Beginner Course

Start from $500
Beginner trading course

Course Features

Beginner

$500.00

Course Details

Welcome to our Beginner Power Trading Course.

Here, you will take your first steps in learning the basics of the financial world, our experts will teach you everything you need to know in order to speak the language of money, from basic terminology to understanding how to look at a chart.
This is one of the most important courses you will ever take. A strong foundation will allow you to grow better and faster, so make sure you understand everything before moving on. And of course, as always, we are here to assist you with any question, Let’s get started.
The Financial Academy Support Team
First section: Second section:

All About The Market Size
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Liquidity, Symbols, Understanding Quotes & The Majors.

There are 60 major stock exchanges throughout the world, and their range of sizes is quite surprising.

At the high end of the spectrum is the mighty NYSE, representing $18.5 trillion in market capitalization, or about 27% of the total market for global equities.

At the lower end? Stock exchanges on the tiny islands of Malta, Cyprus, and Bermuda all range from just $1 billion to $4 billion in value. Even added together, these three exchanges make up just 0.01% of total market capitalization.

The Trillion Dollar Club

There are 16 exchanges that are a part of the “$1 Trillion Dollar Club” with more than $1 trillion in market capitalization. This elite group, with familiar names such as the NYSE, Nasdaq, LSE, Deutsche Borse, TMX Group, and Japan Exchange Group, comprise 87% of the world’s total value of equities.

Intro to Margin: Double Your Buying Power
When you buy on margin, you borrow money from a broker to pool with your cash, buying more stock than you could by yourself. It’s riskier than paying with just cash – sometimes much riskier. Think buying a home with a mortgage loan and down payment, but usually involving less money and a shorter time frame.

The other difference is that most people borrow to buy a home because they don’t have enough in the bank to pay cash. But one reason for investing on margin is to benefit from leverage while you keep more of your cash available for other things.

What’s leverage? It’s strategic borrowing. You take a loan, in this case from your broker, because you expect to earn more on the investment than you’ll have to pay in interest on the loan. In fact, when it works best, you score with a greater percentage profit than if you’d used only your own money. No surprise, then, about what happens if you strike out. You can lose more, too.

Note that tax regulations don’t allow margin in retirement accounts; margin is a tactic that can only be used in individual or joint accounts.

You will need a margin account before you can trade on margin. If you are approved you’ll be required to deposit at least $2,000 in either cash or securities that get the broker’s okay, or a combination of the two. That’s a Federal Reserve Bank rule, called Regulation T. It’s insurance for the broker in case things go wrong.

With a margin account, you can borrow up to 50% of the purchase price of an eligible security, as long as your half — not including the $2,000 minimum — is available in your account. You give the buy order and the trade goes through.

Here’s an example:
Let’s say Jane Doe and Mara Smith each have $12,500 to invest today in a stock. Jane buys $12,500 worth of the stock at $25 a share, for a total of 500 shares. Mara uses margin to buy $25,000 worth of the same stock at $25 a share, for a total of 1,000
shares. She combined her $12,500 with a $12,500 margin loan from her broker.

Third section:

The Spread
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Spreads during events, Dangers of spreads.

Spread trading
In the preceding chapter, we described hedges, then showed examples of how you can take a primary position in the cash market and reduce the risk inherent in that position by taking a contrary position in the futures market.

But let’s say that the cash market is, for any number of reasons, unattractive to you as a commodity producer, as a commodity consumer or as a financial speculator. In fact, if you’re trading financial as opposed to agricultural contracts, the futures exchanges may be the most robust market available. In either case, you might want to take both your primary and your hedge position in the futures market.

Definition and Objective:
A spread combines both a long and a short position put on at the same time in related futures contracts. The idea behind the strategy is to mitigate the risks of holding only a long or a short position. For example, a trade may have put on a spread in gold. If gold increases in price, the gain on the long position will offset the loss on the short one. If gold were to fall, the reverse would hold. As with any protective trading arrangement, a spread may be vulnerable to both legs moving in the opposite direction of what the trader may have anticipated, losing money.
Margin requirements tend to be lower due to the more risk adverse nature of this arrangement.

Expectations
In the example above, the spread could actually gain (or lose) in value, even if there is no movement in one of the legs. As stated, one of the legs is for September delivery and it is already August. There might not be much more play in that price of that futures contract; as it approaches its expiration date, it will stick closer and closer to the spot market price. Still, December is a long way off, and one of two things will happen: either the December price will go up, or the December price will go down. If the December price goes up (pursuant to our example), then the basis will widen. If the price goes down (assuming the bottom does not fall out altogether), then the basis will narrow.

The spread will continue to trade as a spread, rather than as two separate positions. There is even a market in spreads as opposed to the uncovered positions. Just as futures prices are typically higher than cash prices (as discussed in the preceding chapter), distant-futures prices are normally higher than nearby futures prices. Thus, December prices will usually be higher than September prices, and so the normal state of a spread basis is to be negative. But there are conditions that can lead to an inverted market, in which distant-futures prices may be below near-future prices, resulting in a positive basis.

What is Leverage?
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Leverage and Margin, What is a margin call?

Two concepts that are important to traders are margin and leverage. Margin is a loan extended by your broker that allows you to leverage the funds and securities in your account to enter larger trades. In order to use margin, you must open and be approved for a margin account. The loan is collateralized by the securities and cash in your margin account. The borrowed money doesn’t come free, however; it has to be paid back with interest. If you are a day trader or scalper this may not be a concern; but if you are a swing trader, you can expect to pay between 5 and 10% interest on the borrowed money, or margin.

Going hand-in-hand with margin is leverage; you use margin to create leverage. Leverage is the increased buying power that is available to margin account holders. Essentially, leverage allows you to pay less than full price for a trade, giving you the ability to enter larger positions than would be possible with your account funds alone. Leverage is expressed as a ratio. A 2:1 leverage, for example, means that you would be able to hold a position that is twice the value of your trading account. If you had $25,000 in your trading account with 2:1 leverage, you would be able to purchase $50,000 worth of stock.

Not all securities are eligible for margin borrowing, and the available leverage for those that are eligible varies greatly by market. Stock traders, for example, typically utilize a 2:1 leverage. It is not uncommon, however, for forex traders to use 50:1 leverage (prior to late 2010, forex traders had access to 100:1 leverage, which many believed made it too easy to suffer catastrophic losses). While more seems better, it’s important to understand that leverage magnifies both gains and losses. Here’s an example:

Stock ABC is trading at $100 per share and you feel that it is poised to rise in price. With 2:1 leverage, you use the $10,000 in your trading account and $10,000 of margin from your broker to buy 200 shares of the stock (($10,000 X 2) / $100 = 200 shares). Without the margin, you would have been able to purchase only 100 shares.

Following the release of a new product and strong earnings, the stock jumps 25% to $125 per share. Your investment is now worth $25,000 and you decide to close out the position. After you pay back your broker the $10,000 you borrowed, you have $15,000 left and realize a $5,000 profit. Because of leverage, you were able to realize a 50% return on your money (less commission and interest) even though stock ABC went up only 25%.

Now assume the trade goes the other way. Instead of climbing 25%, a scandal involving the company’s management causes the stock to suddenly drop 25%. With a share price of $75, your investment is now worth $15,000. You conclude that price is only going to continue dropping and decide to close out your losing position. After paying back your broker the $10,000 you borrowed, you have $5,000 left. This represents a 50% loss, not including commissions and interest. Had you not traded on margin, this would have been only a 25% loss.

While this example may not be realistic for active traders who typically seek small price moves, leverage does allow traders to make more money off smaller moves. While trading on margin and using leverage can increase your returns and allow your account to grow faster, it should always be used judiciously. It is possible to lose more than you originally invested when trading on margin.

The bottom line is trading on margin has inherent risks and may not be appropriate for everyone. You can mitigate some of those risks by using protective stop loss orders and limiting your use of leverage by not using your entire margin balance (just because you have the margin, doesn’t mean you have to use all of it on any given trade). In addition, you should adequately test any trading plan before putting it in a live market and risking real money.

Margin Calls:
Part of your agreement for a margin loan includes a “maintenance margin” percentage set by your broker. You get a margin call when the equity in your investment drops below that percentage. For example, Mara’s maintenance margin is 50 percent. When Mara’s stock dropped, her equity dropped to $7,500. That’s 37.5 percent of the current $20,000 value of the shares. Since her broker’s maintenance margin is 50 percent, she’s short 12.5 percent, or $2,500.

Mara gets a margin call saying she must deposit $2,500 in her account before the deadline her broker sets. Or, she could select securities to sell to come up with the $2,500 requested by her broker. If she doesn’t “meet the call,” her broker has the right to sell any assets in her account to make up the difference. At this point, the broker chooses what to sell; Mara doesn’t.

If the price continues to drop, Mara will keep getting margin calls requiring more deposits. You can see where this is going. Mara could lose more than she invested.

Margin
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Learn and get access to the importance of margin management.

Intro to Margin: Double Your Buying Power
When you buy on margin, you borrow money from a broker to pool with your cash, buying more stock than you could by yourself. It’s riskier than paying with just cash – sometimes much riskier. Think buying a home with a mortgage loan and down payment, but usually involving less money and a shorter time frame.

The other difference is that most people borrow to buy a home because they don’t have enough in the bank to pay cash. But one reason for investing on margin is to benefit from leverage while you keep more of your cash available for other things.

What’s leverage? It’s strategic borrowing. You take a loan, in this case from your broker, because you expect to earn more on the investment than you’ll have to pay in interest on the loan. In fact, when it works best, you score with a greater percentage profit than if you’d used only your own money. No surprise, then, about what happens if you strike out. You can lose more, too.

Note that tax regulations don’t allow margin in retirement accounts; margin is a tactic that can only be used in individual or joint accounts.

You will need a margin account before you can trade on margin. If you are approved you’ll be required to deposit at least $2,000 in either cash or securities that get the broker’s okay, or a combination of the two. That’s a Federal Reserve Bank rule, called Regulation T. It’s insurance for the broker in case things go wrong.

With a margin account, you can borrow up to 50% of the purchase price of an eligible security, as long as your half — not including the $2,000 minimum — is available in your account. You give the buy order and the trade goes through.

Here’s an example:
Let’s say Jane Doe and Mara Smith each have $12,500 to invest today in a stock. Jane buys $12,500 worth of the stock at $25 a share, for a total of 500 shares. Mara uses margin to buy $25,000 worth of the same stock at $25 a share, for a total of 1,000
shares. She combined her $12,500 with a $12,500 margin loan from her broker.

The stock goes up, life is good!
The stock price goes up to $30 a share. Jane’s investment is now worth $15,000. If she sells now, she’s gained $2,500 or 20 percent of her original investment (before we deduct any transaction fees).

Mara’s total investment is now worth $30,000. If she sells now, she’s gained $5,000 or 40 percent of her original $12,500 investment (again, before deducting transaction fees, interest, or the loan amount). If the price rises quickly enough that Mara can avoid lots of interest charges, then Mara’s in the pink.

The stock goes down, life is not so good!
The stock price drops to $20 a share. Jane’s investment is now worth $10,000. If she sells now, she’s lost $2,500 or 20 percent of her original investment (before we deduct any transaction fees). But Mara’s in worse shape. Mara’s total investment is now worth $20,000. If she sells now, she’s lost $5,000 or 40 percent of her original $12,500 investment (again, in round numbers). Since she still owes her broker $12,500, the value of her original investment has dropped to $7,500.

Mara can wait to see if things turn around – remembering that the longer she has the loan the more interest she’ll pay – or sell now, repay what she owes, and eat the loss. But even if she doesn’t sell, Mara may have a tough decision to make. That much of a drop may put Mara at risk for a margin call from her broker. That basically means she has to quickly put up more cash or sell some of the stock.

Fourth section:

4 pillars of successful trading
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Introduction to Technical Analysis.

What is ‘Technical Analysis’?
Technical analysis is a trading tool employed to evaluate securities and identify trading opportunities by analyzing statistics gathered from trading activity, such as price movement and volume. Unlike fundamental analysts who attempt to evaluate a security’s intrinsic value, technical analysts focus on charts of price movement and various analytical tools to evaluate a security’s strength or weakness.

How Technical Analysis Is Used
Technical analysis is used to attempt to forecast the price movement of virtually any tradable instrument that is generally subject to forces of supply and demand, including stocks, bonds, futures and currency pairs. In fact, technical analysis can be viewed as simply the study of supply and demand forces as reflected in the market price movements of a security. It is most commonly applied to price changes, but some analysts may additionally track numbers other than just price, such as trading volume or open interest figures.

Over the years, numerous technical indicators have been developed by analysts in attempts to accurately forecast future price movements. Some indicators are focused primarily on identifying the current market trend, including support and resistance areas, while others are focused on determining the strength of a trend and the likelihood of its continuation. Commonly used technical indicators include trendlines, moving averages and momentum indicators such as the moving average convergence divergence (MACD) indicator.

Technical analysts apply technical indicators to charts of various timeframes. Short-term traders may use charts ranging from one-minute timeframes to hourly or four-hour timeframes, while traders analyzing longer-term price movement scrutinize daily, weekly or monthly charts.

The four pillars of success:

Know yourself

Traders need to know what type of trading will fit their personality and risk tolerance. Some traders are patient and make excellent trend followers others engjoy the action of day trading. Some want to spend all day in front of the screen others do better to simply trade the open and close. One trader may be able to handle a 20% draw down in pursuit of out sized returns while others may quit trading at the first 10% draw down. It is crucial that we know or strengths and weaknesses as traders and do more of what we are good at and less of what we are bad at. We need to find that trading method that we have complete confidence in for robustness and faith in ourselves for following its trading plan.

Know your market:

We need to do our homework on the market we are trading. We need to know its historically price patterns and volatility. We need to have understanding of whether it tends to trend or stay range bound. What our markets recent daily trading range is and the long term historical high resistance and support levels along with the recent support and resistance levels on the chart. We need to be a historian of our markets price action.

Know your strategy:

Being a master of our specific trading strategy and time frame can be an edge over other traders. It is much more profitable to focus our time, research and energy on one strategy. Successful traders usually are not a ‘Jack of all Trades’ but instead the master of one. It is dangerous to drift from one strategy to another, a day trader holding overnight or a trend follower to start day trading usually leads to losses. It is better to follow our trading plan through all market environments which may involve doing nothing and waiting through some of them.

“I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times.” – Bruce Lee

Know your limits:

We have to know how much ‘heat’ in trading we can handle before our stress overtakes our trading plan. Traders have to build up to larger and larger position sizes, sizing up too quickly can lead to uncontrollable fear and greed that clouds good judgement. We can not put ourselves in situations where our ego has to prove we are right to an audience of other traders, family, or friends. There is more to life than trading it is important that traders diversify their lives and not forget why we do this. Health, family, friends, and recreation are just as important to a trader as the work. If we know why we are trading the ‘why’ can generate the passion we need to get to the ‘how’ and keep us going through setbacks.

Introduction to Fundamental Analysis
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Major Events, Currency-Commodity Correlation, Economic Calendar.
Connection between Fundamental to Technical Analysis.

What is ‘Fundamental Analysis’
Fundamental analysis is a method of evaluating a security in an attempt to assess its intrinsic value, by examining related economic, financial, and other qualitative and quantitative factors. Fundamental analysts study anything that can affect the security’s value, including macroeconomic factors (e.g. economy and industry conditions) and microeconomic factors (e.g. financial conditions and company management). The end goal of fundamental analysis is to produce a quantitative value that an investor can compare with a security’s current price, thus indicating whether the security is undervalued or overvalued.

The Basics of Fundamental Analysis
Fundamental analysis uses real, public data in the evaluation a security’s value. Although most analysts use fundamental analysis to value stocks, this method of valuation can be used for just about any type of security. For example, an investor can perform fundamental analysis on a bond’s value by looking at economic factors, such as interest rates and the overall state of the economy. He can also look at information about the bond issuer, such as potential changes in credit ratings.

An Example of Fundamental Analysis
Even the market as a whole can be evaluated using fundamental analysis. For example, analysts looked at fundamental indicators of the S&P 500 from July 4 to July 8, 2016. During this time, the S&P rose to 2129.90 after the release of a positive jobs’ report in the United States. In fact, the market just missed a new record high, coming in just under the May 2015 high of 2132.80. The economic surprise of an additional 287,000 jobs for the month of June specifically increased the value of the stock market on July 8, 2016.

Trading Psychology & Risk Management
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Margin and Leverage, Risk-Reward ratio, Position Sizing, The importance of Stops and TP.

There are many characteristics and skills required of traders to be successful in the financial markets. The ability to understand a company’s fundamentals and the ability to determine the direction of a stock’s trend are two key skills, but neither is as important as the ability to contain emotion and exercise discipline.

Trading Psychology
The psychological aspect of trading is extremely important. Traders often dart in and out of stocks on short notice, necessitating quick decisions. To accomplish this, they need a certain presence of mind. They also, by extension, need discipline, so they will stick with previously established trading plans and know when to book profits and losses. Emotions simply can’t get in the way. (To read more about trading psychology, see “Master Your Trading Mindtraps.”)

Greed Is a Trader’s Worst Enemy
There’s an old saying on Wall Street that “pigs get slaughtered.” This adage refers to greedy investors hanging on to winning positions too long, trying to get every last tick. Greed can be devastating to returns, because a trader always runs the risk of getting whipsawed or blown out of a position.

Greed is not easy to overcome. It’s often based on an instinct to try to do better, to try to get just a little more. A trader should learn to recognize this instinct and develop a trading plan based upon rational business decisions, not emotional whims or potentially harmful instincts.

Fifth section: