Trading Strategies during Covid-19

Although there are many trading strategies, not all of them are helpful during the Covid-19 pandemic. Alan Safahi, a leading entrepreneur, advisor, and San Francisco-based startup founder, says that businesses or individuals must choose a strategy that suits their personality type, risk tolerance, and available time. In this post, we will talk about five effective trading strategies during Covid-19. Read on!

1. Scalping:

Scalping is an effective short-term trading strategy for individuals and businesses. According to Alan Safahi of Orinda, CA, it involves taking multiple profits of smaller sizes on trading positions within a short period.

Scalpers typically enter and exit training within a matter of seconds or minutes, meaning they need quick reaction times. If you choose this strategy, make sure you monitor price charges to predict future exchange rates and their movements.

2. Day Trading:

Day trading is an effective strategy for traders during the Covid-19 pandemic. It is a short-term strategy followed by traders during a specific trading session. According to Safahi, day traders usually avoid taking overnight positions, meaning they close out their traders each day. The purpose is to decrease exposure to the trading market movements.

Moreover, you must use trading plans based on short-term charts and their technical analysis to know the intraday price action. Focus on the breakout trading because Safahi’s research shows that it is the most popular one during Covid-19.

3. Momentum Trading:

Momentum trading, also known as swing trading, enables you to plan a medium-term strategy to identify, examine, and evaluate more market moves. If you want successful momentum trading, make sure you trade both with major trends and against them, especially when the market is correcting. Thus, you will hold overnight positions.

The relative strength index (RSI), moving average convergence divergence (MACD), and histograms are commonly used indicators in momentum trading. Moreover, you should start with at least $10,000. You may end up risking each trade if you fall below $10,000.

4. Trend Trading:

Unlike other trading strategies, trend trading is a long-term strategy used in the forex market. It involves focusing on the market’s directional movement or prevailing trends for a particular currency pair. Safahi recommends traders to purchase on pullbacks in up trends and sell on rallies on downtrends.

Once you have taken a position in the trend direction, hold onto it until the trend starts reversing or the market reaches its objective. During Covid-19, Safahi suggests traders focus on more technical analysis indicators, such as the average directional movement indicator (ADX). However, you can also focus on moving averages to smooth out the price action. That way, you can identify trends and watch for crossovers in the market.

5. News Trading:

You can use news trading strategies if you have enough budget and a solid plan for risk management. Bear in mind that news trading strategies are not suitable for beginners during the Covid-19 pandemic.

News trading strategies are usually based on fundamental and technical analysis and benefit from volatility seen in the market quickly after news releases. Alan Safahi recommends monitoring economic calendars for data releases and watching the forex market closely to identify support and resistance levels before the event.

The purpose is to analyze the results and react quickly after the event. Furthermore, you have to maintain discipline during currency position management to streamline your strategy and take profits orders in the forex market.

Final Words

The covid-19 pandemic has hit hard the entire world in terms of health, business, and economy. The unpredictable lockdowns, surging cases, and disrupted supply chains have significantly affected the business world, including trading markets. However, the five strategies given above can help you thrive in the Covid-19 era trading if you use them correctly. Until Next Time!

Originally Posted: https://vocal.media/trader/5-effective-trading-strategies-during-covid-19

How Spot Next Stock Market Crash

A stock market crash refers to a sudden reduction in share prices. According to Alan Safahi, the San Francisco-based founder of 6 Startups and renowned entrepreneurs, a stock market crash usually occurs within a day. Most often, it is due to economic disaster, natural calamity, investor panic, or speculation.

All investors must act proactively and prepare for such crashes. Safahi says investors can deal with stock market crashes if they diversify their portfolios and shift to bonds or CDs. The question is: how to spot the next stock market crash. In today’s article, we will give you some tips based on Safahi’s research and experience as a stock market expert. Read on!

The Inverted Yield Curve

In everyday situations, short-term interest rates are lower than long-term rates. The interest rate primarily depends on the risk factor. For instance, you will have lower interest rates when you have long-term security because it ties up your investment or money for a long time. On the other hand, interest rates are higher for short-term securities.

The inverted yield curve occurs when there is an alternative situation. For example, when investors start accepting lower returns on long-term securities, it is a warning sign that the stock market will crash. Investors accept lower interest rates on long-term debt securities because they expect lower investment returns in the future.

Declining Credit Quality

Alan Safahi has done a tremendous amount of research on stock market crash prediction. San Francisco’s renowned entrepreneur states that credit is the most crucial aspect of the US economy. Safahi says the entire country’s economy is based on credit, including businesses of all sizes.

The expansion of credit is directly proportional to economic growth and prosperity. However, it is crucial to maintain credit performance. For example, when the credit remains steady, the stock market will flourish. On the other hand, a decline in loan performance is a serious sign of the stock market crash.

Widespread Complacency

Complacency is another sign of a stock market crash. According to Safahi, widespread complacency is primarily based on investors’ perceptions about the financial market. It is all about the market sentiment. A rising market means investors have positive and consistent sentiment. In contrast, negative sentiments are usually due to the declining market.

Various factors influence or affect the sentiment. Alan Safahi highlights that these aspects are political developments, geopolitical conditions, socioeconomic indicators, and Federal Reserve’s pronouncements.

For instance, inflation in the future is most often due to fluctuating trends in the Consumer Price Index (CPI), leading to elevated interest rates. Bear in mind that increasing interest rates can significantly affect the stock market and lead to its crash. Make sure you watch out for this sign.

Final Words

The points mentioned above are essential, and investors must consider them to spot the next stock market crash. Higher interest rates are also due to rising government deficits. Safahi says because the U.S government is the largest debt borrower, the deficit can lead to higher interest rates.

On the other hand, the deteriorating economy is the leading cause of rising unemployment rates in the US. It negatively affects the corporate profits and stock prices, causing significant turmoil in the market, leading to its crash.

Originally Posted: https://safahi.com/how-to-spot-the-next-stock-market-crash-4cfc16aeb289

Should Your Own Investment Bot?

Investment bots are automated trading systems with designs based on machine learning algorithms. An investment bot allows you to establish rules and regulations for trade entries and exits. After programming or owning an investment bot, the computer will execute entries and exits automatically. 

According to Alan Safahi, a San Francisco-based entrepreneur and founder of 6X Startup, over 80% of shares traded on stock exchanges come from investment or trading bots. The question is: should you own an investment bot? We will answer this question in today’s post. Read on!

Advantages of Owning an Investment Bot 

Safahi has conducted substantial research on investment bots and trading systems. Alan Safahi says investors and traders can use investment bots or systems to turn precise entry, exit, and financial management rules, allowing computer systems to execute, monitor, and analyze the trades. Here are a few advantages of owning an investment bot. 

Mitigated Emotions 

The biggest advantage of investment bots is emotion minimization during the process of trading. You can easily stick to the plan when you keep your emotions in check. Because the system automatically executes trade orders after it meets specific trading criteria, you can save time, effort, and avoid questioning the trade. 

Backtesting Efficiency 

Backtesting is a crucial concept that focuses on applying trading rules to previous market data. As a result, it helps you figure out the viability and feasibility of your investment. Because an investment bot can’t make guesses, you need to program it and set specific rules. 

Next, you have to test the system based on historical market data before investing your money in live trading. Backtesting via an investment bot enables you to assess and fine-tune your trading idea, analyze risks, and determine profitability. 

Enhanced Order Entry Speed

Safahi states that an investment bot responds quickly and efficiently to stock market changes. Owning such a trading system means automatically generating orders immediately after the bot confirms meeting the trade criteria. An investment bot gets in or out of the trade efficiently and on time, making a massive difference in outcomes. 

Diversified Investment and Trading 

An investment bot allows you to trade multiple accounts simultaneously, which creates a strong hedge against losing positions. Because you can’t execute or trade multiple accounts manually, a programmed bot can perform the execution within milliseconds. The bot can scan for investment opportunities in diverse markets, generate orders, and analyze trades to keep you updated. 

Disadvantages of Owning an Investment Bot 

Although there are various advantages of owning an investment bot, Alan Safahi’s thorough research shows several downsides of such investment systems. Continue reading! 

Network Failure 

A trade order usually resides on a computer system and not a server. However, this depends on the trading platform. If your investment bot loses connection to the internet, it won’t send the order to the market, causing discrepancies between theoretical trades and real trades. That’s why Alan Safahi suggests investors must expect a learning curve when operating investment bots. 

Over Optimized Programming 

Over-optimization can lead to unsophisticated operations in live trading. Because the bot is programmed or trained and tested based on the historical market data, it may not predict the future trading parameters. In such a situation, you can readjust your bot and focus on other parameters to create a viableplan. However, Alan Safahi says an investment bot is sometimes prone to failure when applied to a live market.  

Final Words 

Investment bots are automated systems that offer various benefits to investors and traders. Alan Safahi argues that investors must not consider bots as substitutes for careful trade executions. Although server-based bots can reduce mechanical or networking failure risk, one must not completely rely on them. 

Originally Posted: https://alansafahi.com/should-you-own-your-own-investment-bot/

What investors look for Pitch Deck?

“Simply put, what investors are looking for in a pitch deck is a great presentation that clearly outlines a pain the point that exists today and demonstrates the Founder(s)’ unique position to solve this pain point at this point in time” says Alan Safahi, San Francisco entrepreneur and 6X startup founder and Principal at Safahi Global Advisors.

According to this definition, a presentation can become the most important document for your company. It is through this presentation that you will be able to captivate your audience and collect the financing you require to carry out your project.

In this article, we will be sharing some essential tips for you to prepare a winning presentation, which answers all the concerns of investors.

The tonality of your presentation

Before starting to prepare your presentation, you must define what tone you want to use in it. This will depend on what you want to convey to investors.

Add creativity to the presentation, and prevent it from being boring or unattractive. The best combination you can use is your creativity with high-quality content.

A high-level summary

Include a high-level summary. Two slides should be enough to start your presentation, highlighting the essence of your business.

You must include all the aspects that you want to make known to potential investors.

Explain the problem that your product will solve

In these slides you must capture the opportunity that your business represents, highlighting what are the needs or problems that it will cover.

You must make it clear what is the lack of the market that your product will be able to satisfy.

For this, you can use two to four slides, depending on the complexity of your project and the level of demand of your audience.

Describe your product in detail

According to Safahi, it is vitally important that you include a detailed explanation of your product in your launch presentation.

You must delve into what differentiates your product, why it is better than the competition that may exist, and how it will guarantee market satisfaction. Make sure you cover everything about your product including the proposed product/market fit and the answer to the question “Why Now?”.

Present your Marketing strategy

Once you have the audience captivated with your product proposal, you must present an effective marketing strategy.

This strategy will depend on the phase in which your business is, but you must demonstrate to your potential investors that you have objectively devised a plan to earn a space in the market.

Describe your team

One aspect that investors take into account is the team you have assembled to get the job done. Remember that they would be investing not just in your idea, but also in your effort and of course in your team.

Use some slides to introduce your team and show that it is made up of people committed to the company. You should also take the opportunity to highlight their strengths and the past relationships with you and each other Founders and team members so show a history of a team that has successfully worked together and gets along with each other.

Well-formulated financial projections

According to the criteria of the San Francisco advisor and 6X startup founder Safahi, this point is highly anticipated by investors.

You must clearly describe what the projections are for both income and costs of your company. Make sure to clarify how you will use the money you will raise.

These projections must be professionally and realistically calculated. Clear and objective information at this point is highly appreciated by investors.

Originally Posted: https://www.allperfectstories.com/investors-look-pitch-deck/

Do's and Don'ts of Raising Capital

According to San Francisco entrepreneur and startup advisor Alan Safahi, the process of raising capital for your startup can be somewhat intimidating. Especially if it's your first time doing it. However, to achieve what you want you must learn, strive and fight until you accomplish your goals.

To give you a little help in the phase of getting investors for your company, we will share some tips. On the one hand, we will be detailing the things you must do; and on the other hand, we will be telling you what you should avoid at all costs when searching for investors.

What you must do to raise capital

San Francisco advisor and Alan Safahi, who is a 6X startup founder with vast experience in fundraising in Silicon Valley, Los Angeles, and Toronto shares his experience indicating what you should do:

You must prepare properly

Raising funds for your business require primarily mental preparation. It is very important that you be realistic and set expectations within what is objectively possible.

You must also be prepared for rejection, and to take this as a learning opportunity rather than defeat. The right investors for sure will see the potential of your venture, so don't despair.

Focus on generating traction

Something that attracts investors is the popularity that you have gained in the market with your product or service prototype. So it's a good idea to focus part of your effort on building a potential customer base from the start.

This can show investors the potential your company has, and all that you can achieve with the appropriate capital.

Lean on good advisors

Having the support and guidance of a good advisor are of great advantage for you. Look for professionals who believe in your endeavor, and stay in touch with them whenever possible.

Great advisors can provide you with unrivaled business guidance, and invaluable guidance on how to approach investors.

Define a good profile on financing platforms

When registering your profile in the different financing platforms, you must define your profile completely and perfectly.

Remember that investors will not only see your business proposal, they will also see who they will partner with.

Make sure to record all your experience, you should even record other ventures that have not been successful. All experience is valid.

What to avoid while raising capital

Alan Safahi, Founder and Principal at Safahi Global Advisors, details the things to avoid during the capital raising process.

Don't raise more money than you really need

You may want to take the opportunity to raise a little more money, as financial insurance. But you should never abuse this.

You can get a little more capital to fix the situation, in case something doesn't go according to plan, but you shouldn't go overboard in this regard. Ultimately, your success depends on what you do with the money you have, and not how much money you have.

Don’t Talk to the wrong investors for your project

Don't waste your time with investors who are not used to investing in projects like yours, or in companies that are in the phase, you are in.

If they do not know the area, you will have to spend a lot of time explaining the details. That time you can invest in something more beneficial for you.

Don’t Meet with investors who have invested in the competition

Another thing you should avoid is talking about or presenting your project to investors who have invested in a company similar to yours. It doesn't make any sense for you to talk to the people who have funded your competition.

You must avoid any type of conflict of interest.

Don't stop studying investors before meeting with them

Before meeting with any investor, you should have studied them. You should know if this is the type of investor who is interested in companies like yours, and if he or she has experience in your area of development.

If possible, talk to other entrepreneurs who have received capital from these investors to find out what it is like to work with them.

Originally Posted: https://vocal.media/journal/do-s-and-don-ts-of-raising-capital