Madoff who?

So, let's join in for the hottest topic of the financial world at the moment, since everyone else is also doing it... I'm just merely following the flow....

Before this, I've not heard of Madoff, but he's now the talk of the world. What attracted me is the simplicity of the scam. It's just an old trick. U use principle investment fund from new 'clients' (or, more likely the victims) to pay as dividend to the existing investors. Am damn sure I could have tat idea too!! But something called logic and morale told me that's wrong.

Madoff's method apparently is known as pyramid fraud. It works well if the existing investors do not withdraw their funds. Tat's exactly who he's caught when he can't return the funds which supposedly he used to do investment.

I think I would admire his personality and character. One would need some pretty persuasive methods to convince the big and small fish. Seriously! I mean, he's allegedly accumulated US$50 billion and his 'victims' included gigantic financial firms too such as HSBC. Surely he must be very good at selling his product.

Having said that, I wonder how can big financial instituitions with 'experts' on board still make mistakes like this? Is it because they trust Madoff, based on his past performance? But I understand Madoff had closely guarded his ledger books. So, Madoff fabricated his financial papers for his fund? If people like him does that, what guarantee I have that other fund managers or even companies not doing the same thing? The financial reports that I read before I decided on my investment is not true?!

Is there any law and regulation in the financial world? I'm beginning to believe that the players of the financial market have their own set of rules, and the bend the rules whenever possible. After all, rules are made to be broken.

Dear investors, who do u place ur faith in? Perhaps keeping ur hard-earned cash under ur pillow is not such a bad idea after all.

Exit!! When?

One of the hardest thing when planning a trade, I believe is the exit strategy. Now, there are alot of opinions out there, using various indicators.

I came across this article abt the Chandelier Exit (I know, it sounds romantic, haha!). Basically it's using ATR (Average True Range) as guidance to time the exit and place the stop loss. Yeh, placing stop loss.

http://www.esignallearning.com/education/marketmaster/Default.asp

Have a close read of the article, as it mentioned how to tighten the stop loss as the trade goes by. Main reason being the entry date price predicts movement for the next few days more accurately and the correlation will weakens with time. Hence, constantly readjusting the stop loss will ensure profit protection and less damage.

Having said that, these strategies work well in trendind market. With the volatility currently in the market, any sound advice from the experts?

Another Medium of Learning Shares

Being a novice in the market often means needing more guidance. I try to learn through different mediums. And guess what, I found this TV series about shares.... It's slightly old, made in 2002 and it's Japanese.

I stumbled upon this series and decided to give it a shot to learn some new stuff, thinking to myself, Japanese invented the candlestick, and they are one of the biggest financial centre of the world, surely I can learn something out of it.

I learned abit more abt how the share market function, but of course in the dramatised fashion, afterall it's a TV series. Best of all, it's free to watch online....

http://www.mysoju.com/big-money/

Enjoy! If u like learning through a fun and easy-to-digest fashion....