Online Trading Academy - Notes and Screenshots (Free sessions)

First Session:
1 Learn to stack odds in my favor
a. Possibilities vs probabilities (we should shift to think to probabilities because anything is
possible)
b. Trading is like Gambling (eg casinos stack the odds in their favor: how? they write the
rules and we have to follow)
2 Rules can stack odds in my favor (not guessing)
3 Discipline to follow my rules (most important to follow the rules)

Our result is a function or a cause of our believes and attitude.

Goal: I should have multiple asset classes: stocks, options, futures, forex, bonds

How the market works:

1 Institutions/Banks,(generally Profitable) has more money and control the market
2 Retail Traders/Investors (Often struggle or lose)

Root cause of changing price in market = Supply and Demand = Law

If D > S → Price goes up
if S > D → Price goes down
if D = S → Price goes sideway

• We need to buy when institutions are buying.

• Eg: if we know Goldman Sachs is buying gold tomorrow we have to buy today
• We need to find a methodology to know that
• We need to think like the institutions
• Past does not determine the Future (but supply and demand does)
• For supply and demand eg for Apple we can check their Apple Press Info
“Apple Reports Record Third Quarter Results: iphone…Mac and store revenue Growth”
→Important: “upgrading(and not buying) status from Neutral to Buy with a price target of” so
they are not buying and the price will drop
Institutions spread false news to change the market. (influence)

Step 1: Mater Core Strategy

• Identify Market turns and market moves in advance
• Increase Probability
• Proper Risk Management (Stop Loss)

Step 2: Understand Leverage (allows to use less money to control larger investment enhance
rate of return)
• Future 20:1
• Forex 50:1
• Option 10:1
Leverage:
eg: stock = 1:1 ($10k stock = $10k investment) if 10% change 10% change
But for forex $10k → 500k if 10% change 500% change

Stop Loss to prevent from Leverage lose (if losing will be very higher)

Chart:
Line chart, bar chart, candle chart (before closing it was higher or lower than open close)

How Institutions behave: we need to find where is the portfolio of institutions to buy.
Between 150 and 155 to buy is good for their portfolio
We have control over timing, but institution does not because institution wants to buy large number
eg: 10 million shares but the market does not have that many → the price will rise → they have to
buy the rest of the shares with higher price OR they have to buy in smaller packets until rich 10
million.
Example:

If we knew when an istitution starting to buy?

Long = Bullish/UP (traditional = start by buying and sell to exit)
Short Entry = Bearish/Down (sell first when it is cheaper buy and return)

Futures and forex are good for shorting, asset classes are not good
Assets: Stocks, Options, Futures, Forex
 Day trade is good for short
• Stocks are not good for daytrading.

→Find a reason that institutions will buy in that area.

The risk reward ratio: should be 1:3 (25% of the time we are correct we will safe)
1:4 → 4*(-100) = 1 * (400) (20% of the time but probability much lower)
But doesn’t matter by themselves.

Institution buy insurance only good for some specific time because they want to sell after that.
 Second session:
Weekly = swing traiding it will last for few weeks
Daily = will last or few days

Futers for daily.

Stocks is bad for short term traiding.
Options are not for daily – short term

What are good for what.

Daily: futures,
Weekly: forex
Monthly: options

Gap: the differences in price when the closing is not equal to opening price of the same asset.

Wealth:
Active (SI) (strategic inverster), Passive
biggest thing is managing risk -> safety is more important
eg: in income we can use leverage but not in wealth management.
Active side: options
Passive: Stocks
Portfolio Insurance - Options

Options are cleaver.

on short term we can do futures and forex and add options,
for short term we do stocks and add options.

Time frames:
most common short time: 5Min , 15min, 60min, 240 min, Daily, Weekly, Monthly (time frames are
different by factore of 3 to 5 eg: 15 = 3 * 5, 60 = 4*15)

Relatation between chart time and the trade time and the sweet spots for different assets:
Futures (Leverage):
Why are futures good (for short term):
Designed to magage cost - originally created to help farmers.
Commadities: sugar, coffee, weat, corn, oil
For farmers to sell their crop any time they want (because when they want to sell every farmer also sells
and the price will drop because of supply). with future, the farmers select their price.
Future trades are contracts
Options - contracts
stocks - shares
Forex - Lots (Contracts)

Oil = CL 1 contract = 1000 Barels (each barel $40 ) --> one contract value is $40,000
if oil 40 to $45 --> $5000 ($45000 - $40000) = benefit
The risk is also the same amount (if $5000 lower --> los is 5000)
We need to have $7000 to enter in the $40,000 investment)
Example:
SPY = S&P in stock --> ES in Future
NOTE: Always we have to use stop with futures very dangerous.
NOTE: We never hold a future contract to its end.

Gap: the differences in price when the closing is not equal to opening price of the same asset.

Example:
SPY = S&P in stock --> ES in Future (= Mes is same as es with no leverage (micro version) it reduces the
size of everything --> less profit , less risk)

Pre market / Post market = some market 1.5 hr before and 45min after, but more problems than
benefit.

Forex is truley 24 hours.

Note: Set rules and follow them

Most important futures:

Futures have diversication: eg gold and weat do not go the same direction

Forex
Forex is similar to Future: Taxation,
In Forex Lot = Contract in futures
there are only 3 sizes
micro = 1000, mini = 10,000 standard = $100,000 Lot
it also uses a leverage.

for micro we need $20, for min $200, and std = $2k
=> leverage = 50:1

NOTE: We have to use stop loss

There is no comission related to size.

each pip is $1 in the below example:

Market by sizes:
if one layer crashes will affect all the other layers under it ( eg: bond crashes, also Real state, futures ...
will crash)

deflation is bad, hyper inlation is also bad.

Velocity in marke:
if we print money, it should cause inflation but it doesn't, because of velocity.
Velocity moving money between people, eg, 1 buys thing 1 -> thing 1 seller buys thing 2 ...
by printing money the velocity increases.
If velocity (demand) rises too much supply cannot handle --> inflation or hyper inflation

Money supply : the curve displays printing money

velocity will cause to crash FX and will crash everything in 2-3 years. (3:03 real)
Session 3:
Option buying disclosure:

Note: "Shiller PE Ratio" indicator

Market Cap to GDP

we might be on "return to normal" point stock will crash from there

According to the graph, shorting will work better.
Note: Future, forex, and options are best for shorting.
Hedging Strategies = Insurance
Fixed Income = Bonds

Asset allocation of Portfolio:

Mutual Fund Verses ETF = exchanged traded fund --> ETF is better
ETF --> same structure as Mutual Fund minus its negatives

Options:
We can do only two things in the market, buy or sell.
Option gives us the option to do two other things, Call and put.

Call option: Gives the option to Buy, similar to coupon. (we can buy with specific lower prices) Definition
of coupon: the agreement between the seller and buyer to buy in a specific price. Bag of chips with
coupon $2 and without coupon $4.
Options have time expiring like coupons.
legal binding contract between 2 parties.
We have to request for option and we have to pay for the option

Put option: Gives the ption to Sell

1:05:30 on the real time (52:00 min)
We can sell Put or Call options
Syllabus:

Portfolio example:

Student Dashboard:
Warren Buffet Quote:

Stocks:
Stock benefits:

about stocks: 1:50:00

How to buy stocks:

How to buy stocks: (Return on Equity)

Companies should have high Equity (compared to Liabilities)
what is IPO (IPO is horrible)

Balance sheet:

10% growth:
ROE = a * b * c (but c smaller better, which is Debt) big ROE but high quality characteristcs
Notes:
To handle competitors:
Brand power (will buy because of brand eg: Apple, Nike) and brand recognition (not important)
Swithcing cost for the customers (eg using apple applications causes users continue using Apple)
How to buy stocks: Good ROE ..

We have to buy undervalue or correct value of a good company, not over valued
We have to be patient, we have to wait to lower under valued (m.o.s = marging of safety)

Calculation to find value of company: