Archive for February, 2016

Discovering Reliable Forex Trading Strategies

By: ispeculatornew | Date posted: 02.29.2016 (7:27 pm)

 

 

Forex trading is a profitable trading platform for all those who know how to trade currencies and use reliable Forex trading strategies. Trading online is an art, anyone who excels in this art can make good money through it and a successful Forex trader is the one who makes the best use of successful strategies. However, many researches have shown that the majority of the beginners in the Forex trading field fail after some time and the most significant reason is the lack of good trading strategies. A good strategy is vital for the success of every Forex trader and therefore it has to be the most important part of your trading plan.

Why do you need Forex trading strategies?

One of the biggest mistakes done by the new Forex traders is that they do not use any of the proven forex trading strategies. They trade by impulse and do not have any specific strategy in their game plan. Trading by impulse may provide some profits for a short while, but it is never fruitful for longer periods of time. Most of the beginners in Forex are keen to prove themselves and they do it in an egoistic manner, overestimating their own trading skills. By doing this they believe that they can prove themselves in a shorter period of time and quickly make a fortune. Instead, they end up in big losses since they lacked discipline and a sound trading strategy.

How to find reliable trading strategies

Forex trading strategies can be learned by researching online and you can find a decent amount of valuable, well researched articles about proper strategies if you search for them on the internet. Some of those strategies are aimed at helping beginners, while some are meant for the more experienced Forex traders. By studying them, you can learn the pros and cons of various strategies and understand which ones will suit you the most. The most important consideration is to find a strategy which suits your trading style and trading goals.

You should consider the following things before you select a good Forex strategy for you:

  • Which currency pairs are you dealing with?
  • Which timings of the trade do you prefer, day or night time, before the economic releases or after?
  • What are you trying to accomplish with Forex trading? Do you want to make it your main profit generating business or do you prefer it to be your side business?
  • How much trading capital do you have?

These are just a few of the many Forex-related questions which have to be answered before you select the right Forex trading strategies for your trading career.  The main thing to keep in mind is that Forex trading and successful Forex trading strategies require time and patience. No single strategy is effective all the time,  but you can become a successful Forex trader as long as you remember to use a patient and disciplined approach.

New Trade: Long Apple ($AAPL) and Short eBay ($EBAY)

By: ispeculatornew | Date posted: 02.16.2016 (3:00 am)

Today I’m coming out of the gate with a new trade as I get back to just over half of the portfolio invested As is always the case you can see the existing live trades here:

http://www.intelligentspeculator.net/livetrades

Today’s trade is one between 2 ecommerce players. I thought long and hard about doing a AMZN-EBAY play but given where they are trading, the risk vs. reward seemed better with Apple. That being said, expect me to soon get involved into AMZN.. more on that very soon!

ebay_amazon

Let’s start off by looking at the numbers:

TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthBook ValueBetaRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg Growth
AAPLApple Inc93.999.999.34-10.527.8623.131.1240.6225.5634.76
EBAYeBay Inc22.4910.7810.74-19.65-2.255.550.957.113.6536.71

For some reason, the y/y quarterly sales growth chart came out funky on this one (I expected it to look strange for EBAY given the big spinout but it looked strange even for Apple so let’s just get started:

 

Long Apple (AAPL)

Apple continues to be undervalued by the market in my opinion. There are some concerns but there are so many other good stories and I do think the growing huge number of loyal iOS numbers will continue to generate growth in both hardware and services. The y/y comparison is very tough this year given sale date changes in China but also last year’s late arrival of the larger screen phones but I have no doubt that the iOS user base continues to expand overall. Apple continues to be one if not the cheapest name on my tracking board (in terms of forward P/E) which screams buy to me.

 

AAPL_chart

Next earnings: April 25th 2016

Short eBay (EBAY)

I have to say, I have been increasingly negative about eBay’s future. Its bright star Paypal has been spun off and it now has to compete head’s on with Amazon which no one has been able to successfully do. I don’t expect EBAY to succeed and therefore expect a continued slide in all its numbers. It does not have a single (from my perspective) edge vs. Amazon which leaves it in a very dark spot. It does not offer more selection, a better customer (or seller) experience, etc.  I will be curious to see how management approaches this problem but it does look like a great short at these levels compared to some other names.

EBAY_chart

 

Next earnings: April 20th

Disclaimer: This trade on AAPL-EBAY will be done on today’s opening, I do have an existing Apple position 

New Trade: Long Facebook ($FB) & Short Yelp ($YELP)

By: ispeculatornew | Date posted: 02.12.2016 (5:29 am)

You might have missed my post earlier this morning where I confirmed I’ll be closing 2 of the existing 4 trades. I did not expect to come out of this week with less trades than I had starting it but I certainly won’t be complaining! As is always the case you can see the existing live trades here:

http://www.intelligentspeculator.net/livetrades

Today’s trade is one between 2 web “communities”, one that .  Let’s start off by looking at the numbers:

TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthBook ValueBetaRevenue/ShareSales 5Y Avg Growth
YELPYelp Inc15.23N/A19.35-46.6745.69.191.157.3659.08
FBFacebook Inc101.9178.9124.54-3.543.8215.540.986.451.72

And the chart that I always look at when doing these trade, the quarterly y/y sales growth… impressive to see YELP’s growth, but it’s obviously about how they’ll be able to keep this growth up:

YELP_FB_chart (2)

 

 

$FBLong Facebook (FB)

I am working on a longer article that will explain exactly why I think Facebook is actually just getting started and has a lot more upside from this point. I am very confident in that view and do think that despite Facebook’s incredible growth story (not only because FB is clearly my biggest single stock position), there is a lot more coming. Facebook’s plan (and more importantly its execution) is extremely impressive and I think it will continue to expand significantly in the coming years.

YELP_FB_chart

 

Next earnings: April 20th 2016

yelpShort Yelp (YELP)

I am sure many of you are Yelp users and I would also count myself as one of those users. That being said, it has been fairly clear that Yelp has had trouble adapting to a world where Google was no longer willing to send as much of its search traffic to Yelp. You can certainly debate the legality of what Google has done but the main fact is that Yelp is not in as good of a position and facing ever-increasing competition from both giants like Google but also smaller players. The main downside to holding a short YELP position is the always existing risk it will end up being bought by one of the big guys. I do think that is a lot less likely now but it certainly could happen.

YELP_chart

 

Next earnings: April 27th

Disclaimer: This trade on FB-YELP will be done on today’s opening, I do have an existing long Facebook position

Closing 2 Trades

By: ispeculatornew | Date posted: 02.12.2016 (5:00 am)

Well, safe to say that yesterday was a good day for long & short trades. As one of you told me via email, this was likely my best ever day for those types of trades with 2 of the 4 existing trades exploding higher. They were mainly caused by very good earnings by TRIP and poor ones by NILE and MWW… as well as an exceptionally volatile environment. I will be closing both at this morning’s opening:

Long TripAdvisor (TRIP) & Short Blue Nile (NILE) +33,34%

TRIP_NILE_chart

Long Apple (AAPL) and Short Monster Worldwide (MWW) +67,43%

AAPL_MWW_chart

New Trade: Long Priceline ($PCLN) & Short Expedia ($EXPE)

By: ispeculatornew | Date posted: 02.05.2016 (3:00 am)

This morning I will be opening my 4th long and short trade of the year. Despite starting later than usual, it does look like I will be able to have all of the funds invested very shortly (which happens when I have 7 live trades). As is always the case you can see the existing live trades here:

http://www.intelligentspeculator.net/livetrades

Today’s trade is one between two very different online brands that do trade at very comparable P/E ratios. I strongly considered doing a PCLN-FIT trade but ended up changing not because I’m optimistic about Fitbit’s long term prospects but I’d be very worried about shorting the stock ahead of its Q4 quarterly results which could include very large holiday sales. So instead I’ve decided to do a PCLN-EXPE trade which I’m pretty sure I’ve done in the past.  Let’s start off by looking at the numbers:

TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg Growth
PCLNPriceline Group Inc/The1069.121.615.54-17.7124.274.34169.931.13161.4125.9741.93
EXPEExpedia Inc99.933.9717.52-22.5320.84.1118.81.1244.7114.6114.5

And the chart that I always look at when doing these trade, the quarterly y/y sales growth:

EXPE_PCLN_chart

$PCLNLong Priceline (PCLN)

Priceline is a star in every single way and has been able to extend its lead as the dominant online travel player (especially in the US). As you know, I’m a big believer in TripAdvisor (TRIP) but it was certainly telling to see TRIP’s stock jump so much when it announced that PCLN would be using its instant booking platform. TRIP has been able to sustain high growth in all meaningful metrics for over a decade now and I see no signs of that stopping. Priceline has several very strong brands (Priceline, Booking.com, Kayak, Agoda, RentalCars.com and OpenTable) and continues to be smart in managing its assets.

I usually add a 1 year chart for stocks here but I just wanted to give you a perspective of how Priceline has performed, here is a 10 year chart with PCLN compared to the S&P500 (SPY) and Nasdaq-100 (QQQ):

EXPE_PCLN_SPY_QQQ_chart

Next earnings: February 17th 2016

$EXPEShort Expedia (EXPE)

I am actually not that negative about Expedia and I think that in a world where very few names will likely do well, Expedia will certainly be part of that select group. That being said, I do not see a reason to think that Expedia can justify a higher P/E valuation than Priceline given its history

trends_pcln_expe

Credit: Google Trends

EXPE_PCLN_chart (1)

Next earnings: February 10th

Disclaimer: This trade on PYPL-RAX will be done on today’s opening.

New trade: Long Paypal ($PYPL) & Short Rackspace ($RAX)

By: ispeculatornew | Date posted: 02.03.2016 (3:00 am)

Today marks my third long & short trade of the year, so far things have been going ok. To start off, all of my long & short trades are always available (for 2016 but also past years) here:

http://www.intelligentspeculator.net/livetrades

I’m opening a new trade between two stocks that face intense competition partially from the “ecosystem” plays. I strongly believe that one will perform much better at least in the short to medium term.Here is the usual chart that I look at with sales growth over the past few quarters:
***Paypal was part of eBAY until a few months ago so I did add EBAY in this chart:
PYPL_RAX_EBAY_chart (1)

I would say that both have seen comparable growth in sales but as I’ll argue below, I think that makes PYPL a much more attractive stock for a comparable valuation.

Let’s take a look at the numbers:
TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthBook ValueBetaRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg Growth
PYPLPayPal Holdings Inc36.8336.0821.082.4315.2411.24N/A7.57N/AN/A
RAXRackspace Hosting Inc19.822.5421.36-18.0916.917.791.1612.6420.8330.89

$PYPLLong Paypal (PYPL)

Paypal is under intense competitive pressure from both giants like Google (GOOG) and Apple (AAPL) but also much more nimble private companies such as Stripe. Clearly, I’m worried about it’s longer term future. But payments are incredibly complex and I do think Paypal will remain the dominant player in the short to medium term. It has also made some acquisitions that at least give it a shot in the future. Growth is clearly slowing but I think it remains a good value at these levels compared to the overall market. Paypal remains the dominant option for peer-to-peer payments and does have a solid infrastructure to manage B2C business (nearly) all around the world
PYPL_RAX_EBAY_chart (2)
pypl
Next earnings: April 28th 2016

Short Rackspace (RAX)

Rackspace is a more difficult name to trade but I do remain confident that Rackspace will greatly struggle to compete with the likes of Amazon (AMZN), Microsoft (MSFT), Google (GOOG) and so many others. There is intense competition in cloud services that are resulting in significant price cuts which end up having an important impact on the stock that I expect will continue. Rackspace can certainly exist and continue to grow but I’m confident that margins will be under heavy pressure.
PYPL_RAX_EBAY_chart (4)
Next earnings: February 16th 2016
Disclaimer: This trade on PYPL-RAX will be done on today’s opening.