MATITraderSystemLesson1PDF
MATITraderSystemLesson1PDF
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No part of the MATI Trader System programme may be reproduced, distributed or transmitted in any form or by
any means, electronic or mechanical, including recording, photocopying or via a computerised or electronic
storage without written permission granted from the author.
The information contained herein is obtained from sources believed to be reliable, but its accuracy cannot be
guaranteed.
All material in the MATI Trader System programme is provided for general information only and may not be
construed as personal financial advice or instruction. The information and opinions provided in this programme
are believed to be accurate and sound. Before trading the markets, first consider your financial situation and
ensure you fully understand the risks involved with trading derivatives. Only risk money you can afford to lose.
Market prices can move rapidly against you, resulting in losses that may be more than your original deposit.
The founder is not responsible for any errors nor any personal financial risk.
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Every bit of advice, knowledge and wisdom I’ve learnt since 2003,
you’ll find in this exclusive and single concise piece of work.
Throughout this journey, you’ll learn different trading lessons,
strategies, ideas and tools along the way.
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The MATI Trader System programme will show you how to bank a
consistent income, on both rising and falling markets.
This lesson will tackle the first pillar to your trading success – The
MARKETS Pillar.
LEARNING GOALS
At the end of lesson 1, you'll be able to:
Understand trading basics: What, why, where and how?
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Just so you know. I’m going to be with you every step of the way during
this programme.
Trade well,
Timon Rossolimos
Founder, Timon and MATI Enterprise (Pty) Ltd
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A simple concept which remains the same today as it was over 10,000
years ago.
To exchange one item for another item for the sake of mutual benefit.
In the financial markets, it is the same principle. With trading, you’ll buy
a market at a lower price, with the speculation that you’ll sell it at a
higher price for a profit. Or you’ll sell a market at a higher price, with
the idea that the price will drop, where you’ll re-buy it at a lower price
for a profit.
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Day 1
The owner tells you he has 10 boxes of these strawberries to sell. With
you being the only customer in sight, the owner decides to sell you the
strawberries at a reasonable price of just R10 per box.
As there is a higher supply of strawberries than there
is demand, you were able to buy them at a low price.
Day 2
The next day, the stall owner arrives with another 10 boxes of
strawberries to sell.
This time he is surprised to find that there are over 20 willing buyers
lined up. The owner decides to pump up the price of the strawberries to
R50 instead of R10 per box.
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The stall owner will keep raising the price to allocate his scarce supply
of strawberries. As the prices rise, so does the stall owner’s profits.
He’ll do this every day, until the customers find that the strawberries
are too expensive to buy. He’ll then have no choice but to drop the
price per box once again.
The supply and demand concept also applies to the financial world.
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✓ Scenario #1:
When a company’s financial results come out better than expected, the
more people will want to buy the company’s shares. This rise in buyers
(demand) will lead to an increase in the share price.
Scenario #2:
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Either we’ll:
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✓ Shares
✓ Indices
✓ Commodities
✓ Currencies
✓ Crypto-currencies
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Relationships Vs Marriage
There are two foundations of analysing the financial markets namely:
Technical and fundamental analysis. Let’s start with the foundation that
most investors use.
✓ Financial statements
(Income, cash flow statement and balance sheet)
✓ Accounting ratios
(EPS, DPS, P:E, DY and PEG)
✓ Company prospects
(Future valuation of the stock)
✓ Economic and political factors
✓ Changing lifestyles and demographics
✓ Income tax rate and laws
✓ Industry trends
✓ News and earnings announcements
(Quarterly and annual earnings)
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Charting.
This relies on chart analysis, price data, indicators and volume that a
technical analyst uses to make different probability predictions on the
future market prices.
Technical analysts try to time the market entries and exits using
different:
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With trading and investing you can buy, sell and monitor different
financial markets.
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Commitment.
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Derivatives
A Trader's Dream
Spread trading
Futures
The main reason why most people use these types of derivatives is
because it’s a cheaper and a more profitable method to trade the
markets...
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Gearing
The Money-Multiplier-Effect
At first, the homeowner most probably won’t have the full R1,000,000
to buy the house with just one purchase.
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Let’s say you buy 1,000 shares of Jimbo’s Group Ltd at R50 per share.
Based on your analysis, you believe the share price will rally to R60.
As a shareholder, you’ll need to pay the full R50,000 to own the entire
value of the 1,000 shares (R50 Per share X 1,000 Shares).
In three months’ time, if the share price hits R60 your new share
exposure will be R60,000 worth of shares (1,000 Shares X R60 Per
share).
If you sold all your shares, you’d bank a decent R10,000 profit
(R60,000 – R50,000). However, you had to pay the full R50,000 to be
exposed to those 1,000 shares.
When you trade a geared instrument like CFDs, you won’t ever have to
pay the full value of a share again.
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• Exchange the
• Price difference between the opening and the closing price of the
Using the example from earlier – you see that Jimbo’s Group Ltd offers
the function to trade CFDs.
With this information, you can now calculate the gearing of the Jimbo’s
Group Ltd CFD.
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#1. For each one CFD you buy for R5.00 per CFD, you’ll be
exposed to 10 times more (the full value of one Jimbo’s Group
Ltd share).
#2. For every one cent the share price rises or falls, you’ll gain or
lose 10 cents.
If the share price reaches R60 in three months time, your new overall
trade exposure will be R60,000 worth of shares (1,000 Shares X R60
Per share).
If you sold all your CFDs, you’d bank a R10,000 profit (R60,000 –
R50,000).
Now that we’ve covered how derivatives and gearing works with
trading, let’s highlight the advantages and the disadvantages of trading
derivatives.
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#1: ADVANTAGE
Minimal costs
When you trade using a derivative, you never actually own anything
physical. This means, you won’t have to worry about paying high
brokerage and other trading costs like:
STT (Securities Transfer Tax)
Stamp duty
Settlement and clearing fees
Investor Protection Levy
VAT
STRATE
#2: ADVANTAGE
Profit from up or down markets
With derivatives, you can buy (go long) a market at a low price and sell
it at a higher price for a profit. Or you can sell (go short) a market at a
high price and buy it back at a lower price for a profit.
#3: ADVANTAGE
Get paid dividends
Note: You’ll need to make sure the underlying share does pay
dividends to their shareholders.
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#4: ADVANTAGE
Instant access to world markets
Your broker or market maker will most likely offer you a large range of
markets to trade on your one account, including: local & international
shares, commodities, currencies, indices and even crypto-currencies.
#5: ADVANTAGE
Profit from more with less
As you’ll only have to pay a tiny portion of the price per derivative,
you’ll have more free capital to commit to other trading opportunities.
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#1: DISADVANTAGE
Gearing – Magnified losses
Gearing is a double-edged
sword. If the trade goes against
you, you could wind up losing
more money than what you deposited.
If your trade continues to move against you, you may receive a margin
call from your provider. This is the worst-case scenario where you’ll
need to deposit more funds into your account, in order to keep your
trade open.
#2: DISADVANTAGE
Commitment
With derivatives trading, you’ll need to commit more time to your trades
than you would with ordinary investing.
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#3: DISADVANTAGE
No shareholder privileges
#4: DISADVANTAGE
Pay dividends when you’re short
If you sell (go short) a trading derivative and the underlying share pays
dividends, you are liable to pay the portion of the dividend instead.
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The best place to start your trading career is by creating your work
station at home. This is where you’ll analyse, monitor, trade the
markets and prepare for the next trading day.
You might also want to remove any paintings, photos or anything else
you have hanging on the wall.
They might be nice to have in other areas of your house but with
trading, you’ll find they will distract you.
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Next, make sure the room is cool, with fresh air and has enough
lighting. I’d suggest you change your lights to cool-white. With just
these few tips, I am sure you will have a more professional feel and a
calmer experience with your trading.
With a trading desk, you’ll need a comfortable chair with only two
screens. One screen for your trading platform, to buy and sell trades,
and another screen to analyse your charts.
Next, you’ll need to de-clutter your desk. Take off any unnecessary
table-pieces, stationery and try to neaten up your desk as much as you
can. A cleaner desk will give you a calmer, more organised and a clear
work place for when you trade.
Spare just 10 minutes after each trading day to neaten up your desk.
This will help you prepare for the next day with a clear and a refreshed
mind.
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✓ 1 Laptop
✓ 1 Monitor
✓ 1 Good Internet connection
✓ 1 Calculator
✓ 1 Pen
✓ 1 Exam pad
✓ 1 Trading cheat sheet (which I’ll send to you in Lesson two)
You might be thinking, is that it? Yes, that’s it. Simple and minimalistic.
The way I believe trading should be.
Let’s now get into the three essential tools you’ll need to set up your
trading platform, in the next part of the MATI Trader System
programme.
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We’ve come to the end of part one of the MATI Trader System
programme. Whether you’re a novice or an experienced trader, you’re
about to learn many new tactics and tips you can apply to your
everyday trading routine.
With this programme you’re about to skip the steep learning curve and
avoid paying any unnecessary school fees. In lesson two, we’ll cover
the second pillar to your trading success – The METHOD Pillar.
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PLEASE NOTE:
If you are not a VIP member of the complete MATI Trader System
programme yet where you can watch and enjoy the next four lessons,
you can become a member by clicking here.
Or you can email me your NAME with the words “Yes, I want to
complete the MATI Trader System programme”
and we’ll personally send you everything you need to continue with
the programme within 24 hours.
Trade well,
Timon Rossolimos
Founder, Timon and MATI Enterprise (Pty) Ltd
www.facebook.com/groups/MATITrader
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CONTACT US
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