Category Archives: Investing

Don’t follow the news if you want to be successful

Retail traders who act on live news are rarely successful, if at all. By the time a major news corporation picks up the market trend, it is too late. If you want to have an “edge” on the market, you need to follow indexes.

To understand the market a little more, I recommend following the top 10-15 future indexes. Looking at these futures can tell you a lot more than reading or watching the news.

Continue reading Don’t follow the news if you want to be successful

National Bank of Canada Improving Their Trading Tools and Platform

For the past year, I have been trading using NBC’s direct brokerage service much to my displeasure, as their web interface and trading tools are simply terrible. There are no charts, no real-time feed and the commissions are way too high for day trading (28$ a trade!). I was about to move my assets to TD Waterhouse until I came across Market-Q, their real-time trading platform, based on eSignal. I also found out they offer better commissions (7$ with a maximum of 10$) if you trade 30 times and more per quarter, which I have recently hit within 40 days. National Bank needs to do a better job at advertising their services to their clients, as I was about to leave them for a competitor. I recall asking my financial advisor at NBC if they had a real-time trading platform, yet she didn’t have a clue.

Regardless, Market-Q is straight-forward, customizable and very easy to use. Comparing it to TD’s Active Trader platform, I believe MQ is a lot more stable and powerful. With AT, I couldn’t have more than 3 boxes in my charts. MQ doesn’t seem to have a limit of how many boxes you can attach to a chart. Also, the overall design and functionality of MQ is quite nice and easier on the eyes. I can also separate charts from the trading platform, so I don’t need to keep the entire application window open. This saves me a lot of space on my desktop and allows me to use my monitors selectively, as Active Trader needs to have the entire application spanned across my monitors for me to read charts while Market-Q’s charts are detachable and free-roaming.

Market-Q is 39.00$/month if you wish to use it, but free if you do 10 trades a month or more. Active Trader, on the other hand, doesn’t have a monthly fee and is free to use has a monthly fee as well (which I cannot recall).

Lastly, I have a tip to offer to all who wish to use NBC as their brokerage. If you move 25,000$ in cash to National Bank, you qualify for the 7$ trades from the beginning, but you must call them first. I had moved said amount but didn’t call them for the better rates when I started. Once I had enough of losing 56$ each time (after 2 months of trading and losing profits to commissions) I called them up and complained. They said they couldn’t do anything until I traded 2 more times (I had already done 28 trades) to qualify for the 7$ trades. Really? I have been trading with National Bank for over 2 years, and they can’t give me the better rates now? Regardless, customer service managed to give me the better rates sooner once I completed two more trades. I didn’t have to wait for the next quarter to arrive so I benefited from the lower commissions right away.

For the record, the customer service representatives at National Bank are fine people, and they are always friendly and professional over the phone. For this, they’ll be keeping my business for a while. 🙂

The Beginning of my Day Trading Journey

Today is my first day of day trading stocks with real money.

About a year ago today, my business partner & friend told me I should look into day trading as a means of extra income. He invited me to a free introduction course that taught the attendants on how to do basic technical analysis using MACD, EMA and RSI indicators. Within minutes of understanding the basics, I fell in love with the whole idea of trading equities as a side “job”.

To further my knowledge on day trading, I took a one day course taught by a professional trader by the name of Charles Langford (who also happened to give the intro course before). He is quite possibly one of the most knowledgeable individuals when it comes to trading: Langford has written books, taught many courses and is a teacher at Université de Québec à Montréal, among other things. His course was sold out within days of being announced as seats were limited.

Before I dove into the world of trading, I practiced my technical analysis skills with a TD Active Trader account with fake money. Making plenty of mistakes, I got the hang of making a small amount of profit each trade by sticking to the rules and indicators I learned by attending the paid course.

The day came two weeks where I felt that I was ready to trade with real money. I had my line of credit increased last week so I can use it to purchase equities and leverage my trades. As a means to help me screen preferred stocks, I have subscribed to Langford’s “Langford Report” newsletter, where daily emails are sent out on various portfolios. Everyday, Langford mentions which stocks to buy, sell and stay according to his professional opinion. Looking back at his analysis records, following his portfolios would have netted you some serious cash.

The whole thing is exciting to me, yet I still feel a bit nervous. While the risks I am taking are very minimal, you can’t help but think that the chance of losing it all is still there… that is, if you invest in sketchy companies with no real products *cough* Nortel *cough*.

My rules for day trading are as follows:

  • Trade Monday to Thursdays. Take Fridays off.
  • Never follow the news, as it is irrelevant to trend following.
  • Never get emotional with a stock.
  • Don’t make your million dollar profit in one day.
  • Don’t be greedy.

*gulp* here’s to the future.

How to Open Up a TD Waterhouse Active Trader Account

I have been practicing day trading for the past six months on TD’s Active Trader demo platform and finally decided to open up a real cash account. While opening up the account was not difficult, it did require a number of steps to be performed before actually having access to the platform. You can’t sign up to the Active Trader platform directly: you must have a TD Discount Brokerage account before. There are a number of reasons TD does this, and I will detail them later on.

First thing’s first, you must create a TD Waterhouse Discount Brokerage account. This is free, but it will take up to 2 weeks for the application to go through. In my case, I found out that TD contacted my bank for authorization and validity purposes.

Once your Discount Brokerage account is created and ready to be used, you must then call the Active Trader team via telephone to register. They will ask you a few questions to make sure the platform is for you. From what I recall, they asked me questions such as my experience level, if I have tried the demo platform, how much will I be transferring to TD and if I have any proof of executing 150 trades in a quarter. The latter question is a bit important, as TD will charge you platform fees if you trade 30 times or less per month (I think a 99$ fee per month). Also, the actual trading fees will vary, from 7 to 10 dollars depending on your volume. They expect you to trade at least once a day.

In my case, whether I was getting charged 7 or 10 dollars per trade did not matter, as my current discount brokerage account at my primary bank charges me 28$ per trade! The savings here are obvious if I go with TD. Among other reasons, I chose TD because their trading platform is highly customizable (you can put in your own values for MACD, EMA, RSI and Stochastic charts).

For those who have not tried the Active Trader platform yet, I highly recommend a demo/dummy account. For about two weeks, you can play with the platform and see if it’s right for you. Compare it to the other financial institutions offerings, such as RBC, NBC and BMO. In my mind, TD’s Active Trader is the best out there, and I can’t wait to start my real trades in January!

Your Credit History Matters

There is a big lack of knowledge when it comes to credit. In my experience, the most important thing about credit is to make sure all of your creditors are paid in full and on time. If you cannot pay in full, at least make sure that you are making your minimum payments.

Another concern of mine is why do people have 12 different credit cards, 4 different lines of credits and loans? I recommend to work with one main financial institution: to have one primary credit card and one back up credit card in case of emergency.

When someone has too much access to credit it is not a good sign to anyone who is analyzing your credit history. Having too much credit is considered a risk to financial institutions, not to mention to landlords, car dealerships and every other business out there that offers financing as a means of payment.

Most people don’t have to worry about their credit. As long as your bills are being paid in full and on time, you do not need to run a report on your history. However, if you feel that you need to see where your credit stands, it’s a good idea to run a report to prevent future problems.

There is such a thing as having too much credit! Be sure to limit it to what you need, say a $5000 primary credit card, a $10,000 line of credit and a back up credit card of $1,000. Depending on your yearly income, these values may be different to you.

An example: if your yearly gross salary is about 32,000$, then having a primary credit card at 10,000$, a secondary at 1,000$ and a line of credit at 10,000$ is perfect. As always, talk to your financial adviser if you are unsure about your credit and its history.