Quest Means Business
June 30, 2009
Posted: 1339 GMT

LONDON, England- Another beautiful sunny morning and I'm back in the City. It's a shame, but I'm not feeling nearly as bright as the weather. I was up very late reading through the course work and trying to get my head around the technicalities of trading. I also slept fitfully, dwelling upon what David Buik said yesterday about my needing to have money as one of my gods.

After much thought I've decided to take what David said with a big pinch of salt. Yes, money may not be a major motivating factor for me, but as personality types go I'm very competitive. I like to win and will work very hard to do so. I've come to the conclusion that my trading motivation will be to pit my wits against the market and win. Whether my profit is hundreds or thousands of pounds or just a few pence won't matter - just so long as I come out on top. The challenge will be more important than the reward.

Am I heading for a fall?

Back in the classroom and Ryan O'Doherty at CMC Markets takes me through the process of placing a trade. I'm introduced to the order ticket and the spread, the difference between the price at which I can buy or sell. I'm shown how to calculate margin, which is effectively the deposit I have to put down in order to trade.

I'm also shown how to place stop and limit orders, both of which will get me out of trades at a pre-determined price, realizing my profits or limiting any loss. It's all beginning to make sense and I leave at lunchtime feeling much more optimistic.

Over at IG Index it's more of the same. The trading platforms look very different but do exactly the same thing. Order tickets, spreads, deposits, stops and limits. Yes, I think I’ve got it.

Before heading for home and another evening of course work I visit the London Metal Exchange, a global trading centre for the likes of aluminium, copper and zinc. The LME is the last open outcry trading pit in Europe. Traders have been yelling across its trading floors since 1877. As I arrive it's nearly 5pm and the markets are about to close. Traders are ramping up the noise and striking last minute deals. The hubbub is unbelievable.

It's amazing to watch but I should imagine that it's an incredibly stressful environment in which to work. Open cry trading requires a particular breed of person. It wouldn’t suit me and I thank my lucky stars that when I finally get to start trading I'll be in the quiet comfort of my own home office.

* How does Adrian Finighan fare in his career as a rookie trader? Watch Quest Means Business Monday to Friday: 1800 GMT London, 2000 CET, 0300 HK.

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June 29, 2009
Posted: 1945 GMT

LONDON, England - A bright and sunny Monday morning and I’m off to work. But my morning commute today takes me not to my usual central London destination, but to the financial heart of the capital, the Square Mile. The City, where fortunes are made and lost. I feel strangely nervous, like the new boy at school.

Open the financial pages or any investment magazine and you'll see ads from companies offering to teach you to trade. I've accepted invitations from two such companies who are going to train me to use their proprietary trading platforms. I don't necessarily endorse either of them and I certainly don't know enough yet to decide whether their services rank among the best. But I need their hospitality if I'm to stand any chance of succeeding in my goal to become a competent trader.

At CMC Markets, market strategist Ryan O'Doherty introduces me to the concept of CFDs or Contract for Difference. A CFD would allow me to trade on a financial instrument such as a share or a commodity without having to physically own it. They are a leveraged product which requires a trader to deposit only a fraction of the overall value of their trade. This is called trading on margin.

Markets fall as well as rise. CFD traders can potentially profit from falling markets too because they are trading on the price movement of an instrument. This is known, Ryan explains, as "going long" if you expect the price to rise - or "short" if you expect it to fall.

Ryan is at pains to point out that while margin trading can magnify returns, losses will also be magnified, so CFDs aren’t suitable for everyone.

A couple of hours later and my head is buzzing. It seems incredibly complicated. Ryan gives me my coursework to read and sends me on my way. I stumble out into the sunshine wondering whether I'm up to this.

Fortified by coffee and a sandwich I'm welcomed into the offices of IG Index and another classroom where chief market strategist David Jones outlines the concept of spread betting. David explains that spread betting is very similar to trading CFDs but with certain tax advantages for UK citizens.

David then goes on to teach me about currency pairs, one of the most popular spread betting and CFD instruments. It’s the volatility of the currency market that makes it so attractive. Whereas stock markets can trade within a narrow range for days, currencies often present trading opportunities many times a day.

David points out that, as a leveraged product, the potential for losses as well as gains while spread betting is magnified. He says that due to the extreme volatility I might like to think about getting to know the currency markets well over time and gaining much more trading experience before venturing in.

More coursework to tuck into my briefcase and my school day is done.

Before joining the swarm of evening commuters streaming away from the city, I pop in to see David Buik of BGC Partner, a man I’ve interviewed hundreds of times on television over the years and someone whose expertise I value.

David has kindly offered to give me "independent" advice as I attempt to become a competent trader.

Sitting in his 19th floor office, admiring the view over the Thames, David drops a bombshell. "If money isn’t one of your gods, you’re wasting your time in this environment," he says.

Oh dear.

You see, money never has been a great motivating factor in my life. Broadcast journalism is a vocation for me. I’m fortunate enough to have a fantastic employer who rewards me handsomely for what I do and I rarely give money a second thought. Sure, I'd like to have a bit of extra cash now and then - but who doesn't? Does this mean then that my attempt to become a successful trader is doomed from the start?

Perhaps it is. Perhaps I just haven't got the right attitude and never will. No time to worry about that now though. I've got several hours of coursework to get through before I can rest my weary bones.

* How does Adrian Finighan fare in his career as a rookie trader? Watch Quest Means Business Monday to Friday: 1800 GMT London, 2000 CET, 0300 HK.

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Posted: 930 GMT

LONDON, England - Just a decade ago, if I’d wanted to trade the markets I’d have had to engage the services of a stockbroker. I’d have been limited to trading, over the phone, UK and perhaps some US stocks. Every trade would have been subject to a hefty broker’s commission.

Can CNN’s Adrian Finighan cut it as a rookie trader?

Can CNN’s Adrian Finighan cut it as a rookie trader?

Today, thanks to de-regulation and a high speed Internet connection, I can trade almost anything, anywhere in the world, from wherever I happen to be at the time. I can do it 24 hours a day - and it won’t cost me nearly as much as it would have done 10 years ago.

I’ve been a financial journalist for more than 15 years. Booms. Busts. Inflation. Deflation. Mergers. Acquisitions. Hostile takeovers. Profits. Losses. Interest rates. Bond yields. Bankruptcy and fraud. I’ve covered them all over the years and I’ve learned a lot about how the markets work.

But, despite having a ringside seat I’ve never actually dipped a toe in the water and tried to make money myself.

Actually I have.

Some years ago I stupidly listened to a colleague who fancied himself as an ‘expert’ and bought shares on his recommendation. They bombed within weeks and, embarrassed by the memory, I try my best never to think of it.

But lately, as the financial markets have suffered a major meltdown and the media has vilified bankers and their "greedy, risk-taking’" traders for helping to tip the global economy into recession, I’ve begun to wonder whether I could have done any better?
As a reasonably intelligent, responsible, adult would I have been able to trade the markets without taking big risks? Would I have been able to trade responsibly and turn a modest profit without having my head turned by the prospect of big gains?

Of course, all of this is somewhat academic. I can’t answer those questions because while I know how the markets work, I know nothing of how to trade them. So, with a CNN camera crew for company, I decided to find out.

I became a Rookie Trader.

I’ll be detailing my experiences right here in this blog over the next few days.
In the interests of full disclosure I should tell you that we filmed my journey into the markets on five days across the course of two weeks in June. As the films are broadcast over consecutive days you might get the impression that I went from novice to trader in a week.

Not so.

The extra time needed to study all of the course work and additional reading material makes that impossible, as you’ll see when I go into detail later. And even now, course work and filming complete, I’m still little more than a novice with much still to learn.

* How does Adrian Finighan fare as a rookie trader? Watch Quest Means Business Monday to Friday: 1800 GMT London, 2000 CET, 0300 HK.

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June 26, 2009
Posted: 1025 GMT
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June 22, 2009
Posted: 1800 GMT
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June 19, 2009
Posted: 1006 GMT
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Posted: 731 GMT
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June 17, 2009
Posted: 1932 GMT

So British Airways is asking its staff to volunteer to work for upto a month for free. (The Chief Executive has already said he is working in July for no pay!)

It all seems a bit topsy turvy. After all normally, I turn up for work. I do my job. I get paid. I go home. that natural order has been changed by BA's new suggestion. In a moment of generosity, it has even agreed the staff can spread the loss of wages over six months.

BA has had an existing scheme inviting staff to take a month unpaid leave for some time. The airline says this latest development came about because some staff wanted to part but their work wouldn't allow them to be out of the office for that long. Bingo. Now you can still help out. Come to work. For Free. BA is quite clear. This is a voluntary scheme. No-one will be forced to do this. I believe them.

What I find tricky is how this will work in reality. Some staff will want to justify why they couldn’t take part ? Others will join in because they feel they have to.

There will be BA managers who will view staff unfavourably if they didn’t take part especially when promotions are up for grabs. I can hear the private whispers…..He wasn’t a team player. She didn’t pitch in. I Did my bit  It will create two tiers – those who pitched in…and those who didn’t.

It has overtures of, "Daddy … what did you do in the war?"

Would you work for free to help out?

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June 16, 2009
Posted: 712 GMT

We have entered the economic twilight zone – where all is not as it seems….and where one day’s good numbers can be a mirage to b e destroyed by the next day’s reality.

We always knew it would come to this – when we would be in that tricky economic area where things are still getting worse – but not as fast. It is like the skier going down the slope who is still descending but slowing down.

Some call it glimmers of hope. Others call it Green shoots – Here we have our QI Traffic lights – where the colour is the sign of what is going on.

We are now clear of the static red – when things were so grim that there was seemingly little hope.

And we have not yet hit that magic area of Green – whether it be weak – it still tells us things are getting better.

We are stuck. Right in the middle. Waiting. With signs suggesting neither one way or the other. Just waiting.

The economic twilight zone – it won’t last forever but that’s where we are today.

Are you in the Twilight zone? And how does it feel?

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June 15, 2009
Posted: 1800 GMT
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June 11, 2009
Posted: 2007 GMT

There have been two major stories today that we have covered. The failure of the G8 to keep its aid pledges to Africa on the one hand, and Ronaldo being transfered for $130n from Man U to Real Madrid.

We had a long debate about these stories and how to cover them. I argued strongly that they should be juxtaposed – two faces of the world – the hundred million dollar transfer contract for Ronaldo and the poverty and lack of money from G8 countries to meet aid pledges to Africa.

There is no direct connection between these two events – except of course, what they say about us all.

The Bill and Melinda Gates foundation has a rough rule of thumb – to be effective their programmes operate on the basis of saving a life costing five thousand dollars.

By that raw number alone the ronaldo transfer fee would save probably 26 thousand lives. That comparison becomes even more extreme when you think the same amount ofmoney would buy 26 MILLION mosquito nets.

It wasn't long before some of senior people suggested I was being unfair making comparisons between governments with aid and companies making profits.

Yup – perhaps this is unfair. It is not an either or situation – and if the money wasn’t spent on Ronaldo it wouldn’t be sent to Africa. I am comparing apples and organes

What I am interested in is what is says about us as a society that can accept both situations and not bristle at either. Market economics may be the best way to run an economy – but it does sometimes produce some very distasteful results. Is it offensive?

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Posted: 1434 GMT

Tonight’s profitable moment – KLM has asked its pilots to volunteer and help the company out. More than a 100 of them have signed up for extra duties on their days off. They will work the Lost Baggage department, or check in passengers. They will work in the back offices helping with the paperwork. It should save KLM millions of dollars that would be spent on temporary staff during the busy summer months.

So We asked you tonight what would you do to help your company. Surely in this day and age – it’s all hands to the pump. No-one should be too proud to do any job surely.

Which then made me think what would I do to help out my company. Surely there must something more than just standing here talking on the television. Perhaps a bit of light dusting after the show is over? or maybe running the vaccuum round at the end of the day.

The issue is not whether we will help out our companies but whether they will take advantage of our goodwill. Of course we will all do our bit to save colleagues' jobs – but to do our bit to make shareholders happy when perhaps your own pay and conditions are under threat? Would you do that?

How far will You go?

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