The Complete Beginners Trading Course - Stocks, Forex, Derivatives. | TheTradingBible Beginners Resources | Skillshare

The Complete Beginners Trading Course - Stocks, Forex, Derivatives.

TheTradingBible Beginners Resources, Founder at TheTradingBible

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76 Lessons (6h 10m)
    • 1. Lesson 1 - Introduction to Trading

      13:55
    • 2. What is Trading?

      4:24
    • 3. What am I Trading?

      6:25
    • 4. Where am I usually Trading?

      11:09
    • 5. Who gives me access to Trade?

      3:42
    • 6. How do people approach trading?

      8:00
    • 7. Summary

      3:26
    • 8. Lesson 2 - Introduction to Charts

      3:00
    • 9. History of Charts

      4:09
    • 10. Types of Charts

      3:40
    • 11. Japanese Candlesticks

      5:36
    • 12. Psychology of Candlesticks

      4:59
    • 13. The Trend

      3:35
    • 14. Summary

      2:02
    • 15. Lesson 3 - Introduction to Economics

      2:38
    • 16. Supply and Demand

      10:05
    • 17. Macroeconomic Indicators - Interest Rates

      5:57
    • 18. Consumer Price Index

      4:16
    • 19. Gross Domestic Product

      3:33
    • 20. Employment Statistics

      3:42
    • 21. Imports and Exports

      3:57
    • 22. Lesson 4 - Brokers and Trading Platforms

      7:01
    • 23. Understanding Market Makers

      3:39
    • 24. Financial Regulators

      3:48
    • 25. Trading Platforms

      4:23
    • 26. Trading Orders

      6:41
    • 27. Market Depth

      4:05
    • 28. White Label Platforms

      1:55
    • 29. Lesson 5 - Shares

      3:16
    • 30. Basic Concepts

      6:51
    • 31. Basic Concepts Part 2

      6:44
    • 32. What moves their prices?

      7:49
    • 33. Earnings Season

      3:42
    • 34. Lesson 6 - The Foreign Exchange Market

      10:24
    • 35. The FX Market, What is it?

      5:29
    • 36. The Pip

      3:53
    • 37. Logic Behind FX Market

      3:15
    • 38. The Economic Calendar

      3:51
    • 39. What moves FX Prices?

      5:24
    • 40. Lesson 7 - Indices and ETFs

      1:48
    • 41. A little History and Math

      6:32
    • 42. A little history Part 2

      4:57
    • 43. Composition

      5:52
    • 44. Calculation and Purposes

      5:06
    • 45. ETFs

      2:24
    • 46. Lesson 8 - Commodities

      4:09
    • 47. Agricultural Commodities

      4:13
    • 48. Energy Commodities

      3:46
    • 49. Metal Commodities

      3:34
    • 50. Environmental Commodities

      1:32
    • 51. Commodities Futures

      4:19
    • 52. What moves their prices?

      4:34
    • 53. Start thinking like a trader

      7:08
    • 54. Lesson 9 - Cryptocurrency

      9:31
    • 55. A little History

      4:05
    • 56. Some Famous Cryptos

      3:06
    • 57. Value of Technology

      2:52
    • 58. Trading Crypto

      6:59
    • 59. Lesson 10 - Financial Derivatives

      1:57
    • 60. Option Contracts

      6:44
    • 61. Contracts for Difference

      6:06
    • 62. Binary Options (Financial Gambling)

      3:21
    • 63. All about Logic

      3:10
    • 64. Lesson 11 - Technical Analysis

      3:03
    • 65. Support and Resistance

      3:40
    • 66. Simple Moving Average

      4:41
    • 67. Bollinger Bands

      5:46
    • 68. Exponential Moving Average

      3:22
    • 69. Relative Strenght Index

      2:28
    • 70. Moving Average Convergence Divergence (MACD)

      4:15
    • 71. Lesson 12 - Time to Trade

      5:23
    • 72. Leverage

      6:04
    • 73. Fees from Brokers

      3:42
    • 74. Risk Management

      7:25
    • 75. Run your own Study

      3:13
    • 76. The End

      5:22
11 students are watching this class

About This Class

Are you a beginner looking to learn about trading or to get started?

Would you like to learn how to make your own trading decisions based on logic instead of following someone else's school of thought?

Would you like to learn from someone who actually worked inside the CFD Brokers industry?

This course is for you.

After working for quite some time in the CFD Brokers industry I had a dream, to create a simple, beautiful and easy to understand trading course that showed beginners all the reality of the trading / investing industry and gave them a fair chance by teaching them how to think instead of just how to repeat random formulas or methods. To accomplish this you need to learn everything about investing and trading from scratch and then build slowly brick by brick.

We will go together from the most basic beginners stuff like trading charts all the way up to supply and demand, indicators, financial derivatives, pump and dump, broker regulations and market makers. Pretty much everything you must learn to not be taken advantage off by financial predators. The financial services industry and in general the whole trading ecosystem is full of people trying to take advantage of those who are not informed.

This beginners trading course is all built around logic. I want you to learn how to think like a trader and to formulate your own opinions and conclusions based on solid trading knowledge. The learning style will be like a conversation between two friends, you and me.

This is the product of 2 years of work and a lot of love. I hope you enjoy it and help me improve it and make better every day, after all, if it goes viral, it means trading will no longer be a mystery, a lot of people will enjoy it more and scams will be reduced.

If my dream comes true, then you'll have learned trading by actually thinking and arriving to your own logical conclusions.

Good luck!

*** Disclaimer: Trading is risky, you should consider if you can afford the high risk of loosing your money. This course does not provides any type of financial investment advise in any form neither any recommendations to buy, sell, hold assets or perform any type of transactions. All of the course materials in any form (such as text, emails, videos, audio recordings, pdfs) are provided exclusively as informational and educational content of impersonal nature as it's not tailored to any specific person needs. If you choose to trade, you're doing so at your own risk and choice without any type of guidance from this course or it's author.

Transcripts

1. Lesson 1 - Introduction to Trading: Hey, guys, welcome to the training bible dot com beginners trading course. We hope that you make the best out of it and that you have a lot of fun, and by the end of the course, you've gained a lot of knowledge. So let's get started. This guy you see right here, that's me. Let me introduce myself. I'm Stephanie. I'm half Greek, half Italian. I was born in Venezuela, so actually, my native tongue, it's Spanish. Apologies in advance is my English is not 100% perfect, but we'll make the best out of it. And I've had the opportunity to work for a lot of CFB brokers. See, that's quite a controversial subject because a lot of people want to understand about this industry how to make money, and they don't know what to believe. What's going on outside and the beauty of it is, have had the chance to see it from the inside of being on the other side of the equation. In the brokers side and everything you can imagine, I've seen already people making trying to £2000 in one day people losing £200,000 in what they people profiting in short time frames in a long time frames people losing an extremely short time frames and in the end, everything you can imagine we have already seen. And why's this important? Because this one you see right here after some period of time became my face. And I'm gonna explain to you why I was horrified out of the amount of misinformation and abuse that was going on around. See, there's people all the time in Facebook in instagram, Twitter, anywhere selling signals, secret profit signals and the Promise X amount of peeps for a week or secret methods. And they tell you I developed the stock options trading course that is gonna make you billionaire and all of this is just not true. OK, how do I know it will have been on the broker side? Okay, there's very little we cannot know by now, and I want you to think logically for one second and understand something. If somebody creates a secret stock option trading method guaranteed to make millions of dollars, the last person he needs to sell it is to an online student looking to pay $200. If you have a secret trading method. You don't need $200 from students online. Unless, of course, your method. It's useless, and you want to make money out of selling that method online. So out of this big problem owns not also not also the secret signal sellers from the methods. No, it's them the broker. So there's a lot of brokers taking advantage of people, and we will go through that deeply and lesson number for the worry. But all of these things happening gave birth to this idea, said Okay, great. Look, I know the truth. I know what people need to learn. So why don't we compile and create a beautiful, beautiful course that gives you all the knowledge that you really need to use as a solid, a solid starting point? Because you need to understand how things work. You need to be able to come to conclusions by doing a logical reasoning and analysis. You don't need any secret methods and fairy tales because they don't exist. And all of that combined gave birth to the training bible dot com beginner's course. And our mission is simple one. No fake promises, and it's just to give you a fair chance. That's it. So what will you learn during the course? Number one? We're gonna talk about introduction to trading all the basics. Assets exchanges. What? It's a derivative. What? Its analysis. That analysis approach is very simple. Just to get you started because I'm not sure. On what level of knowledge are you coming? This course is designed for beginners, But maybe you have never even read anything about trading. Or maybe you have read a little. So with this one, we set everything straight. Then lesson number two is gonna be about introduction to charts. We're gonna be talking about the history of Charles. Where do they originate from the data table. Why do we actually need Japanese candlesticks? And it's just not a fashion. There is a really good point behind it. And the trend? How? Despite a trend and all of that, then lesson number three, and perhaps one of the most importance in the whole course. And my favorite, it's we're gonna talk about introduction to economics, specifically supply and demand. We're gonna cover it very well. And then so macroeconomic indicators such as interest rates, a gross domestic product, the balance of trade But here's the thing. The supply and demand part is gonna be the most important one. Because this is how price determination happens. And all the time is getting eating altered by external events, which we, for example, one of them can be a shift in the supply curve because of a natural disaster. Or it can be manipulated by people with large amounts of money. And how did this manipulation happen? Well, what? You will learn the lesson Number three when you connected what you will learn a lesson number 567 is gonna make sense. And you're gonna understand. Then how is it happening? How to spot it and it won't make sense to you then. Lesson number four. We're gonna be talking about brokers and trading platforms extremely important and white. You need to understand how brokers work. How do they really make their money? Some brokers make money just from commissions. Other brokers make money by taking people's losses. And actually, that is not wrong. It's just you have to think of it like a casino. We don't just in the casino owner for running a business based on people losing money. It's OK, but The only problem happens is when the broker is actually getting you to lose money. And that can be avoided because in the same way, there is brokers. Most of the brokers of the CF the brokers profit from losses. There's brokers that do it to do this in an ethical way. They just don't don't alter the games that people do whatever they're gonna do. And a lot of people are profitable. A lot of people lose. It's up to them. And then that is broken. Of course we want to put out the way. Call it in Venezuela the hairy, hairy hand in the game, and I'm gonna teach you how to spot this. Understand? What is going on was the regulation how to how to search for this regulation and to stay protected. And also, we're gonna be talking about the trading platforms, the buttons, the sell orders, thereby orders and all the stuff you need to understand to successfully operate a trading platform and the different types of them. Then lesson number five, we're gonna be talking about shares, basics, the common misconceptions. You know, if I own a share, can I take and I take a table from the company just because I'm a shareholder? No, you cannot. But it will explain what the earnings report. The impact on price is what drives them and all of that. Then we're gonna be talking about forex, the foreign exchange market. What moves the prices, how to trade it, the papers, the calculations, all the basics. Then in this is the footsie 100 NASDAQ. We're gonna cover some in. This is the most important ones. What is your composition and how are they calculated? That's one of my favorite parts understanding. You wanna learn how to actually how to do them? The Dow divisor created by Charles Darwin Nedra Jones from the Dow Jones Index gonna learn how to calculate this number manually, just like the Wall Street Journal has been doing for a long time to keep tracking continuity off the index. Then lesson number eight. We're gonna be talking about commodities, what moves the prices and this when you're gonna start thinking like a trader finally gonna learn how to spot opportunities everywhere, for example, a natural disaster. How can you say the natural disaster and then we're going to go for lesson number nine Cryptocurrency, what is the Blockchain? How does it works? What? It's a wall that I really trade in Bitcoin on my trading a Bitcoin or a CFT of Bitcoin and doesn't have any really any real value at all crypto, I'm gonna also share my personal viewpoints on this. I'm dying to do it right now, if I could, but we need to leave it to lessen nine, then lesson number 10. We're gonna be talking about financial derivatives. Okay, look, financial derivatives are pretty much everything. That's the funniest part. Supposedly, there are complex products, but in the end, those are the ones that are more more exposed to retail investors. You know, it's it's so fun if you ask a normal person out there that probably told you that has traded somehow. The most probable thing is that they traded the financial derivative with or without knowing it, and they're actually quite cool, but they are complex when we don't understand them and they have great uses. You're gonna learn everything about them. For example, options futures. See if these contracts for difference, then lesson number 11 is gonna be about technical analysis. We're gonna explore the logic, the principles. Is it really worth it? Right. You just drawing down money in the toilet and the most common use indicators such as a maxi the arse, I the simple moving average. And we gonna understand how how are they composed? And what are they usually telling us? And then last but not least, we're gonna combine using older knowledge We have learned during the whole course, and we're gonna have a final lesson lesson number 12 or we're going to discuss trading approaches, rescue management, calculating our costs and the 100 philosophy, like I like to call it. Okay, It's old. Based on common sense, logic and reason. There is no secret here. Once you're there in older knowledge, then you're gonna take all this pieces of knowledge, join them together in your head and use them to make decisions no more than that. So during the course you can undergo during the course, you can undergo a transformation process. So see, the most likely thing that is happening is this one. You arrive as one of these three guys, number one. You're lucky you're profiting. You're excited. You're I say, shiny and ready, like our money and number two. You're sad. You lost money. You're like, Oh, God. You know, like I just can't find a way or number three. You're a beginner with zero expedience, your completely blindfolded and new to this. You have never read anything, and you're excited about it. And you want to learn. Great. What's gonna happen with use this during the course? First, we're gonna make you become this guy. This guy right here is aware. Why is he aware? Well, now he understand what is what he's doing, how the prices move and everything that is happening around him, that it's just not a pink world. And there is no fake promises. The reality behind it that's gonna happen around lesson number 56 By the time you reach there, you're gonna be this guy right here, okay? And then, by the time you reach lesson 11 you're gonna become this guy right here, a business thinker. Now you're going to see trading opportunities everywhere. You don't care what you're seeing. You know that there is a trading opportunity to be found, whether it's something good or something bad happening. And then by the time you complete the course and you complete lesson 12. You're gonna become my favorite character of the trading bible dot com. Mr. Gordon, Why? Because you'll have lost your feelings, your souls, and you have become a full trader in all your capacities. Great. So let's talk about the requirements of the course, and I'm gonna go through this very quickly. But it's important. It's not gonna be just a trading course. I'm also going to share ah lot off our philosophy the way we see life, the business thinking also the good thinking and this list right here, and it's very important. Look, you need to have an open mind, okay? Walking in somewhere with prejudices, whether it is that you can any type of prejudices never get okay, that's very important. Stay open and never accept the truth. Okay, judge, discuss it and stay open to changing the way you think. Then patients businesses never done in a hurry. And when it's done in a hurry, something goes wrong. So take your time. Trading is not the way to make easy money. It's not at all if you come here expecting to make money quickly, then it's not for you and you're likely to lose even more then. Willpower. Even if you're feeling tired, Lacey, Whatever it is you're doing, you gotta work. That's it you got. You gotta study. You gotta check your news. You gotta check your trading platform. It doesn't matter what's happening around the world or in your life. You got to do this. Otherwise you lose the edge, then perseverance. Look. Quitters and winners. Think about the Kentucky Fried Chicken guy. If you quit, you'll never see the results. You got to stay on this at least six months. One year, maybe even more. Regardless, if you're performing good or not, to actually see some results and in order to do that and not be broke, that's when you learn risk management and trading psychology and not to trade when you are tilted. And all these things that will keep you in the game for the long run in less than 12 people understand it then. Last but not least, a notebook. Why do I recommend this? Look, you have the course yet just it's not good just to watch videos. And that says it down like board. Okay, let me wait till he finishes this lesson. no is great if you take notes of everything you see and you put it on the discussion and you Google whatever you want to Google and you go back and forth because when you're doing that know, Ledge tends to stick much more in our heads and one off are approved brokers or your own. So here's the thing. If you're in you be if you have no experience or even if you have some experience. Okay, scenes. Unless you have a real connection inside to see if the industry is likely, you don't understand completely. How does this brokers work? How to spot a good one from a bad one. So we've taken care of that part for you in our website to trading bible dot com. We have already set up the Review Center to explain you how brokers make money and how they don't make money and how to find a good broker from a bad broker. And the best thing you can do is choose from one of ours. Now, if you have already yours and you want to stick to it, that's completely fine by us. It's not a requirement to find one of the ones we provide. But if you do it, it can be better for you. And by the time you reach lesson for it will make sense much more for you and you'll be able to choose your own broker regardless of what we say or whatever you see, great, So let's get started. 2. What is Trading?: Let's get started with lesson one. So the first concept winning two started its trading. You gotta understand. What is it? So basic definition would be exchanging one item for another. Which means give me this. I'll give you that right. It always existed from the times of barter all the way up to today trading. It's not just that. Something like I want you to get a concept in your head. It's not just something done for fun, for money. And that's it. No, There has to be a purpose behind trading right? We do. We don't We don't just trade because we have to trade. No, there is a reason behind this. Why? Maybe this guy right here has extra oil. He doesn't needs it. And maybe this guy right here has extra corn. He doesn't needs it. But maybe this guy and it's the corn. Maybe this guy needs the oil to produce something, right? So if you were studying, what each one of these guys is doing, for example, was the name of this guy's business super oil dot com. Right now I'm making up something right now, and we understand that every time of the year. He's selling a structure in product that is based on oil, and we understand that he has a need for it. And we know who he is buying from and why. Then we understand what can be moving the price of oil, but it's by understanding the transaction behind it. We will get more, go deeper into this later on. But this is just to give you the night. That idea, like I've noticed a lot of people after 1000 conversations on the phone of hat would clients that they believe that trading is just done. Forefoot like Imagine the charge there 200 numbers of finals. That stuff no, like that's not the important part. The important part is, why is it trading getting done? So now we understand we're talking about exchanging one item for the other, okay, and people do it usually to buy or sell goods, which is the real reason with Valley with purpose behind it and to generate profits, which is a speculative part. Great. So let's talk about training vs investing because this is where I see one of the greatest mistakes. Look, they are not the same thing. Okay? Trading involves frequent buying and selling speculating, which means I don't care what I'm buying or selling or like carries to profit from the transaction. It is done on shorter time frames, and it carries much more risk. That's the first thing we need to understand. Why will think about it. It's much more likely if you're executing 100 transactions and trading per day 100 orders that a lot of disorders can go wrong. There is a lot of volatility. You don't know what can happen in such a short time frame. Compared to investing right investing. We buy and hold something. We do it under the longtime friends and it's all about the real value under its less risk than makesem emphasis into these two points all about real value. Why, Let's say you know a friend that is developing an amazing app, right? His dream is to build a nap company. And then by the time he registers this company, he talks to you and tells you. Okay, body, I need some money. And when I opened this company, you know, and you're like, OK, perfect. I'm gonna be one of your shareholders. There you go. Here you have $50,000 to open your company and let's be partners and you register this and you bought some shares. But straight from the moment the company's starting right, this is a very small scale to picture how it works. But at that point you're becoming an investor, and it's not like you can go and do that. And then the next day, after, release the stairs off your friend and sell it to somebody else. No, that's not the optic of the investor. You expect to put that money in those shares toe own a percentage of the profits off. Or maybe have some voting power over the company of your friend. And over the course of years, you expect this company to do good and to be worth it in the same way. Like if you were buying a house, right? You expect in this house to increasing value over a certain period of time. It has nothing to do compared to trading trading. We do it on short time frames. Investing is done under the different optic, with more value in mind or longer time frames and with less risk compared to trading and understanding this to this crucial because all the time I've heared even brokers telling to people, Sir, how much are you willing to invest? Invest? Every time I hear this word, they just want to kill myself. It has nothing to do. What? What we're doing when we're trading and understanding, This is a key to getting started because now at least you know what you're doing. 3. What am I Trading?: assets. What are they? A resource with economical value? Right. So what am I trying to say by this? It can be anything that has Economical Valley. For example. You can be the owner of a company, and you can be speaking about one of your employees and you can call John. It's called this employee John. He's a great asset to this company, right? It can be £200 of gold that you can have at home can be your car, your car. It's also a research with economical value, right? You can say it is one of my company's assets, but in trading, which is where we care also in investing this concepts are general for defining financial investments. World it's can be money can be shares. Metals can be pretty much anything that you can treat right, And it's very important to understand this because it answers the question about water. We trade okay. And yet, let me explain something later around, you're gonna understand that even though you think you're trading this assets, most likely you are not, and you're gonna understand why. So let's talk about the types of assets. No, these are the most common number one currencies the forex market, which even if you think you've traded them, you probably haven't. You will understand why, Because you are speculating on them. You're actually never getting a hold of the currency, you know, when have you really trade it for its? If you took a plane, you took a trip to a country with a different currency, for example, that say you went to Turkey and to Istanbul and you change dollars for the Turkish leader. Then you actually perform a forex transaction. The real deal. But what you're doing in a trading platform is not at all that. And I will explain to you why later then in this is another type of acid. What are they? A basket of stocks? Just a bunch of companies together grouped by some characteristics, then stocks or shares right, little pieces off ownership on a company. Later on, we will explain because remember, not just because you own a share doesn't means you get to take the TV's and the computers inside the company. There's some rule for this shares then commodities right raw materials or primary agricultural products using the production of something else So, for example, oil we used in the production of gas for the car. Great soil said commodity gold is used in jewelries Eustis. A store of value itself is using electron ICS. Right. So commodities, usually they're split into several categories. We will see it Indefinite lesson specifically designed for commodities. But the most important thing is that they tend to be extremely necessary things. Okay, then financial contract derivatives. This is an asset. Okay? They are an asset themselves. Look, an option or a future can be based on the price off the commodity and the price of this corn. But also we treated as an independent asset so we can actually separate them and understand what it is we're doing. Don't worry. We'll go deep into it and a little bit then Cryptocurrency also an asset. What is it? In a simple way, virtual money. It doesn't exist physically, is not operated by somebody. It tries to run on the network by everybody. Put in an effort all together. And that's how it stays over there. Well, look at it better after. So the financial instruments, right. These derivatives, what are they? Let's do it together. So monetary contracts between parties, right, They can be traded, created, modified, and they're known as financial derivatives. Great. This concepts we understand, but what did I just say? Look, this is the asset. This my share. Then somebody's gonna say, OK, I'm gonna make a paper based on the price of that share that will give me the right to do something. It can be. Sell it. It can be buying to compete and, I don't know, destroy that can be print copies. Doesn't matter. I'm just making up stuff right now. The point is that this paper has no value by itself unless they first acid here exists. Okay. And most of the time, what were trading is financial derivatives. Just think about it. If you're creating, it's like a coupon, right? That coupon that gives you the right to do something. So think about it. What is better for you to go ahead and trade 100 barrels of oil? No, transport them, get a cargo truck, be able to move them, or to just go ahead and write up a paper that has the value of this 100 barrels of oil and then we decide how we're gonna move them or not makes sense, right? Right. So what are the most common financial derivatives now? We only care about the 1st 3 The other two is just to let you know they exist. But these are the most important for you on option gives you the possibility of buying something at a fixed price. Later possibility. You're not obliged to do it so I can get get an option to buy one snicker chocolate in one month and not necessarily means that I need to go ahead and buy it because I bought the option. No, I have the option to do it. Then a future. It gives you the obligation to buy something later on in the future, which means you bought the future. You must execute the dance action specified in the future and then the c f t. The contact for difference. It gives you the ability to trade price differences just like the name says. You know, if you open a see if theon apple at 50 and apple goes to 55 then what you're going for here is this 50 to 55 this $5 difference in the price later on in the derivative lesson, we will expand deep deeper into what is the CFT? How to use it out as it works. But it's just to give you the idea off. What does it means, right? And then forwards and swaps other types of derivatives that are used buy more professional investors and are not available to the public easily. And they're not traded on the trading platforms that you're gonna be exploring all the time . No there, not so common for us. Remember, this one's here are the most common for us. You're going to see them in old, the brokers, and you're gonna be exposed to them all the time, especially world the C F T. One of the most important things you need to remember treated as something independently. When you see your platform by oil, it doesn't means you're buying all you can be buying a CFB on oil. You can be buying a future on oil, or you can be buying an option on oil. Great 4. Where am I usually Trading?: So the answer to the question, Where are my trading? The exchange. What is an exchange marketplace where assets and financial instruments are traded, Right, So everyone goes there, meets up buys and sells simple to understand. No. Perfect. So let's talk about this. Exchange is an exchange. Can be a physical place in Elektronik platform or both. Okay, The new your stock exchange, for example, has there have their own building the NASDAQ as their own building and they also operate electronically, right? But then you have exchanges that are just online. Let's say Cryptocurrency exchanges like this, famous by Nance preload Next, whatever. And they just existent as a platform, right? So you can logon online and do your trade. So it's their very different from each other. But remember one thing Not always. We are training on the exchange. Regardless, if you think you are trading here, you're likely not. And I want I'm gonna explain to you what? Look, First for shares to be listed on exchanges as an example, they have requirements, right? So think about it one second if I just went ahead. I'm Stefan. I'm going to open a company, right. I go to the register and register my company. And then I say, like, Oh, great, you know, I have a company. What this does it doesn't even matter. Maybe it's a fake company, and then I go to the exchange I posted there and people start buying my shares, you know, because I'm making a bunch of fake promises off how this company is gonna perform, and then I just take all the money and disappear. And that stock fraud, fraud, right, well, that there are requirements for shares to even go on the exchange in the first place, such as the capital amount right there. Maybe they have $50 billion in capital. Okay, we accept you may be the sheriff has also specific value, and your shared needs to cost more than $200. If you have a $1 share, maybe we don't want it has to be regularly audited, Which means some international company that's dedicated to Disney's to go all the time and oversee the book, see what they're doing. If the, you know, check the company and then a certain threshold in revenue, maybe we want only companies that make $10 million every quarter. Otherwise, we don't want you here. And this prevents, of course, that any crappy little little business you know that could be fraudulent goes into an exchange and becomes a traded company. Because those are technically, they end up being this old penny stocks that you saw from the wolf of Wall Street. They were just shares. They were so small that they didn't even trench trade officially in the exchange, and people were just buying and selling them with fake promises. And in the end, it was like, I don't know, like a small tent in the woods. They didn't even have an office, that company. And then people were buying and selling, thinking there's gonna be a $1,000,000 company and it was all just lies. So that's why we have requirements for shares to be listed on the exchange. And there's not just requirement for shares that commit requirements for commodities for everything. You will see each one of them during the later lessons. So now that we understand that we have exchanges where people are meeting to buy and sell all the time, yeah, there's a centralized place where all the investors gathered together to trade specific shares. We need to understand something else regardless of where you live. Probably there is a stock exchange, an onerous famous stock exchanges all over the world. Okay, so in this case, let's talk about the New York Stock Exchange or the NASDAQ Exchange in the United States, or you have the ASX Australian Securities Exchange. Right then you have the U Hanners book stock exchange. So if you look slowly, you'll find them everywhere in the world. You have a stock exchange open and operating at certain time, okay? And that the shares of that country are being traded there. So think about it. If you're an investor, you live in the United States and you want to trade shares on the London Stock Exchange, the one we have highlighted right now. This means you need to know what time is the London Stock Exchange open? What time do they close and what are the shares that are being listed on that exchange? And as I was telling you in the beginning of the course, all of this information is publicly available. You can just enter into Google shares of the London Stock Exchange, or top 100 shares of the London Stock Exchange, and you'll end up finding everything you want to know about each specific exchange, and you need to understand that each one of them operates under a specific time frame. So this means that you're not gonna find open at the same time all the exchanges in the world. Never it's not. You're not gonna find the the Japan Exchange Group or on the London Stock Exchange and the New York Stock Exchange exactly at the same time, because every country has their own time zone, right? So in the end, there's always eventually except on the weekends where there's a bunch of them close. But in the end, all the time there's someone open operating, but not all of them at the same time and understanding what times are they open makes us see, for example, that investors are pulling hard when this exchange is just open, and then they switched to the other one. After this one is close because they want to trade on the other one, and that each country has their own assets. That is training on each exchange. OK, great. So let's talk about O T. C. Okay, I know it sounds dodgy, but it's not. Look, OTC is over the counter trading don off exchange, and I know I'm saying it doesn't sounds dodgy. Well, it sounds that you, but it's not. It's to explain to you why. Look, if you and I, right now, gather together, right? And we say, Great, We're gonna do some trading. No, exceed just you and me. We we have our paper shares in front of each other way. Have the bank accounts open toe wire. Technically, that's doing an OTC transaction. Okay, but the thing is that this old dissident section and they're not happening like this is not just you on a friend. It's a little bit more complex than that. All these brokers that we're constantly seeing online. The CFB brokers are OTC brokers. Why? Because see if these are not exactly who have the lead regulated, standardized products there customizable, we're gonna explore. That's one. Once we look at this difference is right here we have in front of us. But just let me make this clear. What I'm trying to say is that all these products that you're trading in the CFT brokers don't need to be exactly off the same way the brokers can customize them, and they are not traded on an exchange. So this means you are trading them internally on your broker, so there can be 20 brokers and they can be quote in different prices, regardless, if they're talking about the euro dollar, they were gonna try to match up right, But they can be. They could be 20 different prices because they're not obliged. It doesn't work that way. They can quote whatever price they want because it's an OTC transaction. It's an internal contact they have in their system. Is not something out there publicly traded on an exchange? So the differences between exchange and OTC let's explore the exchanges. We discuss mandatory rules, right, so the product needs to be with certain specific stations or needs to be traded asserting our standard products. For example, if you're trading on a commodities exchange, oil or gold, each contract needs to be off 100 ounces of gold. Okay, higher availability off course. The big players, the governments, institutions are all trading there so that that's where you find the money, then more transparency off course. If it has more rules, task, standard products and all of that. This means that it's gonna be much more transparent. Right then, determines have maintains the market price is very important for us. So in this place where the big money is getting played around and there's people buying and selling, it's where the price determination it's happening. Okay and old everyone out there, the CFB providers of brokers are quoting. Prices are trying to mirror the prices that are happening in the exchange because the exchanges one responsible for this prices. And last we say centralized structure for a reason, because it's just one place is the exchange is being traded there and that's it, period. There's not like 20 different places where you find the same asset under 20 different prices. No, usually is the exchange the price, and that's it is being traded there now, on the other hand, the OTC, the CFB broker, for example, or other derivatives which we don't care. But it's nice to know the forwards and all these customized products have no mandatory rules, right? We can do them, however, we want them where nobody's telling us how to do it customizable, they can have different sizes. Why do you think you see when you're trading gold on your CFB broker And they tell you you can take Cedar Point Want contracts of gold is because trading a CFB you're not trading gold. If you go to the the commodity the biggest commodities exchanges in the world and you tell them I want to buy Cedar Point want contracts of gold? They're gonna tell you goodbye. You're poor and that's it because it doesn't work like that. Then there is less liquidity, which means less availability. Why imagine in one place we have the big players playing right in the other place. It's a noticed A transaction. It can be a broker. Maybe it has. I don't know, 1000 people training against each other. And in the end, there's not much money there, right? So it's less liquid, less hostile s availability, then less transparency. Important one. Think about this. If the exchanges transparent, it's public and it releases all the information. This means they disclose the orders, right? How many people are buying are selling how much money is going up and down in the OTC broker? They're not meant to disclose it right. They don't care about how many people they don't care for you to know this. It's their problem. They are quoting their own prices and that's it. No, The difference. Okay, One of the most important ones. Okay, it's decentralized. As we told you, it has a bunch of different structures everywhere. Everyone is quote in the room price, but I want to make emphasis on this one on lower fees. The reason that it's much more cheaper to trade on a CFT broker is because, since it's a customizable product is OTC that is less volume, less size of the trades that you can execute the end. They can quote much, much lower fees. And when you're paying when you're opening a trade, you don't need to pay ex commission for opening a massive contract with you opening a small trade, let's say 0.1 context of gold. The commission you're gonna pay on that is gonna be much, much smaller, then the commissioning opening a trade off 100 ounces of gold, which, if Goldwasser $1500 announce it can be a $150,000 operation. So in the end the commission tends to be much, much slower. So remember, you're not trading. It's likely it's the most probable thing to be happened in most of the situations. You're not trading on an exchange, their trading on an OTC broker, which can be a CFT provider. And how did they do this? Well, they're quoting the prices that are in the exchange. OK, so you technically, what you're doing is trading a mirror off the exchange. 5. Who gives me access to Trade?: dah mighty broker. Let's clarify some concepts before we jump into lesson number four, which is when you're going to see and understand fully how brokers work their business model there types and good ones from bad ones. Financial regulations and all of that. But for now, just a quick one to be on the same page together. So broker a person or firm that executes financial transactions for others. Right? And if this guy right here is you and this one is the new your stock exchange, then there is some guy in the middle and we call him the Broker. It can be a person or a firm. Now, bear in mind one thing. The broker is just a middleman. He's never choosing what you're gonna trade. He's just the middle man. Very important to remember this. And later on, you'll see why. How it works. It works with the brokers. So look, option one. A broker does it on your behalf, right? What do I mean by this? So, you know, a license professional that it's a broker. You call him, Tell him by me 20 apple stocks at this price, and he executes a transaction for you. Okay, then affirm dusted on your behalf. Then we're talking about a big firm and investment from you. Tell them. Okay, look, buy me this That are creating a portfolio with deceptions, you know, And I'm gonna choose if I want to do this or not. Right? So still, you always have the choice. That's why we have the work on your behalf in in common in both points And point number three, you do it using a broker's services. This is the one we want. We want new to be the one who's always in charge of how you're gonna use your money When, how and why. Because that way you can attribute yourself the wings or the losses, which is much more pleasant than just wondering. Oh, my God. That this guy hired to handle my manager disappeared it all. What am I gonna do now? Know it's on you and you can make rational decisions. Okay? No. How did it make money? There's actually a lot of waste. This was just the basic ones. Commissions to open and close traits. You've heard about it? Probably school. The spread. One of them. The difference between the by and the cell prices. That's why you see always in every broker platform. You see that the buyer and the seller different, and it's called the spread or commissions in and out. When you're opening a tape in a specific market around the world, let's say you're going to United States and trying to buy a stock. Durst on brokers charge a commission to go in and a commission to go out of the trade. No, there's also maintenance fees. Some brokers charge a commission for having a position open during every night. Some brokers charge a commission for not using their account they several types of commission, and actually, they're quite open about. It is just a matter of knowing how to find them. But later on, we will explore the type of fees and commission that's broker can charge so we can include them always in our costs plan, because we need to plan before opening a trade. All this kind of things okay and last, there's others. There's other methods that brokers used to make money. Some brokers can act specifically. I'm talking about market makers. You'll see it later on and listen for some brokers can act like a casino. You know, they're making money out of trading losses, right, because they're betting on people losing. But they're not altering the game. They're not doing anything to make you lose. They're just hoping you lose. You know, statistically sometimes because people don't trained on, get prepared and educate themselves in trading the step. Statistics are under favor. That's why there is a lot of brokers and their profitable. But this brokers quite good. There's nothing wrong with this business model. When it goes wrong is when a broker is advising you to take wrong decisions to make sure that you lose. And that's exactly one of the things we want to prevent with the trading bible dot com. But don't worry. You'll see later under a lesson. For at least now we're clear on who's the broker. He's our middle men into the financial markets 6. How do people approach trading?: analysis the most important tool we will use during all the course our brain power. I want you to become level God. Question asters that does the key to success. So that's it. For what? It's analysis. So we that we're gonna take something, we're gonna break it into small parts, study each part, explaining and understanding. Okay, take any problem you've had in your life. It doesn't matter if it's a good one about what doesn't matter. It just takes any scenario. And you can always ask these questions. You can ask what happened and why did it happen in the past, right? For example, let's take a financial problem. What happened and why the U removed in any date three years ago, it moved 20% in one day. Okay, So what happened? And what was the reason behind it? Why then in the present, right now, what it's happening and why? Why is it you removing 20% today? Search for the what and the why and then using what we have learned, then we go and we say, Okay, what could happen and why could this happen in the future? Right. So that's the main way to approach analysis. Now, let me show you a more life example of how it works Now, for example, the state, the shares of Netflix. No, we go ahead, we do our research, and then we say, Great. What moved prices in the past. Okay, well, let's say maybe Amazon read Amazon Prime video may be released. Some ads and that change the price of Netflix stock. Right? Okay, what's moving prices now and then we start searching, We find all. So the new season of Castle EPA bill came out and the prices NFL exchange because more people subscribe? No. Okay. Is there business doing good? Okay. Water. Netflix business metrics, for example. How many subscribers are they gaining per month? What is their target numbers, you see, like, what is the business figures behind Netflix that can tell us? Okay, this company's performing good or bad. Then is there any patterns? For example, is Netflix performing well, always in December because people are annoyed and the one stay at home watching movies. Right? So a lot of people subscribe. I mean, what are the patterns or what time of the year is? Usually you spot that Netflix is having some great movement. Do investors like to cash out and the stock drops in December? See, then how much it moves every day. Oh, okay. I see that Netflix usually is moving 10 $20 per day. I'm just making up numbers, just not the real numbers. And then I say, OK, based on these numbers, I know that if this number is suddenly gets exceeded something weird that's happening, right? So this is how you approach analysis. And why did I put a photo of Donald Trump here? Because also, every time Donald From says the word huge or whatever it is, he's saying massive, anywhere the markets move. So you need to spot it. You need to understand. Okay. Every time Trump says something about the markets, about taxation, about days, about that, the markets tend to react in any direction, coming up can be down. So it's good to understand and analyse everything that it's happening. And you do that by taking a piece of paper. Okay? Doing your research and writing down What? Why, what? Why? And in answering all those questions? Okay, great. So let's talk about the two approaches off analysis. Now, look we're gonna be talking about the 1st 1 technical analysis in lesson number 11. You're gonna explore it in depth because there's more advanced. You're gonna see indicators, how it works and all of that. But for now, we need to understand the basis of how it works and let me start by saying one thing. It's not the beginners weighing. It's complicated and beautiful, but I say it again. It's not the beginners. Wait. So I've seen some advertisements online on Facebook that say, once you learned technical analysis training, it's like a game you click. Buy, you click send. I mean, like, you should just go kill yourself for posting this ad. It's not simple, and it shouldn't be simple. And you understand why? So let's start with the definition. What is it? The art of attempting to forecast future prices by analyzing past market data. OK, so this means we don't care about Netflix business performance. We don't care about subscribers, girl, we don't care about anything. We just look at a chart with the prices and we say okay, based on the past prices, I'm gonna try to predict how the future price is gonna perform right, And they have three principles. The technical analyst. So number one, the market discounts everything. What does this means in simple way is that it's all in the chart. Okay, If a panda bear isn east and a butterfly flaps its wing somewhere else, it's already in the chart away the fear of the investor. Everything is accounted for. It's already in the chart. That's why they believe that the charge is a good way to predict the price is no. Then number two prices moving. Trends If you notice if you have ever looked at a stock chart and if not, you will look very soon, you'll notice that prices are never just going in a single way. Like OK, if if Microsoft stock went up this year, you're not going to see just one big arrow going up, you're gonna see as exactly gonna see up, down, up, down, up, down. But it's going up. The general direction is going up right? Great. And number three history tends to repeat itself, and in this one, it's very simple. If it happened in the past, it can happen again, right? Well, if you look at the current world political situation and many things, even in our own lives, that one kind of like makes sense. So this is the main principles of technical analysis. No. And remember, it's sort of a predicting and forecasting the prices on Lee using price data, often acid. So you can just printed charts. Steroid it. Drossin, start, do some calculations and say where this is going to go based on the now 100% true or not, it depends you'll see later on. Great. So the analysis approach number two fundamental analysis and also my personal favorite someone explain what is the art of calculating the real value of something using data outside the price? Okay, this data can be Look at each of these points right here. But Foreman's reports what I was talking about with Netflix. So how's Netflix doing? Did they sell alot? Did they grow? The subscribers they want to grow was going on news news. Drive the prices Also, for example, let's say they find guilty of murder. The CEO of Unimportant company, right? And then they found he was embezzling money and disappearing into the came in. Allen's great that kind of news moves the price of the stock of the company. Okay, The balance sheets also part of the performance reports, they income how much money they're making and look macroeconomic indicators. Also, if the whole country situation is changing, if the interest rates are changing and this causes the loans to become more expensive, more cheap. All this stuff I'm saying you're going to see every one of them in detail later on as we move on through the course. Remember, this is just a basic introductory lesson to paint a picture for you. But fundamental analysis uses real data trying to get to calculate the real value off something. Okay, not just looking at the price or past prices noise. I want to see if this is really worth $40 for example. That's why I put a little break here. And one important note I've heard a lot of people say this fundamental analysis suggests issue. Have a look at the news. Yeah, you and look at the news and I'm like, Go kill yourself is not just looking at news. He's actually doing a lot of calculation. Okay. For example, going into the website off this company, downloading the investor relationship report, reading it all understanding where is demanding this company located. And there is a lot of advanced things we need to do to be a proper fundamental analyst. But at least I'll just show you the basics to understand where you're standing in terms of it. Okay, great. So now you understood what its analysis on the main toe approaches that traders used for analysing training situations. 7. Summary: so summary. Now, let me clarify something. Not in every lesson. In the end, you're gonna have a summary is just in. The ones were I saw it was fit for you to have this summary. And like this one? No, in the beginning, especially to clarify some points. So look, what have we learned? No Number one. What are you doing? You're trading. You're not investing yet. If you want to invest, all the knowledge in the course is gonna be really, really useful to you. Then what are you trading with? Assets off all kinds and specially financial derivatives. Which is assets being contracts based on the price of another asset. Okay, Now, where are you trading it? Well, you thought they were trading in the exchange. In some cases you might be. But most probably your training in an OTC broker that is mirroring the prices of the exchange. OK, then, who gives you access? The broker and who's the brokers? Just a middleman. Not somebody who gives you financial advice on how to invest on where All what to do. The brokers, Just your middle manure bridge to the financial markets and how to approach trading easy. There's two ways, and both start with the word analysis. Right? So we, Anna, twin allies something toe. Take it into parts. Break it, study it, explain it. Ask what? Why, what? Why? And there's two ways to do analysis. There is technical analysis and fundamental analysis. No technical is based on looking at charts and passed Freis data. And fundamental analysis is based on looking off a lot of data outside the price and trying to calculate the real value of something not just looking at news new start a part of it. But the idea is to calculate the real value off something. No. And I want to close this lesson. Number one your first lesson. Um, with this look, the main difference between being this guy right here, you know, and throw money in the toilet or being this guy who looks much more evil, happy with the brain is it relies on One thing is you don't trust anyone. You ask a lot of questions, okay? And you don't open traits, right? Based on it Looks like going up. It looks like it's going up or someone told me You have no idea how many times I told you have been working for very well known brokers CFT brokers, no Indian. Thousands of conversations across the years with a lot of people friends, family, even clients, etcetera. I've heard this words. And I asked him, sir, why did you open this trait? Why did you believe that gold was heading into this direction? It looks like it's going up in them. And I'm just thinking to myself now I can say it because this is my course, Right? But I was thinking to myself, Well, I wish it could just send you my bank account number If you want to throw money in the floor. I mean, I'm more than welcome to receive it, and that's it. Remember, we can donate it. You know, I love ducks. We can start a dog shelter, which is one of my projects. But like, trading is not for you. Then if you're gonna trade like that, no And well, remember, the difference between this guy and this guy is to analyze, to not trust anyone, to ask a lot of questions. Okay. To think the what on the wise of what are you doing? You have to become a level God question asked her. Okay. And this was just a very basic lesson to set the main concept straits and build on them together during the course. And I really hope you enjoyed it. See you soon. 8. Lesson 2 - Introduction to Charts: Lesson two. Introduction to charts. Let's get started with the basics. So the data table, what is it? Is data arranged in columns which are vertical up and down and roach horizontal left him, right? No, this one. To the right side of the screen. It's a data table. Right? So we have or two columns, Month and Price and we have each item with one value. Inside each column, for example, we each wrote we have January $10. February trails dollars? No. And we can use it to represent many things that can be your income. It can be how many people? Um, we left our country. It can be a table full of the data. It can be a table of the price of the stock. Changing can be pretty much anything you want. No, no. What is a chart? It's a visual representation off data. And the purpose is to give us a better understanding of that data. And that data comes from the data table. OK, this is gonna be the fundament for technical analysis where you're gonna see later on in the course how everything is built from exactly these things. When you're calculating an index when you're doing technical and dance, if you want to do it manually, it all comes from here. It starts here, so usually these charts look like this. It is a line chart, a bar chart, a pie chart. But right now, right now, we don't care. We just get an idea of How do they look? Let's start with the line chart and let's look at it Morning left in the Next Life. So look, this is a table versus a chart known to understand the purpose and then need off which one is better. So look, tell me something. Which one Do you think it's easier to see a table or a chart? And look, The stable has just four values, the same as this chart. Imagine if you're looking at a price search with 500 different values. No, or who knows, maybe more two years of price data per minute. It's gonna be impossible now if I ask you to look at the table and tell me where do you think this is going up and down? Even if it's just for values, it's a little bit confusing. You see first the 10 then you see the 30 2040 and then you go like, OK, now imagine with 500 values And that's where our chart comes in. We visually represent the data that it's inside the table. How do we do it? Easy. We have the X axis in our table in your chart and the same X axis represents this column in our table, we have the Y axis and it represents the Y axis the white columns in this table now. So if February he's $30 right? So x is February. Why is $30? Then I go right here to my chart, and I look OK. What is February right here? Now And what is $30 right here? So I go ahead and I draw two lines that connect connect the point. And I know. Okay, this one right here, that's my point. $30? No. And do you do exactly the same thing? And you end up connecting the points and building your own chart? No, no. What do you think? It's easier to use a table or to use a chart, and they have a purpose which is to visually represent data in a much more simple away 9. History of Charts: history of chart. This is Rene, the Scotus. You probably heard the fin. He's sees famous words. I think. Therefore I am No. He was a French philosopher, mathematician and scientist. But what we really care about him just to know, because it's good to know their origin of things. Is this baby right here the partition plane? If you heard of it before, great. If not, let's go through it together very quickly. It actually has a quite a funny story behind it. No, and it's a legend. We don't know if it's true or not. But Legend says he was looking at a fly on the ceiling, and he wanted to describe the position of this fly in reference to something else, knowing that's how he came up with the idea of building the Kardashian coordinate. So how is it built? Easy. Look, this is our X and Y axis. We already know, right? So now, instead of just being positive, it's negative also. So this side of the X axis it's positive and decide, represents negative numbers in the X, and this is why accesses the positive side, and this one is a negative side of our y axis. Now look, when the fly says you can find me at minus 2.3, easy. The first value. It's X second value. It's why so? Minus two X blustery. Why? So I go to my X axis. This is my cedar point. No. Minus one minus two. There you go. And then the three. Okay, one to three. No. Then I joined the two lines together and I find my point. And now we know Where is the fly located? In reference to the center point Right here. Now, thanks to him, like math changed forever. Also, geometric sciences look, algebra, calculus. A lot of things harder. Foundation built on this right, because now you can describe shapes. You can describe the location of something you can precisely describe the measures of triangle, you know, and be more precise about it. And look, everything in modern science gets built based on this GPS coordinates and drawing photo shop. You know, it all starts from something so simple like this. Okay, Green, then our second relevant history character. We want to study its William Blake for Look, this guy, it's very hard to describe. He was Scottish and he had, like, 200 different professions. Okay, just put a few of them right here. Political economists, engineer but black. But he was also a secret agent. And if somebody understood the importance of money, it's him. Because when he wants a secret agent for a foreign from the war, right? And doing doing during the war with Great Britain and France? No. When he was a secret agent, he created the plan to counterfeit toe make fake currency of the French currency and collapses you. Once we get to lessen the you're gonna understand why this is possible because supply and demand can actually drive the prices of things up and down. We're going to study in depth. And don't worry, leave it for now. But what I'm trying to say is that this guy understood the importance of money. He trying to collapse the currency of another country by printing fake money. You know that that he was a real life bad us. But the most important point from him is this one. He's a creator of the line. The bar area and pie charts. OK, which was still use nowadays and they're quite useful. We see them in Microsoft Excel every day and we don't care about them. But in trading there, quite important. And this is the charts. Look, we have the line chart, which you already see we have seen together. It's built from the data table. Same with the area. Charge is the same as a line chart is just has this idea filled up right? Then we have our bar chart. Also the same built from a data table. You have one point that its X one point. That is why they joined them together. And they draw a little borrowing. No. And you have a patron which is built on a circular shape. We're going to study each one of them. And how are they useful to us? And don't worry. Be patient. As I told you, this is just a very basic introduction to get to know all the basic concepts way. We're just about to get two candlesticks. Be patient. See you soon. 10. Types of Charts: Okay, let's go over the play. Furs charts. Look, this is the by truck. No, it's a circular graph that allows us to understand the distribution of something. And what do I mean by this? Look, here we have our circle known. We have a bunch of different categories. Now, right now you're seeing the monthly expenses of a person. So now I know this person spends 50% in the brand 15 and education 20 savings, 15 fold Now in trading. Maybe it's not so useful because you're not gonna be looking at price charts and technical analysis using fighters. But if you go ahead and you transform each one of these elements in this charts into company expenses when you're looking at the report off a company, as I told you when we're doing analysis is the kind of stuff we want to be looking at. Then, just by looking at a big circle instead of a data table of how the company spending their money, it gives you an idea. Okay, I know this company spending the money here, and this is gonna be good for the company or bad for the company. So that's one of the ways that the pie chart can be useful for us. Great. So the bar chart also not so common in trading. But it's also very good in analysis. Okay, look, you used vertical bars to compare performance of something. No. So, for example, here we have the sales in millions of dollars off a company per month. No. So in January, this company sold $30 million okay? In February. So $70 million. Now, why do we care? Because we could be looking at the report off the sails off several divisions off a company . And based on that information, we can understand How good is the company likely to perform or not? No. Or where is the strength in this company? Or if these divisions are under performing? And we believe that since this is the most important divisions, then it's not gonna be good for the company, and the share price can fall. Okay, then the line chart the famous line chart. This one is the one we use every day on trading. No, look, it allows us to see the value of something over time and think about it this way. X axis equals time. for example, 10 in the morning. 11 12 1 No. Then the Y axis equals price. Simple. Right? And that's like I told you before, how we do know each point on the chart and we understand. Okay, this is this. This is that, and we know this is going up, but this is going down. But the reason we know is because the X axis is the time. No green. And let's talk about the info problem. Look, now we finally get started in training. You can relax. No, no, no. Excessive basic stuff anymore. We covered it. So, look, how do we see more information? And I'm Let's talk about it a little bit. Look, a share or any asset that is trading on the market has more information. That more information that just one simple price. You know, that is much more than one price. Look, the open price. When the exchange open, they asked. It opened at a certain price. No, by the time the exchange closest. Okay, there is a different price from when it opened. And during that trading session during that day, they asked, reach some highs and some lows. No. Now, look, at this chart right here. No, right. There's a lot of information missing. We just don't see it and try to imagine, like we say, try to imagine a truck like this one for one year. It's just gonna be a mess is gonna be something like this knowing the end, we're not gonna be very clear on what happened, because during a certain day, something different could have happened and we're missing all that information and that comes in the $1,000,000 question. Then how do we squeeze all the extra information into this simple line chart? And that's where Japanese candlesticks coming. 11. Japanese Candlesticks: great. So finally, we started with some trading stuff, huh? You've been waiting for it. Here you go. So, look, just a little bit of history to be on the same page. This guy, you see right here it's money. He's a Homa. He was a Japanese rice trader, and he's considered the father of Candlestick. Charts and technical analysis. Notice that this was a wild back ago, right? 17. 24? No, when he was born. So look during those times between Sakata and Osaka in Japan. There was a lot of rice trading going on. And rice is very important in Japan, A very important commodity. Now look, The legend says that he had a network of men spread across 600 kilometers just to communicate market prices. So imagine this guy was really obsessed about price. And here's the thing. He spent 60 years of his life studying how prices behave patterns are they seasonal? And the market sentiment does. It affects prices. If his investors feels optimistic, will it have an impact? And he was plotting, or this information into this chart. And he's the creator off the Japanese candlestick. Now how the Japanese candlesticks look easy. Let's take a look together. No. Okay. I start by saying one thing. Each candle represents a time period. Okay, so let's say that all these candles we have right here, it's five minutes. So look in this five minute candle. What do we see? We have four values. Okay? First value we need to look at is the open price, which is by the time the period started. What price had the asset, then the close buys. By the time the period ended, What was the closing price? Okay, the last price available in that period and then the highs. How high it moved during that specific period. Okay. And how low it moved during that specific period. Now, why are candles different? Why do we have one green one? Do we have one red candle? No. Easy. So if the price opens here and it closest lower than when it opened, right? It's a red candle. No. Now, if the price opens here and closest higher that when it opened, it's a green candle. Very simple. Right. Great. So this is how candlestick chart looks. Now we have our Y axis, which is price, and we have our X axis, which is time in days can be minutes are seconds. Remember, this is customizable. We'll talk about it in just one second. So bear with so this candlestick chart self the squeezing problem. Now we're able to fit much more information than just a line. No, because the line tells us very little. And why do we care about it? Okay, we're going to see it in a bit. One second. First of all, an interesting fact to understand the Lang chart, you see, which is a veil available also in trading platforms is composed off closing prices. So you see, this is a getting candle, right? So we know that it opened here, and we know that it close here now. And we know that red candles open here and they close here. So technically, what we're looking at is more advanced representation of the line chart. So if we wanted to draw a line chart, we have to do this. We have to chase each closing price and drew it a second. Doing it right now. This is not scripted. No, I'm doing it in real time. But I'm doing it to show you a very important point. Look, right now you see this? This is this would be your line chart if you were looking it in your training platform. Do you see how much data you're missing from the picture? For example, these huge candle right here, the red one? No, think about it. Something happened big that day that pushed the prices down so hard and and they opened at a certain level, they close at a certain level. But all you would be looking is this a line between this point on the line between this point, you're missing all dining formation and why it's important. Well, when we get to kind of stick psychology, we're gonna evaluate this much better. But see all the information that you were missing? No. Great. Now one very important point. The Candlestick time periods. This is not an accurate presentation of data. Is just an example for you to understand. What's the problem with time? Periods of candles? No. Look, candles can have any period you want Can be one hour can be one day can be one week, one month, one year doesn't matter. No. You can make candlestick however you want now What is the problem? A lot of people, when they're starting to trade, they open the dating platforms and they put one hour charts when our candlestick charts. So this means that each candle is gonna be worth one hour off data and they make decisions based on that. And that's super wrong. I will explain to you why Maybe you're looking at this hour chart, right? With made of candle sticks that each candle has a period of one hour and it looks like it's going down. You see it just like all great is going down. So I'm gonna make money when it's going down. I'm going above the bulb about okay, But then you look at the daily chart, and actually it was like, This is like, OK, is going Super up is doing better than ever. So what is the problem? We need to learn to analyze what it's happening in several periods, Okay, because it's never the same. It can't be going down for the past three hours, right? And then 5 10 hours, and then it can be going up during the last 20 days, and that's when you need to understand. You always look at candlesticks in several periods. You never go for one. No. And remember each candle contains O C H l for the time period represents. What is the O C h l? You're gonna see it in all the trading platforms in all the brokers? Easy, open, close, high, low. 12. Psychology of Candlesticks: psychology of candlesticks when you need to get in our head to terms, there's three types of market movements, but just to animals. Okay, number one, the bullish market, which means going up. And number two, the British market, which means goings down. There's also sideways, but we haven't. We don't have an animal for that one. Look, the recent we go bullish going up is because when the bull attacks, he goes from the bottom to the top right, making an upwards movement toe attack and the reason we call him our bearish market when it's going down a bearish market. It's because when the bear attacks with the clothes, makes it downwards movement right from top to bottom. And that's the reason why they have. They called these two animals the different market movements and one thing. The reason you have a bull in New York and Wall Street it because it symbolizes the strength of the American economy. In fact, uh, great. So remember we weren't talking about why it's important to have this four values. They open close, high, low. You're charged the all Chl. It's because represents more than just numbers. It's a battle between the Bulls and the Bears right there, fighting constantly to determine something. Look, every candle. It's a battle between bolts, embarrass. And if we compare the closing price to the highs and lows and you'll know who won the battle, it takes a lot off analysis. See online. You'll find a lot about candlestick patterns or about types of candlesticks, and they have already predetermined names and all of that. But I like to take this approach of living it very open to interpretation, because it's very good for us to think. I mean, the more we exercise the brain by looking at a chart and thinking, what does this means, then the better we become looking at just a candle and a pattern and say, No, this is this because it's called like that. So this was gonna happen. That's gonna make you lose money because you're not thinking you're just repeating like a parrot, and that's that's never good. So look at this candle right here. Now we know it open around here and close around here. But look at this super long bottom week. What is it saying that the barest were pushing really hard Yet the Bulls managed to recover and drive the price all the way up here again. No and, well, the maximum loss here. But where they closed, it's over here. So it's saying that there is a lot of bear pressure accumulated over there. There's a lot off cell intent. It started to make sense. Great. Let's look at some examples. No, I'm going to tell you a few of them, but what I would like you to do is to after I tell you just a few of this once, I'm not gonna tell you all of them toe pose the slide and to just look at them and think maybe you can write it down. What do you think this candlesticks are telling you? I mean, and it's completely subjective for game and you only going to start getting the hang of it . Once you start looking at thousands of charts and you start looking every day at your charts and you start saying, OK, look, this scandal, what is it saying? Okay, what happened after this scandal, you know, and the more you see it, then you're the more you're gonna build up your philosophy about what do you think they're saying because that's the idea I want. I want to teach you that. I told you there is no secret method. I want to teach you how to think and how to arrive to your own conclusions. So look, the 1st 1 right here So far, we know one thing. No, this candle right here, nobody want. Why? Because it open and close exactly in the same price. That's why it's not like a cross. There's nobody on the candle. So this candle right here? No. Same one as the example before it opened around here. Close around here yet bulls The bear story managed to push all the way down here. So what is it saying to us that there is a lot of cell intent accumulated? So maybe the booze won the battle, but it's not likely. Maybe they cannot win the war. That's what we need to learn to spot again. Let's check this scandal over here. What is it saying to us? Well, it opened here. It close here, and yet the bulls managed to push the price all the way up here. Right? So there is a lot off by pressure accumulated know there's a lot of by intent. So maybe the Bears won the battle, but maybe the bulls can win the war. Okay, then. Look at this one in this one. Full bull domination, and it's a full win for them. Why they open here? They don't care about anything. And they close here, right? There was no excessive bear forces that I've been The price is in a different direction. That what they wanted. So remember, the only way that this is gonna work is that you start looking at charts and a lot of them and start thinking when you look at the candles and try to arrive to your own conclusions. I mean, there is no secret method known or signals the master techniques. Don't take your take your trading platform from our approved broker sections of the train Bible that come or your own. Open your charts and start looking at candlesticks as much as you can, and then arrived to your own conclusions by looking at them in several periods and starting to think 13. The Trend: the trend. So you probably heard this famous phrase. It says the trend is your friend. No. Stop. Top level phrase for technical analysts. Remember if you if you saw a lesson one on the analysis part, when we're talking about technical analysis, one of the principles is that prices or we move, always moving trends. So what is the trend? Is a general direction where something It's moving the overall. Okay, if you think about it, you don't see it like a candle just moving in one direction. That said, no. You see them going in this exact snow. So when the train is moving up, we call it a bullish trend. When the trend is moving down, we call it a bearish trend. Now, let's look at them more in detail. OK, Okay. So the direction of the bullets drink going up and how we spotted higher highs and higher lows. What do I mean by this? Okay, look, if this is our charter rights moving like this, no, we can see this is the high points, the highest points, and we can see that they're getting higher every time. So first condition meant higher highs. No, and the Loesch look higher lows low here. Low here, Low here we can say, OK, we got higher lows, so we can say confirmed. This is a bullish trend and you can just take in your trading platform The charting tools. They have a little icon to draw lines and you can practice. You can put many as many charges possible and started throwing Trent Lines. How do you do it? Simple. You draw a line all over the lows, and then you draw online all over the highs, you know, and you say, OK, then the trend means that it's moving in this direction. It's a bullish trend. Okay, then, a bearish mint. What is it? Easy direction going down. And how do we spot it? Lower highs and lower lows. What do I mean by this? Easy. This is the highest points in the chart. Great number two, number three. OK, so they're lower every time they're getting lower starts here. Whatever price this is, you know, then moves with the way here. Whatever price it is all the way here. So you see, the the hires are going lower every time and then lower lows. Second condition easy. See? Lowest point. Lowest point, Lois Point. Lowest point. What? What can we do? We take our trading platform, we take our charts, and we started looking as many charges we can, and we started growing trend lines all over the highs all over the lows. And that way we started measuring If this is the Trent or not. Now, one thing I want to clarify here, that is very important. Okay? Not because you look at a chart in two minutes, period. You can say that this is a trend. No, A trend needs to be something bigger than that. Okay, maybe you need to look at a chart with the four hour period, one day period, one week periods. You can call it a trend because a trend when you're talking about just one minute chart. One minute child with each of one of these candlesticks is one minute. Then you cannot call it a trend, you know, because actually, you're not looking at the overall performance of the asset and they rating, which is something we will talk about later. What, by the time reaching the end of the course, it's not the best way for a newbie to start. It's a guaranteed way to lose money. Day trading is quite complicated, and it's being performed by supercomputers by banks. And it's pretty much for for their retail average trader like us. You know, it's a waste of time. No. So be careful. Remember when you're talking about trends. We're trying to talk about longer periods of time. We're trying to talk about the overall direction where something is moving. In this case, a bearish trend means going down. 14. Summary: so summary. What did we learn? One lesson. Number two. Number one. The charts originate from data tables, okay, and it's important to know it to be able to build your own charts and understand how they work. And you'll see this when you get to lessen 11 about technical analysis and you start, for example, building your own simple moving average if you wanted to. You don't depend on anybody. Now you understand what you're doing, which is the most important point then number two Japanese candlesticks help us see more information such as highs, lows open and close, and because a line chart would provide us with so much less information on the battle, and this to each candlestick represents a time period that we choose when we must always compare it. Candace charged in different time friends. Remember, you could be looking at a chart in a one hour time frame, and it can be going down right all round. And then you look at the chart in one day timeframe and in the candlesticks and one day period per candlestick, and you realized the asset has been going up for the past two years. So always compare in different periods of time. Each candlesticks for you understand their your behavior of the acid. No great look. Bullish movement equals going up. Bearish movement equals going down and each candle. It's a battle between the bulls and the bears known the psychological aspect behind it. Okay, then the trend. The general direction where something is moving. And let's make some emphasis in this one to remember. You have never seen a market chart. Even if you haven't seen one before and you start to seen it now notice that they never look like something is just going straight up or straight out. Right? They move like in Zig Zac's. No. So and that's six this exact direction. The overall direction off this exact is what we call the trend. No, and at Trent is bullish when it has higher highs and higher lows and Barish when it has lower highs and lower lows. Great. So you know, you've completed the two most basic lessons, and now let's get started with introduction to economics so we can jump into price determination 15. Lesson 3 - Introduction to Economics: Lesson three. This is the most important lesson in the courts to connect all the dots when you look back where by the time to reach lesson 12th. No, let's start. What is economics? The study of how society uses, produces and distributes its limited resource is okay. Let's make a lot of emphasis in the world limited white because resources are always limited, and that's the reason they are valuable. And think of it one second. There is a limited quantity off oil in existence in the whole world, and the same for all this. Two different things you see right here. And if you want to take it to a different example, quick metaphor would be your boyfriend, girlfriend, husband, wife, partner. Whatever it is you call it, it's limited, right? If you walk out of your house and your sold five million copies off your off your partner, then they wouldn't be so valuable, right? The reason why something it's vow excessively valuable is because it's he led. The more unique it is, then the more valuable valuable it is because less people can have it. No. And there's two ways to approach economics. Remember, just like in analysis two ways. Fundamental and technical in economics is the same. We have the macroeconomics. Okay, which is the big picture. And what do I mean by the big picture? Okay. For example, take this image to the left off the world map in Germany were pointing out Germany exclusively in that map. Then we want to study. How is the employment in Germany that imports the experts? Inflation? All this concept we're gonna go through during this lesson, but it's studying the big picture. Okay, Another good example. Look, if the European Central Bank increases the interest rate decision from Cedar 0.25% to see the 0.75 then this can have an impact on the euro dollar. Right? Great. And this is a macro economical event. No. What about Meeker Economics? It's the opposite. It's the small picture, for example, the decisions of a company to produce and expand whatever decisions the companies making or how much money they make in 2019 and the supply and demand off goods. We finally made it. No, because this is where price determination happens. Now. I want you to remember we have to economic approaches the macro, the big picture with all this important indicators that drive the prices off a lot of things, OK, there factors that affect prices. And we have for microeconomics, which is the small picture. And also price determination happens during the supply and demand, which you're gonna starting left in the next lectures. 16. Supply and Demand: supply and the men. We finally made it to the most important lecture from the basic health of the course. And look, this is the day where everything begin to make sense for you. Price determination. Why people want something. Why the price is moving this way or that way. It all comes from here. Okay, so let's get started. Look. Supply. What is it? How much the producers are willing to sell? What do I mean by this? For example, if I own a chocolate factory, how much chocolates I'm willing to sell at certain price levels? No. And demand. How much are the buyers? You and me? The people buying the products from the producer are willing to buy okay at certain price levels. Okay, in a free market supply and demand determines prices. It's a constant fight between the Bulls and the bears also. Okay, it's quite funny enough, but we can we can we can put it that way. Also is the Bulls and the Bears fighting the sellers and the buyers to see then how much I'm willing to give something. How much are we willing to sell? What I have and the other guys How much am I willing to buy this for? Okay, great. So the low off the meant look, number one, the lower the price, the higher the quantity demanded. Okay, let's start with a beer example. Okay? If the beer can cost $1 you see that the price of the pure citing the drops 20 cents. You're gonna go wild, You're gonna buy all the beer you see available in the supermarket and if you don't need it , Okay, even if you don't drink beer, you don't care because the price is too low. Okay, then the higher the price, the lower the quantity demanded. So if the beer that cost $1 suddenly you see it at $20 bird can you're gonna be like, uh I don't want to You're gonna go run and see charts are useful or gate and understanding the data table and everything actually has a purpose. And here it is. Look, in our x axis, we have the quantity in our white access. We have price? No. So what is this bearded man charges saying us that at $1 OK, the demand for beer is gonna be around 30 units right. But at $4 price, the demand for beer is gonna be off 10 cans on Lee. OK, now, these examples you're seeing right here in the simple, fun way of beer or chocolate, whatever they go to the stock market, the price of the share. If the price of Apple stock is $200 it drops toe 195 some people say, Oh, it's cheap. I'm gonna buy and boom, they buy and it moves again to 198 because they're start buying the available stocks at certain prices. By the time we get to the order, the book, you're gonna understand. How does this work and why does it make sense? So now you know, Great. The low off soup line number one, the lower the price, the lower the quantity supplied makes sense? No. So if I have 200 chocolates in my house and I know they worth $1 each and then I'm gonna sell them a 20 cents, I'm not gonna want to sell my 200 chocolates. And when I want to sell, maybe 23 if I need money, But I'm not gonna want to sell the rest. I prefer to keep it now number to the higher the price they hire, the quantity supplied. If I have 200 chocolates and I know I can sell them for $5 I bought them for one. I'm gonna go like, OK, I'm gonna go wild and sell them all right now. Okay. So what happens? Same. Look at our chart. No X axis quantity. Why? Access price at $1. I'm willing to sell only then chocolate or started 10 cans of beer, This beer supply in this case and at $4 willing to say plus 30 40 cans of beer. Now think about it in the stock market. So in the stock market during the fight of prices, there's some people that they see. Okay, the price is too cheap. I'm not willing to sell my shares. Okay, But if the price starts going up, then they go wild and they start selling, you know, and the mortar start selling. Then they're more quantity available. There is in the prices. Start going down. And that's where you still this exacts in the stock market. Happening all the time. Okay. No, What is the equilibrium? You When supply and demand are equal, we call it the equilibrium point. Okay, like the perfect a lot that the full laugh point where both of them meet supply and demand . Okay, so we know that twenties equilibrium point right here, because at $3 they're willing to buy 22 producers. Okay, Are willing to sell at that price. And the buyers, the demand are willing to buy at that price. So both of them are very happy they meet here. But this only happens in theory. In real markets, it's always changing. And that's why you always see the prices moving up and down, up and down, because this points are just moving all the time in different directions. No. Great. No. What is this equilibrium? Okay. And now we start with the approach to thinking like thinking about trading opportunities. Okay, because these things affecting supply and demand are the triggers we want to discover in time to take advantage of them. No. Let's analyzing mean every abstract week, the excessive supply. No, look, producers are selling at 0.2 and buyers are buying less at that price. Why does it means that producer said selling a point to. But buyers are buying much less at that price. Why? Because at $4 Okay, the buyers are the demand is 10. But the producers at that point are producing 30. So the rest nobody wants to buy it because doesn't meet the demand. So what happens? The price is too high and it's likely than then it gets pushed down. Unless the producers want to keep producing the stuff to just throw it in the trash. Okay, Now disequilibrium in the excessive demand. No buyers in this case, 1.2 and the producers are offering 0.1. What? I mean, so the demand is in this case for 30 units at the price of $1 something but the supply, they are very level productive. Produce quantity is gonna be 10. So there is the lack off all this extra quantity of whatever it is we're talking about that is not available, but it's wanted. So what's gonna happen? The price needs to be pushed up. Tomita level where actually the producers are willing to produce a quantity that people are willing to buy. No, in this case, what's happening the price is too low. And that's why you see this situation off the SEC labor. No, let's talk about shifts. Okay. Now we're getting also into the best real scenarios that you see every day happening. Look, a shift in the demand. The quantity demand changes by a reason other than price analyzes. Example with me, all airlines close and only one remains open. Yes, in this case, their social change in the supply. But in this case, let's analyzed only the airline that suffer the excess off the man changing the man. And why do I mean this? Because this Erling, that the man for the tickets in this airline was X quantity nor waas 10. And now that all the other airlines close the demand for tickets on this particular airline is gonna be, ah 100. No. So the change in demand, it's just go wild. So what is happening? Look at our chart. No. Okay. What do you see here? Right now you have at $3.10? No. So what happens the moment that the man changes and it moves all the way up to this site. Now we have that at $3 the quantity demanded. It's bigger. Okay, it's 20. So was going on here that in the end we have the same supply because the Ireland has to the same quantity of planes, the same quantity of tickets. But people are willing to buy much more. Okay, so it's likely that then the prices gets pushed up once the new supply goes in effect. No. Great, no. What about shifts in supply? And this is my favorite and the easiest to spot all the time everyday. Look, the quantity supplied changes by a reason other than the price. And when I say this, I mean the price fluctuations itself. No, no. And natural disaster damages 40% of the oil refinery singing in one country. No. Now look at this. Here you have right 0.1 at 0.1 in the supply. You have that. They're producing 30 and they're doing it at $3. Know now. Since hurricane came and destroyed all the oil refineries, they're gonna be producing at the same price $3 But the quantities last 20. Now imagine if the demand was still the same, then is gonna move the price from a different level to a new level over here. Okay? Because in the end, it needs to accommodate and push for the supply change. Because we we lost the supply. Yet we still have to sing demand. No. And this is the example you're gonna see happening every day in your everyday life. And it's a trading opportunity. When the hurricane comes and destroys old refineries, like in 2017 happening the U. S. It pulls the old production for a long time. Or, um, think about more examples with supply change. Okay. When the attack of the drones happening the era and in the Saudi Arabia, right, they flew a bunch of drunks and they blew up the old production plant the largest oil producer in the world, and disposed your production and increase the price booming open superhot. So this is shift in supply. Okay? Remember, you can spot them every day, and this is how price determination happened. Okay? It's a battle between the bulls and the bears, the buyers and the sellers, producers buyers Call it whatever you want to call it. But both of them are battling to do what's best for each other. Okay, but they need each other OK, because no matter if I want to sell 200 of something at the highest price possible, then other people are not willing to buy. And in training where the rich trading a commodity and at share forex doesn't matter, there is a supply and demand. Is people considering something too cheap and too expensive? Okay, And learning to process this information is what's gonna get us to spot trading opportunities in time. 17. Macroeconomic Indicators - Interest Rates: microeconomic indicators. In this case, we're gonna start with interest rates, but let's get an idea of what a macro economic indicator is. No, this analyzes definition together by parts no. So the first part economic statistics released every certain period of time or gain. And they're released by the government or private organizations that help us see how a country or part of a country's doing in some aspects no or part of the country's economy. For example. We have the USA, and we're gonna check how the jobs were doing, how the imports are, the exports and all of that, and the $1,000,000 question. Why do we care about this? Economic statistics? Simple, Healthy economy When economies doing good right indicators are showing good signals, growth equals two business spending producing, hiding their currency, getting more appreciated in value. And all of that now, when the health economist that bad, when a crappy economy, not attractive currency and businesses were doing bad, stock prices are going down. People are getting fired and not good for the currency also, so as you can see, these macroeconomic indicators have ah, great effect on the person. The perception that invented investors and traders have on the market because if the jobs are climbing means that companies are hiring right. So companies are hiring, maybe because they're importing and exporting whatever it is we're doing. But jobs are climbing. Companies are generating more money because they can't afford to be more salaries. And this is a good signal for the economy and for the currency of the country. See? So it's part of a big parcel. No, let's talk about the interest rates. Look, in a simple way, is the cost you pay for using someone else's money. That's the first idea we have. Right? When you're banks created cars, it says we're gonna charge you. Ah, 2% per month. It sounds very low, but when you take it on the gears like 30% and you and you get killed. But well does the interest rate we know now when it comes to macroeconomics, it's different because we're talking about the rate. Okay, when the interest rate is the rate that the deposited institutions are chart for borrowing money from central banks. Now less translators, the depository institutions, the backs right in our charge. Okay, what they pay and for borrowing money from central banks. Okay. In the U. S. Can be the Federal Reserve in the Europe can be the easy be the Europe Central back? No. So this super huge bank was called the Europe Central Bank is it's creating a fixed rate for the other banks. Okay, off, let's say, 2%. No. Now then this rate gets passed into the Internet investor into into the normal people. Because by the time the banks changes this rate that the central bank changes this rate than the banks changes their rates also towards certain products they sell to people. No. Okay, now the general rule. The general tendency. Okay. What? Assuming other valuables don't affect this equation is just one. When a country raises the interest rate, the currency value Appreciate? No. Now, there is some logic in this and why people save more money spent less. Okay? And this is this is the products certificates of deposit. All of the stars start paying more. Right? So this is beneficial for the currency of the country because investors say Okay, I'm putting my money in the economy of this country, and this currency is gonna pay off better if I want to just leave the money parked in terms of interest. I'm putting it into another country with a lower interest rate. No. Now the opposite. When the interest rate is down, okay? And then the currency valentines to appreciate why? Well, the opposite of what we just said. So if the interest rate goes lower, it means that then it doesn't pay offs as well to have your money and discourage. See? And you want to switch it to another one than the demand for this one falls down. And this causes the price of this currency in respect to others to lose valley know and remember. Very important other factors can affect this tendency is not a general rule that it must be No, but so far has enough, sir, for a long time that this is exactly what it's happening. No, no, look. Another general tendency. When the interest rate increases, inflation goes down. No. Now, when I'm talking about inflation, I'm talking about Let me simplify it in the buying power. Know For example, if today an egg cost $2 and in two years then the same egg cost $2. I'm just talking about this abstract example with the neck. Then the inflation was zero. Now, even two years, the egg instead of costing $2 custody or four. Then we had a certain big percentage off inflation. No. Okay, So if the interest rate it's high, No, it means that the inflation goes down. No. Why? Because when they interested when the interest rate is higher, people safe, more money, they spent less. And this slows down the economy. Okay, so when there is less spending right, then this causes inflation to decrease. Now, when the interest rates get pushed down, the inflation goes up. And why? Because people save less money, they want to start spending more and economy grows and prices grow along with it. No, you will see more in the FX market about economic calendars, important interest rates and the effect. But this is to give you a basic idea and fun fact. This interest rate decision it's happening every certain period of time. It's scheduled in a calendar. It has forecasts. You will see it when we get to the economic calendar, but there is no secret. Okay, I'm gonna keep repeating this phrase across the whole course again. There is no secret this information is publicly available. How to find the interest rate or we need to do is understand what can he do to certain assets prices, for example, in this case, currencies of a country. 18. Consumer Price Index: So the consumer Price Index. What is is how the prices off the stuff we buy change over time. Okay, so notice I'm saying stuff. It's not just one thing. The egg is just an example to know what we're talking about, right? So if one bank in 2015 costs $2 then in 2016 cost $5 there was a price change, and we need to keep track of it. No, this is the inflation. But it all starts with the Consumer Price index because we're measuring not just the egg. We're measuring about your stuff at the same time. No. So in the consumer price index is the average change in prices over a specific period of time off her basket off goods and services. Okay, basket. There's quite many of them. Now, let's let's take a look at a brief idea of how the CPI ice calculated. It's much more complex than this. But for us, what we care is to understand the idea behind it And why this number it's important. No, look, right here we have or by chart, see by charts are useful. Okay, so we have 40 years for the yellow side. We have rent okay for the blue when we have food. Transportacion in the red 1 15% and entertainment We have 5%. No. Now let's say this is the amount of money we're spending in. Oldest things. No, To make any index, you you go on at all these things together and divide them by the same number of items you know, and then you have a result in you can call it your index, but that they actually do something differently. They waited. They give it a specific percent of weight percentage to each of the items. Otherwise you couldn't keep track of the precise changes of the index and you wouldn't understand. Imagine if this one is $100 this one is 100. No, but it increases to 110. It's a 10% increasing their entertainment sector in the entertainment expense category. But it's nothing when by the time the index move is gonna move a little bit. Now if Rand changes, the movement is gonna be huge. So they need a way to make it more compact and understandable and make the values relate more to the rial. Wait, they have. But don't worry how to do all this thing. You're gonna learn it in death In lesson number seven. When we discussed the Indus is in detail and you gotta learn how to calculate manually. They wait oven index like the Dow Jones, for example. So look, they take all the stuff they multiplied by their respective weight, each one of them needs to have. Okay, then the animal together and they divided by the amount of items in the basket. And that is the C B. I know. Okay, the consumer price index 1 27.87 Great. No, when you compare if in 2000 and 12 year CPI I waas 127. And in 2013 your CPI, I lost 154. Okay. What is it telling you? Look, if you go ahead and you do something called the rule of three don't worry. We're going to learn how to do it together. OK, but what you want to do is measure the change in percentage between this number and this number. Okay, so this number is your 100%. Okay, so what do you do? You subtract immune from the new number of the old number and you get a number right? Then you divided into this one and multiplied by 100 to get your 100% to get your percentage and you get 21%. And don't worry this calculation, you're gonna learn to do it in detail in less than seven. Right now, what you're carries to understand the importance and a little bit of the calculation behind it. So what happens? The inflation? The change from 1 27 toe 1 54 is a 21% change in that number. Right there. It's the inflation. Okay, now, if the economy is inflating too much, maybe it's time for the bank to adjust the interest rate to decrease inflation. And this will cause a currency value to do something you see. So, forex, it's not magic forex. It's all about understanding what's happening. And you have all this numbers publicly available out there. They're not secret. They just have a logic behind them. And I get really excited because now finally, we're getting into the stuff I want you to understand. See that it's metrics there is values out there. You need to compile them, analyze them, understand them, do your math, you know, and taken a broke again. And an educated guess. 19. Gross Domestic Product: the gross domestic product. I never really liked the word gross, you know, might confuse it with its gross or oh, are Grosso in Italian? I don't know. It's just something strange about it, but well, anyways, the gross domestic product is very important. No, look. What is it? It's a big picture of the nation's economical activity. No, and we're talking. For example, Here we go, Spain on the production off their very tasty Haman theoretical or any time on the makings being is good or the cars. They're exporting, the computers and the chairs. But notice one thing in the advanced definition. It's the value in currencies. So, for example, in euros in dollars off all final goods final goods, which means finished products. That's why I'm putting on Harmon a chair laptop final goods produced, you know, and services by a nation over a period off time. Okay, now, why is a gross domestic product important? I'm getting feeling I'm not pronouncing the word goes in the right way, but anyway, you know me already. Look, why is it important? Let's talk about a gross domestic product going up. No, look, Number one, it's a good signal for the economy, right? Think about it one second if the gross domestic product is growing and there is a lot of finished final goods and services brought us. But it means that there is a lot of production going on. No. So it's good for the economy. In the other hand, if we have a gross gross domestic product going down figures, no, it means that the economy start producing us much compared to the previous period. So it's not a good signal for the economy now in the gross domestic product, it's higher. No, it means one thing. It means that consumer spending is increasing. Also, think about it more finish to its more services, more stuff on the street. More people willing to buy that stuff because there is a lot of production. If the production is there, it's a healthy signal for the economy. OK, then revenues increase off course. If there is all this production backing up this gross domestic product figure right this final figure, it means that the companies are making more money by selling more stuff, No, great, And if all the companies in the amount of Finnish stuff, it's much more valuable, Bigger. It means one thing that companies are hiding. Also, more people to be able to build all that stuff. No. So, ah, healthy gross domestic product. No, it's much better than the other scenario. Gross domestic product falling down, which means unemployment. Because, of course, imagine the total value off all the finished goods in Spain's goes down that on the Haman disappeared Don't and all the products of Spain. There's many more things in Spain that Haman, but I love among So if all these figures are going down means that, then companies are not hiring enough people. So a lot of people are starting getting unemployed. Okay, people are not consuming and spending because there is not much stuff available compared to the previous time. And this means that companies are not making the same amount of money they're making less. So now think about it. Start remembers to start connecting all the dots. And if you're doing the course in the way recommended in the beginning using a notebook, analyzing doing questions, then you know one thing. Think about it when you look in before Millot, all the indicators, all of them are going to start connecting like like break on top of brick? No. So if if the gross domestic product is doing down, this is likely to have some effect on the currency value and then is gonna have some effect . Of course, in the consumer C B I in the consumer price index because people are spending less and see all of them are a big parcel. You need to learn to put together no. And by understanding how each one of them work, we can put the puzzle together. 20. Employment Statistics: Let's start employment is having paid work unemployed, not having paid work. Okay, now there's several reports that indicated situation of this variable. Now, look, I'm saying several reports for a reason. There's many of them there. Is there employment, the unemployment, the the N F B. There's a bunch of names for each report. Nobody. In the end. Most of them are telling us figures that relate to the same issue. Now the report that we care about the most okay, US traitors is called the N F P. And it's from none other than the U. S. A. No, let's look at it for a second. No, is the most famous report, and it's called nonfarm payroll and why it excludes farming jobs. Okay, and why it excludes farming just because they're highly seasonal. Think about it. There is not crops all year long, certain PDS, where they hire temporary workers. They come to do the job they leave. So if we had this numbers on the statistics, the statistics would be impossible to understand. They will be constantly swing in, and they wouldn't give an accurate market representation OK. They also exclude military, government and nonprofit organizations from the statistics? No. How does the n f b looks like? Like this. So we have a prodigious value. 224 k A forecast. What they think is gonna be They also call it consensus. I really don't like the word consensus is just like like to make something complicated for no reason at all. You can call it forecast. You know what it is. And then you have the actual value, the value when it gets released. No. OK, bear with me one second. What is this? 224 k 224,000 jobs were added no to the payroll. Now, if a forecast is 185 means they're expecting 185,000 jobs to get at it. So already in this two were doing bad. Okay, because they're saying they expect the lower forecast. No. No. Then the actual value comes out on its 75,000 for us, not get. Okay. Why? We're gonna allow nice and then the next light. But imagine 75 k jobs got at it. Compare it to compare to 248,000 jobs added before. No case receives, like three times less jobs added into the paper. Now, this report okay, is sacred for traders. It comes out first Friday off every month. OK, so look at this. If you take your trading platform you, Google and FB later running the course, you're going to see the dates, the precise time, all of that. But if you take the platform and you go and f b announcement time and you find the first Friday off a month and you put the Euro dollar chart, you're gonna while like you're watching Ah, action films, right? They're gonna watch your Jack Reacher and the equalizer Altogether, the euro goes up and down like it's doing like he's doing drugs. And this all happens because imagine this figure says a lot about a countries economy and the situation now and why look, the higher the payroll is is better for the economy, for the reason and easy people with a job and money spent more and help the economy grow remembers. Spending equals growing OK n in the opposite case. Easy people with no job and no money cannot spend. And this doesn't help the economy grow and remember all these factors combined off the n F B. Up and down are also connected to the C B. I are also connected to the Consumer Price Index, that sort of story to the consumer price index to the interest rates into the gross domestic product. It's all a big changes connected together, and we need to join the points and make sense of them in order to make solid business decisions. 21. Imports and Exports: great to wrap it up. We're gonna talk about import exports and the balance of straight. Also, remember all of them connected to the previous ones. So look, what is imports to bring goods from another country, which means bring your stuff right. So if I'm from Venezuela and I'm bringing stuffs from Spain, Spain is the exporter on the importer. And I'm bringing the goods home, right? Very good. Now it's great if a country is bringing a lot of goods, it means there is demand money to pay for it. So it's actually good? No. Yet remember, in a lot of economic textbooks and everywhere they say that imports are a good signal accepted after the internal demand. But it's never good. Too much of something. No. And well, if we go to Venezuela, we like break old economic textbooks and other principles and everything. Because in Venezuela, for example, we don't have anything. We have zero production. We have to import everything. And this is a crisis. No. So remember, the extremes are never good. No. Okay. So, experts, What is it? The ship goods to another country? No, in Venezuela we're gonna go and they're gonna shape out of Venezuela at a bus, which are a very nice product. No, I'm just joking. You cannot ship that to ship what you used to make it. But when a ship octopus to Spain? No, in Spain's got sick or great. No receiving. So Spain is the important in Venezuela is the exporter. No. We bring in the goods to Spain. No. What is the balance of straight? Don't worry. The old off this is gonna be important. You're gonna see what? Look, the difference in value between a country's imports and exports. Okay, so they're measuring one against each other. No. Good. Now look, when exports are greater than imports, we call this a trade surplus. No, we're gonna talk in the next life. And when imports are greater than exports, we call it a trade deficit. Okay, so look, when the trade surplus look at each point means the following no, grapple off them. Look more production. Okay. More money flows into the country and signals economic growth. Why remember, in the previous light, we said when exports are bigger, greater than imports? No. So this means that you're exporting much more than what you're importing so other countries need your money. So more money flows into the country? No. Then signals economical, economical growth. Why? Well, more money flowing into the country or products are shaping your expanding your hiding more people and all of this is a good signals. Now, Wen, there is a trade deficit. Okay, It's signal strong internal demand which is not necessarily bad dependent, depending on day, how much it is or not. Don't remember access. It's never good. And there is also not internal, not enough internal production and money is leaving the country. You're using your own money to bay and throw it outside your country, right to go ahead and buy some stuff that someone else needs were trading your currency devouring ah, lot of your currency of your important excessively just to go ahead and buy stuff and get your country No. So when there isn't access three deficit, you know when there is the bigger imports and exports is not a good signal Now, on the other hand, when there is more experts and imports OK, and it's a traitor, Plus it's a great sick. So why do we care about this? Okay, think about it at trade surplus right is going to mean that the country's performing much, much better. Okay, that their currencies valuable that other countries need to get a hold of your car currency to buy your stuff and bring it to their countries. So what does this means? Ah, positive signal in terms of foreign exchange market, a positive signal in many economical indicators in the gross domestic product. See, connecting all the dots and understanding everything is what's gonna make help us make sense. And now, in Lesson three, in total, you have learned about supply and demand and also about all this economic indicators, and you're getting wants the closer to price determination. 22. Lesson 4 - Brokers and Trading Platforms: lesson for the brokers. Let's get started. So the broker love, hate, love relationships or sometimes hate, love, hate relationships? No. Let's explore this in death. So to remember, the broker is the bridge to the financial market. Okay, so look at the process on the top. No, this is you. You execute an order. Okay? Then you send It goes to your broker than your broker goes and says, Okay, I'm sending this order to the New York Stock Exchange, and then since, for example, is a This is just made up. That necessarily means that apple and Facebook are in the New York Stock Exchange. They can be another one, or maybe they can be, but we don't care about that. So Facebook arrange and to be listed on the New York Stock Exchange is one of the company's being traded? No. So their shares are actually over here. So this means that your broker executes the order, buys the shares? No. And then great. When you want to sell the same, you have your shares. Don't on your you have the ownership of the shares. You send your order to your broker. No, and it executes it in section No. Now here's the thing. Look, not always. This is what is happening. Sometimes the process can be stock over here and you didn't even know never even get to the market. And to understand that we need to know the types of brokers that exist. No, because I mean, the main times we need to care about we need to focus on is just four times. Okay, The market maker, OK, He's making the market the straight through processing a direct market access and electronic communications networks broker. Now look this also, I'm not gonna right now, we're gonna go into detail into each one of them, but all these names, their sound off fancy. But in reality, they can be doing something else. And I'm gonna teach you how to spot this and understand it. For example, a broker can cling to be straight through processing, but actually not So don't worry. We're gonna look at it together. So look, the market maker. No, What is it says they make the market by quoting buy and sell prices, right? What does this means? That the process is closed. Okay, Like there is no extra. I know somebody outside. There is just you under market maker. OK, so if they want to leave the euro dollar, actually, everyone in the world this world 1.1 the market maker, If they want, they can quote it at 1.5. OK, so that doesn't think we need to start understanding. A market maker is quoting their own buy and sell prices, okay. And they can be a big market maker like a bank and then provide liquidity, which it means the availability often asset. No. When we say Apple shares are liquid, it means that there is a lot of them. And when sir, there's not so much liquidity in that market means that maybe there's not a lot of them available for you to buy. OK, no, look, this broker, it has a dealing desk model. So what did this means? It means that while the dealing desk where the dealer sets and who's the dealer where he's a guy trading no for that firm? No. So this means that the CFB brokers No, when you are trading with them, what are they doing? No. So you executed by trade? Now you're trading an asset that is OTC is just happening between you on the broker. So you send your by order. Your broker receives it. No, he gives you. You're quoting price, blah, blah, etcetera and the process Onley stays here. Okay. And the dealer? Maybe he can be trading the extra exposure on the market. Don't worry. In the next couple slights, after we finish this part of the type of broker, we're gonna analyze the market maker properly in left because it's the one we care about. No, but it's good to know about the others. Okay, So look, this is a straight through processing broker a lot. If you go into each broker space, you're gonna see, they claim to be easy and SCP And so this is straight through processing. What does it means? OK, no dealing desk model. So this means No, there is no dealer over there. They're just like it's Think about the name. No straight through is going straight through the order, so they send the orders to another broker. Okay, So look, when you are the traitor, you click your bottom buy, sell whatever known the broker that s STP received the order and then it sends it to a broker, be who can be the big broker, the liquidity provider. Whatever. Now, look, some brokers claim this as a signal off honesty. But it's crap and I'm gonna explain to you why So let's say I'm Mr John the owner off this STP broker, and I'm claiming I'm super honest, you know? And I don't play against my clients because I'm on STP broker. Just process orders. True. But then my casting all phone. So is the owner of the broker be who is a market maker? So in the end, what am I doing? I'm routing orders between the family and and you're still playing against the market maker , the low type of market maker, which you don't even know about it? No. So that's why you need to be careful. Because if a brokerage STP, then we need to ask yourself who is he sending the orders? Who's his liquidity provider? Great. No direct market access. Okay. Number one no dealing desk model also. Okay. And order gets sent to several banks and brokers. House A process. Easy. Look, this is us a traitor. You click on by Apple shares. No, the d m a broker received the order and immediately sends it to this pool off liquidity providers. They have no and they see who gets to feel the order. And as you can see, this process is also transparent. Now, remember, if a broker claims to be D m a and again, he's only sending the order to to brokers which they happen. Toe. Oh, no. So then we are in problems now, so we need to be very careful with this, Okay? Some progress. Big brokers that personally, I know they are DME, as they say. And some others, they're not the m e there. Just claiming to be DME. Okay, then the electronic communication network broken. So no. Didn't this model again? No dealer seating anywhere. Doing some trading? No, just on electronic processing, off orders. Okay. And is that what is the easy and network is a network that links the market. Participants know. So you have this bunch of brokers that it's a lot more in the Z and network. Now all of them are linking back and forth to the same pool. No. So when you execute a trade, okay, The M a broker along with many other DME brokers. They altogether link into this super huge pool and compete for pricing. And that way you won't even end up getting much better. Prices? No, again, there's big brokers who are easy n and they do it straight for what as they're supposed to do. And there is some brokers that claim to BCN, and they just owned five shell brokers to personal them, and they claim to have any CIA network. Now the easier network is. One is global, it's big and there is a lot of people connected into it. Okay, just because you own to brokers and claim to BCN, it's not an easy and good. So now you understand how the system works for us. A traitor in the main types of brokers now in the next electoral can explore fully how to understand the market maker 23. Understanding Market Makers: So the market maker the must the most common type of broker you're gonna find all the time in Europe. No. Also in several parts of the worst part in Europe, there is a super explosion. And and in Australia now, let's explain, how do they work? Most of them are dedicate themselves to the trading of CFTC. Okay, contracts for difference, which is an OTC derivative. Later on, we're gonna expand more into this. But for now, you need to understand that there how their matching their orders internally? No. So they have 200 people betting the price of something is going to go up? No. And then they have 200 beats. 100 people. So re betting the price of something is going to go down? No. So what are they doing? They go ahead and they say, OK, orders received. So how we're gonna handle this situation? No. Because if these 200 guys they win, how am I gonna pay them? No. Perfect. So what did they do? They match this 100 by 100 cell right together because they cover each other in quantity? No. And then the remaining 100 that they don't have how to cover internally. They take him to the real market. No. And they execute the same order as you. This is school hedging. The market maker had just the extra exposure into the real market. Now, look, sometimes the market maker can choose to do something different. No. So let's go again. We have our guys here, Okay? This one's are covered because it's 100 by and 100 sell orders. No, but we have this extra guy over here, the extra 100 that they don't know how to cover internally. And we thought that they gonna shoes to send it to the real market. But what if they don't know? They go ahead. They received the order, and they say, Okay, I believe this. This This is a very bad trade, and we think it's likely to lose. So we're not going to send it to the real market. We're gonna Padgett internally by taking the opposite side of the trade. So they're gonna take the opposite direction off the one you took. So what are they doing? They betting against you? Okay, now there is nothing wrong with this. Know, the market maker can say OK, I received my order. I bet against it. You know, he loses. Great. I made money. No, or he profits. And I lost the money. And that leads me to the next light. Okay, so when the market maker OK, when you make a profit, the market maker makes a loss. Okay? And when you make your laws, the market maker is making a profit. And with this we have to be very careful. White. There's nothing wrong with this approach. Is the same as a casino. The same as many other things in real world. No, as long as a market maker right here is steering clear off how you're handling your money, then it's completely up to you, in fact, there just betting on the probability off more people losing money than they profit. Why? Because they're not. They're not informed or not educated, which is exactly the point. I want to attack with discourse, and they're betting on this probability. Now. There is some market makers that really loved this side of the area, okay, more than this year, and they try to bet against their clients and also to deceiving into making broke decisions or to accelerate this process. And with this we need to learn to be careful. Not all market makers are good. Some of them they engage in the gray areas off certain tactics. And this is what we need to learn to spot. We should never receive any type of financial advice from the market makers or any tips or any Okay by this because it's gonna go up. No, none of that. Okay, the decisions must be up to you. You gotta be responsible if you want a profit or if you're gonna lose with your money. And this is what I'm trying to help you do with this course is not to give you financial advice on how to know is to is to teach you to make your own decisions. 24. Financial Regulators: Okay. One of the most important slights off lesson for the financial regulators. We're gonna talk about what? Our day. A few of them. And why are they important? And listen very careful in this one. No, this is a lifesaving lecture. So look, what are they? It's a government institution that regulates financial behavior. No. In the case of Cyprus, we have sisic right here. No, Cyprus is where most of the European CFB brokers are. I'm actually physically located here at the moment of recording this beautiful video course . And as I told you, have been working in the financial services industry. So that's why I have a very good hand in contact with all of this in my daily life. So Sisic who? Who are they? The Cyprus Securities and Exchange Commission. Very good. So what are they doing? Well, they have the super big building and they go on monitor. What broker? Be broker. A and broker. See are doing okay to see if they're behaving. They're not being bad boys. Now look, there's a There's a lot of financial regulators is such a sisic Notre. Everywhere in the world, there is a regulator in each country? Probably so. Look that the bosses off the regulators know the most. Directing and complicated one. The S E c. The Securities and Exchange Commission from the United States. No, they started toughest guys ever. Then you have the FC A in the UK, the financial conduct authority. Then you have the ASIC, Australian Securities and Investments Commission. Okay, I think I'm saying it was Spanish accent. Well, look, each regulator in each country is monitoring the behaviour off the financial entities in each one of their countries. No. And why is all of this important? Here we go, The golden part. Look, here's what's gonna happen in the event off. Broker abuse, for example, your broker misleading you with financial advice. That shouldn't be any type of practice. Maybe they're closing your positions when you are on profit and you don't even know why. Anything in the event of that you have this financial regulator to cover, you know? Okay. What about bankruptcy? If the broker goes bust? I don't know. Maybe the financials were not doing good. And boom, they explode. Perfect. If you're regulated, then you're protected under certain investor compensations. Fun? No, Because the regulated institutions have that benefit and any other bad scenarios. What do I mean? Well, look, anything can happen. For example, as I told you that they misleading the closing positions any any bad thing they don't want . They don't want to return your money quick. Any bad scenario in the regulated broker? At least you have someone to go to. Okay. Without regulation, you are naked. Okay, now, here's the thing. If you don't want this one right here to be your face, then you need to be careful. You need to study. What is this broker from is in regulated. Okay, what about the regulator is it's a reputable regulator. No. And all these kinds of things. Otherwise, I promise you, this one's gonna be your face. And I'm gonna tell you a funny story So you can laugh. No. When talking to many clients, I told you, talk to thousands of people working. Deceive the industry. No client. And one of them was telling me how he opened an account in a broker that it was regulated. I don't even remember the place, but no, but I remember I started laughing non stop because I told them. Okay, This is how your broker looks. What are you gonna do? Open Google Maps Know, Find a location. Exact exact location of that broker because it was not even regulated. It was just registered. Okay, Like a company. I can register one tomorrow and call it a registered company. No, no, no regulation there. And it was like in a place where the United States has been throwing like nuclear weapons for a test, you know, for the past 50 years, in the middle of nowhere in the Pacific Ocean? No. And I'm like, I think so. You feel safe, you know, putting your money. They're like, you need to do some research, you know, and understand. What are you putting your money? Okay. So remember, without regulation, you are naked. 25. Trading Platforms: trading platforms. Okay, So look, Now it's time to get started and jump into how to use a platform. How do they look? And the order? The types, the order types are gonna help you Because look, I know people who have been trading for two years, okay? They claim to be advanced and whatever, but they're constantly complaining with their brokers and they having issues and problems because they don't understand the types of order, the different types of order and how the broker is executing them. No. So then they closer trade. They see the trade closed at a different rate, and they're all angry. Our fast up, you know, for nothing, everything. All these questions are going to get solved in the next lights. But the start with what's a trading platform? Look, it's a software that allows you to trade and check some of the financial markets. So remember, it's just to suffer. That's it is not a broker, just a piece of software that belongs to the broker. Or maybe it's a genetic suffer, which will see also later. No, and you can find them. Usually, industry in this three ways either. Is that just a Web platform. Okay. What is that downloadable suffer? You can using your computer. Oregon, maybe can be a mobile app. Right that you don't load from the I, the r US store or the android store. Whatever device it is you're using? No. How do you look? Usually like this. Okay. So look, you have a man in your where you can edit some stuff. Maybe the account history, the settings. Okay, then you have a bunch of assets. A group by their class as we saw previously. What? We understand the basics off each asset class. Then we're gonna explore each one of them in left. How to trade them. What moves them and all of that. Then you have your charts, OK? Which you can customize that periods do lying Candlestick indicators and all of that. Okay, then you have a bunch of assets, right? There may be your favorites window with all the price is going up and down and changing constantly. Okay. And then you have your asset trading panel. Know where you have to buy and sell buttons in your standing orders. Your stop losses take profits. The classical stuff of a trading platform No. Now, look, this is a very key point. We're gonna answer to important questions that I know every newbie has problems with. No. And actually have seen newbies losing huge amounts of money just because they don't understand these two things. Number one look, You see, the price is different in the by undersell button. Why? We're gonna answer it. Wait a bit. And also number two when you're clicking on by, supposedly you're just buying something, right? And when you're clicking on sale, you're supposedly selling what you bought, right? Well, no wrong. And I'm gonna explain to you why. Okay, look, this is a CF the market maker platform right here in this side. And the other one is a direct market access platform. No. Now look in the contracts for difference CFD, the market maker. Here's how it works when you clicking on by your opening a long trade. Which means we're expecting the asset. Prasit Price to rights? No. So you make money when it goes up and then when you're clicking on the sale button, you're doing something cool going short. You're banging against the asset. You're expecting the price to full. Ok? Don't worry later on. During the course, we're gonna understand the shorting process and how is it possible? But now this is the basics, and you need to understand them. Okay? And in a direct market access platform, what's happening? Well, you bought something. Oh, gang. And then you sold something you own when your training just a regular asset, could be the apple shares your clicking on by you both your shares. Are you clicking on Stallion? You made a sell order for your shares, but in the CF, the world it's completely different is it's called Going long, which is expecting the price for rice and going short. OK, which means expecting the asset price to fall. Okay, that's the question number one answered. Now, question number two. Why are the prices different? Okay, And where's the logic in this? Look, when you're buying, you're paying the asking price. No. And when you're selling your paying the bidding price okay and the difference between both of them in the middle notice the difference right now between 60.5 and 59.5. No. Is gold the spread. That's the difference between the bid and ask prices. So the spread is how to give the market makers make money is the commission they charge sharing. Every time you're opening trades, knowing is proportional to the size of your trade or this guy collisions. You will learn one once we get to the trading lesson. But remember, the spread is the difference between the by and the cell prices. 26. Trading Orders: trading orders. Very important lesson is going to save us a lot of trouble down the road, especially when training and look. I've met people who have two years trading and they don't know trading orders. Well, that's why they have a lot of problems, So pay good attention to this one. Look, what is an order is an instruction on how to execute a trade. Right? And the most common types of forgers are market limits. Toe blows take profit training stop. Okay, old, some of them can be the same, but they have different names. And you're gonna see what I start with the 1st 1? No, the market order. So look, it's in order to buy or sell an asset at current available prices. Okay, that's when you click, buy or sell. It happens instantly if there is availability, you know, Great. Now this order has many problems, and that's what we need to learn to understand. If you go ahead and click here on $50 you click by doesn't necessarily means you're gonna buy at $50 now why? The market order will eat through the available price levels until your order becomes failed. What am I trying to say here? So, look, this is your price availability chart. No. And you see that at $50 there is only Stan shares available at $51. 20 at 52 that is 40. The more expensive. You see that there is more shares available now. And when you don't get executed where you want it, it's called slippage. No. So when you click, buy at 50 and you end up getting only 10 at that price and the other 50 shares You want it ? I don't know. 2030. Whatever is the number you end up getting made a different price. It slippage. Why? Because there was not enough market availability. So you get executed at the next best prices. Now, look, this is a market order. The market has no feelings and is gonna execute the order at whatever they have available. OK, very important to understand it. Now, the limit order here, it gets better. So order to buy or sell the assets only at a specific price or better. So this means if they asset prices over here, okay? And you put a limit order to sell when it reaches over here. Okay? This means that only when it reaches 65 OK, or better or better in that moment is gonna triggered a sell order to get rid of your asset . Okay, This means that no matter is what this is the condition. It's either a specific price or better price. No. Good. Now this stop order Also gold stop loss order. Now look, there is a problem with disorder. It's an order designed to protect you from further losses. But most of the brokers don't Don't explain this very clear, unless it's too late. Okay. And and beginners have a lot of problems with this. Look, if you board at $45 you're going to set a stop loss to protect yourself A 35 because you say OK, I'm maximum willing to lose $10 per share. No, great. Now here is a proper Maybe by the time you reach this 35 the market has a super drop orders no availability. And by the time you exit, you don't exit at 35 you exit. I don't know authority 20. God knows what price because it waas the price available because memorize this The stop loss. It's also a market order is going to execute you at whatever price is available. And whatever price available means that there can be slippage in terms of your order. So you're not gonna get executed at the level you want. Okay, Good. You know, there's some brokers. Not all of them offer this. This offered the stop limit order. Also, some of them can call them guaranteed stop whatever. When this market makers, they can do whatever they want. No. They can quote different types of orders. Now, look, is the same as a stop loss order with a limit condition. Okay, so this means that if you board at $45 right here, you're stop limits. It's here, and you're gonna get executed over there. And you don't care about all the other part under because either it gets executed because there is availability or it doesn't gets executed, and you don't exit. Now, some brokers to see if the market makers offer a guaranteed stop loss. You know, which works like a stop limit order that will get executed regardless, one. So they charge a commission. And by the time we reach here, they're gonna execute, you know, because they don't depend on the availability on the market. Remember, there are a market maker. They're quoting their own buy and sell prices, and they can do whatever they want internally. Great. No. What about the take profit order? No order to secure your profits. So you bought a $45 you said I take profit order over here. So when it reaches 70 Okay, your trade closest. And you cash in your profits. Right? Great. Now it works like a market order, remember? So by the time you click your take profit, you said it and the price which is here, Maybe in that split second, you know, it goes down again to 60. And your order was getting executed already. And you see that you got out at 65 70 and 72 you know, So you have to be careful with this. You have to understand that the take profit is also a market order. Okay, Great. No. The take profit limit order. Now it's making more sense now. So you secure your profit at a specific price and it works like a limit order. So you bought at $45 you're gonna get out of 70. Any? There is no availability to get you out at 70. Then you don't get out. You get out only on the amount that the 70 can be covered. Okay, great. No. What about the trailing? Stop Order. No, the training stop. It's quite an interesting one because it allows you to. It's called the dynamic Stop, Lhotse, That allows you to secure profits now. So it adjusts to a distance that you set. Okay, You said this distance already a predetermined distancing points. And it's going to start moving along with the price. No. So, for example, look at this. I'm going to drag it and do it in real time. So the training stop is right here, the yellow dot No. And this is the level that you bought and what? Then you went ahead and set a fixed distance, for example. 50 points. 20 points, whatever it is. No. And then, while the market is changing Okay, your order is going to move, you know, with your asset. Now, the beauty of this is by the time it reaches over here No. Maybe the assets starts going down again, But you're trailing is going to stay there. So this means that when you heat here is gonna get close. So what is this doing? It's securing profits that are already made. That's kind of like the basic F d off. What a trailing stop order. Thus great. So now you understand all the order types and you need to be careful. Always. Which one are you using? Because every time you see the bottom by yourself, you're expecting something. But you don't know if what you're expecting. It is possible, or it is exactly what your broker is advertising. 27. Market Depth: great. We've made it far. Now we understand all the order types. How during work, what it's in order. How not to get confused, what to really expect and demand from your brokering next terms of execution and be realistic about it. OK, and now we go for the following the order book. Remember, we were talking about the price availability in which I showed you like a list. No to tell you which shares with available in which level. Well, now it all makes sense. Look, the order book. It's a list of the buy and sell orders and reflects the market liquidity. So in the exchange, your OTC market maker broker there is a lot of people setting orders, no limit orders and they're leaving them. They're set. And that constructs an order book. No. So now you know that at $47 people are wild, the insane, ready to sell their shares because it's a good price for them. No, but at $40 no one wants to sell because these two shapes or there's only five guys right there now and to buy at $40 there is five guys know and the cheaper it gets, for example, at $33 there is 1000 ready to buy? No. So is just a list of the bias and orders, and most of them are Limit. Orders are already preset over there. That reflects the market liquidity. So why is this important? No, Look, there's something called the market death. No, it's just a visual representation. Often order book that allows you to understand how easily or not could the price move by a big order and hashtag charts. Okay, See, they're good. They're worth it. Now, look. And this is your market depth chart. So what is it telling you? The getting guys over here is your buy orders? No. Notice how it's getting bigger and bigger and bigger to the left side because the cheaper the price? No. Then the more quantity off orders are available for buying. So remember this one right here is orders in your Y axis and in your X axis. Okay. It's the price levels. No. So in the right side of your chart No. What is it is the sell orders. Notice that the higher we go in price again, then the bigger the bigger the quantity of shares available to sell. Now, this is very good to receive and study for a reason. If this wasn't not liquid and illiquid market so imagined it had super small charts like this. You know, something silly then it means that one guy can come in and execute a market order and move the price of this whatever way he wants. No. And think about it. If you look at this list right here, maybe a market manipulator can see the asset and say whom is very easy? No. So I just need to buy 120 plus 8200 plus stand 210 215 215 shares. You know, at this combined price levels, and I'm gonna push the price of the shares to $44 because I'm gonna eat all this availability here. No. Makes sense. So now maybe some got some guy a couple months ago, bought some shares, you know, it's waiting the price to rise to, up, off, load them. And what is he doing? He's just waiting the right moment. Or maybe you want to try to drive the market up by manipulating it and driving it to this level to download his shares. Now all of this, you can see it visually represented in the market depth chart. No now important. Note most of the brokers to see if the brokers will never in their life let you see the market deft or the order books. Because this is See if the OTC brokers okay, they don't want to disclose what's going on behind doors and how many orders we have, because they can advertise us having 20 million clients and they just have 20,000 people trading. And they don't want you to see the reality behind it. No, but in the exchanges, some of them charge a monthly fee like the NASDAQ to access their market data and see the order, books and everything. So it is possible to see this data, except it's not so easy to see in the Cryptocurrency world in the exchanges. They really allowed to see this kind of stuff very easily, which is one of the things we like about Cryptocurrencies. There is a little bit more transparency because it's not somebody deciding what to do behind closed doors. You know, it's like everybody at the same time together, working on it great 28. White Label Platforms: So a white label platform. What are they? Look, they're in genetic. All use platform. That working partnership with several brokers. And what do I mean by this? Now, this is you with your Achmed platform. Okay. And then there is the white label platform, that justice taking care of the software. And then there is the broker that handles the money. But the broker doesn't owns the software or the platform. The brokers just handling, receiving the orders, executing all of that. The commission's your money, everything but the software through which you interact with the broker. It's genetic, and it's shared by many brokers. So you need to have your own logging given to you by this broker to access the genetic suffer and trade with this broker. Know now the most famous company also for the most genetic and software easy to use friendly. And everything is none other than meditator. Okay? And the Meta Courts company also, they have an office very close to my house right here. So I see them every day. No, no, look, they work us a gateway 200 off O D. C brokers, which means that through meta, trader is not a broker. It's It's a software for trading platforms and you access the market. You access your broker. Okay Through meta trader, Your broker gives your log in. Okay, You download meta trader you use you use your mental traitor to trade with that broker. But the broker is the one handling the money. No, this other software called ninja Trader. I have never personally interacted with this one. Okay? But also is quite reputable. It's created by the company and injured traitor Group LLC. And look, it works. It's a genetic solution, but also they provide brokerage services. So this one decided to expand and try to become also a futures broker and provide different services. So remember, white label platforms OK are not brokers. They're just trading software. And some of them can choose to become brokers. But we need to understand that who they are. Remember the more questions you ask, the better 29. Lesson 5 - Shares : great lesson. Five with made it. Let's talk about stocks. Shares. No, let's start with a little bit of history. I don't want to go too deep into it, but it is good to know because it's gonna teach us a little bit about business thinking. So Okay, how how all of this came up, okay. He studies very complicated. There's a lot of facts, events that were not recorded, and it's hard to trace the origin of things. But this is the most well known story. It will start it in Venice, in Italy around the year 1300 when they were trading depth. Okay, so imagine there is a paper that represents a piece of depth off my money being owned between two parties. Okay. And you can trade this paper? No. Then in Antwerp, in Belgium around the year 1500 they were trading bonds, also another form of depth. So imagine about what is it? I can go ahead and I need 100 K And the government government needs 100 k for example, or a company and issues the bond. Okay. Somebody pays 100 k and then at the company of the Government needs to return that 100 k with some interest? No. And that That's kind of like the basic idea what it's about, then, in the year 1600 in Amsterdam on the first AIPO in the world happened. Now, what is an I p o. It's an initial public offering. Okay, what is an initial public offering? The first time? A stock? Because becomes public the first time it goes into the exchange and it can be traded No green. So who was this? I p o. None other. That the Dutch East India company. And what was the purpose of this company? What were they doing? They were doing trade exploration and colonization. No, they were the world first recorded. I beat. Oh, Now why am I mentioning all of this? Because I don't like to dive too deep into history is because it helps us and teaches us how to think like business thinkers. And I'm gonna show you white. No. Why did they needed to do an I p o for a a ship company dedicated to trade, explore and colonize. Well, look at this map. Okay. This is an approximate idea off the routes being used by the Dutch East India company around those times. So ships were leaving from here. They were traveling all the way down here than they stopping here. And they were dating. Exploring tryingto get more resource is bring them back home. But a lot of those ships never even return. So here's the thing. They get attacked by parents. They sink, they get lost on the road. Tsunamis, things, them whatever. No. So But when one of them returned home, it came loaded with resource is with gold, with whatever they were bringing. No. So in order to keep funding all the strips, that's why it was required to get more money for more people to be able to expand the tips and make it even go bigger. See? Okay, so now I want to talk about the first exchanges. So look, you can read it yourself. There's no need for me to mention each one of them by name, but I want to tell you something into signal. So the first exchange was the Amsterdam Stock Exchange again 16 02 Now, contrary to popular opinion in the first, the first stock exchange in the United States, it was not the New York Stock Exchange. It was the Philadelphia Stock Exchange in 17 91 then the London Stock Exchange in 18 01 Then look the Italians and then last in the party of the big guys in New York Stock Exchange in 18 17. Great. Now you have a little bit of introductory knowledge about all of this and let's dive straight into shares. 30. Basic Concepts: Okay, now we are in the basics of shares. No, let's start by. Look, it's a small piece off ownership in a company. Okay? To a certain extent, this definition is true. Okay? But it comes with a lot of misconceptions, and I'm gonna explain to you why later on Wait a second. So, look, this is your company, okay? And the company goes ahead and issue some shares, which then investors can buy when the shares are traded on an exchange. Their publicly traded shares? No. Now, when you cannot find the shirt in the exchange than the company still in private, No. And it only accepts investors by approach and directly to the company. And you got to see you. They accept investors or not know. Okay. And here is the main problem that people don't understand about shares. Why do company Eastern issue shares? And that's why I show you the example off the Dutch East India company. They issued them to raise capital okay, and be able to expand business or to do any other activity. Okay. For example, uber wants to raise capital to expand into 25 more countries, and they want to do it faster. OK, maybe the company's has a plan to not be profitable now, but in five years, they want to be profitable. And in order to be able to do this expansion, the issue, their shares to be able to do so to get money in from investors. Okay, Now, look, shares has some common misconceptions, you know? And quite funny one. No. So, look, this is you, OK? And you own some shares. Now, how did this happen? The company, which is a legal entity, is like a person also just like you. You know, the company has an identity, a number. Everything is the equivalent off. You know the leader legal entity version of you. Now the company has several things. They have their shares, they have profits. And they have their assets. No. Now the shares entitle you to vote to do days toe to take part of the profits inside a company. But owning a share does not make you owner off the company's assets itself. For example, a chair or a computer? No, The company is the legal entity that owns this assets. No. And just because you own a share, you don't get to go ahead and take it at the table. A chair? Well, chair share. No, Just because you own a share, you don't get to take a laptop from the company. Okay? Because the shares give you a right to vote, for example, some of them, some of them not in the fate of this company. And they entitle you to a part of this company's profits. Okay? Proportional to the type of share and the quantity of shares that you have. Okay, So common misconception, The most important one. It's solved. Being a shareholder doesn't give you the right to go ahead and take a car, a laptop and a chair from your company. Okay? It gives you the right to decide upon the fate of this legal entity if you have a share with voting rights and it gives you a piece of the profits of this company, Okay. But the company is a legal entity itself, like a person, okay? With their own identity, their address, their own assets. And you don't get to go ahead and rip it off because you want to. Okay, great. Now there is certain types of shares. Okay? There's something very important to know. Look, the ordinary share. So look, it has one vote per share as equal dividends participation. Okay in that pool of investors. And it has voting rights, which means you have own 51% of the shares in a company. With that 51 you can get the right to vote and choose the fate of that company however you want. Okay, So the more shares you have from that total 100% out there, then the more voting power you have. Okay, Good. Then there is no nonvoting right shares, Okay, that they don't give you the right to vote, but they give you the right for money. Okay? They have the evidence and this type of shares usually given to the employees know to compensate them. So the company goes ahead and gives this employee ah, 100 shares, you know, as a bone room. But they don't give him voting rights, so he cannot influence the voting part of the investors and everything. And that way they're able to compensate him with something that is worth money. And then there are preference shares. Okay, Now, look, they have fixed dividend spay so imagine their guarantee to get X amount of money for a year, regardless of the performance on, they have priority pay. So this means they gotta get paid first and the ordinary shares and the non voting shares, investors and in the event of liquidation, okay, these investors and get And that's when we go ahead and we take the chairs and the company and everything we sell it. If the company goes bankrupt, they're gonna liquidate it. Okay, so they're gonna go ahead, they're gonna sell all the stuff from the company. They're gonna take whatever money the company has, and they're gonna distribute it across the shareholders, OK? They have to pay the Debs. They have to pay the shareholders and not off them. And these guys right here are the ones that get the priority pay. Okay, So remember, is good to understand what type of share were trading on the exchange? No. Or because they can have different values. Most normally, the type of share that is being traded on the exchange is gonna be either one of these two . Okay, Good. No, something important to know about shares. Let's talk about how to find them, regardless, if we have a broker or not? So look, there's something called the stock ticker symbols. So what is it? It's a unique identification quote assigned to each stock. They can be letters, numbers or both. So you can go ahead right now to Google, and you're gonna do this you're gonna put and f l X space stock. And Google is gonna throw the results off Netflix right there because nflx means Netflix. Also, if you put b a, then you're gonna get another stuck. I'm not gonna tell you if you put a a p l, you're gonna get another stock and so on. So remember toe uniquely identify stocks world. Why each one of them have a stock ticker symbol that you can just input and find your stock easily in Google without even needing to use a platform or anything. Okay. And the stock symbols are universal. So in brokers in in Google, whatever you is you're going, you can use them to find stocks good. No, Another must know basic concepts about stocks. The market cap, what is it is a total value off a company's outstanding shares. And what do I mean by outstanding or the authorize shares out there in the open market. For example, if this company issue in total a bunch of shares, okay, and this is the bunch of shares the company issued perfect. And the shares are worth in total $2 million then the market capitalization the market cap off this company, it's $2 million. Okay, great. Now let's take it easy, and we're gonna split it in two parts. The basic concepts in the next one another and everything about the trading volume, their necks appreciated stocks, plates, etcetera. 31. Basic Concepts Part 2 : great. So let's talk about the other basic concept. We must know. No. So I'm throwing small bites of information that all of them is gonna connecting your brain and make sense that the more we move on through the course, you know, teaching, trading, teaching stock trading is very complicated task, especially doing in such an abstract way as have tried with this hand drone trading ports. But the more you keep learning this lonely everything is gonna make sense for your white things are happening. So the volume What is it? Is it total amount shares traded during a specific time frame? No. So, for example, these usually they look like this No, except very much bigger and have much, many bars, much more bars. So look, when you see the volume like this and you see, this means that for example, X amount of shares were traded in that day. Maybe 50,000 shares were traded in that day. No. Now maybe you see this super huge getting bar means that more that shares were traded. But when you see the bar becomes red and can also be told, OK, so what is what is It means It means that also, there was a massive sale volume that date. Okay. And this data is usually not provided by the OTC brokers is provided by the exchanges, and it's still publicly available. Thank God. So you can go into the NASDAQ exchange and find all the shares traded during a certain day for the apple shares. For example, why is this data important? Don't worry. Later on us, we start moving through. The courts were gonna understand. But if if you remember, think about it. It's all about arriving to our own conclusions. You know, if there is all this volume of shares being traded that day and it means that and it's positive it's rising. All these people buying is a strong market sentiment. No. And if there was a huge red bar with all the people selling, you know, super huge volume of shares being sold, you know what is it means Well, it signals a strong bearish market. Know so well, don't worry. As we move on, everything is going to keep making more sense. No. What about the earnings per share? No. So we talk about the investors actually putting money to shares because they can make money . That's the whole purpose. And the company can expand the activities? No. So what is their name? Pressures is how much money each shareholder will get per share They own? No. So the company goes ahead. Issues that bunch of chairs? No. And each share gives the investor the right, for example, to a $2 profit. If that was the results of the company during that quarter or if it's a fixed pay up a preferred share, then it gets, ah fixed $5 per year, so it can vary. But remember, Adam's been share is how much money each shareholder against per share they own. Get what is the stock split? Okay, Perfect. So look, when a company the sites to increase the number of shares by re calling the old ones and issuing new ones. Okay, what do we mean here? Okay, so if the additional share, if it's worth $60 okay, and then they can split it and say OK, the new shares are gonna be worth $20 each. So if a company is huge and they have a shared that cost so much, and the company wants to make it accessible for Smalling investors or they can have many reasons to do this. Maybe they can split a super expensive share and make it a cheaper share. So the value off off off the investor holdings didn't change and the value of the market kind of the company didn't change. They just changed that the device for in the equation. So this means that this when you had one of 60 now you're gonna have three of 20 Okay. And this is gonna make a lot of sense once we get today in this lesson, and you're going to see why, and you're gonna love it when you understand it. But remember, companies do this when they want to reduce the price of the share okay from a big one, too. A small one and one thing. Their stocks that people want to keeping expensive. If you look at the belt shar. But I don't know how to pronounce it good. The Berkshire Hathaway, which is a company of Warren Buffett you'll see that each stock is worth proof like I don't know. I don't even remember the number like $300,000 per stock. You know he's intention is to keep it expensive and only deal with millionaires, you know? But other companies don't have this intention, and they want to make it more accessible for small investors to also to buy their shares. Good. No. What is that? Reverse stock split. Okay. In the same boat backwards? No. So when a company decides to decrease the number of shares by re calling the old ones and issuing new ones, No. And the key word here is decreased the number of shares. Okay, so let's say we have a shares are worth $20 each. Okay? And we're gonna call them back, and we're gonna give the investors better. Three shares they have. We're going to give them a new share that it's worth $60. No. Why? A company can choose to do this. Well, look, it can be, for example, the company image. Maybe your share is starting to look like crap because it's super cheap and no. And it looks like a dodgy company, and you want to make it more expensive to look better. Or maybe you're about to get de listed from the exchange because in the exchange there is a certain level off price. You need to have to be there. So maybe you want to call it an issue. It more expensive to make sure that you can state being traded in the exchange. No. All these things that I'm mentioning, such as the stock split or the reverse stock split. They have an impact on stock prices, and we will see later on. But remember, everything that you're seeing here has a point and has an impact. And it's all supply and demand also. Okay, it's everything is connected. Good. So last mergers and acquisitions. Also, a lot of things happened when a company, when the companies go through this and it affects the prices. And it's like I said, I don't want to give you a straight methodology and just say when this happens, this happens now. I want you to learn to think with me. No, let's think together. Look, this one right here, it's a manager. No, what happens with the manager? That is to companies. Okay, they go ahead, they join forces and they create the super company. No. So it's likely that the super company stock prices much, much better or before the merger the stock prices start to rise because they know that what's gonna come out of it is gonna be really good. No. Great. So what about an acquisition? Okay, because an acquisition is different is when a big company goes ahead. Because usually it is a big company. Goes and buys a small company. No. So what happens? Usually the price off the company that is get is being traded in that moment. The small one can shoot, you know, because they know that it's gonna be swallowed up by this one, okay, and has more value. So remember these things can always going different ways. But all these different actions that companies are doing all the time, Okay? They have a name back under prices, and it's up to us to scout for them. Learn to understand. Why is this happening? How is it happening? And keep asking questions? Remember, analysis? What? Why? How? Keep asking non stop 32. What moves their prices?: So what moves? Prices of shares? The most common reason? No. Look Number one, it's supply and demand. That's the natural way. That removing. Okay, then you can say that Associated news or events to the shares to the companies, to anyone involved in the transaction over there also drives prices. And then business performance also drives the prices of shares. But then again, that's why I put this number seen in this in this way. Right here. Look 123 but in reverse. Why? Because a business performance ends up becoming in news and this news end up becoming something that drives the supply and demand. Not so ultimately, it's supply and demand. But some of the factors that affect that's a plan. The man can be the Associated news business performance. And there's also one extra that I will show you right after we get finished with the 1st 3 No. So number one supply and demand. Great. So now we have everything we have seen together. We understand it because we know what is the charge. Okay, we know what? It's a data table. We know how it works. The order, the book and this supply and demand everything. No. So look retail and institutional investors drive prices by buying or selling at available market prices. So now it makes sense to you. So these investors are going ahead. They go into the the broker in the exchange and they are buying. They're selling constantly and and this stuff you see right here, it's moving no constantly, and it's changing all the time. And it looks like a snake moving both ways. No, because they're constantly battling for the price determination, just like we saw also a lesson to the battle between the Bulls and the bears. Now, something important I want to let you know. Okay, so you, when you're training on a sea of the market maker broker, you're not driving prices of shares. You're not moving the market even a bit. Why? Because when you're trading, see if these remember it's an OTC transaction on an OTC broker selling derivatives Your money is never even going to the exchange, which is the one responsible to the price determination. So your trades do not move the market even if you were a millionaire and your trading on the CFB broker, unless the C F T Is brokers hatching you in the real market, then it's unlikely your trades are moving the market. Okay, good. Now what about news and pay close attention here. Okay. Because this is all about learning to spot training opportunities. Look, this is the boy in company. Chart will gain. So look, ah, weekly chart. Now pay attention to the dates we have. October. We have March 2019 in July 2090. You remember when this news happened? Very sad day. No, of course. When this news happened, the boys 77 max, eight in Indonesia crashed, killing everybody. And there were some investigations now. So look, when that happened, that was the behavior of the stock. Know the highest price was 3 $71 in the lowest was 328. So imagine that fluctuation in one day. So just because you understand that this news are gonna impact negatively the price of the shares, okay, you can make trading decisions based on that. No, by yourself. No, here's a catchy part, okay? And I want to teach you how to think like a business tinker and then trader and investor because they don't have feelings. Even though a playing died with 200 people on, there was a massive crash. And all of that the blind there was this huge drop in the stock. It doesn't matters for them because they saw okay, just a setback. We don't care. We still have faith in the stock. And then the market got even warded them or news. They announced about the playing, having fatal consequences and whatever on the investigation. And then they kind of like the apologize. What whom the stock again started rising. No, again, Because investors don't care. And why? Because it's all about business metrics. Boeing has a lot of contracts may be with the military, maybe for other things. Whatever it is they're doing, that could be confidential or not know. And investors know that they're gonna keep making money so they don't even carry for plane crash in. 200 people died. No. So remember maybe during the news, you could have made money out of the plane crash, But then after that Okay, boy, and is still bowing. Okay, the setback. OK, it's over now. What happens again in March 10 19 2077 max. Eight crashes in Ethiopia killing everybody. Now, here we go again. The close price on the day before that was $422. And by the time the mark open again, it open in 3 71 Okay, so what am I trying to tell you about this news? Have the power to drive prices and traders are scouting for this opportunities like this one right here or this one right here. Okay. I'm not telling you to be happy and profit from this grace of other people know, but this graces are gonna keep happening anyways, because that's the world we live in. So you might as well trying to make money out of whatever is happening as a trader. No. Now it's up to you. What decisions to make or how to make them remember news are constantly driving prices. And as an investor, okay, this is a trading opportunity. This is a trading opportunity after the setback. And this is iterating opportunity. And remember, when you are trading cfd these I told you you can go short and you can also bet against the price off a NASA to fall. So if you believe in acid can falling price. You can short it now. I'm not telling you to go shorter to do anything. I'm just saying you what's possible for you to do now? Later, in the trading lesson, you're gonna learn how to get down in a better way to calculate risks. Accepted a Don't worry. I mean, take it easy. This is just to show you that trading opportunities are happening every day out there just because they are news. Great. Now what about performance business performance? No, look, Twitter announces the earnings per share. They called it E B s. Okay, everyone. Coast earnings pressure. GPS off steed or 0.15 compared to the cedar 0.6 forecast. Okay, that's a surprise percentage of 150%. And this information is easily easy, easily verifiable by you on the 23 off. April 2000. Anything to stop? Climb $6 in one day just because of that announcement. Okay, So look from here to here, So investors were expecting some good forecast. They were analyzing Twitter. They were thinking about the revenue. Blah, blah, blah, blah, blah. They were prepared, and they were in this kind of today. So when trader makes the announcement boom, they enjoy the jump. And $6 might not sound like a lot of money, but Twitter is a cheap stock. Okay, we're talking about the stock jump from around here. What level is this? OK, that's something around 34. 35 whatever. All the way up to 40. 41. 42 c. So for a Twitter, that's actually a lot of money. So remember, business performance can drive the prices of stocks. Good. What about the last one that I didn't mention before its market manipulation? One of my favorites. Now, because this is the first time I think you officially see Mr Goto doing in action. So, look, this is the Oce Bank was call it like that. It's an imaginary banker, just invented. Okay? And this is Mr Gordon, the trader for Ocean back. And he has $200 million in his account, and he just goes and he feels like him. Looks like money tonight. No, it's two o'clock in the morning. He goes ahead and he clicks the buy button. No. So what happens when he clicks the buy button over here? well, he eats up completely all the sell orders available and pushes the prices of the stock up. No so he can manipulate the market however he pleases just because Mr Gordon has $200 million at the reach of a button and he worked for Roche Bank, which is extremely powerful, and they can do whatever they want. So we need to learn to spot when a stock it's a liquid, has not good liquidity, and it's easily and is prone to be manipulated by market manipulators like Mr Gordon. Great. Now you understood the main price drivers off shares. 33. Earnings Season: great. So the earning season the favorite time off all stock traders in the world. Okay, Now, hold on. What is this that you have right here? It's a map off the business year for companies. Right? So they have 4/4 in each year? No, no. During certain periods off the year Cos. Announced how they did in the previous quarter? No. So, for example, Amazon is going to announce how they did in the third quarter of the year in July. August, September. No, if you think about it, October, November, December, which is the fourth quarter of the year. Must be amazing for Amazon because it's Christmas. People are buying gifts like insane. You know, it is going wild. So they're making a lot of money. And during those times, So that is the earning season. Right? Is this is the This is where companies report. Okay. What happened during their business quarter? No. So after each quarter, publicly traded Okay? Notice here. Publicly traded companies will issue reports regarding their operations. Could be they can disclose all kinds of numbers the income, the balance. But but But what we care about is the earnings per share report. Know why? Because, Well, company's gonna tell. This company right here is gonna tell how much money the investors are making for sure they have. And a lot off metrics regarding the business performance off the company. And as we know, this is the kind of thing to drive prices off the company shares. So one example that you're gonna laugh. I love this example myself. Okay, look, Netflix, everyone knows Netflix Castle, the pill. You'll know it's sensate. Whatever. So you have. Netflix announces that earnings per share of Cedar 0.60 verses the four guests off 0.56. Okay, hold on. So, actually, the number was good. No. Was a little bit better than the number expected, but they missed their subscribers targets. So investors know that Netflix Okay, drinking doesn't matter if they announce a good earnings per share in that moment, they know that they missed the growth numbers they need in the future to keep being the in the profitability level they consider to be valuable. So the stock look on the 17 seat of 7 2019 it dropped from here or gay all the way down here. That's a 40 daughter dropped in one day. So, as you can see and did this kind of things are happening a bunch of times for a year doing the earning season, okay, and its public of public information. Remember publicly traded company dis closest the public information. So you go into the website, you find the investor relationships. You don't know the documents you read about the company, their numbers. Then they released their reports. For example, if you entered in Google right now, okay, Netflix NASDAQ earnings and then don't click on the advertisements on the first ones. Find the official link for the NASDAQ exchange. You're going to find the next forecast future dates for when a necklace will release the earnings. What analysts are saying and everything. See, no secret method, no guru, no broker, nothing. No, just Google and the NASDAQ exchange. I'm going to see if it's possible if I can leave you a link down there for an earnings report. The the announcements of Netflix, for example, if you can see it, Okay, so remember all of this is public, and it's also a training opportunity, and it's happening a bunch of times per year because earning season is about disclosing business performance, and publicly traded companies are disclosing all year long at certain periods third business performance, and this is gonna move the share prices. And all we need to do is think and analyse. What are these results they're announcing about their business saying to us, and that, ladies and gentlemen, is one step closer to price determination. 34. Lesson 6 - The Foreign Exchange Market: great. So Lesson six, the foreign exchange market. And before we dive deep into it, I want to start talking a little bit about money. Okay, I know it sounds silly to discuss money in such a such a simple way, but trust me, you'll see the importance of it in the logic and will how you can use it as a trader now. So, look, it's a funny question, but if I ask you what is the money right now and before you see the slight that you give your answer and you're going to start? Probably mumbling a lot of answers off our common sense of her logic. We have right as humans that were used to using money every day. No, but we need to go very conceptual and understand what makes money money. And here's the thing. What makes money money is that it's widely accepted, which means a lot of people are doing accepting, and it's a medium off exchange. No. Now, look why it's money valuable. And this is the question. Okay? Understanding the root of things makes us good traders. Okay, so think about this. The acceptance. Right. So you have the money okay, You know, other people are gonna accept it to for performing transactions, then faith and future used what I mean by this it means that in the future, you know that in the future this money that you have in your hands, it's gonna have some buying power, Okay? And you try to say that you try to earn it because you know, later on, you can do things with it. And once these things are lost, okay, in a currency, the value starts to fold. For example, they can take the currency of my country. Venezuela No. In the 1950 something's when President America's Paris Minutes waas leading the country they believe are a some point was even more expensive than the U. S. Dollar. No, during a short period of time. But after than all the disgraceful situations that we've been going through, what happened? A believer now has zero faith. Nobody believes in it because the government backing in the policing behind his government . It's horrible. So you know that the acceptance is very low because nobody wants it just losing value every day. Nobody has faith in the system behind it. And, you know that in the future and by future, I'm talking the moment you have a believer in your hand by the next day is gonna be worth probably half you know less. So this is the things that gives us the value of money and understanding. This allows us to approach opportunities as traders. Okay, Because we can study the currency, that the country situation, the currency of that country and see how people really feel about it. And what's the policy behind it? Okay, it's all gotta make sense. That's what I'm trying to see. So just a bit of quick history of money because it's fun to see a nice to to know these things, you know, I'm just gonna go history of money is very complicated. Okay, look, humanity is quite extensive. There is a lot of things happening, parallel developments in certain places of the world. So we're gonna try to just look at some of the most important events, and that's it. So look, in case you didn't know and if you know, great. But this is the timeline where things happens. No. So you have remember before Christ. Okay. NBC and I know don't many okay. Also after Christ and the breaking point where all this all these things happen. Also, if you remember, it looks a lot like the Kardashian co ordinates. No, there will be a zero point break. How did it all started? The rate m barter right to exchange goods or services without using money. And for thousands of years, we have been doing this. So I have two arrows and give me your cow. I'll give you my two hours, right. Good. Then one of the earliest traces of money of when standardized form of money could be the Chinese miniature replicas. No. So around 1100 BC, they used the small replicas made of bronze. So this means that if you wanted to get a hold of a sword right, then you probably had in your pocket a small sort made of bronze. Okay, That holds the value off the real sort. No, the the Eastern cultures are impressive. All of them. They invented so many things underway. So smart, you know, it never ceases to amaze me how smartest people were. No. Great. So look, the first coin in none other than Turkey. So there was this king called Ali at this. Okay? And in modern day western turkey and the kingdom of Lydia, he crafted the first official coin. And he made it from an Electra mawf alloy gold and silver. Okay. And was called the Lydian Lion Against is the oldest coin known to be made standardized from gold and silver. And it was a pretty symbolic moment. Okay, then then the next event that we could say that it's also very important in the history of money. It's paper money. No. And also China Look in the Tang Dynasty in China around the seventh century. Okay, They already using some forms of currency. But later on, in the 11 century during the Song Dynasty, the actually currency became something standard. A much more will know and a fun fact about currency about paper money is that these guys were never messing around in the bills. They put something. This is not the exact text that they put. This is much more funny version. No. But something like this. If you fake it, we look at your head in the bills. You know all counterfeiters will be decapitated. You know they were not messing around the understood Su plan Demand. Quite well, then. Marco Polo. Okay, this when this stuff starts coming to Europe, finally know. So Marco Polo was an Italian of a nation explorer Americans, and he was pretty, pretty awesome guy, you know, the travels of Marco Polo are very well known history, and he's the one that brought the idea of per paper money to Europe. Okay, but it was not until 16 61 when the first bank note was issued in Sweden. Great. No, The next event we care about is the U. S. Dollar. So in 17 92 the coinage act they gave use, they gave life to the use of the U. S. Dollar is the official currency for the United States. No, this was a very iconic moment in the U. S. History and also in the world because, as you know, the U. S dollar is still one of the strongest currencies in the world. And the one that everybody wants to have because they trust the policy and they want to keep it. No one has future used. It has value everywhere you go. Okay, then. Another iconic moment in the history of money. Also now, till to the present time is the end of the gold standard. Know something interesting? And why do we care about this? Well, the more we advance in the course and we get to commodities and all of that, we're gonna see the purpose in the correlation between the U. S. Dollar and gold. But on March 3 1933 President Roosevelt close the banks okay and make made them hold give their go back in exchange for US dollars. This was an attempt to stop the like, an attack on the restricts of the United States. And by doing this, he stopped people from redeeming gold and U. S dollars. In that way, he increased again the reserves of the United States. And that's how the Fort Knox reserves got built. No. And thanks to him, of course, that's when that dependency between us dollar and gold started going away. That's what we called it the end of the gold standard. Great. No, also a very interesting one. And there is very little information about this one is the first bank issued card. Okay. I couldn't even find a proper portrait of John begins to draw it. So John begins of the Flatbush. National Bank of Brooklyn created the first bank issued card and they had a program called Charges. No. So the way it works is that, for example, you go to a shoe store to buy some shoes. No, the shoe store sends, like, a name voice to the bank, and then the bank builds through okay for having used your card with that tragic program? No. Then with the most iconic cards in those times. Okay. And I love to draw enough off, Mr Frank. Actually, I think it's one of the best in the whole course. No. So Frank McNamara created the diners card okay. From the Diners Club. So how did it work? Easy. You go ahead, which were diners card. And you went to a restaurant to eat. Okay, if you were a member of the club, you show your card, the club would pay for your food, okay. And then you would bring birth circleup later. Now, this stuff grew of when Wild game, super quick. More than pretty much. All the restaurants, outlets. Everybody started taking the car everywhere around the U. S. No. And the last to my top favorites in the history of money that brought us to today. Okay. Paypal. So there was two companies. Okay, Confidently that Come on x dot com and they merge together. And they created this Elektronik money transfer service that we call paper. OK, And people change the way money worked. Okay, think about it now. We don't need to at that point, you don't You don't even need to use the bank anymore. Tow wire money to somebody in another country. Just need an email address. No. So two computers I'm here. You're here, and we were able to send money. And a fun fact that I know I thought you would maybe like to know. Is that l a mosque? The owner off the founder off Tesla. Okay, everybody knows Tesla from the car's air space axe from his super cool rockets. He was an owner off ex dot com. No. So, actually, Ellen waas on some very good business instances, early days in a very smart guy and then the latest development in history Bitcoin no. Which we will have its very own lesson to study more about Bitcoin. So in 2009 Mr Developer, known as Satoshi Nakamoto created Bitcoin. Okay, is the largest virtual currency in the world and nobody knows who Satoshi Nakamoto is. Okay, you will see a lot off Very interesting things from Cryptocurrency about how it works. The blushing in the Blockchain in blushing lesson in the Bitcoin The Cryptocurrency lesson . But for now we can leave it like this. And why did I share Hold this money history with, you know, from all the way from barter all the way up to Bitcoin for a reason is because you need to understand that humans always are trying to simplify things. Look, the more we position ourselves in a school of thought where we try to find a logic in things about why people valued money, how that's how the supply and demand change because of the perception that people have towards the money. That's really our first entry point to the forex market and now normal history. Let's just dive straight into it. 35. The FX Market, What is it?: so the F X market. Let's dive straight into it. I love to break down things, to understand them better. So let's do it together. Look, the first term is FX. So what the effects stands for first, the F stands for foreign, right from a country that is not your strange or unfamiliar No. And then X stands for exchange, which is to give something and receive something in return. In this case, we're not talking about a specific exchange like the new your stock extension. All we're talking about just the act of exchanging no and market where everyone meets to trade. Get Remember, The forex market is not centralized. It's happening all over the world in several places. No. So in this case, the term market is quite open. Good. No. What do we trade in the FX market? Currency pairs and water currency pairs. Combinations of two currencies measured against each other. For example, that the U. S. Dollar against the Japanese skin or U S daughter versus great British pound US dollar versus Canadian daughter You'd versus us dollar. No, something you need to get in your head straight away. Is this when you are trading Forex. What you're doing is you're comparing the currency off one country, okay? Or against the currency off another country. In this case, we're comparing, for example, the European Union against the United States of America. And that's why in lesson three, we learned a lot about macro economical indicators because macroeconomic indicators are the way to understand how a country it's doing and how a country is doing is going to reflect off course in their occurrence. See, it all starts connecting and making sense that the more we move on together through the course Now, what about the spares? No. There are certain types of currency pairs to this tree. Look, the major, which is the most traded payers. Okay, then the miner most traded without the U. S. Daughter emphasising without the U. S. Daughter, okay, and then exotic from emerging countries. Now let's go and look each one of these types individually. So the major pairs is the most traded currencies globally with the largest liquidity, so ah, lot off availability. Okay? No, All the spares include the U S dollar, and you can see it from looking at all the piers we put in the left side here? No. So when the U. S dollar is there, right, it's a major bear. Okay, especially. And also, it's because it's one of the most traded and it doesn't include smaller pairs. Illiquid currencies? No, we're talking about big currencies in the U. S. Dollar right there. It's a major bear. Now. What about minor repairs? No, they're they're still belong to strong economies, but they don't include the U. S. Dollar. For example, a great British pound versus the Japanese yen. Okay, too powerful economies. But there you can see that it's no U. S daughter in this whole list. Now, what about the exotic bears? No. Look, a major currency against an emergence country's currency. Okay, which is not that liquid usually. Now think about this. No, the euro against the Turkish leader. Okay, in the U. S. Dollar versus the Hong Kong dollar. Now all these currencies give you right here. Know that the minor one is usually not that liquid? No. In fact, if you travel abroad and you go to this currencies, you see that the currency fluctuates allotting price? No, and it is actually a great opportunity for forex traders because the more movement there is , then the more probably do you have making more or losing more money again. Something that doesn't even move. So the problem with this currencies, as I told you, is that they're not so liquid. OK, very good. Now you know the main three types of bears. Now, let's go straight about when you look things in the trading tries. And what do they mean? No talk about how the currencies are expressed. So look, this is the, you know, this is the dollar, okay? And then you say, Okay, Euro dollar is at 1.12. What am I did really saying like this? No. Well, the euro the first part of the pair is called The base is the main currency whose value we will express using the quote. Who's a quote? The U. S. Dollar, no secondary currency. So in the end, the prize all it's saying is how much quote you need to buy the base. So how much Donner you need to buy the euro, which is the base. Okay. And that's what the price is expressing. There's a lot of confusion always around this Good. Now, some facts about the FX market to understand what you're getting into. Look, Number one, it has the largest transaction volume, about $5 trillion per day. You know, treating is a lot of C. Rosen there. And in the world, there are around 170 different currencies. Okay, so there is a lot of exotic pairs to explore. Meant 40% of the four x traits happen in the UK. Okay? London has always been a global hop for economy, for forex transactions, for stock markets, for a lot of things. And the majority of the transactions are speculative. Okay. And what do I mean by this? Is that most of the transactions happened because people are have a real no real value or interest in the currency itself. Okay, the bigger part of the transactions is speculative. Means that they're just trying to make money out of the transaction, and they don't really need what their transacting. Okay, They just want to squeeze some profit out of it, which is, in other words, trading right. Get 36. The Pip: the bib. You probably heard this term a lot. You know, when I heard people talking about forex? If you have now, let's go through it together so we can understand. What does it means? No. So, look, what is it? It stands for pointing percentage in price interest point, but I really don't care about that. What I care, it's about understanding it and using it. No. So what is it is the smallest price measurement, changing currency training, for example, in the euro dollar. OK, if the euro dollar changes from 0.1 to 0.2 it changed one pip. Okay, good. Now look at this huge example. So this one right here stands for 10,000. Perhaps if we look at it all in Peps? No. So if this one changes to two, then discrepancy change in total 10,000 peeps. No. Okay. So you can see each position and understand. For example, in this one, if it changes from 1 to 2, it change 1000 bibs. Now, the baby is gonna be the fourth decimal position in 99% of the case. So these three if it changes to for its change. One pip. Also some other brokers at the fifth decimal position as a cedar 10.1 pip. But the most common is to find the just four positions. Now there's some exceptions. Some variations to the spit. Know. For example, in the case of the Japanese yen, Japanese yen is a very important currency. But since it doesn't have sold this decimals than the paper is gonna be the second decimal position. Okay, so it's gonna be cedar 40.1 Get now. I love to talk about the purpose of things, because that way we understand that there is some logic behind them. No, look, look at this. Two values OK from and to so that change over their know how is it easier to express if we stay the normal way? Okay, in the euro, dollar change 0.2 or it's easier to say it change two pips, right? It makes much more sense to say change to perhaps than go the old way. No, And to wrap it up about the paper, I want to mention one important thing why currencies are have so many decimals, right? because when we are talking normally in our daily lives, usually we only see two decimals. Now, if this is a euro dollar, we see this positions right here. 1.1 14. Okay, we can pay like that. We can have sent. And it's easier. This is the only way we know. But why? In the FX market, it reaches all the way down to this four decimal position. Well, there is a reason for this look in something so liquid and so large, like the FX market, you need to make it as a device a Poulos possible in order toe make it able toe in order to make it able to be traded. Okay. Without moving the price so easily. Okay, Yeah, that's the best way to put it. Think about this. Okay. If this were the only steps in forex trading, for example, from Cedar 0.30 to Cedar 0.40 no gang and there was no no nothing in between. So either it's gonna be on this one and jumps to the other one, then imagine so one day you have in your bank Okay, X amount of money, okay. And the value is one of the currency. And tomorrow you wake up and you lost 10% of the value of your currency, you know? And it's 0.90 so it wouldn't make sense. We need to make it small since there is so much of them. Okay, currencies have a lot, a lot of quantity available, and we need to make it a smallest possible toe, make it tradable, and do not let the prices move so easily. Okay, good. So that's the purpose off this off. So many decimals in currency trading. And this is the purpose off using a paper, it's expressing the price changes in a much more easier way. 37. Logic Behind FX Market: the logic behind the F X market. As you know, you know me already very well. I love to go in the root of things. What is the logic behind them? And look at this one right here. No, this is very interesting. Euro slash question mark. So if I have nothing to compare the you know the euro, how can I say it's a valuable currency? Okay, maybe the buying power of the euro. It's huge inside the European Union. But if I cannot compare it to another currency, how can I call it a valuable currency? No. And that's that's That reduces to the logical point that currency value come from comparing one toe another. Okay, And that's how the economy gets built because currencies are being measured against each other to measure the performance off two countries economies. Okay. And this is very important to understand the purpose of the FX market. Now let's talk about the purpose of the FX market. No, look. So let's talk about Toyota Car Company. They make some profits in the U. S. And at the end of the year, they want exchange him to J. P. Y. Okay, Japanese again and bring them back to Japan. So how's this process? Toyota make the money, Okay, They have it in dollars in the United States. And then they go like, OK, we want to bring it back to our headquarters in Japan. So they perform on FX transaction, and then they bring back the Japanese yen. Now imagine hundreds of companies are monster companies, big ones like Toyota, and many more are exchanging currency. Okay? And maybe they're doing it on a seasonal way after these quarters. Maybe that they have some deals arranged to do this in certain periods of the year. And this kind of stuff, it's moving the FX markets OK, or could be that you're buying oil. So you're exchanging into a particular currency to buy oil, right? So governments, big companies are the main play, and banks are the main players driving currency prices. Okay, due to the need to do international trade because it's a necessity, no. One of the second purpose of the FX market. No, the traveler, this is the one that mostly relates to us. So look, if you're from the us saying you're gonna travel to Ukraine, then you need to get a hold of Ukrainian hryvnia, right? The currency they have over there. So every time you travel, you're actually coming apart of the FX market, assuming you're using a different currency, okay. And maybe this currency is liquid. Okay? And that's why you can get some very good prices, because the spread is very low and the market is very tight. Or it can be any liquid currency like the Ukrainian hryvna, where sometimes you get exchange rates that have some big gaps because there is not so much currency on demand or available. Also, no. The third purpose. The speculator, Mr Gordon. Okay. He doesn't cares about what he's trading. No, really interest. He's just trying to make money out of the trades. No. So, Mr Gordon, Okay is scouting. Where are the opportunities when companies are performing distance actions? It Z So now you start looking at FX. Charge you started with He started thinking all the time. Okay. Is the euro that does the euro always change by this time of the year? Why is this happening? Who's behind it? Let's look at the public traded companies. Are they performing? FX transactions Insert computers off the year, and the speculator is just trying to go ahead and pick up all the information he cans to guess and to make trades and make money out of them because he doesn't need the currency, he just wants to make money. 38. The Economic Calendar: the economic calendar. Okay, What is it? A calendar to displace events with economic significance is quite obvious. This one, but which were in those events? Well, let me tell you made your students. You already know a lot of them because are the same macroeconomic all indicators you saw on lesson three and also many more. But you saw the most important ones. Now, how does this economic calendar looks? How do they look? You know, And what are they telling us? Look, all of them are. They can have websites, links, blah, blah, blah, blah. But in there, it all of them are the same. No, look, they have a time that can be expressed in GMT. Time depends on the calendar. Usually they're going to specify what time is the event. No, or maybe they can make it local to your time. A time for the event. They have the currency, the most affected currency from the event. They have a priority level to indicate how important it is. Maybe this event is highly volatile. It is going to drive, move prices in a very strange way. Or maybe it's an event that is not so important. and nothing is gonna happen. No. And then they have the event name, like the ones you know, Interest rate, gross domestic product. Okay, this is the e r. A. It's an oil report. We're gonna look at it when we get to commodities. The worry and then the n f b, for example. Then they have the previous value released in that report. They have the actual the US use a dash unless it's released already. And then they have the forecast or the consensus. Okay, they can call it both ways. I told you, I hate consensus forecast. It's much more easy to understand. Good. So that's how events are planned and their plan with long time in advance. So it's not like a surprise. There is no secret method. Know the event is already there on a calendar is just waiting for you to open it, analyze it to make your decisions based on what you think. No. Good. Now why this economic calendars are important? No. Remember what we talked about during lesson three and also during this lesson? Look, all this events show a signal of how the country's economy is performing, okay? And how the country's economy perform is what moves the currency prices from that country. No. So which brings me to this part C to believe. Okay, instead of just we have done a lot of obstruction in the course and we have everything you like in our own private Han drone world. So go out there in the real world and seat for yourself. Look, the first Friday off every month at 8:30 a.m. e t. I want you to look at the euro dollar when the n f b the nonfarm payroll report report it's out. Now, remember, one thing to find this time in your local time Usually what you need to do is write in Google 8:30 a.m. e t to my time, you know, And Google is gonna do the compression of the time and tell you what time in your local time this is happening. And also I want you to look at this one. This is very important one every Wednesday at 10:30 a.m. e t. You're gonna look at the w T i oil price once the e i a report is out. Okay, now this report drive the E. A. Inventories in the United States drives also the price of the oil in an impressive way. Sometimes they have big movements. Sometimes it doesn't. But most of the times it does. So watch it by yourself and the funny the fun fact. You know, there's a lot of people with secret methods to trade oil when they have this report every Wednesday coming out, you know, with clear statistics. And there is also another report called the A P I coming on Monday. But you learn to discover this. This one's by yourself. Slowly, slowly, you know, For now, just start by looking at this to remember. It's just like watching a football game. You know what? You sit down, grab popcorn, your trading blood for and wait for these two events to happen and watch the asset in the moment they're getting released. But try to get it down to the precise second because you're going to see it's insane is even better than watching a life football game Good 39. What moves FX Prices?: so to wrap it up, let's talk about what moves The ethic prices my favorite lecturer in this lesson. Because now we start done to understand that we can combine all the knowledge we know and use it to make decisions. And the beauty of it is that CR So far I've never shown your chart and told you, If you buy here and you do this, you're gonna be able to succeed in the signorina like I'm just teaching you how to think like a trader using common sense logic, you know, using data that is publicly available and the logic behind that data. And using this data yourself by looking at charts and starting to think you'll be able to come up with your first decisions in your first guess is so what moves the ethic, prices, politics and important events is number one, natural supply and demand of the market or market manipulation. You know, they started top three. There can be other reasons I haven't thought about, but this is the most important ones and know What is that? As I wanted told you in the beginning, you know, perseverance is very important. You remember my first drawings in the beginning, off the course, they look a little bit crappy. And look at this one's now we're getting even better. Know, like See that the more the more we continue doing something, the better we get at it eventually at some point. And trust me, I'm like the worst artist in this life. It's not for me, and it's It's so funny. And that's exactly why I decided to do a hand drawn course. Why? Because it drones were so silly that I knew they were so easy to understand. And people would probably love them. You know, at least I know I do. Good. So political decisions, a major events, okay? They always have an economic impact. Okay, for example, Look, the change off tax rates know if Trump goes tomorrow, he wakes up and said Huge tax perfect. Then companies are gonna have something in some incentive, maybe to switch business overseas. If they don't like this tax rate. And when they're doing that, they're gonna convert currency into the foreign current currency, and it is gonna have an impact in the US dollar. Okay, for example, then raising minimum wages. Another political decision a political economical decision now was gonna happen cos they're going to try to pass on that coast into the products. And this is so so gonna end up affecting the economy, changing the interest rates. Also, this one we know very well because we saw it on lesson three. Great impact on the price of currency. Because investors can choose either to invest heavily in the country, for example, in to, say, the United States because the interest rate is quite favorable for the banks, for the lenders, for everybody. Or they can say now, we don't like this. We're sending the money to Japan. No good. And some example of major events can be natural disasters or work. All this events will have a consequence that we need to logically deduce in each country good that natural supply and demand is quite easy. One. We need to spend much time on it. Okay. High demand for something. Price goes up low. Demand for something. Price goes down. We saw it on lesson three and five. Remember, you saw your supply and demand charging your your order Book market Death visual? No. And remember what's going to cause the high demand. Will any of this political decisions? Or maybe some investors are planning some staff? It can be many things, but the rules stays the same. High demand price ups low. Demand price down? No. What about market manipulation? Again off. I love this light. You know, I actually I did it toward three more times because market manipulation, it's happening all the time. So remember, Bush Bank. Any coincidence with real life? It's just for fun. Mr. Gordon the trader. And he has $200 million in his account. He clicks by, He goes ahead, he sees the market death and he says, Easy to move. Boom. He eats all the orders and he moves prices, whatever he wants. Okay, no, to finalize. This light is the best. Look, everything is connected, and that's what I need you to learn. If Trump wakes up and he says, Oh, it's huge, we're gonna put tariffs because I'm the best. So what's gonna happen? Wall Street is gonna go like this. They're going to develop my own face that I had when I started in the sea of the industry is gonna be like, uh, they're gonna sell all your shares and run immediately. Okay, then they're gonna sell older a dollar that they have from their shares, and they're gonna go ahead and they're gonna buy Japanese yen, okay? And then they're gonna end up buying maybe Japanese shares or buildings or whatever they want to buy. But look, just because Tom woke up bad that morning, he tweeted something, right? This coast, Wall Street, Then to have a crisis attack and become like this guy and execute something in section. Okay, this is a very drastic example. A very excessive one. But it is how it goes, OK? I mean, for something socially like Trump sending a tweet, tweet, saying that he's planning toe, maybe, I don't know, increased taxation by 10%. And then he never does it. But just he sends the tweet and the trader can be like, Oh, my God! Look at all what's happening with the chain of events. No. Now a traitor. What is waiting for? He doesn't cares. The trader doesn't cares if this message is positive or negative. The trader cares about how to profit from it because you have the ability to profit from upwards market movements or from downwards market movements. When your trading CFTC no. So it's all about learning how to spot wants to move, what the movement is and what's gonna happen so you can do something about it and make your own decisions. 40. Lesson 7 - Indices and ETFs: Lesson seven in this is an E T EFS. Let's get started. So, an index. What is it? No, Look, it's a measurement off a part off the stock market. Okay, So for example, we have our food C 100 here, which is a famous index. Okay? And we have a bunch of stocks associate ID to that index again. That a group together. And that way, when we look at the footsie 100 we understand how old those stocks are performing together as a group. No, Think about the following example. Which is quite funny. No, our first guy right here to the left. He's saying, Oh, I wonder how the U. S stock market is doing? No. And he's like, Okay, then I gotta check all the United States shares one by one, to then average it and get a feeling of how the U. S stock market is doing. Yeah, right. But our second guy here, look what is doing, OK? I wonder how the U. S market the stock market is doing easy. I'm gonna take a look at the S M P 500 right? Because the standards and Poor's 500 is a huge index that tracks of 500 big companies in the United States. No. Good. So you probably here. I just want to refresh your memory. You probably heard it because these are very common. To see it in the news all the time. A bunch of famous in this is now We're gonna start looking at each one of them together. But the footsie 100 s and P 500 dexterity, Dow 30 and nasty 100. All of them are in. This is which is a bunch of stocks group together for particular reasons. Okay, We're going to learn how to calculate some of them and understand the logic behind them and even some history. In fact, this lesson is also one of my favorites. Because you can earn some math about how to calculate your own doubt. Device her, get let's get started 41. A little History and Math: Okay, This lecture is gonna be super cool because we're gonna look a little bit a little bit of history. And also some math and counter calculate thou device or you know. So look, Charles Dow, the Indus is boss right here you have. So, look, he was an American journalist that co founded the Dow Jones company. Okay, You probably heard about the Dow Jones index. He's also the one who founded The Wall Street Journal. No. One of the most trusted source of financial information worldwide. No. And he created the Dow Jones industrial average. Okay. Also spent all his life researching the markets and analyzing. No, look at the dates. 18. 51 when he was born and died in 1902 So we're talking so such such long time ago, we already had such an advanced person. Not now. What about the co founder, Edward Jones, also American statistician, And he co founded the Dow Jones Company and the Dow Jones Industrial average. The index? No, look at him as you can see, the portrait star improving us. We move on through the course. No. Good. Now what about the Wall Street Journal? And it's important to mention them in the course because they are the ones keeping track of this Dow Jones index and I will explain to you how in a bit so look. And this is also very passionate story about Veena Entrepreneur. In November 18 82 they started their own news agency. No, in the basement off a candy shop in New York. No, and they started putting out a two page summary of the day's financial news. And quickly, quickly. This guy's working from the basement off a candy shop. They became a company selling more than 1000 subscribers. No, no. What about the first edition of The Wall Street Journal, which is Sonic are iconic moment in history. So in 18 89 okay, they already had 50 employees, and they decided to become a real newspaper. And then the first issue off The Wall Street Journal came out on July 8 18 89. It cost either to sense for issue or $5 a year, a subscription, see, So this models, which I hated all my life, you know, I mean, the kind of people that suffered when, for example, photo shop when I'm subscription model All the software when we were renting everything. I feel like I'm renting my life. My music Spotify, apple Everything is being rented. No, but this model started quite a long time ago. 18 89. Okay, no, look, the beginning off. Dow Jones. We're approaching the Dow divisor calculation. Don't worry, it's gonna be very soon. So look, he had the idea of doing the following off. Tracking the closing. Now, you know about Ocho closing stock prices off 12 companies, Okay? Adding them and dividing them by 12. So he took 12 companies. He added the prices, the closing prices. He divided them again by 12. And that's how he created the Dow Jones industrial average, which he started publishing in the Wall Street Journal. No, let's talk about the Dow divisor. We've made it. Look, this is super cool. You have no idea how excited I get when I'm talking about this, this one to left, no gain. Don't avoid looking at the right now so we can deal together with this one. This one to the left is a normal situation. Often, Index. Know why this is the share This is different companies A B C D E t know, they have a share price. So how do we make the index? Okay? We add them all together. 110. We divided by five because there's total five companies and we have an index. We have 22 Right? Okay. Now what if this company company be okay? Had a reverse stock split? No. What happens? And look at this right here. No, look through the company be became a $300 stock. Now, does this mean the company perform in the share price? Rose? And it's doing super well. No, doesn't means this. It just means that they call back their shares and they make more expensive shares. Right? So then when we calculate the index again $300. 316 we divided by five. It gives us 72. Okay, now look at this. This is what happens. The stock be okay. Went from $50 to $300 it's wrong for us to think like that white. The stuff he did not earn 250 learning performance. It just shrinking quantity making and have a new price. But is the same company the same total value. Nothing changed. They didn't perform. And the index now, because of that new calculation, is growing from 22 to 72. Okay. And the index, What happened with them? They did not perform good. It's just affected by the reverse stock split off B share be. And now five is no longer a new device. Her We need to find a new one. Uh, good. Now let's find a new device together. So what are we gonna do? Know some basic math seeing? Finally, Matthews useful in life. Who would have thought about it? So look, we take all our share prices, okay? And we divided by X, which is a valuable we don't know it. This is a new device, or we need to find okay. And we need the index to still give us the result of 22 because that's the previous number we have. We need to adjust it in such a way that despite having a stock split and price changing, we still maintain the value for indexing 22. Okay, How we do it easy. A simple math equation. No. 360 divided by X needs to be 22 white. 360 because this is the total amount of fall or shares. Remember, 360 after the reverse stock split. So let's go again. What about So 316 to 22 is gonna be X. Why? We swap the 22 with the X, which something you're allowed to do now 360 divided in 22 is gonna be 16.36 or common. Sorry. We use common points. So that's why I'm messed up. Sometimes when doing it. No Europe, United States, whatever. So 16.36 is our new devices and how you can confirm it. Well, look, if you divide 360 which is a total value of your shares into 16.36 is going to give you 22 and 22 is the correct value. Why? Well, that was the initial value off her index before the reverse stock split. See? So that's important of learning how to calculate the dow divisor because now you understand that there needs to be some continuity. And the beauty of it is that the Wall Street Journal has been providing this number since this index exists. 42. A little history Part 2 : the Dow theory. So as we already know, Charles Doll Waas the boss, okay, he created a lot of interesting things in the financial investment world. Now, look, he wrote a lot off technical analysis, knowledge and a lot of principle snow. And from this 255 different Wall Street Journal edits other authors, compiled this work and presented it under his name. Asked the Dow theory. Okay, so what is this? Dow theory has go through its six tenants so we can look at it together. So Number one there are 33 primary kinds of market trends, So the prime in the main train number one is the primary can last years than the second that he may be up to three months, and it's usually in the opposite direction of the main trend, so you can see the apple share rising for two years, but then, for maybe up to three months, it can be going down. But it's just a secondary trend. And then there is minor things that can last less than three weeks and are usually just called market noise because in the end they don't signal any clear direction. That's why it's important to look at things in the correct time for him to understand the decisions we're making. Then primary trends have three faces, and this is very cool. Look, let's say about the in the by direction. No, look. So the history faces the accumulation, the public participation and the distribution. No accumulation. So smart, guys. Okay, go ahead and start buying stock. Okay? Nobody knows prices don't move and change because everybody is just too busy doing something else, then public participation face everybody catches up in. Oh, my God, This is going up and then distribution, OK? The smarter guys dump their stock, okay? They made the money and the rest of the people. Well, bad luck. And it sounds like pump and dump, but yeah, it's kind of like that, you know? It was It's already in. The knowledge is in 1900 it's happening for quite a long time. Good, then number three, the market discounts everything. So now believes that the moment news are out there already accounted for in the market in the share price. So, in the end way, you don't need what What is now trying to say is that the moments something happens, it's already in the chart. So that's why looking at the charts and predicting using technical analysis patterns, data it's a good way because he believes that whatever is happening in the world the moment it's out, it's already gonna be in the truck. So number four indices marks must confirm each other because if you're looking at a sector , for example, in the United States economy, and then you see the in this show in a clear signal off, attend, forming and then you see another index who that's also part of that shares in those companies showing a different signal, it means that then some change can be coming. And you need to wait because you're still not sure okay of what's going on, what's gonna happen so they must come from each other. Now volume must confirm the trend. This one you already know, right? Remember what is volume the amount of shares traded in one day? Good. And why do we care about volume? Think about the following if the share price is rising. But there is no volume, which means there's not much people trading it in that moment. It's a thou believe that this is a signal off weakness. Okay, so we need to be to learn to be very careful to detect when there is volume confirmation upon the movement, for example, you see that you see the share or the index rising, and you see a lot of volume under trading off those shares. Okay, so this confirms and then number six. A trend persists until a clear reversal occurs. So what does this means? Well, technically, it's, ah, more complex Russian of the trend is your friend. Okay. So is the trend is happening regardless, if you see a small pullback or some different movement for some time, some noise, it doesn't matter. Because tents usually persist according to the doubt theory. Good. Now, what about another important character in history, Mr Henry Barnum? Poor? No. So he was a financial researcher and analyst behind the creation of the standards and poor index. Okay. He also wrote a famous book in those times called History. Afraid roles and canals in the United States. Never read it, but he's very famous for it. So why not mention it? No. The beginning of the s and P 500 No is the biggest index in the United States, has a bunch of shares Now, in 18 60 Henry created Pours publishing. No. Then, in 1923 Standard that six is a company developed the first stock market index with 223 companies. Now in 1941 both of them merge and form the Standard and Poor's Index. And in 1957 the index was expanded to have 500 companies. Now it's cool to another. Is not is not such a romantic story like the one in the Dow Jones, But this is nice to know where all of this is coming from. Okay, now we're gonna start with composition off in This is 43. Composition: so the composition off induces. So are all in. This is the same or just Are they just a bunch of stocks group together? Well, no, look, for example, they contract different things. The Footsie 100 contract the top 100 companies in the London Stock Exchange or the Dow 30 contract, the 30 best in class largest in the US The NASDAQ contract different kinds of stocks, so in the end, they don't necessarily need to be the biggest. But usually they are in this kind of major industries. But each in this has certain rules for their composition. Let's go over a few of the most important injustice. So the NASDAQ 100 you probably heard about it before, right? Well, look, the NASDAQ is quite an iconic, and this is like a like the baby, like the baby of the United States. You know, it's more recent, much fresh index with a less history than the Dow Jones and all of the others. And look, it's it's quite interesting. It's some multi sector index, okay? It excludes financial services and has the largest stocks that trade on the NASDAQ exchange because the NASDAQ it's also in exchange, not just in index. Very important to know. And a few of them you're gonna find them in this index or Microsoft Apple, Amazon Intel, the one that makes the processors and Pepsi Pepsi Cola. Who doesn't know something. So it's quite interesting to understand that each index can have also several stocks repeated across them. You know, maybe you're gonna see you, my cousin Phan Apple here and also in the next index. You're gonna see them too. Now, look, what about the S and P 500? No. Okay, as we know it, this is the largest index in the United States. And why, look represents around 80% of the U. S. Stock market. So if you want to check how the U. S stock market is doing, what do you look? SMB 500 simple. And it has the largest 500 companies in the U. S. Okay, and it has many requirements for the companies to be there. They have to be, for example, in positive earnings in the last quarter. That is seven other requirements. But what we can to understand that if a company is here, it's big. And who is there OK, there you go. Microsoft Apple, Amazon, Facebook. JP Morgan See Banking, industry, finance, industry In the NASA, we don't have the financial services industry. Okay, What about the Dow 30? No, the Dow Jones look monster thing. This is not the right way to put it knowing the super professional way. But I'm not here to be super professional amateur to teach you the best I can. No. So it's monster companies in the US, the best underclass or sector. So a few of them you already know Apple, Boeing, Coca Cola at this name, IBM. But example Boeing Top level bosses on the the aircraft industry. Okay, Apple, their boss in technology industry reaching the $1 trillion market cap. You remember market cap, huh? The shares lesson. Coca Cola, for example. Monster companies in the United States Now and usually it's good to keep a track of this monster companies because since they are industry leaders, if they are going down, it's likely that the rest of us, of course, can also be going down. No good. Now what about the footsie? 100 know? Okay, this is quite interesting. Look, the largest UK companies by market value. Okay, so it represents around 81% of the London Stock Exchange market cap. So think about it. You want to check how the UK is doing? What do you look at the footsie? 100. And a few of them can be HSBC Holdings. Lloyds, this one I'm going to say in Spanish. Like Come on. The inhale. Okay, so So look, when you want to check how our country's economy is doing, maybe they already have an index. A big one that covers a large percentage of the market gap. And by tracking that index, you can understand also how that country's performing. And if you add your knowledge of the f the footsie 100 you add your knowledge of the macro economical indicators in the UK together, then you can take a better guest on, for example, the price of the great British pound. See, it's by combining everything you know. No, the most traded, and this is in the world. I just put a few of them here, but in the end, this is something you can start researching on your own. By googling I'm I'm a big fan, you know, like I guess I was raised that way that you are not supposed to Go ahead and just give people bread. I want to give you the method to manufacturing bread yourself. So if I just go ahead and post right here, which I could African ordering 1.5 years a complete list, you know, and and make you memorize. And in the end, you're not gonna learn what I want you to do. It's also toe toe awake. Your curiosity to get you to research a lot. No. So look, the most traded in business in the world. Well, we can say the Dow 30 NASDAQ 100 s and P 500 in the United States of America. No. Then the footsie 100 for the UK Also, this European indexes are very strong. Once looked, the order stops 5600 dax 30. And look over here. Also, you have the Nikkei 20 to 25 in Japan. So look, you gotta be tracking constantly to see how the world markets are performing. And that way you can also enter the forex market using this perspective. No, and trading in this is no. I've had a very simple logical example about it now. So look at all the effects. Look. So if we have a bunch of companies in those in this is, for example, in guessing be 500 if 300 of them report bad earnings, no. And then the SNP takes a plunge off 20%. Okay, then this is gonna end up being a bad gross domestic product, OK? And this is gonna end up amounting to a bad US dollar situation, the value off the U. S. Dollar. So you see how everything is connected together. Great. 44. Calculation and Purposes: so calculation methods now look, it's important to understand how indices are calculated because he will get us one step closer to understanding which shares of the index are more important than the others. Now look, the most common methods are just for number one, the market cap weighted where, as you so you remember from the shares lessen the market cap means that you multiply the price of the outstanding shares. No, by the quantity of those shares available. Okay. And that total big number is how much that company shares are worth. No. So if a share, if a company has shares worth $90 billion out there, but it's austerity, then the one with $90 billion can be more important. No. Now there is price weighted where the more expensive the share, then the more weight it has on the, the more impact more weight has on the index price. No, there's also other methods, like volume weighted, are fundamentally weighted. But about those we don't care that much because they're not so common. Now, look, let's get started. The first thing you need to learn to calculate the weight of an index is the rule of three . No. Now, you probably heard about this one before. If you haven't, I always joke about it. Like you like you can really. You can skip college. You know, if you want. As soon as you after you've learned the rule of three. Because it's so useful. Now, look, let's go here one second before we go back to the rule of three. So, look, if you have 25,000 euros saved and that 25,000 euros, 100% of the money you have and you're about to spend 4700 euros, then how much percentage are those? 4700 euros, you know. How much are they? Well, rule of three. No, this is your 25 euros. 25,000 euros. Sorry. This is 100%. This is the amount you gonna spend. And this is X, the number we don't know. And using this formula you see right here you're gonna be able to calculate How much is that X? No. So how do we do it? Easy would replace the values inside the formula. Okay. And that gives us 18.8%. That's the percentage off your savings that this amount for percent 4700 euro. You can try this calculation many times by yourself. And it's so useful for anything you're doing daily life. It's unbelievable. So let's start with induces. What about price weighted? No. So look at this table we have here. No. So this means that share a has a price of $70 the number of shares Okay, 50 and then it has a weight of 24%. OK, now look, why easy. So if the price if you add up all the price of the shares right here is $300? No. So $300 is the 100%. Now, how much is 90 if you want to find out the weight it has this this $90 on the index. Well, we do the rule of three and we find out is 30% so 30% impact on the price of this index on the value that the index has. So what happens is that if this share right here moves or tricks a big movement, then the index it has 30% weight on the price of the index or the movement is going to be big. But if the share of $10 moves, then the movement on the index is gonna be super small because it has barely any weight at all. So by understanding the weight off the shares on the index, we can understand, for example, how to track a couple of them. We think they are the most important just to be ahead of the potential movements that the index can have. So, look, what about the market cap weighted Super easy. Look at the left side table. And what do we have? No, we have the shares. We have our price. The total $300. And now we have a number of share. No, it can be several different numbers over there. And now we have out of market cap. How do we calculate it? Easy. You take the price of the share your multiplied by the number of outstanding shares. And that is 1200. No, doesn't market cap off that share be? And how do we determine the weight? Easy. Now, instead of basing ourselves in, the total are 100% wash. $300 now are 100%. Is gonna be the total market cap. 7200 off our index. So 7200 is worth 100%. And we want to find out, for example, the case of a what is the weight off this share? A easy now 2800 which is the way the market cap off the share A and we do our rule of three formula, and that is 38.8%. So in that case, surrounded up to 39 to make it easier. So what does this means? That you can keep track of a big index and see which shares are having the largest impact on the index prices. Maybe that is 34 shares that if you keep a track of them, you know that maybe when they are going down, they wait so huge that they can also direct the other ones down. No, this is the interesting part about understanding how the indexes are calculated. 45. ETFs: So now to wrap it up, just a quick talk about E T f snow. What are they? Look, their basket off securities. What? I mean by this. Okay, take a bunch of securities, for example. Shares can be commodities can be currencies, anything you know. And we put it on a huge basket or a small basket, we don't know, and we call it an e T f. No. And they go by certain groups now, they're very easily traded on, like the index, which is much more complex, much for huge. And there is a lot of variety in their composition. Okay, They can make them pretty much of whatever they want. They have. They don't have all district rules like that, like the index. So look, some types of e t f there can be industry TFC, okay. It can be according to the tech sector or the beef producers. You know, whatever or come commodity et al. No combinations of certain types of commodities or companies dedicated to those commodities , or can be pretty much anything you know, or currency. TFC. Certain for 40 of currents is grouped. Okay. Is there highly customizable and much more liquid and easy to trade. And in this is no, not why are they useful? And I want you to think about this, so I want to invest in gold companies. Okay. Oh, my God. What I gotta do? I gotta search all the companies in the world and find those that work with gold. No, no, it doesn't. Sounds good to me. No, I want to invest in gold companies. And what am I gonna do? Okay, I'm gonna find my e t f cold G d x. Okay. Why GDX their own vectors? Gold miners and you invest in a bunch of companies dedicated to the gold production of the gold mining industry. See? Good. Now some important TTF says I mentioned Wasit GDX dedicated to the gold mine industry. Axel, I have dedicated to financial services, or XLK, dedicated to the technology sector. So it CSR just one more instrument that you can use to diversify your portfolio. Okay. Now, as I told you, remember, there is no secret trading method. Nothing. There is just common sense and logic. And by now, by this point, we're reaching together. Now you understand that you, without the help of anybody after finishing discourse, you can just sit down, pull a piece of paper and think why? This is going up and down, What's driving it, what's affecting it and what does it means, All the things behind it. Okay, and as you can see, there is no secret method needed to do this. 46. Lesson 8 - Commodities: Lesson eight Commodities. Let's get started. No So first what? Issa commodity? It's a row material or primary agricultural product that is considered valuable. Okay. For example, crude oil, coffee, beans and gold. No. Now, here's a thing. Remember, I love to teach you the Rudolph things in the real understanding behind them. So you can use it to your advantage as a trader, you know? And we need to start. But why are they important? Know for example, the gas that you using your car is coming from oil? No, the coffee you didn't every morning. If you like coffee and you love it like me, it's also traded commodity. Okay, Your bread. It's coming from wheat traded commodity and your gold HD and my cable is made from several commodities. No being one of them. Gold also oil. Now here's the thing. No, I want you to put yourself in this scenario to understand the correlation between the assets and the price is that you end up paying for stuff you know, and why this is important for us is a traitor. No. So this is the price of oil. And if price of oil goes up right then what's gonna happen? The price of gasoline is gonna end up going up. And then by the time you reach your gas station and you're gonna put gas, then this means that you're gonna pay more. No. And why do we care about this cycle here as a trader? Well, think about it. This means that oil, for example, and gas can have ah, seasonal variation, which we'll see later in the course. No, If it's summer and everybody goes off to driving in the whole country, then this means we can expect the potential price increase. No, in us traders, spotting the price and Creech increase on each one of them is was going to give us an edge . But to find that, like I told you always, it's not just about I think it's going up. It's about finding the reason why no, in a logical reason. Now look at this example with Golden Electron ICS. So if the price of gold increases, what's gonna happen? No. Then the factory that is producing your HTM I cables that you need to play your PlayStation or whatever it is you're using at home is gonna have to increase the production, their production costs are going to increase. Knowing what's gonna happen by the time you reach this store. Your HD and my cable is also going to be more expensive because there could production costs for them a rising No. So why do you care about his example? I'm gonna give you a new one. Know if suddenly all the television manufacturers in the world say okay, from tomorrow, we only gonna produce the TV's that work with a D and my gold cables, you know, and all the other ones are not gonna work. And this is the only and is only one model of cable made of pure gold. That is the one that is gonna work. What's gonna happen? Well, look, the demand for gold is going to increase. The price of gold is going to increase the production costs for the factory going increase . And you're gonna end up getting the cables. They're more expensive. And why do you care? Well, as a trader, this is the kind of stuff you want to be spotting out. You want to be aware of the news and how this news affect you either As a consumer and also as a trader. So it's all about understanding the basic needs. Now, what about commodity categories? No, this is the main categories. Look. Agricultural, commodities, energy, commodities such as oil and metals, gold, platinum, silver, palladium and in vital mental commodities one That's quite interesting. You know, Now these companies can trade also on carbon emissions, which you're gonna look in the next years Lights. Now, look, there is also specific commodities exchanges. Know now you know how to read. I'm not gonna read through the whole list right here, but I can tell you one thing. You know, my tough favorite amongst them is the Chicago American Town Exchange. Okay, is one of the largest in the world, and their website is quite open because you can go in there and see the prices of commodity futures. Now, don't go right now. After we reached the part of the futures, which we're gonna discuss in this lesson together, then I would love you to go to the Chicago Mercantile Exchange website or you have to do is type in Google and see a me oil futures, you know, and then avoid any advertisement in the first links in Google Search and then in the right wing for the Chicago Mercantile Exchange. You can go and see all the different expirations and the futures. And trust me. Once you understand the logic behind this, you're gonna be impressed and you're gonna left to use them in to your advantage. 47. Agricultural Commodities: Okay, The first commodity category. No agricultural commodities. You already know a few of them. You use them every day, but we don't think about them as commodities. No. As traders and investors. So you know them. Wheat, coffee, corn, soybeans. Now let's start looking. A few of them in death. No, Look, before that, I want to talk about the industry because this is the key to success. To position yourself as an investor, remember? I'm talking about investor right now. Now, look, it's grown. Some bring some fields, talk about coffee. No. And then it's transported into a factory. Dennis transported again either to a supermarket so you can buy it and make it in your house or is transported straight in, tow cafes into businesses that is going to serve you the coffee industry. No. Now think about something. Anything that happens to this field, you know it's gonna end up screwing up all the chain to the right side, right? So if there is some brain, you know, and the coffee gets damaged, you know? Then something's gonna happen to the price of coffee, and you will see later on when we talk about seasonality price drivers. But what? I want you to understand that there is a whole industry behind every single product that you end up getting in your hands now. And that is companies in both. Maybe this supermarket is a public traded company. Maybe this factory is also a publicly traded company. Maybe the producer is the publicly traded company and maybe the transport of the destruction. A publicly traded company and you can also invest. Or you can speculate on the price of the shares off this several different companies based on your understanding of how the industry works and what can be affecting the prices. Now, Now, let's look at the industry. You know what coffee is? You know this one? I don't need to say you love it. Probably. I love it. This this I know for sure. At least 86 cups per day. Minimum. No, no. Look, the key data from the industry. It's worth around $20 billion that is 500 billion cups of coffee consumed every year. Think about this. No. And you know something? Coffee? It's limited is not like we have unlimited coffee in the world. OK, we have pollution. We have all this bunch of stuff that is causing the production to the police as years passed. Right? Because, of course, is going to be impossible to produce once the Earth stars becoming a mess. So an investor who believes that the price of coffee can rise? Not necessarily. You need to go and buy coffee and started in your house. No, but you could could invest If you believe that coffee can be a potentially more valuable commodity, you could invest in the company behind the production in the company behind the retail sales of coffee in the company involving the transportation of coffee, you see. But it's all about understanding the industry and each party involved in the industry, and it's all the same for all commodities. There is an industry behind them now. What about soybeans? And this is kind of cool? No. Okay, so it's a species of legume native to Asia, using all kinds of products such as, and this is quite interesting. No oil, cosmetics, biodiesel, you know. So they're making cosmetic stuff that you're putting your face, you know, from soybeans. We don't even know about it. And there is an industry that is worth around $40 billion. And look, think about this bio diesel. Okay? Oil, important stuff. You know, the more the more that dependency on regular crude oil goes away and starts begetting replace, you know, buy new new things or things being produced out of different commodities than the price of these commodities can be affected. And again, you need to explore and understand each industry behind each thing You want to invest or trade in. Okay, What about wheat? Okay. Wow. Look, this one, it's huge. And you know what? It is already, and it's a grain, and they use it in the production of stuff that you love. Probably. I'm gonna make emphasis on the one I love pizza right there. No. So think about it. Also to feed stock the animals for biofuel. So all these things okay are important. And this is a massive industry. 250 million. Hector's off. It is being grown around the world, and it's an industry worth over $50 billion per year. Okay, It's traded every year. Now think about that. This means that anything around this industry also the limited supply, the current world climate change is the future that can be potential to get involved in the industry. As to me, we explore each one of the parties involved in that industry makes sense good. 48. Energy Commodities: energy commodities. You know them. They're quite famous, you know, for example, crude oil, gasoline, coal. Now, what about the industry? As I told you, remember, you need to position yourself as an investor or trader with industry knowledge to understand. What are you putting your money? It's not a simple is looking at a chart of oil and saying, Making decisions now you need to understand who are the parties involved behind the industry, and that's how you change the money. So think about it. That is the only production company. No, they have the oil rigs pumping somewhere in a plant in the middle of the sea. Then there is that shipping company that it stands transporting all that oil from point A to point B Point be the factor. You know, for example, that factory, they're refining the oil. Then there is another transport company involved, you know, and it's shipping that that products they make from oil, for example, it can be the plastic in your water bottles. It can be gasoline used in cars and Houston planes. So, again, any major issues presented here or any issues presented year of the ship sinks full of oil . You know, it's gonna end up representing a major screw up for the rest of the people involved in the chain. So this means that just because some oil plant exploded in the Middle East means that you could end up a more more price on your plane tickets because the gas is more expensive. Why supply and demand? You know this already and quite get Why does it means? Well, think about it. You have a supply and demand of oil. There is a shift in the curve off supply for oil due to an external event, right? What happens? The price of oil tends to increase. No, because we have less supply and the same demand. And you end up paying the price over here. Or maybe winning when you're gonna put gas in your car. No, Look at this. Understanding the industry as an investor or trader allows you to position yourself. You could investing shares of this company in shares of the company dedicated to production in shares of the airline. There is many options available, Okay, But the most important part is understanding as a whole. Everyone involved in the industry Okay. No. What about this. Energy commodities the most important ones. I get up the molding one slide because they're so close to each other. Oil, gas and gasoline or going. We know them already. Now they're being used in the production of things such as gasoline, asphalt, plastic and energy. So oil, gasoline, all of that very closely related to each other. And here's some interesting facts about this industry. Okay, it's worth around 3% of the global economy. Imagine to the person of the whole economy in the world, that's a big number. So any major changing the oil prices, it's a major screw up in the economy. Yes, women, it's about. It's about one light, for example. And a currency of a country can be completely dependent off the oil trade. No. And if oil takes a day, are a huge, huge plunge. Right. What's gonna happen? Well, you and I end up seeing the currency of that country being affected. No. Now, this industry in total is worth around $2 trillion the total world gross domestic product is around $85 trillion from things that are deriving from oil. So think about it. It is worth studying the industry and the parties involved and understanding how to spot training opportunities by events that out ultra supply and demand, you know, and could happen over here in this ship would happen from the airline. Maybe they decided not gonna use oil anymore because they're making electric planes now. Or maybe water stops using plastic for their bottles. Or maybe this this this company that extracts will from the sea funds away to make it 20 times cheaper. No. And they reduce the price of oil. We never know. But what we know is one thing. Understanding the industry helps us getting to the commodity, trading in a much better position. 49. Metal Commodities: great. What about metal commodities? No one has just mentioned a few examples. So in this case, we have gold and we have copper, Right? Okay, let's understand a little bit about the industry. So it all starts with the extraction process. No, some mind somewhere is extracting the material. Then they're taking it somewhere, and they're processing it, and then they're bringing it to a factory. That factor is going to produce a bunch of products, you know, could be several different factories and companies involved in the production of this something. In the end, we can end up getting HD in my cables or gold gold ingots, right? And then another transport companies involved in either shipping them to the store so you can get in your house, your HD in my cable, or maybe to the Oce bank, right for the gold reserves of the pushback. So think about it. Any major problem presented here or anything that increases the supply, the demand is gonna end up affecting the chain old together, knowing everyone else involving that chain. So remember understanding the industry positioning yourself in the industry is what gives you the knowledge as an investor toe properly. Throw in the money. Whatever you think, it's best. No. Or to not throw the money at all. No. What about gold? No, I know it sounds quite obvious, but we need to think about where it's being used, why and how in order to be able to trade it nor to invest in it. Now look jewelry, Madison, Alec Droning. Since Justus, a store of value itself in jewelry, you know it. Gold watches gold chains in medicine. Maybe in certain surgical equipment? No, in electron ICS everywhere in computers and processors, in cables as a store of value. Okay, just as a store of value itself, you know, because it's a metal with low oxidation degree at last, a bunch of time. Let's call it like that. No. So remember, there is a lot of uses for gold and understanding the industry that is using that gold is gonna allow you to make decisions as an investor slash traitor and think about it. It's an industry worth around 5 to $10 trillion so there is a lot of money being thrown around. So, for example, if you detect that there is a company selling that depends only on selling surgical equipment made of gold. Right then this means that you can say, OK, I know that if something happens to the gold mine, then I know all of these guys are gonna be affected. But the company that is selling that surgical that its manufacturing that surgical equipment made of gold is gonna have a rough time in the stock prices. If gold prices increase all the way up right, maybe their sales are going to decrease. So remember, understanding the industry allows you to position yourself in a much better way. No. What about copper? No, I love copper myself. In fact, if you have a bunch of copper in your house, I have a bunch of copper in my house. It's something I just love to see, and I'm gonna tell you why. Look, it's known as the red metal. You know, it's has great electric conductivity, and the market is worth around $300 billion. Now, most of the power plans the electric generators, they need to generate motion. Somehow, I'm not gonna go into into that because we don't care to go so deep into how it's generated . But the more, you know, always the better. Now to generate that electricity, they need this red metal. No. So they start generating motion forces. And that is that this way that this metal is positioned as a coil and ends up conducting electricity do way through some carbon ends. And okay, there's a whole process involved there, but electricity is greatly associated toe copper. Okay, so remember, now you think about it. Something happens to copper. Something happens to a bunch of electron ical companies to the production of electricity and all the industry involved behind it. 50. Environmental Commodities: great environmental commodities. And I'm gonna keep this one very short because it's associated to the ones we did before. No, and this is super cool. Look, all these industries we saw before, such as the oil industry or the mining industry or the factories or the transportation industry, pretty much every single industry is producing something called C 02 carbon emissions. Now look at this. It's impressive how the humans can invent something like like this. You know, for me, it's quite impressive. Look, as a commodity, carbon emissions are a permission. Okay? Keyword to produce a specific quantity off C 02 Okay, so this means that now you can trade the right to produce yo to now, you know, half of this bunch of regulations about how much co two how much carbon emissions cars can can produce her factor. These boats, whatever. No. So imagine now companies can degrade this quarter off emissions. Okay, that they're allowed to produce. Now. Think about it. This industry is worth around $82 billion. No, because the more factory needs to produce and the more sio two they need to produce, then they're gonna have to go into the market, and they're gonna have to trade okay from other companies who maybe have access off this quarter. They don't need it. Okay? And they need to get a hold off these carbon emissions to keep producing. So remember, understanding all the industries, all the parties involved, okay, in a transaction is what's gonna make you a better investor or trader, because that way you gonna understand what it's moving prices. 51. Commodities Futures: great. We've made it to futures. Know what is the future? This guy right here to the left. No, Look, it's a legal agreement to buy or sell an asset at a preset price at a specified time in the future. What am I saying with this? It means that we can make a contract, that it's given us a legal agreement where I must by yourself that asset in the future in a certain price, know that we are getting all red in the beginning. Now, look, what about future? As I told you, I remember. I think I told you in lesson one. If I stand corrected that this contracts are standardized, right when they're being traded that way we can guarantee they have some rules from quality accepted. And that's how they work in the exchanges in the commodity exchanges, for example, the quality off the oil that we're gonna trade there must be certain standard. Otherwise, you know, you don't know what kind of oil you're gonna get. No. Now, the type of oil, maybe it's a sweeter or maybe, ah, much more heavier oil. Right? Then the quantity of the contract it's a mandatory contract off 1000 battles. We don't do smaller and it has an expiration. So remember this contract actually are standardized. And when you're taking your CFT broker, no matter if you think you're trading an oil future, you're not trading to standardise version off this country. No water you're gonna see later on white. No. What about the expiration? And here's where it gets interesting. Futures involve an obligation to deliver. Okay, so when you buy a future, it's a must is not optional. Okay? And after the expiration, the future is that it cannot be traded and very important. Look in the US they expire on the third Friday off every month. OK, so look. And that's what I was telling you. In the beginning of this lesson, you can go into the Chicago Mercantile Exchange and you can check for yourselves was going on with the futures. When are they expiring? What availability there is for its futures that volume off the futures traded, see all publicly available information. Now, what is the spot price and what is the future price? Easy spot price is the price at the moment that you used to buy or sell the asset? No. So the spot price is the price right now, and the future price is the price of that future contract Agreed to be executed in the future. Some CFT brokers don't tell you which one are you trading? So you have to be careful. Some of them provide sport price and some of them provide future price. Okay. And it's very important to know which one are you trading? Because if it is the future price and you open a contract in oil a cfd eq on that future, then you might be trading on something that it's about to expire in one week. And then suddenly you're position is close in your life. But what happened now? This is what happened. No, why? Our future is useful. And remember, we need to understand the root of things and think like a business persons. So look, if oil is that $75 today, then I'm on. I'm a company that needs oil for producing some product. I sell into the market. And what do I do? I buy a future. All contract at $76 expires in 2025 for example, and my future business is gonna be secured at $76 because I'm going to get the oil I need in the future. That way I can guarantee my operational margins. No, no, let's do a case study and a very easy one. And tasty one. So, look, beer, beer factories. No, for the wheat beer I love with beer. So you need wait to produce a wheat beer now and then there is a factory. And then in the end, is that the beer You end up drinking the street now, So think about this question. How can the beer always be at $1 if we prices are always changing? No, because we see that prices of beer stable. No, it's not like you see in fluctuating every day from 1 to $10 you don't know what's gonna happen. No. Is because this producer right here secures himself by buying futures of wheat to get the quantity of with deliver delivered that they need to produce the beer in the future. So that way they maintain the operational margin. So why do you care about this? Well, now you know that we it is a huge industry behind it. Okay, you know that this beer factory is trading, and it's also using futures, and they're also probably some of them are. Companies are publicly traded, and you know you can enter the market from different positions and based on understanding the needs and how these guys are using the instruments of financial instruments in their benefit. See, now I hope it's all starting to make more sense because now we're gonna go deep into how to run a study in trading very soon. 52. What moves their prices?: what moves? Prices. Okay, some of them you already know, and we'll go through it very quick. And some of them you don't know any super interesting. Remember, if you understand what it's moving prices, then you can make trading decisions, right? So, look, you have political decisions and make major events. No supply and demand, which already know quite well seasonality on very interesting one. You have market manipulation, which were already Mr Gordon, and you have asset correlations? No. So let's explore some of them. Look, number one political decisions, major events. If the government as a 50% tax on corn exports, it's likely that the corn prices increase. What? Because producers are not gonna lose money by paying tax and never making the profit again ? No. So they need to compensate. So this is going to increase the price of corn and hence is gonna affect all the all the chain involved. Remember, you need to understand the industry and every party in both. Now, another example. USA goes to war against Russia. So now we're scared about the United States Economical stability. The U. S. Dollar is no longer safe so investors can train to gold, for example, to safeguard their money? No. What about seasonality? A very interesting one. And I'm not gonna mention each one of the name of this. You see, right here the purpose of drawing it is that they're very clear so it can affect the price of a commodity. Look, fire, thunderstorms, anything. Now how? Let's look at some examples. Look, summer driving season. So no summer came. People are gonna start partying and enjoying and why? Look, they start driving like crazy to go on holidays and gasoline demand increases. So if you remember to plan the man correctly, you know that if the demand of something increases and just reply so far as the same is likely then to the prices increase No. Okay, now what about whether damages crops? Look at this example. A massive hurricane and a thunder strong destroys all the wheat fields in the largest producing Addie in the world. So what is likely to happen? Well, so plan demand again. So we have this. We have less production of wheat, okay? And we still have the same demand, so prices are likely to move up. So we need to pay attention. Toe always toe who's a lot toe investigate. Good. What? We're training. Who is the largest supplier who is the largest buyers? I'm gonna go into detail very soon because we're gonna be talking about think like a traitor. Okay. It's gonna be my favorite time on the whole lesson. No, look. What about the storm blocks of mine? No. Another good example. So if you know when you have spotted already, which one is the most important mind for the production of certain commodity? Then what if this happens? A severe weather conditions hold the extraction of important gold mine. So you know that when this happens, then if this Goldman is in operative for two months, then it's likely that the price of gold increases why we lost that supply. And we still have the same the man going under get supply and demand this one we already know. We don't need to talk about it too much, but just to refresh ourselves high demand price up low demand price down. No. Now you remember your supply and demand charges in your market. Death charts don't need to go too deep into it now. What about market manipulation? This when you remember quite well again. Oh sh bank, right, Mr. Gordhan, Mr Gordon has $200 million. He clicks the buy button in the middle of the night, and he drives the prices up because he's able to eat all the sell orders available in the exchange. Now what about correlations? Look, it's been observed for a long time. It's not a general rule, but it's a general observation, a tendency that when gold price increases, US dollar decreases in value and when gold price decreases, US dollar increases in value. And there is some logic behind into this. No, so gold is seen somehow. Sir, I'm don't make it an absolute truth. Remember, you always have to set up your own judgment on things, but it's seen us a safe heaven, OK? And investors in times of instability, they turn to gold. Why? Well, think about it. If dollar is going down, it means investors are not so confident in in the currency's power in the value and the policies in the country. This is a reflection of old economical indicators, you know, and one of the ways to safeguard themselves. It's returned to go no so This is a correlation that you need a lot of a lot of time to explore and to understand. But at least it's good to know it exists. And every time you see the price of gold moving up or down, you can also go ahead and check the value of the U. S. Dollar against other currencies and see if the court relation is happening or not. Great. So now next lecture, we go on fire, we start with thinking like a trader, and I'm sure you're gonna love this one. 53. Start thinking like a trader: great. So we've made it Time to start thinking like a trader again. This is where you're gonna put together all you've learned during the whole course the first time you're gonna put it together. Then there's more times. Now, look, let's suppose this event right here happens. What is the event? Look, Serena second, Yes. A nuclear missile hits the largest oil factories in the U. S. Okay, now, this is the consequences. 50,000 people died and to see this disappeared. Now tell me, what do you think about this event right here? And what I want you to do is take a piece of paper, pulls the video right now the first sentence that came to your mind, OK, And then move on to the next light by continuing the video. So what happened? Don't think like a trader. This is the most likely answers that I've got from either myself or people who are traitors for people who are not traders. Okay. In the have zero experience in the trading world. Answer number 10 God, this is horrible. Well, let me tell you, you are a great human being now. Number two, I'm depressed. The world is full of evil people through, But you're a great human being. Perfect. Congratulations. Now, I'm so sorry for the people, but and what we will do without oil. Okay, Now I'm talking to a business person right there and number four sad, but we will go up Time to trade. And that, ladies and gentlemen, is a trader. If you understood everything we talked to in the whole course about supply and demand the industry commodities, you know that such a thing. Disgraceful event like this one. It's still a trading opportunity. And there's gonna be a lot of price movement just because of this. You understand now. Good. No. What about scouting? For a trait? No. Because how do we combine everything with learned so far? Super easy. And you're gonna love to do it. Okay, So I hope this is you after some time at two oclock in the morning, scouting for your trade? No. And not believing any cannot be secret methods and signals just using logic and knowledge. So, first, let's start. Let's do this with oil. This is gonna be the example we're gonna use. No, we're gonna talk about the oil case. first thing you gotta do. You gotta find associated events. How do you do this? Easy? Google is your best friend. The door to the Internet. Okay? And you pretty much can avoid going to college if you have Google nowadays. Now look, the first thing in oil, for example, What could it be? The associated events Wealthy E I. A report. Okay. The crude oil inventories weekly in the United States the A P I report from the American Petroleum Institute. Also Monday's, you know, on a weekly basis, then OPEC meetings. And I won't let you understand why the OPEC, because it's the Organization of Petroleum Exporting Countries, is the largest producers you know are there. And they have a great impact on the prices of oil. Remember, supply and demand. And there is a group of suppliers altogether deciding what to do no and then relevant and recent news Also, to understand what could affect what the fact could this news half of the price of oil? No number to find relevant data. Now Google your best friend in life. Okay, So what is relevant? Data, for example, were the biggest producers of the this oil suppliers USA, Saudi Arabia, Russia, Canada. You know what happens with the suppliers? What if they have some policies and mistakes of wars on whatever anything can affect on the price of oil? If the one of the biggest suppliers you know is affected by something big, then the biggest buyers, the importers, you know who's buying all that oil? China USA in the Japan. What if China says tomorrow we discover we have the greatest oil deposit in the world thing . We don't want to buy any more from anybody else. See, you have to pay attention to who's involved in the industry. Okay? And then we finally arrived. Two of my favorite part creating your first study. Know what I mean? By creating your first study? No, I Now, look, you gotta make a huge charge. You come by just a piece of board or you can do it in the computer if you're a fancy digital person. You know, however you see, see, best I love to have a white board in my house and do this kind of stuff. No, look, you put in the events you found about the asset you want to trade. For example, the EA A p I. The OPEC meetings that dates the calendars and then you mark them. What do you think? This events, but consequences. Can they have? Are they positive? I did. Negative. Now then you talk about the data. From your asset is not only main buyers, two main producers. Like I told you it can be. Anything can be. They're worth of the industry. It can be fully upcoming policy. Anything. You know, Just think about all the data from this industry. And then what about the news, Luke? Companies merging the title for there was a drone attack. And mark this news as either something positive or negative for your asset? No. And then you take a head and you have your main chart. Okay? Where you're gonna look at the huge timeframe of your asset for a long period of time. And then you also look at charts on several time periods with different candles. Like I told you, remember, Because you never know. You have to look at in different time periods to get their real feeling of where this is going. No. And of course, after when you learned technical analysis and also you apply to this, you're gonna be able to successfully run a study and make one of these every time you're gonna open and trade and make a decision that is filled with logic. And you like reciting a lesson one, you gonna be able to answer the what? And the wise off every move that happened, that will happen. Or it's happening and that you are going to make now I started to make sense. Great. Now let's doing guessing exercise together. No. So remember, after I say what I got to say posters light and think about it. Okay? I'm not going to tell you this time. So guessing exercise number one USA in North Korea Goto war Trump issues a statement that he will print $50 trillion to fund the war. He will trained $50 trillion to find to fund the war. Okay, so tell me what happens to the price of gold. I'm gonna give you a hint. Remember, supply and demand print correlation between golden U. S. Dollar. I live it up to you, and this is going is very cool, right? Get no guessing exercise number two. OK, so look. 20 drones dropped bombs on the largest oil plant in the world. What happens to the price of oil? And this is not such a guest in exercise, because he's happen in real life, you know? I guess. Probably if somebody did this must have been a trader. You know, I doubt it was a terrorist attack. Savina trader who wanted to do a terrorist attack. Two traded. So why do you think is happening to the price of oil up to you? No, to wrap it up the summary. As you can see now you are undergoing the transformation process. You know, you started like this. Now you're becoming a business thinker because you're starting to slowly lose your feelings . Your soul in your shirt didn't look at everything incinerating opportunity. And very soon, by the time we reach lesson 12 you're gonna be just like Mr Gordon. Except you won't be working for Roche Bank. You would be working beauty for yourself. Great. I hope you enjoy this lesson. See you soon. 54. Lesson 9 - Cryptocurrency: Lesson nine. The mighty Cryptocurrency. No, let's get started. Okay, Straight to the point. Look, what is Cryptocurrency? As I told you, I love to break down things to analyze them. No. So it's virtual currency that uses cryptography. And what do I mean by this? Well, look. Virtual because it doesn't exist physically. OK, then, currency. Because it's the money medium of exchange which you already know a lot about from lesson number one and listen. Number six about the foreign exchange market. No, and it uses cryptography and cartography. It's because crypto hidden and graffiti off writing. No. Now it's all about secret codes and security methods. That is the main idea behind it. Money that doesn't exist. Okay, Money that doesn't exist physically. And it has cryptography as a security measure. You know, he didn't secret codes and stuff. No, look what is Bitcoin? It's a decentralized virtual currency that operates using cryptography. So now you know virtual currency because in the sanctions, physically operates using cryptography, a bunch of secret codes and numbers, right, and to make secure and decentralized because, unlike for example, in exchange which is a single place where you can find or a central bank off a country that we all depend on. No, Bitcoin is decentralized, you know, it's a strong as its network. And don't what are we gonna explore it together right now? So look, Bitcoin Properties and we need to understand that. Remember, you need to go to the root off things to be able to trade them. Okay, Looking at a chart of bacon without understanding this zero point in the winning look limited supply. So unlike the U. S. Dollar, which the government can print Hamas much as they want for the terrible life or any currency you know, Bitcoin has a limited supply exists X amount of Bitcoins and video. Do you know there's not gonna be more now anonymous in Bitcoin? You don't need to submit your passport and utility bills knowing Bitcoins, you just have a wallet that that's composed with a bunch of weird random numbers and that's your wallet address, you know, that's it. And yes, at the SSR public invisible people can see how much harder in each wallet. But in the end, you know, like this not like your wallet is attached to your name, right? Good number three its immutable. And what do I mean by this? Means it cannot be changed. You will understand now in a bit how the Blockchain works and you will see why. But big con transaction side, not reversible. People cannot go on, tamper and and mess with the Blockchain and change the stuff. No good. The centralized. As I told you, it operates in a network. I mean, a lot of people contributing to that network at the same time. Okay, Make it, Give it the strength. And also they don't make it rely on a single organization of person. Making the choices now is divisive. All highly divisive. Will. In fact, Bitcoin can be divided into a bomb to small decimals being the smallest one of them called the Satoshi. No, I will explain to you why it's called a Satoshi also and its virtual it doesn't exist physically. OK, good. Now why so much hype about Bitcoin? No. The first question you need to answer. Well, because Mr Gordon woke up OK, And I'm gonna explain to you why in 2013 between watching $100 known before that it costed like 30 cents and stuff stuff like that? No. Ah, a long time ago. Now it turns out that when people started to find out about the bait going okay, they started buying under a friends, you know, And all over this point, there wasa bunch of inv