CAUTION: Another round of expert level trader questions - ANSWERED

by , 03 November 2017
CAUTION: Another round of expert level trader questions - ANSWERED
Q.Hi Timon, I have seen a lot of flushes about options trading. What is your view about trading options? Is it something one can consider to embark on?

Answer by Timon Rossolimos:


Options trading is one of the most complicated forms of trading as you have to consider the variables of Delta, theta and gamma...

I would stick to CFDs with trading as the returns are similar and the financial instrument is a lot easier to learn...

I stopped trading Options over 8 years ago because of the complexities, unnecessary costs and time decay with the options I bought and sold...

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Q. With regards to the Cup of T and W formation, how many bars do I look at for example the Cup part to form?
 
Answer by Timon Rossolimos:

It's a good question....
 
With the number of bars, I've noticed that it should be more than around 20 bars. This means that the price action will show not too much volatility and jumpyness. 
 
You want a smooth rounding cup and W and not a V shape which will give you a better probability trade. 




Second, If the previous trend was a downtrend, then the cup that forms which breaks to the upside of the brim, will be a medium probability trade. The reason is, any chart with a strong downtrend has a higher chance of continuing to the downside. 
 
However, if the previous trend was to the upside, then you can expect a high profitable trade when the cup breaks out of the brim level as it's continuing the previous trend it was on. 
 
You can think of the cup as a pause or a consolidation phase before the next trend continues 
 
 
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Q. What is the difference between The SA Investor and Real Wealth? I’d like to know the difference in terms of their core offerings and what type of investor they are best suited to (long term or med term). Also, how would each one add to my investment knowledge?

Answer By Joshua Benton
 
There are quite a few differences between both newsletters.
 
I manage both, but in each issue of Real Wealth, I use a very strict and specific strategy to find any stock on the JSE to buy.
 
I also share an alternative investment like investing in an exchange-traded fund or bonds etc. Or it could be an idea on avoiding a specific investment.
 
Whereas, the South African Investor usually recommends any low-risk and both local and global market investments across all types of assets including (Property, Shares, Bonds, ETFs, Hedge Funds, Structured Products, ETNs etc.)
 
South African Investor opens you up to powerful global and local network of acknowledged investment experts - Portfolio managers, economists, political analysts, tax and retirement experts. 
 
SAI has a long-term view of about 5-10 years - aiming at people looking to build wealth for retirement.
 
RWT hold stocks/investments anywhere between 2-5 years.
 
In terms of risk: SAI is for very moderate to low-risk investors, while RWT is for mainly moderate-high risk investors. 
 
SAI has been around for 17 years and RWT for 7 years and both have built solid track-records. 
 
35% average Real Wealth over the last seven years. And 28.19% for South African Investor for the last 17 years.
 
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