5 TRADING MISTAKES YOU SHOULD AVOID

Avoid the Five Fatal Trading Mistakes and Start Winning in the Market Place

Avoid the Five Fatal Trading Mistakes and Start Winning in the Market Place

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Avoid the Five Fatal Trading Mistakes and Start Winning in the Market Place

Free course

The Wolf of Wall Street…Fact or Fiction?

The Wolf of Wall Street...Fact or Fiction?

Australian Investment Education
Wolf of Wall Street 2014

Wolf of Wall Street 2014

Movies that relate to the stock market depict greed, money, drugs, women, fast cars, fast boats, more women, and a debaucherous and never-ending party. As a qualified equities and derivatives analyst with more than 15-years experience in Australia, the activity that is depicted in the movie “The Wolf of Wall Street” are so far from reality, that it’s hard to actually believe that these events were true!

Touted as one of the most exciting movies to be released in 2014, The Wolf of Wall Street is a movie based on the true story of Jordan Belfort, who released his memoirs in 2008. In the late 1980’s and through the 1990’s, Jordan Belfort built a successful stock market firm which was later found to have been a “Boiler Room” – where high pressure telephone sales of investment products are conducted.

Now, the offices of Sydney or Brisbane are a far cry to the glamorous New York and Chicago offices in the United States. But the industry is the same. The stock markets are quite similar, albeit volume and a few variations in rules. And the dynamics of prices are influenced by the same factors. Day in, day out.

But the events that are shown in the movie The Wolf of Wall Street are an extreme, and unfortunately, paint what is a well established and professional industry as being dominated by greedy, young yahoos who will do anything to rip you off. To that, I take great offence!

Over the years, there have been many movies made about the stock market. Some of the more famous movies include:

  • Arbitrage (2012) – starring Richard Gere, Susan Sarandon, and Tim Roth. Loosely based around a family Hedge Fund business, this movie depicts a manager involved in fraud and scandal.
  • Margin Call (2011) – starring Kevin Spacey, Jeremy Irons, Stanley Tucci, Demi Moore, and Paul Bettany. This feature film shows the collapse of an investment bank, much in the same vein of what had occurred in the Global Financial Crisis.
  • Limitless (2011) – starring Bradley cooper, Abbie Cornish and Robert De Niro. A struggling author is introduced to a mind enhancing drug that allows him to learn faster and remember everything. He uses this to become successful on the stock market.
  • Inside Job (2010) – documentary examining the events of the 2008 Global Financial Crisis
  • Floored (2009) – a documentary that follows traders who must deal with the changing market place from an open outcry system to electronic trading.
  • The Pursuit of Happyness (2006) – Will Smith. This true life story takes us through the journey of a struggling salesman who takes custody of his son, and embarks on a career as a stock broker. It has very little to do with the industry outside of the fact that has an ethical person, the character is able to build a successful career.
  • Boiler Room (2000) – starring Ben Affleck. This movie is said to be based on the broker firm established by Jordan Belfort.
  • Rogue Trader (1999) – starring Ewen McGregor. The true story of Nick Leeson, a trader who brought down Britain’s oldest investment Bank – Barings Bank, losing $1.4 billion, through unauthorised trading on the Singapore exchange.
  • Wall Street 1 & 2 (1987 & 2010) – starring Michael Douglas, Charlie Sheen, and Shia Lebouf. A fictional story about an investor who will do anything to make money, especially trading on insider information – an illegal practice.
  • Trading Places (1983) – starring Eddie Murphy, Dan Ackroyd, and Jamie Lee Curtis. A street hustler is unwittingly swapped into the role of a successful broker in a social experiment.

None of these movies depict the reality of the broking world, or the mundane day to day role of number crunching, client service and order execution. Their romantic depiction of bottomless money pits and living the fast life is a glamorized version of the successful nature of the industry.

The modern world of the stock market is a high pressured, and fast moving game of buyers and sellers. Mathematics, speed of information and execution, strategy and money management make it an environment that requires dedication, perseverance, and broad shoulders to take the wild market fluctuations, and emotional roller coaster ride that the clients endure.

As a professional advisor, I am qualified for stocks and derivatives, and have spent more than 15 years learning my trade. I am also governed by ASIC (Australian Securities and Investment Commission), who are one of the strongest market regulators in the world.

Before you even discuss what to invest in with your broker, you need to ensure your broker is an ASX market Participant, that your broker is qualified in what you need advice in, and that their experience sufficiently meets your needs.

My view of the movie The Wolf of Wall Street, is that whilst based on a true story, and by all accounts the events are documented as being true, it is an extreme scenario that more so reflects the attitudes of the 1980’s then it does the modern stock broking firm. And although having a circus entertaining me in the office might be a novelty for at least 30 minutes, it would be a major distraction to what I want to achieve – that is, producing returns for my clients.

Matthew Brown – US Stocks & Options specialist
US Equity & Option Client Advisor

Halifax Investment Services
ASIC Australian Financial Services License Number – 225973

If you would like to learn more about the strategies you can use to profit from any type of market direction, visit www.australianinvestmenteducation.com.au or you can contact Matthew on brown@halifaxonline.com.au

Matthew is an Representative of Halifax Investment Services (Halifax). Halifax provides broker services, including Full Service and Discount Services using multiple trading platforms. For Discount platform services, Halifax charges the same fees for phone service as the online trading platform.

about Matthew Brown

Since 1998, Matthew has been involved in the Financial Services industry providing stock, option and CFD advisory services, trading advice, funds management and education services. Matt is an Authorised Representative of Halifax Investment Services, providing analysis and recommendations for trading Covered Calls in the US markets and using Exchange Traded Funds (ETFs) ...

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