The technological process has enhanced the calculation capacity; this has opened new frontiers favored by the spread of the web. In the area of finance relating to individuals, the People-Based Portfolio is making its way. We know better the phenomenon and the solution implemented by MPW.
Until a few years ago, those who had savings (that is, who set aside surpluses over expenses), had two main alternatives:
- entrusting its capital to an investment company (bank, investment bank, mutual fund, etc.), and this, against the payment of commissions, built a portfolio of financial products that reflected the customer’s risk and return profile ;
- going, through an authorized intermediary, directly to the market to build its investment portfolio. If this happened from a speculative perspective, then what is called Retail Trading was emerging.
Also known by the English acronym TOL, it is the trading of financial instruments via the Internet. It refers precisely to the activity of those savers who have a speculative propensity and autonomously invest their capital on the stock exchange through the Internet (shares, futures, commodities, forex, cfds, options, covered warrants, etc.).
Today, with the growing computing power, new paths are possible thanks also to the web now present in every corner of our lives. This has allowed more and more people to take care of the investment of their capital directly.
Of course, this requires time, expertise, experience, operational know-how. All factors that not all people have. The consequence is that those who do not have them adequately lose money rather than earn it. The trading platforms themselves publish that 80% of their customers lose money.
Despite this, more and more people want to personally deal with the investment of their capital, from a speculative point of view?
Because the belief is spreading that by doing so:
– it is possible to do one’s interest better, even by taking advantage of speculations from which one would otherwise be excluded.
– the commissions applied, directly and indirectly, by managers (banks, business banks, etc.) are reduced.
So by diverting the performances from the manager to oneself, it is possible to have a new source of additional income or even the first source of income.
Many try, but the widespread know-how is still inadequate, so much so that 80% lose instead of gaining.
The set of necessary skills cannot be improvised, nor can the many courses advertised on the web today replace them. Then you need time to devote; it is a real job that, over the years, accumulates experience. This motivates the high percentage of failures.
With this adverse scenario, an increasing number of people are looking for a solution. At the same time, facilitated by the trading platforms, they begin to have the few good ones who earn and, in various ways, make themselves available to the mass of losers. In essence, in addition to creating a financial portfolio, the investor can also create a People-Based Portfolio consisting of traders who have already proven themselves profitable because they possess the necessary skills.
At the same time, computer programs appear that simulate human activity, potentially improving their capabilities.
Let’s see what the trends of the moment are.
Autotrading is when a trader, instead of executing his buy and sell orders personally and manually, use a computer program that acts for him.
The rules that establish when to buy, sell, and why are included in the program’s codes, which constantly monitor the market and automatically act as expected under certain conditions.
Autotrading implies either being a programmer and knowing how to build these programs in their own language or purchase and install them on your own trading platform.
With Mirror Trading, Autotrading strategies are used, but these are not installed on the investor’s platform but are saved and run on the servers of the Mirror Trading company’s platform.
After evaluating their performance, the user can choose the automatic strategies he prefers and automatically replicate them on his trading account. When the strategy sends a signal to execute a trade, the same signal is sent and replicated on the user’s trading account, which thus mirrors the operational orders of the strategy.
Therefore, this system assumes a trader who submits his Autotrading computer program to the Mirror Trading company. The latter makes it available to other traders for mirror replication.
Copy Trading is very similar, but with one substantial difference. In this case, the trader who has decided to share his signals does not have to submit an automatic program to the Copy Trading company but simply has to connect his personal account.
In practice, the trader connects the trading account with which he operates to the Copy Trading company, which from that moment will record every transaction that has taken place. The investor can then view these operations to evaluate their performance and, as in Mirror Trading, if he so wishes, he can decide to copy everything that that trader does.
The trader who sends the signal (also called Signal Provider) can operate manually, or he too can use Autotrading programs, but the difference with Mirror Trading is that in this case the programs “run” on his personal account, and the orders they are simply sent to the Copy Trading company that automatically “forwards” them to the user who wants to copy them, while in Mirror Trading it was the company itself that had the strategy and sent the order.
Social Trading is the largest of the three sectors, the one with the widest and, until recently, less defined boundaries.
Today, with this term, we can mainly mean two things:
- It can be understood, on the one hand, as a “Social” extension of Mirror Trading and Copy Trading, or as the possibility of interacting with other users and with the same traders in a social context, to receive advice from the latter, to comment and vote on their work, and to see the opinions of other users. In this case, we tend to use this term to indicate both Mirror and Copy Trading.
- On the other hand, Social Trading also means the simple exchange of opinions and ideas about markets and trading and the sharing of operational ideas. Users create their own profile and share the operations they intend to do or have done, comment on those of others, propose their interpretation of economic events and related implications, explain them in simple terms and, in general, generate discussions. In which everyone can participate.
The impossibility of the generality of people to be able to meet the essential needs of life that go beyond everyday life, in an adequate way, grows with the lengthening of life:
- Financial life-vest for any unforeseen events during the working period of life
Generational relay to ensure children complete their studies
Annuity for when you will be forced to live on a pension with living, health and care costs that increase in value and duration
Longevity risk must be covered with resources that most people do not have. A new source of revenue must be found, potentially within reach of the most significant number of people.
MPW has identified a possible solution in trading, absolutely basic, limited to stocks.
It has developed an algorithm that every day extracts 4 potentially profitable bundles of shares (up to 10) on the New York Stock Exchange for that day, with only 2 trades (IN 15 minutes after opening, OUT 30 minutes before closing) . It makes this data available to its subscribers who can use it as they see fit. Also divert them to their broker to whom they delegate the operation, to automate it.
For transparency, MPW publishes the results achieved the next day so that everyone can evaluate, day by day, the performances and the overall algebraic sum for the period of interest.
In the complex world of trading, the MPW solution is really basic to simplify trading to make it usable by the most significant number of people possible, not to get rich, but to finance the essential needs mentioned above.