing by different rules, but they are playing the same game. They higher the price of stocks makes people will buy stock. The lower the price of stocks, people will sell stock. If a TV is on sale, you will buy. But we do not do that with stocks. Market tops because of exhaustion of buyers. The lows occur because of exhaustion of sellers.

There are two types of orders in any market. There are Buy orders and Sell orders. An order can either be filled or unfilled. What causes prices to move are unfilled orders.

Stocks are not on sale when prices go up. So if prices have gone up do not buy. Buying is the wrong trade. So, you want to be on the opposite side of the wrong trade. The problem institutions have is that they have too much money. It is easier to buy 100 shares than 600,000 shares. Trading is all about supply and demand.

On my other blog I am today writing about Johnson and Johnson (NYSE-JNJ) ... learn more...

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

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