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Investing Education with Bola Abdul

Bola Abdul has plenty to say about investing education, financial education and advice, and foreign exchange. In a nutshell, Bola is a self-starter and has learnt a lot about the financial market and the foreign exchange market.

Investing education, the next 100 days podcast hosted by Graham Arrowsmith and Kevin Appleby

Investing education: starting as a young ‘un

Bola started learning about the finance and foreign exchange market when he was 18 – 8 years ago. He’s still a kid! How did he get into it?

Surprisingly, it’s quite a low entry point to get into this market. Bolo says it’s because the brokers introduced LEVERAGE. That enables you to trade on a higher volume, relative to your count size. The low end is 1 to 30.

For example, you might have a $10 million account and you’re trading 1:30. If you wanted to buy pounds versus the US dollars, and have a stake of £10, for every single point that the market goes up or down you would either gain or lose £10. How it works is, with a 1:30 leverage, you’re capped as to the stake size that you can do.

Now, this is a bit tricky to understand so here’s another example.

If you opened an account NOW, with a 1 to 30 leverage, there is a maximum you can stake. Let’s say you cannot stake anything above £10. Contrastingly, if you opened up an $10 million account with a leverage of 1 to 400 a point, you would be able to do a significantly higher stake size.

Points and pips

Pip – this is a term used in the foreign exchange market. “It moves in pips”. This is an abbreviation for Price Increment Point. Now, we’re talking about the pound-dollar exchange rate. It’s quoted in 4 decimal places. For example, let’s say it was quoted at 1.3001 – if it changed to 1.3002 it would have moved one point. If it moved to 1.3003, that’s two points.

However, the brokers have their spreads – how the brokers make their money I based on the spread they give people like Bola (retail traders).

E.g. Let’s say you are earning £10 a point and the spread is 2 pips. Instantaneously, the broker makes £20 pocketed, regardless if that trade is a winning or losing trade. If it was £100 a point, and the spread was two pips, the broker would make £200.

Ultimately, the trick is to figure out that, regardless of what you’re paying a broker, you’re betting that the outcome of the trade will appreciate considerably because of some event.

Is this trade about events then?

Bola says you must think about what the demand for currency is today. Because the market works by supply and demand. If we were on an island with US dollars and pound sterling, and there was a high demand for USD, you would have to give away sterling to acquire the USD.

There are sporadic events – for example, Nov. 2016 where Trump was inaugurated – that can make an impact. You’ve always got to think about what the market participants expect. If the market participants expected the USD to go up in value, that will make a difference to the foreign exchange rate.

So, to answer the question, yes the market can be impacted by big events in society…most likely political. However, these are SPORADIC. What the market is based on, and what is most important and influential, is supply and demand.

There are many ways in which market participants base their trade ideas:

  1. Supply and demand
  2. Technical analysis
  3. Sporadic events (thinking political shifts in power).

More on technical analysis

Within the market, there is also something called support and resistance, which fits in with demand and supply. Essentially, supply sits within the support zone and demand sits within the resistance zone. Where supple = demand, is what is called equilibrium. Equilibrium is where market participants like the put their orders in – it’s where a fair value is placed.

How technical analysis works is price gravitates from one equilibrium area to another equilibrium area on a day to day basis. The magnitude of the deviations from one equilibrium area to another is based on the supply and demand of any given day.

Golden Seeds FX – a business of investing education

The general conception is that this trade makes money over night. Now don’t get Bola wrong – you can indeed make money over night. However, the understanding is way more important than the money, because once you understand the mechanics of what you’re doing, what you’re trading and the way it all works, the money follows you!

The more you know, the more money gravitates towards you because you’re making more correct decisions. As a result, investment education is incredibly important.

On Bola’s website, there are plenty of articles that break down foreign exchange and the market mechanics. Bola is also big on monetary history.

Interestingly, he also has a membership zone. For those who want to take their understanding to the next level, they can get involved in a 5 day-intensive programme. But, the 5th day of this course is no the end – it is just the beginning. But Bola will still make appointments for members to come see him after the course, if they need it. AND he puts out his trade forecasts on the forum so members get a real insight into his experience and expertise surrounding the market.

Predicting events and confidence 

The elections – Bola’s consensus was that, if the conservatives won, they’d definitely be a rise in demand and value of the pound. With the technical analysis, it was already predicted that the move upwards would be significant. It went up at least 150+ pips against USD!

When things are looking good, the temptation can be to leave your trade on the table too long. That’s where the psychology part comes into play here – you need to understand truly what is going on in the market and the aspects that are at play.

However, here we’re just considering an election example. Elections don’t happen every week. Nevertheless, liquid entities enter the market every single day! When they enter the market, Bola assesses what’s happening during the specific time that entity enters the market. He will use and consider his technical analysis as well. What is the demand for currency? It is never one – it will always be two in a quotation.

Note: Liquid Entity – MONEY.

Risk within the foreign exchange market

To summarise, what Bola does it help people make money by effectively predicting what’s going to happen in the foreign exchange market. There’s analysis, and there’s spreading the risk. Bola helps with  educating on investment and investing in the foreign exchange market.

For the average retail trader, they wouldn’t be able to predict or even avoid losses if the pound depreciated against the US dollar. This is why Bola is living in the markets day in, day out; because he can offer investing education to others with a full understanding of what is going on.

Bola’s story

During University, Bola was already offering free advice on the markets and so he left uni and started Golden Seeds FX. He was excited to get on platform after platform, get an office and take a business seriously. He wanted to see if there were any other people who wanted to understand the markets better.

Through this business and Bola’s experiences, he has realised the gold that is in guidance…which he didn’t have! Therefore, he assures his members that he has already paid for the mistakes they will not make.

That’s what most people want to know – that someone’s got their back.

What was the reason right at the beginning that got you into the market?

Ever since secondary school, Bola wanted to get into stocks and shares. That desire led him to speak to the right people and attract the right people to him to help him build a platform.

To understand why Bola took the trade is this: investing education and reflection. Learn, learn, learn with guidance and reflect on each trade you do to make better choices in the future.

To find Bola’s business, follow the link here.

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