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Category: Investor Education

Learning to Die with Zero. The Last Check Must Bounce (guestpost)

Learning to Die with Zero. The Last Check Must Bounce (guestpost)

My friend Christopher Ng recommended to his reader to read this book by Bill Perkins called Die with Zero.

I do not know whether it is a good book or not but I think it might be thought provoking enough for me to read it.

Die with Zero sought to answer a core question we all seek:

What’s the best way to allocate our life energy before we die?

This post was originally posted here. The writer, Kyith Ng is a veteran community member and blogger on InvestingNote, with a username known as @kyith and has 1,000+ followers.

When Bill released this book, I also heard many interviews that he did to promote his book. This book… might be the book to help re-calibrate my thinking. After doing so much research on how much a person need to accumulate so that they won’t run out of money in retirement, we need a book to teach us not to spend all our time accumulating.

Is this a good book? Personally, I find it hard to connect with.

In this article, I list out some of the notable takeaways from Bill Perkins.

Consumption Smoothing

The first concept that Bill explained was consumption smoothing. Bill took a page out of a time when he started working not too long ago. Back then, he was very thrifty and extremely proud about it.

However his boss, who is a partner at the company he worked for was astonished he was saving so much.

 “Are you a f***ing idiot? To save that money?”

It was a slap across Bill’s face.

 His boss Joe Farrel said: “You came here to make millions, ” he said. “Your earning power is going to happen! Do you think you’ll only make 18 thousand a year for the rest of your life?”

In his boss’s mind, Bill would eventually made much more than that.

He could certainly spend today and not save this sum of money.

It was a life-changing moment for Bill as it cracked his head open to new ideas about how to balance his earnings and spending.

If we look at our income chart over the years, it should be upward sloping. Due to our experience over time, we should earn more.

If we know that, we should be able to spend a greater percentage of our income today because eventually, we will make more and our savings rate will go down, but the savings in the future will make up for the higher consumption today.

We will basically transfer money from years of abundance into the leaner years.

What is difficult to connect for a lot of people is how much higher would your salary be in the future?

To use myself as an example, some of my peers are currently director of security while others are still a team lead in a small company.

If we smoothed out our income, the director of security and the team lead would be totally different.

I get the idea but I think whether it is sensible for us to do that or not is subjective.

Investing in Experiences

Your life is the sum of your experiences.

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How to Identify Trend Reversal in the Markets With Zero Indicators (Guest post)

How to Identify Trend Reversal in the Markets With Zero Indicators (Guest post)

Do you want to know how to identify trend reversal ahead of time, guaranteed?

Well, it doesn’t exist.

No trading system or methodology can.

However…

The closest thing you’ll get is to learn how to read the price action and identify potential areas where the market could reverse.

And this is what you’ll learn in today’s post:

Ready?

Then let’s begin…

This post was originally posted here. The writer, Rayner Teo is a veteran community member and blogger on InvestingNote, with a username known as @Rayner and has 617 followers.

How to identify trend reversal — identify weakness in the trending move

First, let me define what a trending move is…

A trending move is the “stronger” leg of a trend and it trades in the same direction of it (that’s why I call it trending move).

The trending move (in a healthy uptrend) usually has more bullish than bearish candles; the bullish candles are relatively larger than the bearish ones, and the bullish candles closing near the highs

An example:


However:

When the bullish candles are getting smaller, it’s telling you the buying pressure is getting weak, or there is equal selling pressure coming in.

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Price Action Patterns That Work (Guest Post)

Price Action Patterns That Work (Guest Post)

When it comes to price action patterns, most traders will think of…

“Hammer”

“Shooting star”

“Engulfing pattern”

Now, these are easy patterns to learn for beginners.

But, if you want to take your price action trading skill to the next level, then you must master new price action patterns.

That’s why in today’s post, you’ll discover 5 price action patterns that work—so you can develop sniper trading entries to trade market reversals, trend continuation, and even breakouts.

Ready?

Then let’s begin…

This post was originally posted here. The writer, Rayner Teo is a veteran community member and blogger on InvestingNote, with a username known as @Rayner and has 617 followers.

Price action pattern #1: False break

The false break is a reversal price action pattern that allows you to buy low and sell high.

Here’s why it works:

 

Imagine, the price makes a strong bullish move into resistance—and breaks out higher.

At this point, many traders have this thought process…

“The market is so bullish”

“Look at how big those green candles are!”

“It’s time to buy!”

So, this group of traders buy as the price breaks above resistance and their stop loss is likely below the previous candle low, below support, etc.

This means if the market makes a sudden reversal, you can agree that these cluster of stop loss will be triggered which puts selling pressure in the market.

Plus, if bearish traders step into the market and sell near the highs of resistance, you can expect the market to collapse lower and erode the gains it made earlier—that’s the power of the false break price action pattern.

Now that you’ve understood the logic behind the false break price action pattern, then here’s how to trade it…

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Golden Cross Trading Strategy Guide (Guest Post)

Golden Cross Trading Strategy Guide (Guest Post)

Do you know about the Golden Cross? screenshot-2020-11-06-at-16-46-18

This post was originally posted here.The writer, Rayner Teo is a veteran community member and blogger on InvestingNote, with a username known as @Rayner and has 613 followers.

Have you heard of the Golden Cross signal?

If you listen to the media, you’ll hear about the Golden Cross (like how the market is bullish when it occurs).

But is it true?

Well, that’s what you’ll learn today…

Specifically, I’ll cover:

 

What is a Golden Cross and how does it work?

The Golden Cross is a bullish phenomenon when the 50-day moving average crosses above the 200-day moving average.

Here’s why…

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Explaining Quantitative Easing & Its Effect On Commercial Banks (Guest Post)

Explaining Quantitative Easing & Its Effect On Commercial Banks (Guest Post)

Do You Know What The Effects Of Quantitative Easing Has On Commercial Banks?

Quantitative Easing: what's it all about? - Investor's Champion

This post was originally posted here. The writer, Kyith Ng is a veteran community member and blogger on InvestingNote, with a username known as @kyith and has 1095 followers.

Quantitative easing means to liquify the financial markets and the main economy, a lot of money was pumped into the financial system.

The straightforward deduction is that if you create money from out of nowhere, either your currency is going to shit or that inflation will run rampant.

We are not seeing both in the United States right now but a lot of the people are speculating it will be a matter of time.

I wonder whether that will really happen. I say this because I can’t say I am that competent to make that deduction. Usually, we have to know to a good extent what I am talking about to make that conclusion.

I do think that from what I hear, we have created an interconnected system that will create more than 2 standard deviations, 3 standard deviation volatility.

One of my favorite people on the financial blogosphere Cullen Roche of Pragmatic Capitalism explained that when the Federal Reserve infuses money, it is an exchange of very short-term liquid money with long-duration money/bonds.

In a way I understand it but if I cannot illustrate it out well, then maybe I do not understand it as well.

In any case, BCA has a good explanation about what happens when the Central Bank buys back commercial securities from the banks.

It sought to help to explain the relationship of Central banks with the monetary system.

I used to not get the relationship of Central Banks that well but the way to think about them is like the Bank of the financial institutions. They somewhat act as the lender of last resort.

If banks produce the lifeblood of the financial system, then they have to be functioning.

But what if the banks are not functioning?

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7 Things About Support and Resistance That Nobody Tells You (Guest Post)

7 Things About Support and Resistance That Nobody Tells You (Guest Post)

How well do you know how to utilise support and resistance for trading?

A Guide to Support and Resistance Trading

This post was originally posted here. The writer, Rayner is a veteran community member and blogger on InvestingNote, with a username known as @Rayner and has 605 followers.

Here’s a quick quiz for you about Support and Resistance…

The more times support and resistance is tested (within a short period of time), the stronger it becomes. (True / False)

You should set your stop loss below support and above resistance so you don’t get stopped out easily. (True / False)

You want to buy near support because it offers a favorable risk to reward on your trade. (True / False)

Do you want to know the answers to these questions?

Then read on…

If you read most trading textbooks, they’ll tell you that the more times support and resistance are tested, the stronger they become.

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The NO BS Guide to Swing Trading (Guest Post)

The NO BS Guide to Swing Trading (Guest Post)

Everything you need to know about Swing Trading

What Is Swing Trading in the Stock Market - Investment U

This post was originally posted here. The writer, Rayner Teo is a veteran community member and blogger on InvestingNote, with username known as @Rayner and has 597 followers.

Swing trading is one of the few trading approaches that’s suitable for the retail trader — even if you have a full-time job.

Why?

Because it doesn’t require you to spend all day in front of your screen, and it still offers enough trading opportunities so you can generate a consistent return from the markets.

Do you want to learn more?

Then today’s post is for you because you’ll learn:

Are you PUMPED?

Then let’s begin!

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The Complete Guide to Risk Reward Ratio (Guest Post)

The Complete Guide to Risk Reward Ratio (Guest Post)

Don’t be fooled by the risk reward ratio — it’s not what you think. You can look for trades with a risk reward ratio of 1:2 and remain a consistent loser (and I’ll prove it to you later).

take-profit-at-resistance-1024x499

This post was originally posted here. The writer, Rayner Teo is a veteran community member and blogger on InvestingNote, with username known as Rayner and has 457 followers.

Similarly:

You can look for trades with a risk-reward ratio of less than 1 and remain consistently profitable.

Why?

Because the risk-reward ratio is only part of the equation.

But don’t worry.

In this post, I’ll give you the complete picture so you’ll understand how to use the risk-reward ratio the correct way.

 

And after reading this guide, you’ll never see the risk-reward ratio the same way again.

Ready?

Then let’s begin…

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Golden Cross Trading Strategy Guide (Guest Post)

Golden Cross Trading Strategy Guide (Guest Post)

Have you heard of the Golden Cross signal? If you listen to the media, you’ll hear about the Golden Cross (like how the market is bullish when it occurs). But is it true? Well, that’s what you’ll learn today…

What is a Golden Cross and how does it work?

The Golden Cross is a bullish phenomenon when the 50-day moving average crosses above the 200-day moving average.

Here’s why…

When the market is in a long-term downtrend, the 50-day moving average is below the 200-day moving average.

However, no downtrend lasts forever.

So, when a new uptrend begins, the 50-day moving average must cross above the 200-day moving average — and that’s known as the Golden Cross.

An example of a Golden Cross chart:

This post was originally posted here. The writer, Rayner Teo is a veteran community member and blogger on InvestingNote, with username known as Rayner and has 457 followers.

Pro Tip: The opposite is the Death Cross — when the 50-day moving average crosses below the 200-day moving average.

Now some of you are probably wondering:

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The Symmetrical Triangle Trading Strategy Guide (Guest Post)

The Symmetrical Triangle Trading Strategy Guide (Guest Post)

Have you ever traded the Symmetrical Triangle chart pattern? If you did, then you know it’s not as easy as it seems.

1-symmetrical-triangle-17-nov-17-1024x451

This post was originally posted here. The writer, Rayner Teo is a veteran community member and blogger on InvestingNote, with username known as Rayner and has 457 followers.

For example:

You might have thoughts like…

Should I trade the breakout of the Symmetrical Triangle or do I wait for a pullback?

Where should I put my stop loss so the market doesn’t hunt my stops?

How do I know which direction the Symmetrical Triangle break out?

Now if you face any of those issues, don’t worry.

Because in today’s lesson, you’ll have the answers to these questions (and more).

OK, let’s get down to business…

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