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Learn To Read Industry Code and Better Your Odds

Have you ever felt the need to be on guard when buying a car, major appliance, new home, or anything that involves a sales person? Or, have you ever had a career in sales which means spending weeks if not months in advanced training sessions where the entire goal of the training is how to convince someone that they should pay $1000 for something that is really worth $200? When you’re the seller, it’s almost like you’re trained to speak in deceptive code. And once you master this new language, those you are selling to naturally overpay which means profits for you.

Trading is no different. The goal is to buy low and sell high which is what I often write about with supply and demand. To buy low (at demand) however, someone needs be convinced that whatever you’re buying is worth selling at that price. Conversely, when you sell high (at supply), someone needs to be convinced that what you are selling is worth buying at that high price. The one who ends up on the right side of that equation and ends up consistently profitable is the one who can decipher “code” and understand the reality of the situation. Let me decipher some code for you here in hopes that it will have a positive impact on your financial life, and then some…

1.  Your broker tells you “this is a good investment.” Most of the time that really means it’s a better investment for the broker who is actually a sales person most of the time. Think about it, the average person buys stocks. Wall Street’s primary business is selling stocks. This is not to say all brokers are bad, there are some good ones. The point is, do your homework and make sure you are buying low (at demand) with the opportunity to sell high.

2.  When you see an advertisement to open a Spot Forex account and the ad says “Free Trading, No Commissions,” while that sounds like free trading, it really means the broker gets paid in the spread which is typically much more expensive than commissions.

3.  When price in a Forex market reaches a key supply level, meaning it is about to turn lower, have you noticed that the news is typically good and the spread widens? This creates the illusion/perception that the trader should buy when in fact, the smart money is selling. Have you noticed that the hardest trades to take emotionally often turn out to be the best trades? There is a reason why…

4.  When the bid on your level 2 screen is ten times the size of the offer , the news is outstanding, yet price can’t move higher, this really means institutions are selling and price is just about to collapse. An institution is going to create a bullish picture or perception when they have a big sell order to fill. They need many retail buyers to fill a large sell order. Its not that an institution is bad or doing something wrong. They want to sell so they do what they can to convince people whatever they are selling is worth buying at the price they want to sell at. Isn’t this what almost any retail seller does in any market?

5.  Your financial planner says, “Annuities are a smart investment for you.” This again means they are a great investment for them.

This code is not limited to trading and investing. Let’s decipher some more code…

6.  When your wife asks, “Does this dress make me look heavy?” What that really means is, “Tell me I look thin in this dress.”

7.  When your boyfriend says “It’s not you, it’s me.” It’s really you.

8.  For young readers, when your mom or dad asks, “Is today garbage day?” This really means: “Take out the garbage, now.”

9.  When you’re driving to a restaurant with your husband and you ask him if he knows where he is going and he says, “Yes, I think so.”  This really means he has no idea.

10.  Being able to decipher code in the markets and in life always gets you closer to the truth which means more money in your pocket and healthier relationships. Learn to know the difference…

Hope this was helpful. Have a great day.

Sam Seiden




DISCLAIMER This newsletter is written for educational purposes only. By no means do any of its contents recommend, advocate or urge the buying, selling or holding of any financial instrument whatsoever. Trading and Investing involves high levels of risk. The author expresses personal opinions and will not assume any responsibility whatsoever for the actions of the reader. The author may or may not have positions in Financial Instruments discussed in this newsletter. Future results can be dramatically different from the opinions expressed herein. Past performance does not guarantee future results. Reprints allowed for private reading only, for all else, please obtain permission.

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