Vela Tech. Technical Analysis (04/01/2016):

Disclaimer: I don't have a licence to distribute financial advice, etc.



Happy New Year!

My proprietary charting software is throwing a wobbly with my Mac's latest update, so these are Yahoo Finance charts:

Zoomed in:

• In this zoomed in chart, the most encouraging upside technical argument is the break of the upper Bollinger Band and the companying upwards implied surge in volatility.
• The relative closeness of the daily close to the upper band is a positive sign as it suggests a smoother run to the upside over a longer period of time as opposed to a short term price spike.

Zoomed Out View 1:

• The first of our zoomed out views helps to illustrate the lack of price resistance to the upside from the current levels. This helps to create an environment where there is little to stall a sustained rise in the share price for the current levels.
• After the break of the small amount of resistance at 0.275, the next resistance levels are placed at 0.35, 0.45 and 0.52

Zoomed Out View 2:

• I've added an RSI here as I am aware that many traders on the AIM use this as an indicator - in my experience, the RSI can be very overbought or oversold in any direction for long periods of time in the micro cap stocks - the lack of algorithmic driven trading plays a large part in this.
• While I don't personally use the RSI in my regular trading activity, the movement through the 50 level is especially encouraging as it corroborated the upside bias expressed in my above Bollinger Band analysis and suggests more upside potential from these levels.

My conservative shorter term targets would be ~ 0.52p resistance level, with the sky being the limit over the medium and longer term as news flow begins to blossom into the new year - the 3D TV investment is particularly exciting, in my opinion!

The only potential downside I could see here would be if any fundraising was carried out (which I highly doubt, because they had at least six figures of cash when I last did a fundamental check) at these levels.

Enjoy,

The Masked Stock Trader

Long Glencore and Thomas Cook

I went long on Glendora and Thomas Cook yesterday morning.


Thomas Cook (TCG):

• This is a volatility funnel trade (very similar to a symmetrical triangle formation really) on the daily chart beginning at the high on April 10th.

• I am looking to exit between 165p and 170p here and I'll begin to rethink/.reanalyse the position at the 150p level and exit at 145p.

Glencore (GLEN):

• This is simply a medium term upwards trend follow.

• I'm looking to exit between the 325p and 330p level. I will begin to reconsider/reanalyse this trade at 195 and probably exit at a break of the 190p level.

Enjoy,

The Masked Stock Trader

Free UK Technical Analysis 24/03/2015

DISCLAIMER: I am not FCA authorised or authorised in any sense to give financial advice. Do not regard any of the following links, or information as investment or trading advice.

N.B. Currently FireFox does not support Google Drive and therefore these reports may not open.

Today's Analyses:

https://drive.google.com/open?id=0B0wd9XTIWftmflk3TUNBVkJXTFZFRHZBQW9PM3ZHZmlSc1hqWTZqU190TnY3WUZWakFjNzA&authuser=0

How to use these reports:

http://themaskedstocktrader.blogspot.co.uk/2015/03/technical-analysis-instructions.html

More information regarding this project can be found here:

http://themaskedstocktrader.blogspot.co.uk/2014/11/my-experience-with-quantitative-finance.html

Free UK Technical Analysis 03/03/2015

DISCLAIMER: I am not FCA authorised or authorised in any sense to give financial advice. Do not regard any of the following links, or information as investment or trading advice.


Today's Analyses:

https://drive.google.com/open?id=0B0wd9XTIWftmfjBPQWtvSTZubHd4bjFzQ2E4NTc5eng1d2t6REUtYm9SY2hiNXV6eG8wMXM&authuser=0

How to use these reports:

• This system is currently based around Simple Moving Averages (SMAs) that are based around the principals of Fibonacci numbers. These are used alongside a Slow Stochastic Oscillator (SSO) to create buy and sell signals, which are given numbers based upon their strengths.

• Over time, I adjust the stochastic coefficients and the weightings of the moving averages to create more reliable results during my back testing (for my use), but to also make the system more reliable generally.

• Attached in the linked folder will be a file called "buysignallers.txt" and "sell signallers.txt", which can both be used to show the position of a stock against the others that are analysed. This is where you will find the total signal strengths for stocks.

• It is worth noting that not all stocks and shares may load or process due to where the program gets its data from and some stocks with share prices below 0.10p will currently not analyse properly.

• These reports are all made up of a list of signals and comments and the data for these are taken daily. E.G. Today's signals use yesterday's closing stock prices - given in pence, not pounds! 

• The "signals" show the fibonacci SMAs that crossover and or any slow stochastic notifications.

• The "comments" show the value of the said SMA with the value of the previous day shown in brackets.

e.g. 

# Signals

Sell - 24.802226076843513707865168540 - 34 crossed 144

# Comments

SMA 3 - 25.50 (25.50)

SMA 5 - 25.50 (25.50)

• More information regarding this project can be found here:

http://themaskedstocktrader.blogspot.co.uk/2014/11/my-experience-with-quantitative-finance.html

Petition to regulate Share Tippers/Financial Journalists

There is a danger that this brief post may well be a little ironic, as it's regarding share tippers however as I don't believe that I "promote" stocks and shares in the FCA sense of encouraging investment decisions, but merely discuss popular stocks and shares, I feel that I can side step this one.


Nevertheless, I would encourage people to have a good look at this petition and sign it if you believe in its message:


https://www.change.org/p/the-financial-conduct-authority-enforce-or-change-the-ruling-under-section-21-of-the-financial-services-markets-act-to-ensure-that-bloggers-share-tipsters-and-financial-journalists-such-as-found-on-shareprophets-com-have-to-be-fully-registered-on-the?recruiter=47444308&utm_source=share_petition&utm_medium=twitter&utm_campaign=share_twitter_responsive%20via%20@UKChange


All the best,

The Masked Stock Trader

Valuing Fitbug.

I'm not FCA authorised, don't view any of this as investment advice, etc.


One of the many issues with tech companies is that they're a real sod to value in any standard way:


PE ratios are often irrelevant, because the company may not make any money and often their balance sheets are pretty bare too, because you can only value assets based on what someone is willing to pay for it elsewhere and because technology sector evolves so quickly companies often can't get this information.


In the case of Fitbug, there are a few things we can do to helps get an idea of the company's current and potential future value:



1. Fitbug Vs Fitbit.


I feel that comparing Fitbit and Fitbug is one of the best ways to value Fitbug, because they both operate in the wearable health sector and we know that their products are very similar because of the trademark infringement lawsuit embarked upon by Fitbug against Fitbit.


Fitbug is currently worth around £22 million and Fitbit (privately owned) was worth $300 million in March of 2013 (around £191 million).


Currently, Fitbug is valued at around 11.5% of the value of Fitbit in March 2013, which may or may not be a fair valuation depending on your opinions of both companies.


In my opinion, the two companies are more similar than Fitbit would like us to believe with Fitbit's apparent aims in its last funding round (August 2013) to be to release new products and grow its global footprint - exactly what Fitbug is currently doing, retailing in Apple online stores across these regions (and possibly in stores on the ground).


2. Lawsuit:


A quick point here, but if Fitbug win their lawsuit against Fitbit, then they will seek to agin at least $10 million and potentially as much as $30 million (between £6 million and £19 million). Based on the information currently available it certainly looks as if Fitbit will look to settle outside of court, so whilst this case is yet to be won, it does look promising for a good payout for Fitbug of almost as much as its current market capitalisation.


3. Sales Forecasting.


The information that we really need to know however is the sales figures between now and the next set of results (I'm going to do this for just the Fitbug Orb to make life easier) and an idea of how much Fitbug make per unit sold and we can have a stab at this, even if it's going to be very crude, so please do your own research and don't take my figures as true:


We know that Fitbug are retailing in 1800 Target stores in the US and in 293 Sainsbury's stores in the UK. We also know that they are being retailed online and or in store by major retailers like Amazon, Apple, Tesco, Argos, Dixons, Walmart, Kmart, Frys, etc. We also shouldn't discount all of the smaller online stores that are retailing Fitbug's products too.


Now, I'm going to run these numbers a few times, but let's assume that Fitbug only makes £2.50 profit per unit it sells and let's assume that these 1800 Target stores and these 293 Sainsburys stores only buy 88 units each from Fitbug between being stocked and the sales figures being released (I've picked 88 because it's the online sales figure from tiny online website I've never heard of in the last 30 days - see the references below for more detail):


1800+293=2093 stores

2093*88*2.50= £460,460 Fitbug Profit


Now, these figures obviously are ignoring online retailers and any other on the ground retailers to whom Fitbug will be selling to based on the demand for their products. However, the point is that even if we take these very low figures for sales, discount the majority of Fitbug's total retailing presence and give them a very low profit margin per unit, they're still making a hypothetical (almost) £0.5 million profit.


I'm now going make some more assumptions based on the following points:

- Applying the sales figure of 88 units to Target and Sainsburys is probably too low and could be realistically increased to 100, especially with the news that a lot of these outlets along with others are sold out or have low stock of the Fitbug Orb.

- I'm going to add into this calculation a quarter of Tescos total stores to the mix (not all will be big enough to sell the Fitbug - 2500/4) along with total number of Argos stores (737), Dixons (530+322), Kmart (1077) and Frys (34):


This gives a total number of stores on the ground of 1800+293+(2500/4)+737+530+322+1077+34

Total number of stores= 5,418


Now, let us assume that each store buys 100 units from Fitbug:

5,418*100*2.5= £1,354,500 Fitbug Orb Profit


Let's increase our profit margin to 10% of the retail price of the product (from 5%).

5,418*100*5= £2,709,000 Fitbug Orb Profit


With 44% of Christmas shopping being done online last year, it makes it harder to get a real idea of (what I perceive as) the huge potential this company has in terms of sales. To get an idea of what online profit from sales are likely to be like, along with the on the ground store profit from sales, we could probably just double that last figure, giving us around £5,418,000 - food for thought!


However, I think that realistically, as Tesco are currently (as I write this) out of stock online, we could add half again to this figure at least, as major retailers are likely to have tested the waters initially with their wholesale purchases and purchased small lot sizes. Due to this, I feel that it wouldn't be unreasonable increase this again:


5,418,000+2,709,000= £8,127,000


I'm going to round this up here, but the point of these forecasting (not to be used for investment advice, I'm not FCA authorised, etc) is to give an idea of the potential that Fitbug has between now and the Christmas results being released. Remember that these forecasts are only for sales of the Fitbug Orb (not the only product Fitbug offer), these are excluding all online sales of the Fitbug Orb, these are excluding any health insurance/provider related sales and they based only on the sales between late October and the expected January results.


Personally, I believe that the actual profit from sales will be significantly higher than this, but I implore people to do their own research and decide for themselves.


Extra Reading:

Fitbug - The Gift That Keeps On Giving:
http://themaskedstocktrader.blogspot.co.uk/2014/11/fitbug-gift-that-keeps-on-giving.html


All the best,

The Masked Stock Trader.


Sources per Point:

1. Fitbug Vs Fitbit.

Fitbit Valuation:
http://mobihealthnews.com/20623/report-fitbit-raises-30-million-at-300-million-valuation/

Fitbit's Aims:
http://techcrunch.com/2013/08/13/fitbit-43m/


2. Lawsuit:

$10,000,000 minimum, as seen on page 12, point number fifty-three and if an out of court settlement is reached it could be from 12th December onwards:
download.html.

3. Sales Forecasting.

Estimating Sales Revenue:
http://www.lse.co.uk/share-regulatory-news.asp?shareprice=FITB&ArticleCode=rdzzvudg&ArticleHeadline=Fitbug_to_be_stocked_by_Target_and_Sainsburys

Small Online Outlet Sales Figure:
http://shirinsevents.com/hype.php?id=fitbug-orb-activity-tracker-retail-packaging-black-p-14145.html?zenid=f3cbd595cd93e572e891c5d5ac43080c

Tesco Store Number:
http://en.wikipedia.org/wiki/Tesco

Argos Store Number:
http://en.wikipedia.org/wiki/Argos_(retailer)

Kmart Store Number:
http://en.wikipedia.org/wiki/Kmart

Fry Store Number:
http://en.wikipedia.org/wiki/Fry%27s_Electronics

Online Shopping Statistic:
http://www.msn.com/en-us/news/us/report-44-percent-of-holiday-shopping-will-be-done-online/vp-BBbb4St

Fitbug - The Gift That Keeps On Giving.

I was a bit sceptical regarding Fitbug's initial rise, because in my eyes any company that has rocketed thousands of percent logically has more downside potential than upside potential, as this is where the familiar trading range exists, which in turn drags strong price support lines lower.


However, I need to eat my hat, because Fitbug just seems to keep rising (N.B. I do hold shares in Fitbug, so I obviously have an upside bias in my view point).


The reasons why this company seems to be doing so well I think can be condensed down into a few points and these points below will only just scrape the surface of the company:



1. Fitbug has official contracts with Samsung and retails in Apple Online Stores Worldwide.


2. Fitbug has broken into the US, within stores such as: Walmart, Kmart, Target and Frys.


3. Fitbug has contracts for selling in Tesco, Sainsburys, Argos, Dixons and numerous other stores in the UK.


4. Fitbug has links with the huge insurer Prudential and other vitality players to offer their products.


5. Fitbug retails online through many outlets, but with the most notable one being Amazon, where the FItbug Orb has an average rating of four and a half stars (the Fitbit Flex only has four stars).


6. The lawsuit against Fitbit from Fitbug for trademark infringement looks as though it's likely to settle outside of court (statistically more than two thirds of civil law suits do), which could potentially provide Fitbug with restrictions on the sale of Fitbit products, but also provide an enormous sum of monetary compensation (at least $10,000,000, as seen on page 12, point number fifty-three  - download.html. Also, if this case is settled out of court, it will likely happen significantly sooner than the expected hearing date in February (12th December onwards).

More details regarding the timing of this case can be found here:

https://cases.justia.com/federal/district-courts/california/candce/3:2013cv01418/264770/31/0.pdf?ts=1387033495


7. The Fitbug Orb is either sold out or is selling out very quickly in the UK retails stores for certain - I know this personally, because the large outlets I went into had out of stock signs above the item in question. In fact, the only reliably stocked place you can acquire one is from Amazon at present.


8. Christmas revenue will - in my opinion of course - be huge, because Fitbug's products retail for around 30-40% less than those of Fitbit, which is a hefty saving in two products that are in raw terms very similar, if not identical.


9. Tech companies aren't valued (and shouldn't be valued) purely from a numerical stand point, meaning that the current market capitalisation of only £25 million is, by the standards of other booming tech companies, a bit low, in my opinion. This is for any number of reasons pertaining to branding, patents, goodwill, etc. Let us not forget that WhatsApp sold for $22 billion to Facebook and that had never even made a profit.



I think that the ultimate reason for the success of Fitbug so far, is because the company has been breaking down the high walls of many popular consumer outlets to sell their products and while good products tend to sell themselves, these two factors combined (great products and excellent retailing of said products) look as though they will continue to push the company much higher in both the short and long term future.


Extra Reading:

Valuing Fitbug:
http://themaskedstocktrader.blogspot.co.uk/2014/11/valuing-fitbug.html


All the best,

The Masked Stock Trader

PeerTV - A Great Trading Opportunity:

I think PeerTV (PTV) has a lot of potential for a technical trade over the coming few days and below are listed my reasons behind this trade, combined with my personal targets for the trade:


1. Resistance.

- There is very little price resistance in this share until 0.5p (giving a resistance free upside of more than 100% from these levels) and if the small amount of resistance at 0.5p can be broken there's no real resistance until 1p and after this a retest of the May price high at 2.45p looks achievable.


2. Support.

- One real beauty of this share is that the gradual fall in the share price since May provides good rising support for every intrepidly downside retest we see, which will help to preserve upwards momentum in this move.


3. RSI.

- The move through the mid point at 50 on the RSI is a telling buy signals that's often used by Zak Mir and I've had a lot of success in following this particular move, as the indicator seems to give more guidance on the daily charts min the middle of the indicator's range and not at the extreme ends.

- Any downside move I would expect to retest the RSI 50 level and then either make a break to the downside or upside from there, which will provide us with some ideas later on regarding where we place our (imaginary or real) stop orders.

- To clarify my last point, I'm not a fan of using actual stop orders in stocks outside of the SETS system, because I think that market makers intentionally try and trigger them.


4. Slow Stochastics.

- Currently writing a quantitative program that has a lot to do with stochastic indicators, I like to feel I'm reasonably knowledgeable here and in this case, we've been given a great set up from the slow stochastic oscillator, which moved from %K=1.61%, %D=3.54% to where it closed on Friday at K=47.63%, D=27.05%.

- The important thing to note with stochastic is the level of divergence between these two lines, which with that jump was an awful lot and this implies that there is a lot of upwards momentum in this share that's yet to be expressed and only when this begins to fall below 90 after that extreme of the indicator has been reached, will I begin to reanalyse that position's value in the market.


5. Fundamentals.

- I don't know a lot about the fundamentals here, but what I will say is that currently being only valued at around £1.4m, this company has a vast amount of upside potential based upon the value of the contracts it has and the contracts it looks as it if it soon to be signing.

- Fundamental value I find is very useful for ensuring positive sentiment is with you on a trade and at a brief glance there seems to be a lot of it here.


6. Simple Moving Averages.

- I use fibonacci moving averages for my technical trades and again, being an aspect of the quantitative trading that I'm part of, I hope can describe the current situation well:

- The shorter term averages (3, 5, 8 and 13 day averages) all crossed on Thursday, giving a big buy signal, this was then followed by a day of consolidation that we saw on Friday and then the continued move upwards in these averages this morning confirmed another significant move to the upside.


UPDATE:

I closed this position in accordance with my personal risk management strategies (+60%) and then reopened a long position later in the morning after the initial rise to 0.45p and the consolidation around the 0.35p.

In my opinion (not to be used as trading advice), intra-daily, the technical indicators used above currently suggest (as I write this) that a move to 0.45p and above is still on the cards for today (17th November). A break above 0.45p should lead to a quick advance to 0.5p

Continuing in the same spirit as that last paragraph, I sold my second position out at 0.49p.




All the best,

The Masked Stock Trader

My Experience With Quantitative Finance:

UPDATE (12/04/2015):

From tomorrow, technical analysis reports will be uploaded weekly as a result of the lack of sleep I'm beginning to get from my computers firing up at 2AM every weekday. Moreover, as a medium term quantitative system daily reports weren't exactly necessary anyway.

Swiss markets are now fully integrated and for the mean time this will conclude the stage of adding more markets to the system, while the configurations are tweaked to maximise returns.


UPDATE (04/04/2015):

The system is currently throwing a wobbly regarding analysis of US equities, but French equities have been added and it is my plan to add Swiss equities as well over this easter weekend.

Continued progress is being made in altering the system configuration to reduce down-side risk in the system via stochastic oscillation.


UPDATE (04/03/2015):

The foreign equity markets that are to be analysed daily have been decided as the following:

UK, USA (NASDAQ for the time being), Austria, Belgium, Denmark, and Italy.

In theory the coding required to be changed for this to happen is easy, but I'm waiting for my friendly computer programmer to have a little more time on his hands, so we can get this sorted.



UPDATE (03/03/2015):

The system is currently being configured to work across foreign stock exchanges (not foreign currency markets); therefore output values for these markets need to be remembered to be viewed as in their traded currency - so as to avoid having to make foreign currency assumptions.


UPDATE (22/02/2015):

The system remains slightly odd, in that it's not really designed to trade for you (it could if I wanted it to), but to be a tool to make trading easier and create technical trading ideas that can then be backed up with fundamental analysis to see if this corroborates the technical signals.

The basic principal remains that it uses Fibonacci Simple moving averages (3, 5, 8, etc, up to 233 days) but now with a slow stochastic oscillator over a 14 day period to trade. It then throws a load of volume restrictors, coefficients and thresholds in there too, to make the whole system harder to understand, but more importantly to avoid mis-signaling

The major flaws are that it currently factors in no slippage and no spreads. It buys at the beginning of the day and sells at the end, depending on what buy/sell signals have been produced - it literally buys when buy signals are made and sells when sell signals are made.

Nevertheless, a lot of configuration of the coefficients alongside the raw theory of the system yields impressive results regardless of these underlying issues:

The best yearly backtested results so far (starting with £100,000):

- £200,929 average closing value of the held stock, plus the current funds.

- £98,356 average Top Buy Signallers' closing value of the held stock, plus the current funds.

- £106,271 average Top Sell Signallers' closing value of the held stock, plus the current funds (NOT HUGELY RELEVANT - DESIGNED TO BE USED LONG ONLY).

- £338,126 average closing value of the held stock plus the current funds (winning positions).

- £844,844 average closing value of the held stock plus the current funds (losing positions).

The best yearly backtested results over 13 years and around 250 days - depending on leap years - (starting with £100,000):

- £450,151 average closing value of the held stock, plus the current funds.

- £336,276 average Top Buy Signallers' closing value of the held stock, plus the current funds.

- £463,513 average Top Sell Signallers' closing value of the held stock, plus the current funds (NOT RELEVANT - DESIGNED TO BE USED LONG ONLY).

- £615,899 average closing value of the held stock, plus the current funds (winning positions).

- £601,546 average closing value of the held stock, plus the current funds (losing positions).

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Anyone unfortunate enough to have wondered onto this webpage may know from some of my earlier posts that I'm currently working on a quantitative finance program.


Although I would never be so arrogant to assume that my program is unique, I'm not going to go into detail for obvious reasons of secrecy.


Nevertheless, from a general perspective, the program is designed to function on the UK stock markets and aside from crunching a load of cool numbers in my terminal window and spitting out some results, it looks for stocks traded in GBP with higher than average daily volumes and runs a moving average system along with a stochastic system over the top of these stocks to then "trade them" through the backtesting process.


So, in raw terms these numbers get calculated, processed and make buy and sell signals, which the program then uses to suggest buy stocks (on the buy signals) and then suggest you sell the positions (on the sell signals). The system doesn't short sell securities and is designed as a long only trading system. Neither is the system fully automated, it's designed as a semi-automated system that merely outputs data that is then acted upon by the individual.


Although the program is know where near finished yet (there's a lot of theoretical tweaking that needs to take place and I'm considering designing it to perform over just one industry sector along with a whole host of other things), I've certainly learnt a couple of things about the power of quantitative finance systems:



1. When facing a battle against these systems the average private investor will pretty much always lose.

- This makes logical sense, because the people behind the most famous and powerful quantitative systems (Man Group, etc) are going to not only be the best in the industry, but some of the smartest people worldwide.


2. Their strategies are constantly evolving.

- In the algorithms behind my trading system, my team considered making it fully or partially genetic (at least in the way it calculate positions it should buy or sell). So, it would evolve by itself as a system to improve with less manual input from my team.

- Now, not all quantitative systems are genetic, because it throws up a whole load of issues (they can end up leaning backtesting biases, change the whole ethos of the program the system they're meant to be running from, etc), but this is just an example of the level of sophistication that the funds running these systems have.

- Even if they are not using genetic programming, these systems are constantly being tweaked for performance by whole teams of programmers and mathematicians, meaning that the laypeople rarely get a chance to truly understand the systems or fight back.




I think that as more finance becomes automated and or based on mathematical principals, it becomes more important for people to at least have a vague understanding of these systems and how they work. If you can at least understand the principals of these systems, their advantages and disadvantages then you then can give yourself an advantage as these systems move into more illiquid and private investor concentrated markets (like AIM).


Some useful watching for those interested:

A look at algorithmic trading:
https://www.youtube.com/watch?v=OINqYdkhOAw

A look at HFT trading:
https://www.youtube.com/watch?v=aq1Ln1UCoEU



Cheers,

The Masked Stock Trader

What is Market Abuse?

In the UK there are basically two major financial crimes, which are misleading markets (this normally involves lying about your results) and insider dealing (using price sensitive information to make quick money) - being financial crimes these go through criminal law rather than civil law. 

I'm not going to write about those today, but instead look at market abuse which is held in civil law courts, not criminal law courts.


Now, in the UK you're not likely to go to prison for market abuse, but you may get nailed for a large fine if you get caught.

This is all to do with different forms of law and in order to understand why you're not likely to go to prison for market abuse you need to understand that in the UK we have criminal and civil law.


For example, let's say you go to a cafe and you come out of it believing that your coffee wasn't worth the £3 that was shown on the label and instead offer to pay £2 for it. This is a civil offence and you could be sued for money, but you're not going to go to prison. It would however be a criminal offence if you refused to pay anything for it, because that would be stealing.

Not paying the full price for a coffee is not a crime, but you could be sued for the remainder.


This is very important to understand because it's much harder to prove that something is a crime than it is to prove that you should be able to sue someone for a load of money. Hence, in the UK a civil law judgement is based "on a balance of probabilities" and a criminal law case judgement is based on the idea that you must have committed the crime "beyond reasonable doubt". 

Also, if you go after someone in criminal court it's going to be expensive, you'll risk public humiliation to the regulator if they lose and they can take a very long time to get a judgement from.

This is where the 2005 Market Abuse Directive comes into play for the FCA, which is basically governmental permission for them to come after you in a civil law court rather than in a criminal law court. 

This market abuse directive is used in conjunction with something called principal based regulation, whereby they have eleven principals which are all intentionally vague and difficult to understand, so they can nail you easily if they catch you doing something dodgy. For example, one of these principals is "market participants must behave with integrity", which effectively means whatever the FCA wants it to mean when they go after you.

In the case of the somewhat complicated and vague market abuse rules and regulations, we can see that holding these cases in a civil court is a much easier way to get a result quickly and reliably. 


Market abuse itself is essentially covered by these three points:

1. Misuse of information - This is about divulging information that's not currently available to investors or as they put it in London, "wall crossing". If you tell your wife about a possible oil discovery in a firm that's about to be bought-out, you've crossed the mark and could be nailed for market abuse.

2. Misleading investors - This will normally be promising returns on investment vehicles or claiming that your company is the second best in its sector, when there only are two firms in that sector (that's a real example).

3. Manipulating Markets - This could be performing wash trades back and forth to give the impression of a more illiquid or placing orders in the stock exchange and then cancelling them to give impressions that are different, for example.


To conclude, going after people for market abuse is essentially an easier way to nail people for dodgy activity than getting them for a financial crime is. Although, if you do get caught you can live with the assurance that you're not going to go to prison for it, but you should regardless of this be ready to pay up a hefty amount to the regulator.

Stox App (beta) - A Review.

I'm normally not particularly interested in apps, but Stox caught my eye for three reasons:


1. It's aimed at teaching basic investing knowledge - a subject I'm particularly passionate about.

2. It looks pretty unique as far as educational apps on the subject go.

3. It has a beautiful Graphical User Interface (GUI) - something that men in their late teens and early twenties like myself really need to bother using any app.


Now, being in its beta stage, the app is obviously not finished, but of what I was able to play around with I was incredibly impressed!


I ran Stox on my Samsung S2 and I found it to run very smoothly and the "swipe" and "tap" UI effects were a great way to separate the app out into appropriate information sub-sections, which took you through the very basic ideas surrounding the stock market mechanisms. I particularly liked the way in which the app tested you on the completion of each section and then took you back to the relevant information if you made a mistake.


As a professional trader, I knew there was a danger that I would fall into the "this has too little information camp" regarding the app, so I tried to review this app as a novice and on doing so I actually felt that people new to the trading and investing world would really appreciate and benefit from the way in which the app uses very basic examples to relay information that has the potential to become very complicated when you begin to get technical.


I ought to warn readers now that I am both English and went to a grammar school and consequently may have a bias regarding my single criticism of the app, which was that it felt a little slow to give information - I'm a bit impatient and when I ask a question immediately want an answer. I just felt that the app was holding information just out of reach of the speed that I wanted to take it in at as a user, but I feel that this issue probably says more about me than the app itself! This could be improved by just reducing the time it takes for the "tap to continue" icon to appear, but I think that in reality most people aren't likely to see this as a real issue, especially if the users are actually members of the target audience (novice investors).


Overall, I felt that Stox has the potential when it comes fully live to continue to be both a highly informative and fun app for those who are taking their first steps into the world of investing and I look forward to testing the app further as it comes out of its beta stage.


For those interested the beta version of the app can be downloaded free on the Play Store for android devices:


https://play.google.com/store/apps/details?id=io.stox.app


All the best,

The Masked AIM Trader.