Tips and tricks for Financial Services advertisers

We’ve asked our AdWords Team Managers to provide tips and tricks for online advertising within particular industries. Over the next few weeks, we’ll feature these guest posts on the Small Business Blog. We're kicking off with a guest post on advertising within the Financial Services industry -- check back for information on your industry!

In thinking about ‘online advertising’ it’s easy to focus on keywords, ad texts, and clickthrough rates. Now with more online media channels than ever, it’s important we think about our online identity holistically as well -- and that we consider how this identity might impact our advertising both on and offline.

This practice is particularly important for advertisers in the Financial Services industry. Our businesses and customers are greatly impacted by economic trends and world events. For this reason, I encourage you to consider the following tips when developing your advertising strategies.

• Be an industry expert. As a member of the Financial Services industry, you must be an expert on the economy as a whole -- not just an expert of your own particular niche. One thing we’ve learned from the recession is just how interconnected the Financial Services industry is: decisions and regulations in one sector often impact dealings in another. For example, as interest rates were lowered through the recession, consumer interest in refinancing increased at a sustained level. As a marketer, you must stay on top of these trends to understand how they impact your business and your customers.

• Adjust your online advertising strategy in reaction to consumer behavior or industry trends. If you notice a particularly pertinent financial ruling or piece of news, use Insights for Search to learn how this change has impacted search behavior. For example, as Congress considered extending the Bush Tax Cuts recently, consumer searches spiked. What an excellent opportunity to get your name in front of your target audience in order to get the most out of your marketing budget!

• As an example, Humana insurance recently noticed changing consumer behavior and incorporated industry trends into their marketing strategy. In reaction to changing healthcare reform and later medicare enrollment, Humana took the opportunity to educate their customers via a YouTube brand channel and edited their ad text to include pertinent terms, such as ‘affordable.’

• Manage your online brand and reputation. For better or for worse, there are now countless channels through which you can influence your brand online. I recommend setting up Google News Alerts that trigger when your company name is mentioned. I also recommend creating Profile Pages, listing your business on Google Places (only, of course, if you have a brick and mortar address), and testing new Google ad formats that showcase your product or service, such as SiteLinks.

• Engage with your customers online. And finally, to build upon your online brand, it’s important to interact with your customers online. Engaging with your customers online can also help you better understand if/how economic trends are impacting them -- and this can help you make business and advertising decisions. I recommend creating Twitter, Facebook and YouTube identities to solicit feedback and engage with your customers!

2011 is an exciting year to be an online advertiser! In planning your advertising strategy this year, make sure you take a step back to see the bigger picture. For more tips on Google’s tools related to online business, please visit the Small Business Center.

Posted by Payton Dobbs, Team Manager, AdWords Financial Services

I'm a Loser

There was a post on one of the forums asking if I have losing days, and The Beatles sing about it here.

Of course I have losing days. I trade several markets at a time, I trade for varying hours a day from just a few to more than 10 hours. It's the nature of the business.

Having said that,there are two types of losing trades: Losers when I followed my trading plan and losers when I went off piste and did not trade according to my trading plan. The first is OK, the second needs addressing.

What you see in the blog is a sequence out of my trading day, a sequence that I believe will be useful in teaching other traders something. The sequences contain the losers and winners in the sequence but it's just one sequence, not all the trades I make every day. I also trade longer term as I have reported. These longer term trades also have winners and losers. By showing the sequences that I do, I'm not trying to say "Look how great I am" but trying to provide information that others may use to become profitable.  If you as blog readers want to see more losing trades instead of winning trades, or some other combination let me know.  I think that showing what I do right is more instructive than what I do wrong, but if you also think it's useful to show losing trades, I'll be glad to show those types of sequences also.

So in my video recap I'm only going to show some of my losing trades. I had to use losers from yesterday as I had a great day today in the ES.

How well I do in real time was seen by the guys over 3 weeks in the webinar training last July as well as the guys at the seminar for MarketDelta last October, and it's all in the DVDs that we made by recording those events.

As I say in the training, don't believe anything anyone says, including me. Test for yourself and verify. You need to own the knowledge and experience before you have the courage and discipline to put it into action with real money.

Increasing the Margin

There was a link on one of the forums here to a story about a hedge fund manager who recently liquidated a large Gold spread position. It seems that with a relatively small amount of money ($10 Million hedge fund), the hedge fund accumulated a "$850 Million" position. While the characterisation of the size of the trade as $850 million may not be a correct description of the amount of gold held on a directional basis, it none the less shows that this guy was holding a highly leveraged spread position.

The spread went against him. I've had option spreads go against me too. I then evaluate what will happen between the now and expiry and make a decision. What seems to have happened here was that the clearing house decided that the margin needed to be increased. The increase was of such a magnitude that the hedge fund's cash investment would have needed to be multiplied. The position was closed, the hedge fund made a loss in excess of it's drop dead level and was closed down by the operator and what money was left was returned to investors.

The story reminded me of a number of things I have strong opinions about:

1. I need to directly look after my own investments rather than outsource. To do this I need to make sure I have educated my self sufficiently to do a good job. There should be no one who you trust more than yourself with your own money.

2. Markets can stay out of line a lot longer than I can stay solvent. Don't fight the market. Being right in the long run doesn't mean anything if I can't hold the position comfortably in the short run. If something strange is happening, cut and run, and re-evaluate. There was an old stockbroker called Stanley R Johnson who, (must have been over 40 years ago now), taught me "the best loss is your first loss". Stan was of the old school of broking and died from a heart attack in the office one day at the age of just over 60 having just remarried.

3. Remember that smart people act in their own best self interest. During the previous Gold and Silver boom that ended in about 1980 after the Hunt Brothers tried to corner the Silver market, members of Comex found themselves short a lot of gold and silver as the market went up and up. Increasing margins didn't stop the Hunts as they were, then, richer than Croseus. Comex ended up making a rule change prohibiting opening of new positions. Only liquidation was allowed. Gold and Silver crashed, the Hunts were toast. This was my second experience of "tulip mania". I've seen a few more since and I'm sure that there's a lot more to come.

I had ES expectations for today that were not realised. The ES dipped overnight before London woke up. I tweeted that I tried to sell the early highs but the market didn't co-operate. I also tweeted that I would sell against 1279ish if the flow turned down. I ended up with a couple of OK trades as the vid shows, but the market didn't oblige and rather gave us the usual after a hard move down - consolidation.

Steeler Nation Welcomes New Arrivals

By Mike Jones
Chartiers Valley Patch
Jan. 28, 2011

Little Brayden McQuillan was in the world for less than 10 minutes Friday morning when the staff at St. Clair Hospital wrapped him in a gold Terrible Towel and placed a Steelers knit hat on his tiny head.

“They’re born Steelers fans here in Pittsburgh,” said Sharon Johnson, clinical supervisor at the hospital’s Family Birth Center.

The staff at the hospital in Mt. Lebanon wrapped up 10 newborns in the towels Friday in celebration of the Steelers’ run to Super Bowl XLV. Each baby born this week at the hospital will also be wrapped up in the black and gold, a tradition the staff also did in 2008.

First-time dad Alexander Ameredes said his wife, Rachel, gave birth to their son Alexander on Wednesday, two weeks earlier than predicted. The Collier Township man said he thinks his son wanted to make sure he was around for the big game on Feb. 6.

“I was worried about the Super Bowl,” Ameredes said. “I think he was, too."

Read more...

Where are the Customers' Boats?

For me, trading is a numb3rs business. I've said this over and over and have posted often on the maths of trading. Reading different blogs and comments around the web, I remembered the story of a millionaire who visited Wall Street from the mid west U.S. looking to invest some of his newly made money. His broker, rubbing his hands with glee, took him for lunch and afterwards took him down to the Hudson River and pointed out to him one big yacht after another, saying: "That's JP Morgan's boat, that's Rothchild's boat, that's Hutton's boat" and so on. After about 5 minutes of this, the rube millionaire turned to the broker and asked: "But where are the customers' boats?"

Sadly, most of the customers don't have boats.

When I was on the floor, at the height of the boom when communism collapsed in Eastern Europe, I was trading about 2,500 contracts a day. As a local, I had very low clearing costs and there were a number of European and American clearers who competed for my business. Even at those low costs, my daily clearing costs amounted to between 25% and 30% of my daily profits. Making the move from wholesale to retail, I can't trade the same way as the costs of trading from upstairs are considerably more, even though costs have been pushed down hugely over the years.

I look at lots of trading systems and methods every year. I'm trying to find improvements and ideas just like everyone else. One thing that makes it difficult to assess the value of trading systems is the fact that often commissions are not included in trading results. I go to great lengths to make inquiries so I can factor the trading costs into results. When I succeed, I have often found that once you deduct commissions, the trading system or methodology doesn't really make money.

If you are trading large enough volume and want to obtain electronic exchange memberships then costs can be reduced. However, the costs for retail traders are much more. If you are trading 5 contracts say 4 or 5 times a day then you can get your costs down to between $3.80 and $4.20 on the emini. These costs MUST be factored into your trading plan. If your average profit per contract - taking into account every contract traded, winners, losers and scratched, is $4, then you are not making money. Your profit per contract has to be more than marginal.

I'll beat my win rate drum again. High win rate is critical to CP as otherwise you need very large profits on each of your winning trades. It's that simple. If you have, say, a 40% win rate, you also need to win the lotto once or twice a month with a super large profit to offset not only the many losing trades but the scratches and commissions on them all.

The issue is that you need to exit a trade only when you know it's a loser. Often, you can't know it's a loser until you have lost money on the trade. If your stop loss per trade (or average loss per losing trade) is, say, $125 per contract and your average profit per contract is $75, with a 70% win rate the maths of your business is:


On 100 contracts, $5250 won - $3750 lost - ($4 x 100) commission = $1100 Profit. BTW, the $400 commish is 36.4% of the profit. This is a little on the high side and needs to be brought down under 30% if possible.

There have been some comments and mails on this subject from people who have an issue because the result of their equation above is break even. The solution is in the numbers. Maybe its more aggressive entries, maybe its squeezing another tick out of your profitable exits and saving some ticks on your losing trades. If my maths is correct, the profit per contract in the above example is $11. Doesn't sound a lot does it. Now if you improve your entries or exits by just one tick on every trade your profit per contract is suddenly $23.50, more than double the previous profit figure. So instead of $1100 profit on your 100 trades, you are suddenly making $2350, a huge difference. What if you can improve by 2 ticks?

Today's trading was very cool in the afternoon. See the vid.

An open message for Blue Origin.

Blue Origin is Mr Bezos's company and he can run it any way he wants. If he is running it to create a profitable business with maximum advantage for B.O. then the rest of my message has no applicability.

If on the other hand if Mr Bezos has a passion for space and making the human race spacefaring then B.O.'s actions are destructive. Most of the "new space" companies are somewhat open from Space X down to the smallest garage operation. Other companies participate in conferences, they publish their success, the publish their failures, and all involved learn. B.O does none of this. They have access to everyone's information and yet share none.

In addition B.O has started filing patents that restrict the trade space. Today's news of the barge landing patent is a perfect example. Other new space people have publicly talked about barge landing of various vehicles to recover stages. I remember John Carmack talking about barge landing more than 4 years ago. Others have commented to me personally that they have written notes talking about barge landing from more than 5 years ago.

There is a huge on-line discussion base about lower cost space flight and it clearly covers this and other B.O patents. If the patent is challenged the patent will be clearly invalid, but if it is issued it will cost millions to have it declared invalid. This is a huge expense to any small organization that might want to use that technology.

So if Mr Bezos's intent is to help get the human race off of the planet, please don't be evil, try being more open.

Addendum:
I am not anti patent, but the patent needs to actually be innovative.

Vacuuming up common sense, not adding anything new, and attempting to patent that, is destructive. This is just a make work patent for patent attorneys. No real new ideas, and if you want to use one of the concepts covered in the claims one will now have to go back and find reference to the prior art, document it, and budget funds to have a lawyer defend your position.
I won't go line by line to refute the claims, that has already been done in several forums by myself and others.

If the patent actually had some new art, say:

• A unique way to adjust trajectory to compensate for performance changes and still land on the barge.
• A cool stabilization and retention system that would capture the rocket on a rolling barge and stabilize it.
• An innovative method to incorporate a flame trench or blast diffusion system on a barge.
• Anything that someone "Skilled" in the art would not find obvious to the extreme.

Then you would not hear a peep from me about it.

The CP Hump

get a huge number of emails from traders that say they are almost CP, but can't seem to make it over that last hurdle. You also know I have been working on an HT(hybrid trading) system Flo. I think that this post could be most interesting for those of you who are trying to reduce the learning curve to CP. 

The vid today is a series of ES trades using what I call HT (hybrid trading).The computer acts as an expert system that has been back tested to oblivion by the trader. To that expert system, we add fixed and consistent context sensitive trade management rules. This allows the trader to turn the system on when the probabilities are in their favour, manage the trades and then turn off the system when their targets are met.

The vid is a lot more detailed and longer than usual, but I want to make my point.  If you have an issue with the vid (Youtube is having a problem today) then go here.