NRC Handelsblad – Benul of investing is not necessary
Benul of investing is not necessary
Day trader Rob Wessels knows nothing about the companies in which he invests, but benefits from price movements. He explains his strategy in a course. “You are nothing with your 100,000 euros capital. A grain of sand.”
By our editor Camil Driessen
Business sense? Unnecessary. Knowledge of economic developments? Go away. Feeling for what the stock market does? Well. According to Rob Wessels (66), all of this is not required to book returns of up to 30 percent per year as a day trader on the stock market.
For years the Rotterdammer has given a course in the Netherlands or Belgium almost every Friday in which he explains how. For the course of 475 euros he advertises in De Telegraaf. They start at 7:30 p.m.
Like this daytrading course in the Van der Valk Hotel on the outskirts of Zwolle. Present are six male students, a reporter, Wessels’ own day trader Adam Reigns who serves the trade program on the computer and his assistant Mila. “Can you go around with the cookies, sweetheart?”
Together with Reigns, Wessels explains in six hours how to copy his successful strategy and to act live on the Deutscher Aktienindex (DAX). It consists of the thirty largest companies listed on the Frankfurt stock exchange, including Adidas, Volkswagen and Siemens.
But the trader does not have to know anything about these companies. “As a day trader you have nothing to do with that,” says Wessels. It gets even better. “It does not even matter if the DAX goes up or down, as long as it moves. We earn the most when the price goes up and down. ”
Daily 300 euro profit
Like other day traders, Wessels and Reigns start and end the day basically without portfolio shares. They set themselves the goal of making 300 euros a profit every day. Is that 300 euro profit within, they stop immediately. In 52 percent of the days, that goal is achieved within 15 minutes. In 78 percent of the cases within one hour, the presentation they give together shows. “And then I will do something else for the rest of the day”, says Reigns.
They deal with an investment account on which 250,000 euros are placed. Then 300 euros profit might sound modest. But it is not, the gentlemen emphasize. On an annual basis that is 75,000 euros: a return of 30 percent.
Wessels is very simple to explain. On the basis of a story about his oldest student (“96 and pig farmer”) he tells us what short is going. A pig costs 100 euros and the farmer thinks that is too expensive. Who thinks that this is the highlight of the market and the price can not go higher. That’s why he knocks up with a befriended farmer, lends a hundred pigs and sells them immediately.
A few days later his wife sees Teletext that pigs now cost 90 euros. The farmer buys one hundred pigs, returns them to his friend and has earned 10 euros per pig. “That is shorting,” says Wessels, concluding. “By doing it you learn it better than by reading books about it. This also applies to reverse parking in England. ”
The fine of AFM
Wessels is actually called Rotgans. But he does not use that last name because he was bullied as a child. In a distant past he was the boss of the popular Rotterdam radio pirate Atlantis. He has been acting for more than fifteen years now and has also given courses for years.
In 2009 he received a fine from the AFM regulator because he managed assets without a license. He did so by trading with the student’s investment accounts and skimming winnings above a certain amount. Wessels let the students know that he no longer does that.
A layered pyramid appears on the screen: the financial system through his eyes. On the bottom of the “mass”, accompanied by a picture of a sheep. At the top American banks like Goldman Sachs, a layer among companies such as Google and Shell. “Understand that you are nothing with your 100,000 euros capital. A grain of sand. I have learned that I do not know anything “, is his point. That is why Wessels does not deepen in companies, but has developed a strategy that benefits from price movements.
It goes like this. Wessels buys from its broker CFDs (contracts for difference): an investment product with a ‘leverage’. You only have to advance 1 percent of the value. If the DAX is now around 10,000, the CFD will cost 100 euros.
The DAX opens at 9.00. But trade pre-trade is already possible from 8.00 am. That is why Wessels and Reigns are always ready at 7.45 am, because then the most important work is done. Depending on how the stock market has moved during the past two days, they decide to buy ‘just’ or go short and speculate on a decline.
And, there comes Wessel’s trick, as soon as trading starts at 8.00 am they implement their plan. In a raid they buy CFDs of different values, using the broker’s automated trading program.
A fictitious example (the real steps of Wessels absolutely not in the newspaper) is that if the DAX at 10,000 they buy CFDs for that price and set the computer to sell them at 10,100. They carry out the same step several times with lower settings. The idea is that they will benefit from the price fluctuations that take place within seconds and that they are hedged against a decline.
Not acting on tough days
Wessels says that the chance is very small that it will go wrong, because the historical data on Yahoo Finance show that the DAX fluctuates daily within a bandwidth of about 3 percent. On heavy days such as when a Grexit threatens, it may be different, but then Wessels consciously does not act.
At times, Wessels has had 20 percent (50,000 euros) in the negative and – against the principle of daytrading in – has to keep several days until he was back in the plus.
This strategy only works if you have a nice buffer. Then you also do not have to panic and if the stock market continues to fall you can keep repeating the stepped strategy on lower points in order to make a profit. The minimum is 50,000 euros according to Wessels, but he himself has 250,000 euros on his trading account.
And no, 50,000 is not much. “You do not have a loempiakar for that yet. That’s what every entrepreneur understands. “
Interested in the course?
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Phone NL +31 10 519 21 15