Gear up for Online Trading

We kick off the year once more with trading: a topic that might not be directly tech-related. It however, relies heavily on online technology to help with investments and therefore, is noteworthy.

More and more millennials are getting into the habit of adopting get-rich schemes. You just have to look on Instagram and Twitter to see how gullible some of them are to Ponzi-like schemes preying on online and financial naivety.

It has become so cumbersome as most of the predators ‘befriend’ you only to present you with the offer to trade (Forex, Binary options or mine Crypto) on your behalf. Some blatantly just ask for you to deposit cash (usually increments of $500) into unknown accounts!

Nothing to perform due diligence is available and not even a website atimes – just the promise of profits of up to 30-80% weekly, monthly or whatever – it’s all click bait!


A notable 60 percent of high net worth individuals (HNWIs) in Latin America alone showed high interest levels in Crypto investments in 2018.


Capgemini’s World Wealth Report 2018.

You can however, as we mentioned around this time last year, take full control of your financial destiny.

When it comes to managing an online portfolio via a broker such IQOptions, there are a few things you have to consider first before dropping cash into your trading account.

Here is a quick checklist of basic things you need before considering it:

  • Equities (Shares or stocks, ETFs, Commodities, Indices, Options, Forex, Futures and Cryptocurrency). These are all vehicles you can engage with  concurrently in the same portfolio.
    • They all also have their (moderate to extremely high) levels of risk. Learn how each of them worksShares are actually the less risky of the batch nowadays.
  • Have a plan! One does not just opt to invest in equities to “make money”. Of course you will make (or lose) money. The question is how much and within what timeframe? When are you looking to have the money back? These questions will help determine what kind of investor you are or the approach to adopt when investing.
  • Based on your knowledge, appetite for risk and the associated costs, you will either be a long, mid (mixed) or short-term investor. The latter is referred more commonly to as day-trading.
    • Long term trading works pretty much like savings. You buy the stock/share and hold it for a long period of time (shares/stocks and indices are the best vehicles for such). All the others can be bought and sold by the minute, hour, day, or weekly.
  • Pay attention to all the associated costs. It costs nothing to setup an online trading account via a broker. Your bank may charge a brokerage fee for running a separate trading account. The advantage of that mainly is just the ease of adding and withdrawing your ‘winnings’.
  • Setting up with your bank means there is also less admin when it comes to verifying your personal details such as ID, physical address and so on.
  • Be sure to have all documents ready and up to date. These are mandatory and required by local financial authorities to help prevent or determine fraud, the use of securities to launder money or fund terrorism.
    • The bank trading brokerage fee can be waivered by going for a online broker independently if you have all your ducks (paperwork) in a row.
  • Once setup, there are further internal costs that the broker will charge you. Pay attention to the commission charged when you purchase a security of choice. Some waiver it but then charge what is called a spread. Then there are other deductions such as a charge for borrowing money to trade – what is termed ‘overnight fees‘.

Some strategies

We strongly recommend actively running a trial for at least 2 months before making  your first deposit to start purchasing securities.

Before that first purchase, you should hopefully have used the trial period to learn some of the tools. Trading (or investing) is not something you do out of a gut feeling. There is about 3% ‘gut feel’ but the rest of knowledge comes from studying the tools for technical and fundamental analysis.

TradingTools
Courtesy of cryptoworld.info

The difference between technical and fundamental analysis is the difference between trading and investing – without any, you are outright just gambling!

Budget within your portfolio

Always start small and see how that goes before diving fully in. People get greedy and think if $10 fetches a $5 profit then $10 000 would subsequently garner $5000 or at least $500. It doesn’t always pan out that way. If it was that easy we would all be millionaires!

One must also quickly avoid the habit of topping up the account to get the next hot stock because like a business, your trading portfolio is an investment for future growth. It must therefore, be nurtured that way.

Ride the waves (with your initial investment) and reinvest your winnings by ploughing back some of the profits into less riskier securities once you make a small ‘killing’.

Switch from a short to medium term trading approach to secure your profits. Many day traders end up losing all their gains because they stay in the game for too long. The stock market always turns eventually and gets its pound of flesh!

As a rule of the thumb, purchase only after a massive drop in price – as you would in a fashion sale. When a security’s price has risen to abnormally high levels, its ‘bubble’ tends to ‘burst’.

In addition, there are tools to measure whether a stock/share or any security for that matter is overvalued. Study them!

Market trends

The markets are constantly in motion and like a rollercoaster, prices are constantly going up and down. You have to choose where (and when) to place your buys (and positions) to make your profits.

TradingTimes
Courtesy of IQOption

Know the market (opening and closing) times so you do not miss a good deal. Many markets will either open with a big rally; cool off in the afternoon and then close with a sell-off (in the red) in the evenings in general.

What causes the up and downs is the buying and selling off respectively.

Based on that, and with the common knowledge that everyone sells at a high profit – what do you then think would happen after a massive rise in the price of a security? It is not rocket-science yet many people fall for it and end up buying at the height (peak) price of an equity.

Easier said than done. Naturally, it is hard to predict where this peak is as many inexperienced profit hunters have found out the hard way.

Markets tend to crash in predictable cycles. The Crypto market fell by a whopping 70% in 2018 – a monumental drop in market capitalization after its equally amazing 2-month bull run. Many individuals and companies who bought Cryptos in January 2018 as a result went down in flames because of such bad timing – and just plain greed.

There are however clear smoke signals in trading – preparation is key!

These are just some of the basics to help you get into an investing state of mind – more particularly with online trading. You will find a few more  useful information on the resources page.

Happy trading and remember to start of with a free trial!

General Risk Warning: The financial products offered by the company carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose.

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Digital Fundraising

The latest abbreviation in finance and crypto-world is ‘ICO’. A word that gives both local and global financial authorities like the U.S. Securities and Exchange Commission (SEC) nightmares for several reasons.

Not to be confused with Initial Public Offering (IPO) which is used by firms to raise cash through the issuing of shares to the public. An ICO (Initial Coin Offering) serves the same function and works like crowdfunding , but for digital currency and tokens only.

We recently covered a feature on raising funds and capital for a business but missed out on one relatively new method. More and more companies are using ICOs to raise capital for their businesses.250x250

The concept of an ICO works similarly to how a company raises capital through shares in that it is all based on contrived value.

Funding raising in effect boils down to sales! If your actual product or service has nothing substantial or intrinsic to offer a client base, then it is nothing more than a scam.

Launching an ICO is quite easy, and to an extent, many tech companies are now catching onto it.

An ICO is the cryptocurrency space’s rough equivalent to an IPO in the investment world. ICOs act as fundraisers of sorts; a company looking to create a new coin, app, or service launches an ICO — Investopedia.

If you still do not believe it is possible, just listen to this testament from someone who did it after unsuccessfully knocking on doors of conventional funders – the angel investors, venture capitalists and banks.

The alarming spurt rate of ICOs often brings with it a scourge of potential scammers. The SEC and other institutions have to step in to monitor and regulate them.

Social media Platforms like Facebook and Google – which house a bounty of users (potential investors) have banned ICOs ads due to possible prey on unsuspecting investors; exposing them to con artists.

Basically, the scammers use fancy websites, laden with impressive figures and terminology to con users into buying into their coins or tokens.

Though the tokens barely even cost a cent, it adds up if they have millions of people buying in.  Once they have reached a certain amount in funding – they close shop and disappear!

Hypothetically speaking if one wanted to create a new coin called ‘DebunqedCoin’, these are the steps:
  • Create a product concept or Business Plan for the coin or what is called a Whitepaper. This describes in great detail what the coin or token aims to do; the core technologies behind it; the team and their qualifications; the product’s lifecycle/growth path etc.

  • Once completed and water-tight, the whitepaper would be submitted along with an application to one of the best Cryptocurrency Exchanges for review.
  • Naturally, the business would need some initial working capital for liquidity. Some of this is raised by the owners and other institutions (through loans) etc. These will serve as collateral/insurance that there is indeed genuineness in the venture for all stakeholders.
  • You must then assure your investors of a solid return on investment (ROI) and deliver – which goes back to sales and growth. Unless your offering is a scam you actually need to do some work! This comes with regular updates (marketing campaigns can have a tremendous or adverse impact on the uptake and price) on milestones reached.
  • The above is necessary to keep the investors abreast with progress and in the process, getting them to possibly increase funding. Growing interest and addition of more funds creates demand for the coin/ token which, in turn, drives up the price and market capitalization.
  • Voila! you would then be in business!

Here are some of the most successful ICOs of all time

NEO:

Known as “China’s Ethereum”, and backed by Microsoft, Alibaba and the Chinese government, NEO uses smart contract applications. It does so, however, with the addition of decentralized commerce, digitized assets and identification.

It enjoyed a considerable hike in token value from $0.03 to $88.20, NEO has big things coming with a 294,000% ROI.

Ethereum:

Unlike Bitcoin, the second-most valuable cryptocurrency in the world has more functionality than just being a coin. Its ledger technology is used to build and deploy decentralized applications a.k.a. “smart contract” technology.

Ethereum’s ROI has been nothing short of jaw-dropping at 230,000%. Having sold its tokens at $0.31, an Ether token now sits at a whopping $713, second in value only to Bitcoin.

Spectrecoin:

The “premier privacy-focused cryptocurrency” enables users to send and receive currency worldwide with total anonymity. It is currencies like SpectreCoin that have most government tax offices quaking in their boots.

If you had repurchased a token in November 2016, that puny $0.001 would be worth $0.64 today, or an ROI of 64,000%.

Stratis:

This UK-based start-up has craftily created a platform that is compatible with .NET and C#. As a result, the product appeals to veteran users of Microsoft products.

Raising 915 BTC in 5 weeks, those who cashed in on the low investment of $0.01 per token have seen a titanic ROI of 56,000%.

Ark:

With Ark, collaboration is the name of the game. The platform’s SmartBridge is a lightning-fast ecosystem designed to integrate other cryptocurrencies into its blockchain.

Investors were eager as any to buy in, and they have made a 35,400% gain given today’s token price of $3.54.

DigixDAO:

DGD, which stands for Digix Decentralized Autonomous Organization, is a self-governing community. It gives out grants to different projects which will promote the growth of the DGX network.

At a current value of $346.88 per token, this gives them a return of 10,722%.

Quantum (QTUM):

QTUM is an open-source value transfer platform which focuses on mobile decentralized apps or Dapps. QTUM is the world’s first proof-of-stake smart contracts platform.

They hosted a highly successful ICO in March 2017, and since that time has seen an ROI of 6,400%.

Source: investinblockchain.com

The prospect can be daunting for a cryptocurrency investor looking to make money off new investment opportunities, while remaining cushioned from fraudulent ICOs and dodgy coins and tokens.

As there is no guarantee that any cryptocurrency or blockchain-related start-up will be genuine or successful. One simply needs to be vigilant and take steps such as getting to know the core team, poring over the whitepaper with a big magnifying glass. Naturally you should be monitoring progress of the token sales.

Most importantly, one must  just using common sense to gauge just how feasible the project is to ensure that you’re not falling for a scam.

Remember, if it’s too good to be true, then it isn’t true!

Bitcoin (Crypto in general) is here to stay and every day, financial institutions, celebrities, and artists are endorsing it. It also has intrinsic value otherwise companies (incl. Microsoft) accepting it as payment for goods and services are either ballsy or just plain stupid!

Read more via Food for thought…

Accountable Supervision

Leadership values are not only confined to the running of a political campaign, party or country for that matter, however, like in any venture that has an objective and deals with human beings – it forms the backbone of a successful any business.

Consequently, what leaders such as CEO of Tesla Elon Musk, for example, say or does, have a positive or, in the recent unfortunate case, a negative impact on the shareholdings of his business.

The share price can decline sharply and worse yet, it can lead to the exit of senior staff members and thus undermining the business, its leadership values and objectives.

This why it is critical for companies to adopt the right practices and responsible leadership to enable them to address both internal and external issues affecting them.

This is even most relevant when dealing with a company that has a multinational operational facet such as the Murray and Roberts Group – a South African company that operates in a global setting.

This specific multinational company was used in a case study for a research paper because it is firmly entrenched in the construction and engineering industry.

More specifically, they service the global natural resources market sectors of underground mining; Oil & Gas; Power & Energy.

Such a diverse set of operations requires a varied set of objectives spearheaded by a solid leadership path.

New model of leadership

We have covered the topic of Emotional Intelligence before. It now surfaces again within a brand-new leadership model known as the ARCHES model.

The name derives from a key characteristic of the physical structure of an arch and its durability. Coupled with its diversity in models and materials and its depiction as symbols of triumph, it represents an apt analogy of what responsible and effective leadership should be.

The model was especially derived by an academic* for a syndicate group assignment and is based on six key characteristics that should be imparted in a leader.

An effective and responsible leader is one who is attuned to their followers, responsive, possesses the necessary competencies, serves with humility, is ethical and adopts a sustainable approach to leadership.

A leader who possesses all these attributes is one who can rise above adversity and lead their followers in a way that promotes innovation, motivates, develops skills, promotes personal growth and encourages improved performance – B.Moyo

Application of the model

The model defines attuned leadership as the act of being self-aware, informed and  aware of the environment in which you exist – servant leadership.

Employees should be encouraged to take responsibility for their actions because responsibility and effectiveness are complimentary. The demise of US energy company Enron, for example, was due to a failure of management to execute communication-based responsibility, internally and externally.

ARCHES

A volatile, uncertain, complex and ambiguous environment in which a business operates can result in many potential projects not coming to fruition.

In such an environment, leaders that are attuned, responsive and possess the right competencies can expert power as their way to influence followers to exhibit the same traits.

Referent power develops out of admiration of another and a desire to be like them. Expert power on the other hand, is a person’s ability to influence others’ behaviour because of recognized knowledge, skills, or abilities.

This requires the leader to have a tolerable level of humility. This is defined as a personal quality reflecting the willingness to understand the self (identities, strengths, and limitations). That combined with a purpose in the self’s relationship with others.

Once again, the emphasis on Emotional Intelligence coupled with traditional leadership competencies is needed to steer multifaceted companies.

Even more so when dealing with diverse cultures and work ethics across borders and continents.

Direct consequences

Being the largest employer in the locality directly implied that Murray and Roberts had to be consistent with the idiomatic Zulu expression of “Umuntu ngumuntu ngabantu”. This means: I am because you are, you are because we are.

Good leadership in the Ubuntu philosophy is based on the engagement with communities and defines a well-led organization.

Not paying attention to ethical issues surrounding a community or the environment can have an adverse effect on your values. This would also affect your staff and the image of the company you steer.

A bitter consequence of the failure of ethics was evident in the $4.2m (64.1 million ZAR) fine to the said company. This was for its involvement in sector collusion related to construction projects for the 2010 World Cup.

Finally, a practical leader will also consider any upcoming projects with the lens of understanding the environment that surrounds them to incorporate the concept of sustainability.

These traits might sound like they need to be learned but most should be already ingrained or come naturally to you or your leaders.

If not this is not the case, you need to quickly install the right personnel with such to help steer your business enterprise or economy for that matter, to success.
*This blog post contains excerpts and is derived from a master’s research paper. It was conducted by Bonnie Moyo for the Rhodes University Business School.