Robb Reinhold: Well, hello, hello, Maverick FX traders. This is Robb Reinhold. I’m joined by Mr. Ankit Sharma and also, our new CEO, Darren Fischer. I’ll introduce him to you later, and here we are. Another year has come and gone, and for those of you that don’t know about the history of Maverick Trading, Maverick Trading started in 1997. Our FX division, we started it in 2011. So this is now going to be our seventh or eighth year that we are an FX firm as well, and I’ve got to say that when we first started the FX division, it was small, and we’ve been doing our Stock and Options division for years and years. So it’s quite large, and I remember the very first year we had our Maverick Trading Summit, and our summit is where with have traders come in from all over the world, really, and we all meet together in person at a location, and I remember the first year was like 90% stock and options traders, and then, like 10% Forex traders, and it was like, “Forex traders? What’s this all about?”
Robb Reinhold: I am really happy that the last summit we did was almost 50/50. So I am so happy to see the growth in our Forex program. I absolutely love Forex trading. I fell in love with it when I started doing it in 2006, and it’s really been such a fun, fun style of trading. So I love it. So, as I said, we’ve got another year in the books. It’s always very important as a trader to stop and look back and go through your prior trading history, go through your numbers, go through your results. Of course, everyone should always be striving to improve. Now, here’s the thing about trading, is that if you had a great year in 2018 or if you had a bad year in 2018, or you had a so-so year in 2018, the market doesn’t care. That’s the great thing about trading, is the market doesn’t care if you had a great year last year because you’ve got to show up this year and do it again, and if you had a rough year last year, guess what. The market doesn’t care about that. You get to show up, and you get to do it right this year.
Robb Reinhold: So we always like to take a little bit of time at Maverick to close the books on 2018. We’re going to look back at the year that we just went through. We’re going to talk about some of the themes, but we’re going to break down trade results. We’re going to break down numbers. We’re going to dial into it, and then, we want to basically say thank you 2018, close the books on it, and let’s look forward to 2019, and let’s look forward to what we’re doing as a business here at Maverick FX, and also, what we think the market is likely to deliver to us. All right, and so, what we always like to do, and I say “we”, but this is specifically me. I really, really like to make predictions, and it’s funny because you’ll meet a lot of people in this business, and if you ever watch CNBC, and they ask someone for their opinion, I would say that 90% of the people on TV will hedge out their opinions and say, “Well, I don’t want to give a forecast on that, but I think that, over the long haul, stocks will go up.”
Robb Reinhold: That’s like the dumbest thing in the world. Of course, over the long haul, stocks would go up. I love to give predictions, and I always like to give predictions at the first of the year, and I love to show up because I make the predictions, and I basically forget about them because things change during the year so much. So, it’s always fun to go back and see what the predictions were for last year, and so, these we’re our predictions for 2018. Our prediction number one, that Mexico paid for a giant wall on their border. Now, of course, look, we always like to have a little fun here at Maverick. These were our fake predictions. One of my favorite fake predictions we ever made was in January of 2016, the year of the presidential elections. We made the prediction that Donald Trump was going to become president because at the time, it was a joke. He had just barely announced that he was going to be in as one of the Republicans, and I think his odds were like less than 1%, and we just thought it was a joke. So we actually said, “Hey, Donald Trump’s going to be the next president,” and it was funny because I kind of forgot that we even did that one as a fake one, and at the end of the year, I’m like, “Oh, my gosh. That’s maybe the best prediction of all time.”
Robb Reinhold: Again, it was just lucky, but here were our predictions from last year. Mexico pays for a giant wall on their border. Well, I guess we’re still working on that one, aren’t one. Still working on getting Mexico pay for that wall. Oprah Winfrey announces presidential run along with Judge Judy, Jerry Springer. Look, we may get that this year. Who knows who is going to come out and run for president this year? We might get some really colorful personalities, but I got to say number two didn’t really come true. Now, I know number three is a big stretch. President Trump tweets something inflammatory. I cannot remember if that happened in 2018. Wait, I just can’t remember. Okay, not such a stretch, but Bill Gates turns all his wealth into Bitcoin. We’re going to talk about cryptocurrencies a little bit. That definitely didn’t happen, and America becomes greater again. Now, this is kind of funny. It was just a little funny thing, but I got to say that where we are in America today, where we were last year, when you look at all the numbers, it’s hard to argue that it’s not better for most people, really.
Robb Reinhold: All right. So look, those were the fake ones. While I always like to have some fun here, let’s go ahead and go over what we really thought that was going to happen. Right, so, my prediction last year was the equity markets continue to rally higher, and they end the year up around 12%. Well, guess what. That did not happen. Now, if we would’ve closed the year on September 31st, this would’ve been perfect because at the end of September, the markets were up about 12%, and that was about the high that they got for the year. We did say that there was going to be a correction of 10 to 15 percent in the second half of the year. Guess what. We nailed that one. That absolutely happened, and most of that happened in December. I want to say December was down about 12 to 13 percent, which makes it one of the worst months we’ve had ever in the history of the stock market, and really, I think the worst one we had was back in 2008.
Robb Reinhold: So we talked about central banks. We said, “Okay, the most aggressive banks were going to be the Back of England, the RBNZ, and the FOMC.” Well, what we did get is we got three interest rate hikes from the FOMC. So, they were definitely very aggressive when it came to raising rates. However, we only got one raise by the Bank of England. We’re going to talk about the Bank of England. We’re going to talk about how Brexit really kind of put them out of the picture, and we got zero rate rises from the RBNZ. So, we called that the FOMC was going to raise, the Bank of England was going to raise. Here was the surprise to me, is that we thought the Bank of Canada would be pretty much average. The bank of Canada also raised interest rates three times, and then, of course, the least aggressive, we said that the ECB and the BOJ, Bank of Japan, were going to be the least aggressive, and sure enough, they were. They were. They really didn’t do anything different, and really, both of them are still trying to stimulate their economies.
Robb Reinhold: So we said that the market, the FOMC was going to hike three times in 2018, and we got that right. That was one of our predictions that we were going to get three hikes, but that was never a very bold prediction. The market was predicting three or four, but we did get three hikes. All right. We said that the Eurozone growth would continue to improve. Well, that was true up until about August. Up until about August, and then, Eurozone growth came apart in August, started to go down. We said this was the year of inflation, and sure enough, we did get a rise in inflation pretty much across the board. That being said, it really didn’t affect any central bank policy. So, we did get a rise in inflation. Central banks, especially in the last part of the year, were definitely not worried about inflation. They were more worried about growth at this point. So, we did see inflation, but we didn’t really see the impact of inflation. We said that inflation in the UK was the first to get out of hand.
Robb Reinhold: So, last year, we really talked about this story of inflation, how inflation was going to start to become a big deal in the markets. Well, guess what. That was not correct. Inflation did go up. It did rise, but there were so many other problems out there going on that the market really didn’t care about it, and specifically, with the UK, we were seeing really high rates of inflation early in 2018 in the UK, but Brexit’s been such a mess over there that, really, has put their economy kind of on the back of its heels, and inflation came down in the UK. So, that prediction definitely wasn’t correct. Oil prices between 40 to 60, and that was pretty much spot on, and then, we had gold rising to around 1400. Gold ended the year at 1290. Actually, gold actually ended up down slightly for the year, but again, we thought this was a year that inflation was going to get out of control and that gold was going to be a beneficiary of that, and again, inflation did rise, but the markets really didn’t care about it.
Robb Reinhold: And then, we talked about the pop of the cryptocurrency bubble. Look, that really happened December of 2016, but we said, “Look, they’re going to continue to pop,” and sure enough, cryptocurrencies have lost 60, 70, 80 percent of their value, the major ones, and some of the smaller ones lost even more than that. So, I think, overall, I’d give that a B- on predictions. I think we did a decent job on predictions, but some of the things we thought were going to happen, like inflation, definitely did not rear its head. So, let’s take a quick look at market returns. We had Europe down 16%. So, Europe got hit really badly. Emerging Markets were down closer to 18%. The US markets held in really quite well compared to everything else. So, the S&P 500 was down 8.5%. We see the Nikkei down 14%. So, really, markets as a whole closed down somewhere between 8 and 20 percent across the markets, and you can see that everything went down. Now, the NASDAQ was an out-performer. So, technology actually out-performed, but we see gold went down. Oil went down.
Robb Reinhold: So, last year was a year where pretty much all asset categories came down. If you really take a look at everything, everything came down a little bit. Now, we’re going to talk about this a little bit later, but I feel like last year was two different markets. January through October was a totally different market than the market we saw October through December. So, let’s take a look at kind of what these central banks did because we really want to talk about central banks going forward to the next year, but we really have to take a look and see what central banks did this year. So, we talk about the FED raised rates three times. The Bank of Canada also raised rates three times. The Bank of England raised interest rates once. They raised it once. I believe that was in August, and then, really, Brexit has put them out of the picture, and we’ve talked about that with our traders for the last four or five months, that there’s just no way that the Bank of England can do anything until Brexit is cleared out, which means that any news and economic news that comes out of the UK really doesn’t matter at this point. It really just matters about Brexit.
Robb Reinhold: All right, the RBA, the RBNZ, they’ve been on hold all year, and they’ve told us. The RBNZ said, “We’re not looking to raise interest rates until at least 2020.” The RBA also said, “We’re not going to raise interest rates until 2020.” So, both of these central banks, they’re still on hold. They’ve said publicly that they are not looking to do anything ’til 2020. So, going forward to next year, we would be very surprised to see the RBA or the RBNZ raise interest rates at all. The ECB was the last central bank … Actually, that’s not true. The Bank of Japan is still technically doing quantitative easing, but the ECB officially ended their quantitative easing program. This is where they were buying bonds from countries. They officially ended that in November, December. Now, that being said, all of the other central banks have ended their programs years ago, except for the BOJ. The BOJ continues their twist program. I don’t want to get too into this. It’s pretty complex, but basically, the Bank of Japan has been buying and selling different maturity bonds to basically pin interest rates at zero. That’s what they’ve been doing with their program, and they’ve basically kept interest rates at zero in Japan for a couple years now.
Robb Reinhold: So, this is what we saw in central banks last year. Let’s run a quick check of equities, and like I said, this market was two different markets. January through October, we had a mild up market. We had a nice up market. We had some volatility in January, February, but off of that, we had a nice bottom. We had a nice bull market, and really, it was all the way until October before we turned into a really nasty bear market, and look at this selling we saw in December. December was, again, one of the worst months we’ve seen in years and years and years. So, the S&P had a pretty good nine months, and then, fell apart, but I want to show you some other charts that really show you what happened around the world. So, remember, the S&P had a good nine months, but look at Europe. Europe was flat. Europe was disappointing all year. So, we have the US that was strong. We had Europe that was basically flat, and then, in October, they tumbled and fell as well, and then, when we take a look outside of the Eurozone and the US, and we go into Emerging Markets, you’ll see that these have been in decline all year long.
Robb Reinhold: So, if we take a look at the January through October period, it was already in a down trend, and that’s really been the story this year. We’ve seen the US perform well. We’ve seen Europe so-so, but Emerging Markets have been a disaster, and so, really, Emerging Market currencies have also been quite weak, and we’re going to take a look at currencies here in a second. Now, one thing you can point to is in the October to December period, look at Emerging Markets. They actually went sideways. Remember, Europe and the US crumbled in those periods, and Emerging Markets out-performed. We’re going to talk about Emerging Markets compared to the US here in a little bit. So, again, looking at all these charts, it was a risk on year for the US, and originally, a risk off year for the rest of the world.
Robb Reinhold: So, let’s talk about the story of 2018. Now, I said this several times, and by several, I mean probably more than 15, 20 times, especially in the second half of this year of 2018. I started trading currencies in 2006. This was the most difficult year of trading that I have seen, at least in my opinion. Now, of course, some of our traders had great years. Some of our traders had their best years, but just the way I trade and my style, this was a tough year, and the reason is, is that my style of trading deals a lot with correlations, and almost all correlations broke down in the FX markets. So, again, if you were looking to peg the correlation of oil to the Canadian dollar, well, that just wasn’t there this year. If you wanted to look at the correlation of gold to the Australian dollar, that didn’t exist this year. If you wanted to take a look at something like the yen inversely related to the S&P 500, that didn’t work out this year.
Robb Reinhold: So, really, all the correlations I know that I look for in my trading, they just weren’t there this year, and also, when you take a look at Forex volatility, the Forex markets experienced low volatility compared to other markets, and I remember in my trading … I trade everything. I trade stocks, options. I trade futures. I basically just trade, and I remember there being so many times when I looked at Forex and just thought, “There’s nothing going on here,” because there was so much going on in equities. There was so much going on in commodities. Everything was going, but it seemed like Forex just didn’t have the volatility, and that’s really what it was. That was the story of 2018 for me, was that number one, there was no correlations that we’ve counted on for years and years and years, and there really wasn’t much volatility compared to other markets. Now, the great thing is, going into 2019, we started to get the volatility back in Forex, and I’m actually really excited for this year in Forex. I think this year is going to be a great year of trading. I’m very happy to close the door on 2018 because the market is definitely acting much better like it used to.
Robb Reinhold: But really, what we saw is we saw the dollar and the yen strengthen most of the year. So, let’s take a look at the total performance last year. So, when we take a look at all of the eight major currencies that we trade, we can see that the yen was the number one. So, the yen was the strongest currency last year. Now, again, just looking at this, you would say, “Well, of course the yen should be the best.” We had a down year in the market, and the yen is a currency of safety, and when the market crashes, typically speaking, the correlation is that the yen does best. We did see the yen perform the best. The dollar was the second best currency. So, it was yen, dollar. Franc was the third best currency. Now, again, at face value, you look at this, and you say, “Look, on a year when the market crashed and went down, the three currencies of safety are the yen, the dollar, and the franc,” and yes, they should be the best performing stocks, or sorry, the best performing currencies, and they were. So, in the end, what should’ve happened, it did happen. It was a risk off year. We had equity markets falling. We had asset prices going down. We had yen first, dollar second, franc third. That’s exactly what should happen.
Robb Reinhold: And when we take a look at it, well, what should be the worst performing currencies in an area like this is the Kiwi, the Aussie, and the CAD, and pretty much, they were the worst. So, at first glance of the year, really, this is what should happen. However, I wanted to break this out because I wanted to show you how the correlations broke down because this end of the year, it looks like, “Hey, the correlations held up.” What we should’ve seen is what we saw. Well, you know what? Let’s take a look at the January through September period. So, during this period, the S&P was up 12%. Oil was up 24%. Gold was down. So, in this kind of market environment where the equities are going up, commodities like oil and copper are going up, this is economic growth. So, what we should in economic growth is we should see the growth currencies perform better. Look at this. Aussie, Kiwi got hammered, got absolutely hammered for the first nine months of the year in a period where S&P was up, oil was up. Everything that should’ve happened didn’t. The Aussie, Kiwi should’ve been the best performers in this scenario, but the correlations broke down.
Robb Reinhold: What was the best? Well, the dollar, yen, and the franc were the best. That’s now supposed to happen. When there’s an economic expansion, when the S&P was up 12%, oil’s up 24%, we shouldn’t see the currencies of safety perform the best, and that’s exactly what happened, and again, this was difficult because, again, when equity markets go up, for years and years and years, there’s been very good correlations that say these are the trades you should make at Forex, and they’ve worked for years and years and years. This year, it didn’t work. We have the dollar strengthening when equities went up. We had the yen strengthening when equities went up. Oil goes up 24%. Look at the CAD. The CAD goes down. Again, that kind of stuff is not supposed to happen. These correlations broke down really badly, and then, you take a look at the period of October through December, this is even more screwy. Now, look, yes, the yen did well during the period, and it should’ve done well. The market went down 20%. Oil lost almost half of its value. So, in the environment, you would expect the yen to do well. What did second best? The Kiwi. That is crazy. That is not supposed to happen. Look at the Aussie. It actually didn’t do all that badly.
Robb Reinhold: Now, again, the CAD, it was linked to oil, but again, when oil goes down 50%, you can see the CAD only lost 3% from September 30th to the end of the year. So, again, I wanted to just point out that the correlations that have been in the Forex markets for years and years and years, they really broke down. I know this is something that Ankit and I talked about so many times over the years, is that, boy, the correlations just aren’t there. Ankit, you want to talk a little bit about what you saw with correlations this year?
Ankit Sharma: Hey, Robb. Well, definitely, but hello, everyone. Well, definitely, I think that 2018 has been one of those most interesting years with the FX trading, and especially with this correlation. I think this was the year where market activity, and we haven’t seen this kind of market activity for years. I mean, since 2016, I would say market has been quite in a bull market, and 2017 was a year where volatility was just so low, both in the equities and the currencies. So, 2018 was a year where what should have been in the equity markets, I think we should have seen the similar things in currencies where things have moved about 10, 15 percent, and that was just not the case, and again, this is just where we always talk about markets can stay more irrational than you can stay solvent, but at the same time, that’s where every day or every week as we meet, we kind of put those things in perspective, and that’s how your strategy should have still adjust to the market conditions.
Ankit Sharma: And as we identify this break in correlation, that’s when you really have to tweak and adjust your trading plan, you trading style to account for it because the way we have been trading around these volatile times, if I try the exact same thing in the last 12 months, well, I wouldn’t say that would really have made a big return for us just because that wasn’t the case. So, I think this is where market does what it does, and I’m definitely more excited for 2019, but 2018, well, definitely an interesting year. We’re still able to bang out some good PIPs around here and there, but relatively speaking, 2018 should have been a year where we should have seen 10 to 15 percent moves throughout the year, but then, we got two shocks, two shocks in the markets. One in the early part of the year, back in February ’til March, and then, we got the second shock back in the last quarter, and both times we did not see the correlations.
Ankit Sharma: So, I think market had opportunity to catch up, but it didn’t. The way we ended up, or the way we started this year, we are actually seeing more moves that we should see. So, this is where market has to change, and then, our strategies has to change, and I think this is where the currencies definitely has a lot more catch up to do adjusting with the market conditions, and that’s how the central banks needs to adjust as well, and that makes it exciting for the upcoming year, but that’s all I got, Robb. Back to you.
Robb Reinhold: And again, as you said, it was definitely a tougher year, but the great thing was, as Ankit said, we were able to bang out some profits, and like I said, this was, to me, the hardest year since 2006, for me, in the currency market. In the end, we were below our targets. We like to average at least 200 PIPs a month. We were below that this year. I can’t remember the last time we were below this. We like to be above 50% on our win/loss ratio. We were below that, but the thing that I do love to see is our profit factor was still up. So, basically, on our winning trades, we were winning an average of $1.67. Our losing ones, we were losing $1, and that’s really what we preach at Maverick, is that, “Look, we’re going to make trades. Some are going to work. Some are not. We don’t know which ones are going to work and which ones aren’t. So, we’re going to make trades, and what we’re going to do is we’re going to sell our losers and hold our winners as long as we can and as much as we can, and our goal is to get a positive profit factor.”
Robb Reinhold: Now, in other years, we’ve been well above two, but look, this is, again, how you can be less than 50/50 and still bang out a positive return. As Ankit said, not as much as we would’ve liked, but still a positive year, and I’ve got to say that I don’t even know if there’s ever been a time in our history where we’ve had two losing months in a row, and we had a really nasty January and February, and I remember in these months, as Ankit said, the market tanked. The market crashed, but the problem was the yen didn’t spike. The yen actually went down as well, and we had all sorts of strange market action, but again, this is trading. You have these runs, and you have some slumps, and you simply keep trading, grind away, and in the end, again, proper trading principles will generate a profit over time, and again, that’s what we’re all about at Maverick, is that, “Look, we have no idea what trades are going to work. We do our best. We do our charts. We do our analysis. We do everything we can, but in the end, we’re going to have winners, and we’re going to have losers.”
Robb Reinhold: Whatever system anyone uses, you’re going to have some winners. You’re going to have some losers. The way to be a professional trader is to work it out to where you have a positive profit factor where your winners are bigger than your losers. That is really the key to trading. So, like I said, it was a tough year for Maverick, tough year for some of our traders, but in the end, we love to see that the returns were still positive. So just a quick collection of our best and worst, our best month was August, both in PIPs and in percent, and again, this is where we talk about streaks, an 85% win streak. I remember in August, whenever we have these kind of streaks, and we see our traders are really seeing the market well, I always come out and say, “Okay, listen. You are not an 85% win/loss trader, okay? I know we all think we’re hot,” but it’s like baseball. In baseball, there’s periods of time where some people would hit 450 as an average, but no one hits 450 for the season. So, we talked. Our traders said, “Hey, look. This is where people make a lot of mistakes. They get overconfident. They start to become more bold, and they start to make mistakes. We want to make sure we just keep trading properly.”
Robb Reinhold: Our most active month was October, 34 trades. So, out of a total of about 20, 21 trading days, that’s over one trade a day, which is definitely a heavy trading period for us. Least active, 12 trades. So now, we’re talking basically two to three per week in July. Again, we talk about the summer doldrums. We talk about Forex volatility is usually much less in the summer, and sure enough, we saw it last year. All right, so again, as I said, I am very happy to close the door on 2018. I’m very happy to see how the market is already acting the first week or two of 2019. I think that the volatility’s going to be back. I think it’s going to be a much better trading year, but I definitely want to say great job to our traders. I’m very happy with our traders, very happy with, gain, the consistency, and that’s a big thing, is that what we want more than anything is we want to have traders that we know are going to manage their capital well. They’re going to trade only their setups, and they’re going to, again, cut their losers and try to hold their winners. So, great job, everyone, but let’s go ahead and kind of close the book on 2019, and let’s kind of look forward.
Robb Reinhold: All right. The first thing I wanted to talk about is that there’s a new CEO at Maverick Trading. His name is Darren Fischer. Let me give you a quick little background about Darren. Darren has been with us since 2009. 2010, Darren started out as one of our traders, and he started out doing some marketing for us, and then, Darren became one of our recruiters, and Darren is now the new CEO. I have been handling the CEO position for a while now, and I actually found that I was doing way too much of the day-to-day operation’s busy work, and I was starting to do less and less what I really love, which is trade and work with our traders and develop new ways of being profitable. So, I asked Darren to come aboard, and Darren gratefully moved his family up to the headquarters here, and this year, I’m really looking forward to spending more one-on-one time with our traders. That’s, again, the whole reason we did this is because I want to get back to what I love, is I love helping people trade. I love helping people figure out what they’re doing right, what they’re doing wrong. It’s something I really enjoy, and what I don’t enjoy is paperwork and filing and all that kind of stuff.
Robb Reinhold: So, Darren, I’m going to throw that over to you. Darren, why don’t you introduce yourself and just let yourself known to all of our traders.
Darren Fischer: Thanks a lot, Robb. First, thanks for the opportunity to do this. As Robb said, I’ve been here for almost nine years now, and one of the things that really attracted me was the support and the feeling of family in as much as people reach out. One thing that I knew from the outside, but really being up here, being able to take a look at it, is how much work everyone on staff puts in to provide the support to our traders. So me, personally, I want to thank all our support staff because when you have a question, they’re researching. They’re really reaching out and making sure that you’re taken care of. We’ve really tried to make the transition between Robb and myself to be as transparent and seamless as possible. One of the things that we took a look at is, is any action going to impact our traders? And if the answer was yes, we looked at it, too, in a different way. We always want to make sure we’re giving the best support we can.
Darren Fischer: I do want to echo one thing that Robb said. Being up here, I have a much bigger picture than what I used to, and I want to give a good kudos to our traders. I’m seeing that people are managing their risk very stringently. If they don’t know what’s going on, they’re taking a half position sizes without us even have to say anything. So, I really do want to say thank you to everyone for that. Keep up that great work. Couple of things that we’ve took a look at doing, since we came on board, one thing we want to talk about briefly, and I will get off because I’ve run through the 30 seconds I allotted myself here, but we’ve had a lot of inquiries about people wanting to trade both FX and options, and so, we really took a look at codifying that. What we find is that people have a much broader picture when they trade both. So, if that’s something you’re interested in, you can talk to any one of our support staff, and they’ll be happy to put you in touch with your recruiter again, and we’ll give you some more information. You can take a look it if it’s right for you.
Darren Fischer: Probably more interesting to you guys is that we finally codified a trader referral program, and that’s always been kind of informal in the past, but we took a look at it, and some of our very best traders have come from referrals from other traders. So, we wanted to just codify it and reach out to our existing traders and say that if you want to trade with someone at Maverick, we would always love to hear from them, and if that happens to be the case, and they do decide to come on board, we will happily suspend your desk fees for three months. So, it’s always more fulfilling to be able to trade with someone that you know. Anyway, Robb, thanks for the time. I’ve really run over right now, so I’ll turn it right back over to you.
Robb Reinhold: Darren, and thank you for coming aboard and allowing me to kind of get back to what I enjoy doing. All right. Let’s finish down this list. As we mentioned earlier in the year, Diana Perkins has moved on to some other opportunities. She has been a big part of a lot of your lives, as far as handling your questions and directing you to the right staff at Maverick. I would like to announce Pauline Jong is going to be handling what Diana was doing previously, and again, if you have any questions whatsoever, you can reach out to any of us. You should all have our email addresses. You should all have our phone numbers. Again, the biggest thing, as Darren mentioned, is reach out to us because we will absolutely make sure that you get in touch with the right person. So, if you have any question, it can go to Pauline. It can go to myself. It can go to any of us at Maverick here.
Robb Reinhold: All right. We also added some software this year, investing.com and tradingview.com. We are going to be doing some training sessions on this early in the year, and the reason we love these so much is because of these proprietary currency baskets. All right. This has been, always, one of my big pet peeves. So we talk about the dollar index. Now, the dollar index is an index that you can look that you can look at quickly, and you can pull up a chart on it, and you can look at the chart, and it says, “Hey, this is how the dollar’s been doing.” But here’s the problem. They don’t have a yen basket. They don’t have a euro index. They don’t have a pound index. So, there’s really no way for you to take a look at the euro and say, “How is the euro doing against all the other currencies?” They don’t have a euro basket. So, we have the dollar basket or the dollar index, but there’s a problem with the dollar index. The problem with the dollar index is it’s a weighted index. So, 48% of what you’re seeing on the dollar index is the euro/dollar cross. So, it really doesn’t show you if the dollar is strong and weak against other currencies.
Robb Reinhold: So, Mr. Sharma did a great job. He actually developed our proprietary currency baskets. We are going to be using these exclusively all the time, and what this allows us to do, this allows us to look at the dollar on an equal weighted basis against all the other currencies and allows us to look at the euro on an equally weighted basis against all of the other currencies. And so, again, our very first exercise we always do before we make a trade is relative strength and weakness, identifying the strong currencies and identifying the weak currencies because those are the best trades to make, is to go long the strong currency, short the weak currency in our currency crosses. So, we’re going to be using these proprietary currency baskets. I’m really excited about them. Again, we’re going to have some training sessions early in the year to make sure that all of our traders know exactly how to use them. Let me give you just a quick idea of what they’re going to look like. Again, like I said, it’s a formula, and that formula will give you a chart, and you can quickly look and see, how is the dollar doing? How is the euro doing?
Robb Reinhold: So, again, in these currency baskets, it tells us that dollar is generally moving higher. Euro is generally moving lower. Swiss franc is going sideways, and pound moving lower. So, again, we’re going to be using these exclusively at Maverick, and again, these are proprietary to Maverick, so I’m very, very excited to get these because it is literally been a pet peeve of mine for over a decade. They have a dollar index. They don’t have any other index, and there’s no quick way to look at all the other currencies. Well, now, we have this. All right. So again, I can’t thank Ankit Sharma enough for those. Those are fantastic. Last thing we want to cover is the Maverick FX Summit. All right. So, once a year, we have a trading summit. Last year, we had it in New York, and I’m telling you what. I love all the summits we’ve done. We started doing summits back in 2009, and they’ve all been fantastic, but I want to say that this New York one, it may have been the best. I’m telling you. Our traders our awesome. We were right in Times Square. Everything was just fantastic, and we just had a great time.
Robb Reinhold: Now, we’re going to be doing another one. We do one every single year, and this year, we are going back to Vegas. All right. So, it’s going to be in Vegas. It’s going to be the weekend of May 11th, May 10th and 11th. We’re going to be making a formal introduction to that, sending out some information. Again, if you’re interested, and you want to sign up for it, please jump ahead and sign up for it. We love our summits. We have such a fun time. Now, look, yeah, we go through trading stuff. We go through some new things about trading, but really, the best thing about those summits is to get together with other traders, and again, it’s fantastic, as everyone gets along. I shouldn’t say everyone, but most everyone gets along, and most people leave the summit with a lot of new friends and, again, friends that are traders to where they can actually have some network support because, again, the whole thing about Maverick is, look, trading is a lonely game, and it’s really hard on your own. The more you can surround yourself with other traders that are like-minded, positive people that are doing the same thing that you’re doing, that have maybe a different way to look at it, the more you can do that, the better it’s going to be for you as a trader.
Robb Reinhold: So, again, we’re looking forward to it. We’re going to give details out to all of our traders here in the next week or two. And of course, Darren mentioned our referral program. Some of our best traders have come from our existing traders. So, if you have anyone you know and you think that’s going to be good at this, sit them down. Show them what you do. Show them your account, and see if they want to be a trader for us. We would love to talk to anyone that you know about that. All right. Let’s move into our market outlook for 2019. All right. So, again, this is where I love to give predictions, and here’s a funny thing, and Ankit can attest to this because every single Sunday, when we meet as a firm to talk about the week ahead, Ankit always gives his outlook, and I always give my outlook, and I don’t know. Let’s see. Out of the 52 weeks a year, I’m going to say that you and I are in agreement, Ankit, what? About maybe 20 weeks of that year? What would you say?
Ankit Sharma: Well, I would say we disagree more than agree, which, again, as Robb always point out, is that’s how market works, and the beauty of that is that you can disagree with someone or have a different outlook and still be profitable because there’s not one time when you have to be right. It’s all about being in the right place at the right time, and that’s what it comes down to. When you’re pulling your trigger, and when do you think is the best time to execute? And I think it’s just a true testament to it, and I hope every trader, throughout your journey or your development, comes to the point where you can actually talk facts and talk why you think is the case because eventually, someone will be right, but having that confidence and having that analysis really helps you to really stand behind your analysis, and you can disagree, but that’s fine, as long as you’re profitable. Back to you Robb.
Robb Reinhold: You know, Ankit, as I was thinking about his, I noticed this last year, is that one of the things that Ankit and I love to do, and I’m going to blame this mostly on me. I love to debate. I love to debate, and I will just take the other side of the debate just so we can debate, and at the end of the debate, I’ll be like, “Yeah, but I totally agree with you.” Now, I did that once with my wife, and she got really mad when I’m like, “Well, I totally agree with you.” And she’s like, “Well, what are we fighting about?” We’re not fighting. We’re just talking. Yeah, we don’t debate anymore. She’s smarter than that. She knows, and I’m smarter than that, too. I know that’s not her thing, but I’ve noticed that when Ankit and I will talk about the market, we’ll disagree with each other, but then, pretty much say the same thing. So, I think we just want to disagree with each other more so than actually having different opinions. That’s what I’ve noticed about us.
Robb Reinhold: All right. So, these are my predictions. I’ll let Ankit make some predictions, but here we go. These are more … I like to make predictions specifically on currencies, and then, I like to make predictions on the markets in general and the world in general. So, my prediction this year, we’ve talked about the border wall. Right now, the government is shut down. President Trump wants money for border wall. I say Mexico ends up building. I say Mexico is so sick of it all that they go ahead and build the wall, and somehow, the USA pays for it. That’s my call. I was down in Mexico last year, and I saw what I thought was one of the most hilarious shirts I saw, and it was a shirt from a cantina down in Mexico, and it said, “Don’t worry. You’re on the fun side of the wall,” and I thought, “That’s funny.” This is funny because it might be the more fun side of the wall.
Robb Reinhold: All right. Two, we’re going to talk about Brexit because Brexit is coming up in the next couple weeks. We think it’s going to be a big deal. My prediction is Brexit fails miserably, and then, the UK desperately votes for a Brenter. Now, look, I hate the term Brexit, and I can’t wait until we no longer talk about Brexit. We’ve been talking about Brexit now for two-and-a-half years, and I’m sick of it. I want to talk about Brenter. All right, that’s kind of silly. All right, you can read the rest. Let’s get into the real predictions here. All right. All right. So, my prediction, again, I’ll let Ankit make his. I think the equity markets … Again, remember we just had a really brutal December. We’ve had a bounce back in the first week or two in January. I think the markets are in for a tough go here in the next six months. So, I think the very first half of the year, I think we’re basically flat to up a little bit to down a little be.
Robb Reinhold: How, I think that the market is likely stronger in the second half of the year, and the reason that is, I do think we’re going to see a big slowdown in growth. So, I think the growth slows, but we don’t see a recession in the US and Canada. However, I think China does enter a mild recession, and we already have China PMI numbers that we got two weeks ago that were below 50. So again, the PMI above 50 is expansion, below 50 is contraction. We got numbers below 50. So, at least the manufacturing sector in China is contracting, and manufacturing is typically a leading indicator. So, I do think we see a mild recession in China. So, I think that leaves the market a little bit shaky for the first six months of the year, but I do think that once we do get a US tariff agreement, which is likely to happen in January or February, I think that, that makes it to where the Chinese economy can come out of recession in the second half of the year.
Robb Reinhold: So, I see that the US markets are going to have an average to slightly below average year up around 48%. However, I think international markets are going to do much better. Now, this is one of those things that people have been calling for international markets to do better than US market now for probably five years, and over the last five years, the US market has crushed international markets. We’ll see. We’ll see what happens this year, but I think the international markets do a little bit better this year. Number four, I think we’re going to see almost no central bank movement this year. The only central bank movement I see this year is the FOMC hikes rates probably once in 2019. Ankit, what do you think about central bank movement this year?
Ankit Sharma: Hey, Robb. Well, this is something I’ve been waiting for because if you look back last three or four years and how the central banks have moved compared to the market growth, we definitely had the FOMC that came out back 2014 that really started to talk about raising interest rates, and then, Bank of Canada really followed suit. We had Bank of England really had one rate hike, but I think we are getting to the point where everybody’s now on a wait and see approach. The data has shifting. There’s a more fear out there, and this is where, I think, some of the currencies are already in trouble because they haven’t raised interest rate, where for the central banks, like for the US or for Canada, I mean, they have already got few hikes in the play there that allows them to really go on a wait and see approach, and I think 2019 is going to be, really, that wait and see approach for a lot of these central banks. And I would say for the last year or two, mostly last year, 2017 to 2018, I was seeing that the news announcements or the news events haven’t been those big movers.
Ankit Sharma: I remember, I mean, going back eight, nine years, we had some numbers are so much in focus that it causes these big moves because those numbers are really depending on what the central bank’s going to do, and lately, even China’s number have just come out at par. It’s no surprises, but with this shift in the market sentiment, the shift in the growth, and that shift in just the overall how things have been, I think we are going to be seeing more wilder swings around that time because we could see … Let’s say if some things start to go worse, other than rate cuts, we could see something more on the negative side, and that’s where, I think, we are shifting where, instead of on a rate hike cycle, in the last three, four years, all we’re looking at is who’s going to raise interest. Now, we’re talking about who’s going to stay the same or how damaged they’re going to get if the market sentiment continue to go on the negative side. Then, I think this is where it kind of makes a difficult job for the FED, for the central banks to really make any sort of movement without really affecting some of the economy.
Ankit Sharma: So, that’s really what I think. I think markets are going to be on a wait and see approach, and then, the news events or the data is really where it’s going to get more scrutinized. In the past, we haven’t got that focused on this data because overall, there’s no surprises, numbers has been good, but as we start to see a misses or see the fall below expectation, that’s where we will see some bigger moves and from central banks as well. Back to you, Robb.
Robb Reinhold: And I will absolutely agree that if things get worse, we are going to start to hear about central banks that are cutting rates, and as Ankit mentioned, there were some central banks like the US that was able to raise interest rates over the last couple years. They have some ammo to fire. They can cut interest rates, but if you take a look at someone like the Eurozone, the ECB, they didn’t raise interest rates. They don’t have any ammo whatsoever. The only thing they have is quantitative easing, which is typically much harder on a currency than just cutting an interest rate. So, I think what you’re likely to see if we do see the fear really build and the equity market come down some more and economy slow, I think you’re going to see the countries that didn’t raise interest rates, they’re going to get really punished. I think that’s definitely the truth there.
Robb Reinhold: All right. Let’s go ahead and finish this up. I really want to talk about number seven because we are right here. Now, it’s going to be interesting watching this in 12 months from now as we’re preparing for our 2019 year in review. Brexit is right in front of us. So, Brexit on January 15th, it’s supposed to go to the next vote in the House of Commons, and every indication says that, that is going to get voted down. So, the dates for Brexit says January 15th is the next vote. January 21st is the last day for the House of Parliament to pass a vote, and if they don’t do it, then, basically, the hard deadline of March 29th, March 29th is the official date of Brexit, and if they don’t have any agreements in place with the Eurozone, it’s going to be what’s called a hard Brexit, and everything that people worried about, basically, there’s not going to be any travel arrangements between the UK and the Eurozone. So, people may not be able to travel. There may not be able to have the ability to ship goods and services over to the Eurozone. So, all the businesses in the UK, they may not even be able to sell goods into the European zone anymore. They may not be able to travel or go do business there.
Robb Reinhold: So, it’s a really big deal, and so, where we are right now, I think we’re going to see what we did back in 2008. If you remember, back in 2008 right before the US voted for the bailout, the Congress said, “No, we’re not going to do the bailout,” and the market freaked out, and then, they said, “Okay, fine. We’ll do a bailout.” I think we’re going to see the same thing with the UK. I think the vote is going to go negative. I think that there’s going to be a panic. I think there’s going to be a crash in, both the British pound, and there’s going to be a sell-off in British assets all across the board. I think that panic is going to get so bad that the House of Commons is going to say, “Okay, we need to pass something,” just like we saw in 2008 in the US. That being said, I think what’s going to happen is that they will get an agreement done in the end. So, I do not think there is going to be a hard Brexit, but what I do think is they’re going to do enough damage to their economy during those couple weeks of turmoil. I think it’s going to be very difficult for the economy of the UK to really flourish in 2019. So, I actually think the pound is going to be one of the worst currencies for the entire year.
Robb Reinhold: All right, last thing, cryptocurrencies, I think we have seen the death, now, of cryptocurrencies. Look, Bitcoin is going to survive. Ethereum is going to survive, Litecoin. The bigger cryptocurrencies are likely to still have value, but I think what you’re going to start to read is you’re going start to read some of these smaller ones, these startups, they’re simply are going to go away, and people are just going to lose their money. Cryptocurrencies has been a very controversial topic. I’ve debated, and again, yes, I’ve debate cryptocurrencies with a lot of our traders, and you know what? The traders that debated me with cryptocurrencies in 2015, they were totally right, and I was wrong because I thought it was a joke, but I think I’m going to be right in the end. I was just really wrong for a while. I think this is the year we’re going to start to see cryptocurrencies really go out of favor, and I think it’s going to get pretty painful for people that have invested in them.
Robb Reinhold: All right. So, let’s talk specifically about currencies. All right, now, I talked to Ankit about currencies. I talked to Ankit about currencies, and I said, “Hey, look. I don’t really have any confidence in doing an entire year,” and Ankit agreed with me. So, this is going to be January through June. We will update this in our mid-year review, but we both thought Japanese yen is likely to be the strongest. The Japanese yen was the strongest this year, and it was in a year when the equity markets were up most of the time. We think that the first six months of this year, equities are going to be flat to lower. So, the yen is at the top of our list. The euro has been acting very well lately, as a currency of safety. So, we have the euro and the franc. So, we think it’s going to be yen, euro, franc. Now, about a year ago, when the market was in a little bit of panic, this is also what we saw. We saw the yen and the euro as the currencies of safety instead of the yen and the dollar.
Robb Reinhold: So, we think the British pound is likely to be the worst currency this year. Now, the funny things is a lot of people are going to say, “No, the pound is already down 20% from when they announced Brexit,” and guess what. You’re right. Yeah, they are already down 20%, but yet, it’s probably going to get worse. So we’ve got the pound as the worst, and the dollar as the second worst. Now, again, the dollar has been a very good currency for the last year or two. The central bank of the US has come out and said, “We are no longer raising interest rates. We’re data dependent,” and if the data comes out weak, there’s going to be no hikes, and they have priced in two rate hikes in the dollar for 2019. If they don’t have any, then the dollar’s overvalued. So, we think the US dollar comes down in value. Now, of course, these are long-term. We look at all these things every single week. We look at them on Sunday together. We look at them on Wednesday together. We always are pairing up relating strength, but we think at the end of the year, or sorry, at then end of June at least, we’re likely to see a strong yen, strong euro, and weak pound, and weak dollar.
Robb Reinhold: All right. Let’s wrap this up. Let’s talk about 2019. All right. As we just went over the numbers of 2018, as I said, this year was a tough year, 2018, and the first of the year started out with two ugly months. We had an ugly January and an ugly February, and these are the moments, as a trader, where you will have a moment where you are not having good results, and no matter what you try, no matter what you do, you don’t have good results. This is where we talk about don’t become your own worst enemy. Don’t deviate from your plan. You’ve spent a lot of time developing your system, developing your plan. We make all of our traders do that. Stay consistent because what happened? It sure enough happened this year, is that by the end of the year, we had a decent year. It wasn’t our best year, for sure, but we generated and ground out some PIPs, and we did that by simply being consistent, trading the same way with cutting losses, holding winners, and doing that all year long.
Robb Reinhold: So, remember, if this is your first year of trading or your second year of trading, you’re going to make 200 trades for the year, 300, however many you make. Some are going to be winners. Some are going to be losers. All you’re trying to do is you’re trying to have a positive net result. It’s not about one trade. I mean, just think about, we just looked at all of our trades. I think we had 240 trades. One of those trades, they didn’t matter. It was meaningless. What did matter is what we did over the collection of 240. Be consistent, proper position sizing, and proper position management. Again, this is where you make it or break it in trading, and it’s funny because people always think it’s about the chart, or it’s about other things. No, it’s about being consistent, having proper position sizing, cutting your losers, holding your winners, and one of our sayings here at Maverick is trade for PIPs, not for money.
Robb Reinhold: I always say that I wish I could completely remove the P&L window from your account. Just think about it. If you could not see the dollar amount of P&L, and all you had to do was trade for PIPs, and you literally had no idea how much money you were going to make or lose on a trade, but all you did was focus on the charts and the PIPs, would you trade differently? And the answer is yes. Most of us would trade differently. Seeing that P&L is really bad because it causes a lot of emotional problems. If you don’t see the P&L, and you’re just trading off the charts and trading for PIPs, that’s how you do it. So again, focus on that. Focus on making good trades. Don’t focus on making money. Focus on making good trades. If you focus on the money, the money’s hard to get. If you focus on making good trades, the money comes as a result. So again, trade for PIPs. Look for weekly income, monthly income, quarterly income. Again, be consistent. That’s the only way to do it.
Robb Reinhold: So again, I want to say big congrats to everyone on 2018. I am super excited, and again, I feel like I’m more excited than I should be because it’s like when you go see a really bad movie, and then, the next movie you see is average, but it wasn’t the crappy move you just saw, and so, you think it’s the greatest thing you’ve ever seen. Now, look, 2019’s probably not going to be the greatest year ever, but after a year like 2018, I am super excited because it’s already looking really excited. I am so excited for this Brexit coming up. I think there’s a small fortune to be made if we’re on the right side of Brexit. I’m super excited for that. I think the market volatility is going to continue to be elevated. I’m super excited about that. We’re likely to see the summer doldrums again. We’ll talk about that with our traders in the summer. We’ll adjust our trading strategies like we usually do, but I’m very excited about 2019. Ankit, do you want to let everyone know what you’re thinking about 2019?
Ankit Sharma: Hey, Robb. Definitely. Well, I think for this one, we share the same enthusiasm with the markets. As I’ve talked about lately, well, every year, well, markets do tend to change, and the market environment doesn’t stay the same, and as you trade over year over year, you’ll find that how every year will have a different theme. Every year, we’ll have to adjust to it. So, as a trader, the most important thing is to be very adaptable, adaptable to market conditions, and I review a lot of trading plans, and I work with a lot of traders, and one of the things that we really focus on at first is that before you can jump on what strategy you want to use, before you jump on how you want to trade, first, you have to really consider the market conditions. And market condition, like last year or year before that, they are different. I would say, last year, the volatility was lower, so it was easier for, let’s say, a passive trader to stay in a position for long because he didn’t see those crazy reversals come during the day, but for 2019, I would say brace for volatility because when currencies are acting as in sync with the markets, we get those volatile moves, and those volatile moves create a lot of those intra-day opportunities.
Ankit Sharma: And we see a lot of those correction patterns, reversal patterns, just not the basing patterns that we get in a very directional market. So, I would say, 2019, brace for volatility. Again, have a plan for how you want to trade in a high volatility environment, and that’s really the key because every market from a US session to a European session, we can see a whole different kind of market. How you want to tackle that and how would you fit that into your lifestyle, I think you should definitely plan for it because I am expecting the volatility are likely to stay high, just like the equities. If you compare 2017 in equities, the volatility was at a all-time lows, and then, 2018, the volatility actually picked up, and we are still elevated compared to the previous years. If we look at the currencies, on the currencies, we almost feels like we hit the volatility low at the last part of the year, and then, December is really where we start to see a pick up in there. So, I’m expecting that pick up to continue, the average volatility to pick up higher. So, make sure you’re adjust your plan and your strategies for it, and then, again, be consistent like Robb said, and the result will kind of speak for itself.
Robb Reinhold: Good. I disagree with everything you just said. I’m just kidding. Of course, I agree. All right. Hey, thank you so much for joining in. Everyone have a great 2019, and of course, we’ll be seeing you a lot throughout the year. Happy trading, everyone. Goodbye.