Search This Blog

Friday, January 31, 2014

Connecting the Dots for Cash By Marc Charles

Connecting the Dots for Cash
By Marc Charles

4:22 PM

Dear Friend:

A “Connector” is someone who brings people or companies together and collects a fee or commission when a “deal” between two or more parties is consummated.

When I started out as a “Connector” I charged a flat fee to the individual or company making a purchase or seeking to complete a deal.

Years later I preferred earning a percentage of each transaction, deal or sale. I found people are very receptive to idea of a percentage of a deal.

My first year as a “Connector” I made $22,000. By the third year I was making more than $50,000 per year…all by making a couple of phone calls and sending a few emails.

A recent example…..

I read about an entrepreneur who wanted to buy travel focused websites.

The prospective buyer was only interested in travel websites with significant traffic, and fully functional ecommerce.

I contacted the prospective buyer by email, introduced myself, and sent him a link to a website with my background and client testimonials. The buyer responded immediately expressing his interest in working together.

I explained my “Connector” service, and submitted a proposal with a fee recommendation. The buyer/client agreed to the terms of the deal.

Connecting the Dots in Three Simple Steps

1)    I located two travel websites which met his criteria.

2)    I introduced the prospective buyer to both travel website principles. One of the websites was a perfect fit and the prospective buyer made an offer to the seller through yours truly. The final sale price was negotiated in a few days.

3)    When the travel website sale was completed, I received a wire transfer for $2250, which was my “Connector’s” fee – in this case 3% of the deal. The entire deal consisted of less than 3 hours of work.

You can locate people and companies who looking for products, businesses, land, commercial real estate, surplus inventory, bankrupt companies, and capital, etc. in top national business newspapers such as The Wall Street Journal, Investors Daily, The New York Times (Sunday Edition), Chicago Tribune, Miami Herald, and the Los Angeles Times.

There are hundreds of useful websites for finding clients and “Connector” deals too.

Here are some of the sites I’ve used for locating clients and “Connector” deals:

·        Alibaba.com is an excellent source for finding companies looking for specific products.

·        International Wealth Success publishes electronic and print newsletters with an abundance of contacts and leads for “Connectors”.  They also publish a comprehensive course on becoming a “Connector” (also known as a Finder’s Agent).


For smaller deals, you can find leads as a Finder’s Agent or “Connector” on classified sites like CraigsList, Crain.com Classifieds, eBay Classifieds, and Backpage.com .

You can also advertise your availability as a “Connector” on business networking sites such as IWS Money, Ryze, Biznik, and FastPitch.

You’ll find joint venture clients and “Connector” deals on these targeted sites too:

Being a “Connector” is a fun sideline business for anyone who enjoys putting deals together and introducing prospective buyers and sellers.

Most of the “Connector” deals and introduction I’ve developed over years have been done online, but this service works great offline too.

Getting Started in This Business

The first step to success in this business is choosing an area market to “connect” people to, such as real estate, money, business purchases, commodities, products, web-based business brokerage, etc.

The next step would be assembling as much information as possible in your chosen field. Hopefully you’ll already be familiar with the field or market in which you chose to work. But either way you’ll need to compile some information on typical prices, demand, profiles of current deals, scarcity of items, etc.

Reach out to people or companies in need of the products, markets or items in which you specialize. Explain your “connector” or finder service and your proposed fees.

Present a simple Finder Agreement to prospective clients.

International Wealth Success offers a great Global Finder Kit for around $100.

Connecting people and companies to the products and deals they seek is a lot of fun and it’s a great part or full time business.

An entrepreneur contacted me out of the blue recently seeking a non-bank investment or loan for a group of upscale mobile home parks he’s seeking to acquire. I’ll be “connecting” the entrepreneur with three “A prospects”, and earn a small fee when and if a deal is completed – sweet.

If a “Connector” business is a good fit for you – click here. We’re considering the development of a program to help entrepreneurs make money in this business!

Marc Charles is often referred to as "The King of Business Opportunities." He is a regular contributor to Early to Rise and The Liberty Street Letter. He's written dozens of bestselling e-books, courses, and special reports on business and moneymaking opportunities. He recently launched The China Wholesale Trader.

Other stuff…..

AskMarcCharles hot blog




Thursday, January 30, 2014

HouDah -- Coolah

5:30 PM


Hey Gang:

My friend Pierre asked me to soft promote his new site to my friends and subscribers.

That'll be $5,000 please :)

Just kidding......

Here's his new venture....


HoudahSpot
http://www.houdah.com/houdahSpot

Powerful file search tool for Mac OS X








Marc Charles

Friday, January 24, 2014

A Gift from Financial Markets by Marc Charles

A Gift from Financial Markets



6:12 AM

Dear Entrepreneur:


Today I’ll show you an incredible “gift” investors, speculators and traders are using to make money.

The “gift” is exchange-traded funds or ETF for short.

Hang on……I know you’re probably familiar with ETFs.

But I’ll show you how my clients and I are making money with them. You won’t learn these tactics on financial websites or from the clowns on CNBC.

An exchange-traded fund (or ETF) is an investment vehicle traded on stock exchanges, like stocks.

I’ll give you a powerful overview in a second.

The profit making potential of ETFs is mind-boggling…and here’s why…

The risk of trading ETFs is super-manageable, and especially for beginning traders and speculators.

I like the ETFs for three reasons:

1.     Risk is limited to the initial investment (LOW)
2.     The ETF market is easy to enter and exit (LIQUID)
3.     ETFs offer nice leverage (LEVERAGE)

You won’t have the same leveraging or pyramiding ability of a futures contract or Forex.

But there’s a new type of ETF which enables traders and investors to leverage opportunities in a big way.

Marc’s ETF “Cheat” Sheet

An ETF holds assets such as stocks, bonds, currencies, or commodities and trades at approximately the same price as the net asset value of its underlying assets.

The most popular ETFs track an index, like the Dow Jones Industrial Average or S&P 500.

ETFs can be an attractive tool for making money because of the relatively low risk, tax efficiency, and stock-like features.

An ETF combines the feature of a mutual fund meaning it can be purchased or redeemed at the end of the trading day for its net asset value (or NAV).

ETFs traditionally have been index funds, but in 2008 the U.S. Securities and Exchange Commission authorized the creation of actively-managed ETFs.

What is an Actively-Managed ETF?

An actively managed ETF will have a benchmark index (like the S&P 500), but managers can change sector allocations, market-time trades and/or deviate from the index as they see fit.

This produces investment returns which will not mirror the underlying index perfectly.

Passive ETFs typically follow indexes pretty closely, which allows investors to track the fund fairy easily.


Oil Exchange-Traded Funds

The price of oil has climbed to historic highs.

However, not everyone believes oil will remain at historically high levels for eternity, including me.

In fact, the last four months is a good indication of what can happen in the oil market….it can skyrocket when bullets start flying.

But…..and listen closely……oil can plummet in price too! Almost NO ONE believes this….but this is where the real money is made.

For example, look what happened to oil during the recent disaster is Japan….the price of oil went down!

You can make a fortune with ETFs when you understand how to trade markets when before they skyrocket or plummet… especially if you go against the crowd at the right time. 

On top of that, with EFTs you can wait indefinitely!

Gold Exchange-Traded Funds

Gold is trading at near three-decade highs.

But you can make a fortune when and if gold plummets in price too!

I know….this is a hard thing to grasp. It’s also one of the hardest lessons for novice traders to learn.

Look around…..everyone from Glenn Beck, Rush Limbaugh and Sean Hannity to Warren Buffet and George Soros is touting gold as the greatest investment since the dawn of civilization. There are hundreds of “buy gold” commercials running at any given time.

But very few people believe the price of gold or precious metals will decline over the next 12 to18 months.

The so-called financial experts try to convince people gold will surge in price for eternity.

But like stocks, real estate, bonds, baseball cards and diamonds this is not always the case.

Sure… in times of sudden panic, stock market crashes, currency wars, etc. the price of gold “tends” to rise quickly.

But the price of gold can plummet during crises, too – as witnessed in the gold market recently.

For example, the price of gold surged from $400 an ounce in 2004 to more than $1400 an ounce in 2010.

However, at the beginning of the real estate and mortgage crisis in 2008 gold actually FELL in price.

So whatever your view happens to be there’s likely a Gold ETF you can trade.

Cool Insight on “Ultra” Exchange-Traded Funds

If, as an investor or trader, you believe the price of something will go up, you are considered bullish, or a “bull.” If you believe the price of something will go down you would be considered bearish, or a “bear.”

As an investor or a trader you might even be “ultra” bullish or bearish, meaning you think the price of something is going to go up or down in a big way.

That is the beauty of a new breed of ETFs called “ultras.”

Ultra Exchange-Traded Funds enable an investor or trader to leverage an investment in a much bigger way than just an ordinary ETF.

Here are a few “ultra” ETFs you can track on any financial website. I’ve noted the underlying stock, bond, currency, or commodity:



ProShares SIJ UltraShort (Industrials)
ProShares EFU UltraShort (MSCI EAFE)
ProShares EEV UltraShort MSCI (Emerging Markets)
ProShares EWV UltraShort MSCI (Japan)
ProShares MZZ UltraShort (MidCap400)
ProShares SCC UltraShort (Consumer Services)
ProShares DXD UltraShort (Dow30)
ProShares FXP UltraShort (FTSE/Xinhua China 25)
Proshares SKF UltraShort (Financials)
ProShares RXD UltraShort (Health Care)
ProShares DUG UltraShort (Oil & Gas)
ProShares QID UltraShort  (QQQ) Twice inverse of NASDAQ-100
ProShares SRS UltraShort (Real Estate)
ProShares SDK UltraShort (Russell MidCap Growth)
ProShares SMN UltraShort (Basic Materials)
ProShares SZK UltraShort (Consumer Goods)

How to Make Money with ETFs

Every investor has an opinion of the world financial markets, politics, and economy.

This is why the markets move so dramatically – up, down, and sideways.

In order to make money with ETFs your world view of the future needs to be accurate.

What’s more, you need to be fairly accurate in terms of timing too.

For example, in 2000 I was confident the Dot-com hysteria was a joke. I was advising several companies being run by 20-year olds valued at more than $100 million each…with NO sales.

It seemed like everyone was swept up in the fantasy.

And novice traders were making cash hand over fist on stocks of these Dot-com companies – on paper.

But no one I knew or read about removed profits from the Dot-com fiasco by the time everything collapsed.

In this case my world view of the market was correct. I made a bundle shorting tech and Internet company stocks. But my exposure to downside risk was way too high.

On top of that my timing was off by 10 months or so. I knew the market would plunge but timing is crucial.

Our view needs to be accurate in terms of “timing.”

And so…..

In order to make money with ETFs we need to examine the market we’re investing and calculate a “reasonable” time frame.

Now….one of the great aspects of ETFs is timing is not overly important.

You can hold an ETF for weeks, months and even years without any downside risk, margin calls or frustration.

For example, everyone knows the housing and real estate market has been in serious trouble for more than 3 years.

Some investors believe the housing market will bounce back in 2011. While other investors believe the worst is yet to come this year.

The reality is probably somewhere in the middle.

If you believe the housing market will stay the same or get slightly worse there are two ETFs you could purchase to take advantage of that trend:

Ultra Short Financials Proshares (AMEX: SKF)
This ETF benefits when and if financial services suffer. This would include real estate lenders, international banks; property and casualty insurance companies; companies invested directly or indirectly in real estate; diversified financial companies, such as Federal National Mortgage Association, credit card issuers and investment advisers; securities brokers and dealers, and investment banks,


ProFunds Short Real Estate Inv (MUTF:SRPIX)This ETF invests in derivatives that ProFund Advisors believes should have similar daily return characteristics as the inverse (opposite) of the daily return of the index. Assets of the fund not invested in derivatives will typically be held in money market instruments. It is non-diversified
The beauty of ETFs and specifically “ultra” and “double short” ETFs is they enable a trader to leverage markets (up or down) in a big way, but offer lower downside risk of futures and Forex markets.

There you have it!

Everything you wanted to know about ETFs but were afraid to ask!

Your humble host…

Marc Charles


******* Action Strategy *********

Start researching the “ultra” ETF market today.

When you start trading ETFs you’ll need an online brokerage account.

But that’s easy…..you can open an account with as little as $500.

The right ETF enables you to profit if a market skyrockets, plummets or trades sideways.

On top of that, you can make a boatload of money with double long or double short (ultra) ETFs.

You can subscribe to ETF publications and advisories to gain some street smart insight. I’ve included a couple of recommendations in today’s issue.

Paper Trade ETFs!

You can trade ETFs on paper and never risk a dime!

Simply select the ETFs you want to buy (or sell, or purchase options on), write down the current market price, and watch them in the paper or financial websites go up or down in value.

Develop an exit strategy.

Buy and hold for eternity will not work in the coming months and years. Nothing lasts forever – so develop a specific exit plan and remove profits regularly.

******* Valuable Resources ********


Exchange-Traded Funds CenterYahoo! Finance

ETF Investment Guide - seekingalpha.com ETFs

CEF ConnectETFconnect.com




New Book Recommendations

The ETF Handbook by David Abner

Super Sectors: How to Outsmart the Market Using Sector Rotation and ETFs by John Nyaradi

The ETF Book: All You Need to Know About Exchange-Traded Funds by Richard Ferri



Saturday, January 18, 2014

The MOST Overlooked Market in the World Could Make You Rich by Marc Charles

A New “Twist” in the MOST Overlooked Market in the World Could Make You Rich

5:44 AM

Dear Entrepreneur:

“Are you kidding me? It CAN’T be that simple”!

That’s what a client said when I showed him a little-known “twist” in the precious metals market.
No….it doesn’t have anything to do with trading coins, picking mining stocks, getting cash for gold or even handling the precious metal itself.

More important, this little “twist” has made a lot of people a lot of money, including yours truly.
Before I show you the “twist” let’s get something straight.

 I Am Not Offering Investment Advice

So don’t report me to the Commodity Futures Trading Commission (CFTC)!
I’ll be as clear as humanly possible.

The information I’m giving you today only intended to be a basic understanding of the precious metals market. 

This information is NOT intended to provide specific financial or investment advice. 

On top of that, don’t rely on nor act the information without seeking the advice of a qualified financial adviser or futures broker. They can help determine if your financial circumstances are suitable for trading.

Ok……now that I’ve managed to scare you senseless… let’s get to business.

The Risk of Precious Metals Options

In deciding whether or not you want to become involved in any type of futures or options trading you should be aware you could both gain and lose large amounts of money. 

In other words, without limitation, you risk losing money because:
(a) You could lose all the margin funds you deposit with the futures broker to establish or maintain a futures position and lose further amounts as described in paragraph (c) below.
(b) If the market moves against your position, you may be required, at short notice, to deposit with the futures broker further monies as margin in order to maintain your position. Those additional funds may be substantial. If you fail to provide those additional funds within the required time your position may be liquidated. You will be liable for any shortfall in your account resulting from that liquidation.
(c) You could lose all monies deposited with the futures broker, and in addition be required to pay the futures broker further funds representing losses and other fees on your open and closed positions.
(d) Under certain conditions, it could become difficult or impossible for you to liquidate or close a position (this can happen when there is significant change in prices over a short period).
(e) The placing of contingent orders (such as a "stop-loss" order) may not always limit your losses to the amounts that you may want. Market conditions may make it impossible to execute such orders.
(f) The high degree of leverage that is obtainable in futures trading with the futures broker because of small margin requirements can work against you as well as for you. The use of leverage can lead to large losses as well as large gains.
(g) Futures and options trading are not appropriate for everyone. There is a substantial risk of loss associated with trading futures and options on futures. Only risk capital should be used.
(h) No representation is being made that futures and options on futures trading is appropriate for everyone or that it should be viewed as an alternative, replacement or supplemental form of income.

As I said…you should discuss these matters with a qualified financial advisor or commodity broker prior to commencing any trade.

How to Reduce Your Risk and Trade Like a Seasoned Professional 

We all agree there’s a risk in trading precious metals futures and options.
However, there are ways to reduce your risk.

In addition to reducing your risk, you can also make money, like I did, as an independent trader.
I started trading precious metal options from a back bedroom office in 1991. Three years later I was trading full-time.

My objective each week is to focus on legitimate business opportunities. 

What’s more, I like to focus on opportunities which do not require huge inventories, office buildings, employees, massive start-up capital, or boatloads of red tape. 

I also prefer businesses with easy learning curves too.

The greatest downside of precious metals options is probably the start-up capital. You will need money to open a precious metals trading account.

Most brokerages require a minimum deposit of $5,000 to open an account. I would recommend at least that much. But you can open an account with $2,000 at some brokerages.

Never Trade With Money You Can’t Afford to Lose!

There are many aspects of futures and options trading. 

My focus this week is on precious metals options trading. 

In future issues, I'll cover other markets and opportunities. 

But today I’m going to show you a little-known “twist” in the precious metal options market.
But first a quick overview……

An Overview of Precious Metals Futures 

A futures contract is an agreement (obligation) to buy or sell a given quantity of a particular asset at a specified future date at a prearranged price. 

Futures contracts have standard delivery dates, trading units, terms, and conditions. They can be based on any one of a number of underlying assets. 

There are futures contracts available in individual shares and stock market indices, bonds, interest rates, coffee, sugar, orange juice, and other agricultural commodities. You can even trade catastrophe futures!

The best futures contracts are traded on government-regulated exchanges like the Chicago Board of Trade (the largest futures exchange), ICE, London Exchange and the New York Mercantile Exchange.

There are futures exchanges in most industrialized countries.

Futures prices are quoted by every top financial website and business newspaper on the planet.

The total number of contracts traded onus futures exchanges in 2009 was valued at more than $600 trillion!

You can "open" a futures position by either buying or selling a contract. You can "close" a futures position by doing the exact opposite − either selling or buying the same contract. 

If you believe the price of the underlying asset will rise, you would buy a futures position. This is referred to as being "long." 

When you buy a futures contract and hold it to expiration, you would be required to take delivery of the underlying asset, or equivalent cash value, at a prearranged price and by a certain date.
But don't worry, only a small percentage of futures contracts are held to expiration. 

In the futures market most of the money is made during the life of the contract.

If you believe the price of the underlying asset will fall, you would sell a futures position. This is referred to as being "short." 

When you sell a futures contract and it is held to expiration, you would be required to deliver the underlying asset, or equivalent cash value, at a prearranged price and by a certain date. 

Beginning traders often have difficulty grasping the concept of selling something they don't own. What you are doing is simply selling something on paper - via the contract. 

There is a risk of sustaining substantial losses when trading precious metals options.


One way to reduce risk is to always have a specific strategy for leveraging winning trades and cutting losing trades quickly. 

In other words, you need to know what you’re going to do if the market moves against your positions. 

The little-known “twist” I’m going to show you today have worked for me, and for countless other precious metals traders. 

The “twist” is selling or “writing” precious metal options. I won't get into all the nuances of option trading right now – it wouldn't hurt to do your own research on Google or Wikipedia.

But know this, when you buy a precious metal option your risk is defined upfront.

In other words, if you buy a gold option for $500 that is the most you can lose.  

Your downside risk is limited to the “premium” or the price you pay for the option.

When you sell or “write” a precious metal option there can be unlimited risk if the option is 
exercised…but most are not. Most options expire before they are excercised.

How Professional Traders Make Money Using a Little-Known “Twist”

There are thousands of systems, techniques, and software programs on the market today which supposedly help you trade profitably. 

Most of these techniques and programs are designed to help you make money. 

Obviously, some products, programs, and strategies are better than others

But I learned a trading strategy from a professional commodity trader many years ago which still works today. 

The best part is you won’t need expensive sophisticated software trading programs or technical manuals.


The “Twist” in a Nutshell


An interesting phenomenon takes place in volatile or high volume markets.

There’s a frenzy of buying or selling….and then at some point, like clockwork, the buying and selling slows down.

In some cases, the buying and selling slows to a crawl and the market remains flat.
This is where the “twist” comes into play.

You can try this on paper without risking a dime to see if the technique works in actual market conditions.


But remember…..

The most important aspect to this technique is volatility or a rapidly climbing or falling market.
The precious metal market can be very volatile, especially when there are problems like war, uncertainty, stock market crashes, or sudden disruptions.

When an event like this occurs you can sell or “write” a precious metal option well above the current market price and the funds are placed into your account immediately.
Now…the trick with precious metals options is two-fold.

One - The option strike price needs to be far enough away from the current market price so the probability of it getting “exercised” or redeemed is very, very low.

Two - The option date needs to be close enough to the expiration date of the underlying 
precious metals futures contract, so the probability of it getting “exercised” is very low. In other words, your objective with selling or writing a precious metal option is to have it expire without it being exercised. 

One way to utilize both of these aspects is to calculate the price movement of precious metals over say a two month period, preferably during a violate period.

This calculation will give you a basic price range.

There are hundreds of ways to calculate the “time” aspect of options. 

But in my experience, if you focus on precious metals options expiring in 60 days or less you’ll be in good shape.

Here’s an illustration:

Let’s say the current gold futures price for the January 2011 contract is $1371.

The price of the January 2011 gold futures call option with a strike price of $1450 is 26.80.
NYMEX Gold option prices are quoted in dollars and cents per ounce and their underlying futures are traded in lots of 100 troy ounces of gold.

In this scenario the premium or amount of money you would receive for selling (or writing) a gold call option with a strike price of 1450 would be $2680 (26.80 x 100 ounces).
This gold option call would expire in less than sixty days.

If the underlying price of the January gold futures remained below $1450 by the second week of January, you would keep the entire premium, or $2680.

Can you see why people become so excited about precious metal options?

Granted, this is only a hypothetical illustration.

But if you do some homework and research you will find this can be a very lucrative market and opportunity.

Have fun and play nice.

Your humble host,


Marc Charles


Important Point: Unlike real estate, coins, brick-and-mortar businesses, and hundreds of other investments, the futures market is IMMEDIATE. This is especially true for the markets that have large volume and open interest (open contracts). The precious metals futures market on the NYMEX is HUGE. When you place an order to buy or sell, it's filled almost INSTANTLY! No lawyers, accountants, appraisers, government workers, or employees are required.

***** Action Strategy *****
If you're new to precious metals futures trading, start your education today. Research the topic on Google. Read books and articles written by hands-on (successful) professional traders. I've listed a few suggestions below.

This is one of the few businesses that enable you to "practice" before you commit any funds. You can "paper trade" futures before you start trading with actual money. 

Paper trading is easy too!

Go to any financial website that offers commodity futures quotes, like Commodity Futures Charts and Quotes. Now select the commodity quote you want. The quotes will typically list the opening price, the high, low, and settle, or closing, price.

Simply right down a precious metals option you would like to select based on the information I gave you today.

Then monitor the market to see if your trade would have been profitable in the real world.
It’s that simple.

I know you’ll get excited when you see the opportunities and potential of this “overlooked” market!

****** Valuable Resources*******
Top World Commodity Futures Exchanges
 
CME Globex Flash Quotes
Chicago Board of Trade (the largest T-bond futures exchange in the world)
Chicago Mercantile Exchange
Global FOREX
Kansas City Futures Exchange
LIFFE
London Metal Exchange
Hong Kong Futures Exchange
Minneapolis Grain Exchange
New York Board of Trade
New York Mercantile Exchange
New York Stock Exchange
South Africa Futures Exchange
Sydney Futures Exchange
Tokyo Commodity Exchange
Winnipeg Commodity Exchange

Commodity Brokers
Lind-Waldock
Alaron
Fox Investments
Great Pacific Trading Company
Ira Epstein
R.J. O’Brien
Traders Network

Tuesday, January 14, 2014

Don't Buy Google Stock and Here's Why by Marc Charles

Hi Gang:

I received this question the other day......


Question: I know you're a big fan of Google. But would you recommend buying Google stock?
E.C. Albany NY

My answer....


No....I wouldn't.


And here's why......


As you may or may not know, I spent considerable time in the "trenches" as a commodity and currency trader. I made my living trading in the markets.


I learned many valuable lessons. But one stands out more than any other lesson.


I call it the "Carpet Theory".


It means the carpet can be pulled out form underneath you at any time, for any reason, without logic and for no technical reason. It is the nature of the market when people are involved.


Another theory is everything moves in waves or cycles.


I know....I know.....millions of so called experts disagree.


But I think things move in cycles.


And most cycles look like a triangle.....things go up at an angle, peak, and then go down to the base....like a triangle.


The trick is knowing when something has "peaked". But you can use historical price charts for a clue.....say 50 or 100 year charts.


In Google's case they haven't been around for 50 years, like many other companies.




But when I look at a chart of Google stock over ten years...it "looks like" the stock has peaked or will peak soon.


Granted, it's just an opinion. But if I were trading Google stock I would sell call options slightly higher than the current price.


As far as buying it at $550 per share expecting it to go to $600, $700 or $1000 per share in the next few months or years......I think this is an unwise investment.


That's what I think.


I hope that helps.


Marc Charles

Friday, January 10, 2014

A Proven Method for Producing Cash without Losing Your Shirt

Shake Your Money Maker!

A Proven Method for Producing Cash in a Nonstop Market without Losing Your Shirt


7:10 AM

Dear Entrepreneur:

This business has made some people very rich, including myself.

Most people don’t think of the commodity markets as a business. 

But believe me, if you approach this market as a business you’ll probably make (and keep) more money.

You CAN and WILL lose money in this business.

My first few trades were horrendous. On one trade I lost about $1,000. I thought my trading career was over!

After my third year in this business I took a break with my family and we traveled for 6 months. I was debt free, with a nice bank account and I owned my homes free and clear (still true).

Anyway, I won’t bore you with ridiculous theories or sell you something you MUST to be a success in this market. 

But I’ll be brutally honest with you. 

Don’t kid yourself….this business is not for everyone. 

On top of that, there are risks involved and you can lose a heck of a lot of money too. 

But I’ll show you how to reduce risk and approach this business like a seasoned professional.

Let’s get to it!

The good news… 

The commodity market is a multi-trillion dollar global cash machine.
Contrary to what most people think, you won't lose your shirt if you approach this market like a (successful) professional trader.

The money-making potential of this business is unlike anything you have ever seen before.

I started trading commodities from the local library, and eventually from a back bedroom in my home. 

You can trade commodities from anywhere in the world. 

You can do this from a PC, laptop, iPad or iPhone or with no computer or Internet connection….but obviously, almost everything is done online today.
I've even traded commodities at 35,000 feet on a flight from Chicago to Boston.

It doesn't take a lot of money to open an account either. 

Most commodity brokerages require an initial deposit of $5,000, but some require only $2,500 if you trade “mini” contracts (about the tenth of the size of standard contracts)

But let’s get real… 

You may need more than a minimum deposit in your account.

If you don’t want limit your downside risk and eliminate the need for a margin account then consider trading exchange-traded funds or ETFs. There are hundreds of ETFs which trade commodity markets.

Marc’s Commodity Cheat Sheet

A commodities futures contract is an obligation to buy or sell a given quantity of a particular asset at a specified future date and at an agreed-upon price.
Futures contracts have standard delivery dates, trading units, terms, and conditions. 

And they can be based on any number of underlying assets. 

Futures contracts are available for every conceivable market including: stock market indices, bonds, interest rates, coffee, sugar, orange juice, cocoa, oil, natural gas and dozens of agricultural commodities.

You can "open" a futures position by either buying or selling a future. 

You can "close" a futures position by doing the opposite - either selling or buying the same future. 

In practice, most futures contract positions are "closed out" before they expire. 

If you hold a commodity futures contract to the expiration date, you would have to take physical delivery of that commodity, or settle in cash. 

Obviously, most commodity traders have no interest in the physical asset. Most traders are looking to make money over the duration of the trading period.

If you believe that the price of the underlying asset will rise, you would buy a futures contract - taking what is known as a long position. 

A long position commits you to take delivery of the underlying commodity, or equivalent cash value, at a prearranged price and by a certain date.

On the other hand, if you believe that the price of the underlying asset will fall, you would sell a futures contract - taking what is known as a short position.
A short position commits you to deliver the underlying shares, or equivalent cash value, at a prearranged price and by a certain date.

As with the stock market, you can place "stop-loss" orders above or below your entry points to make sure you lock in profits when the market rises or limit your losses when the market falls. Stop loss orders are a great tool for limiting risk and locking in profits, I’ve always used them.

The best futures contracts are traded on government-regulated exchanges such as Chicago Board of Trade (the largest futures exchange), the Chicago Mercantile Exchange and the Intercontinental Exchange or ICE.

You’ll find commodity exchanges in most industrialized countries.

An "Insider" Commodity Trading Strategy Used by the Pros

Amateur traders typically trade like they're on a weekend trip to Las Vegas.
Amateurs become excited when they have a big winning trade (I was in this group when I started out too!).

As a result, amateur traders don't know when to stop or remove profits.

Successful traders on the other hand don't get emotionally charged after a winning trade. The most successful traders I’ve spent time with approach the market with a calm assurance. 

Okay…let’s take a look at a hypothetical trade in the corn futures market. 

Corn futures are one of the most popular agriculture commodities. (Other “ag” commodities include soybeans, soybean meal, soybean oil, wheat, rice, oats, and barley.) 

Each corn futures contract on the Chicago Board of Trade consists of 5,000 bushels. The deposit (or margin) to control this contract is around $500 (give or take a few dollars).

Every time the price of corn moves one cent in the futures market, the value of the futures contract increases or decreases by $50 USD. 

For example, if the price of corn on the futures market closes up five cents this means the value of one corn futures contract would increase $250. 

If you bought one corn futures contract when the market opened and sold it after the contract had gained five cents you would have made $250 (less any exchange or brokerage fees). The corn market is fairly predictable and usually trades within a 20-cent range. 

Okay, on to our hypothetical trade……

The most important aspect to this “insider’s” strategy is to limit the amount of contracts you hold, systematically remove profits…..and perhaps the most important thing…start over again small.

So let’s say we purchase one corn futures contract at the market (prevailing price). 

The contract closes up 10 cents on the first day. But let’s say we hold it and don't sell. 

Over the next few days, corn futures close up another 20 cents – and now we decide to sell it.

In this scenario, you would have made $1,500 (30 cents x $50 = $1,500).
But instead of celebrating we continue with our strategy. 

Important Tip: There are basically two ways to approach the commodity markets. If you Google this you’ll see its true. You can base trades on a technical or a fundamental point of view. A technical view is the use of charts, cycles, Elliott Waves, and mathematics etc. A fundamental view is on opinion based on supply, demand, weather, and crisis, etc. If you can use both approaches so much the better.

Okay, let’s get back to our example…

After you sell the one corn futures contract, the next step is to buy two corn futures contracts. 

This may sound confusing but it’s not!

The idea as I said is to trade through a series of four trades. In other words limit the number of contracts you hold.

If you draw this strategy on a piece of paper it would look like an inverted (upside down) pyramid

It would look something like this
Buy 1 contract - and then sell it
Buy 2 contracts - and then sell them
Buy 3 contracts - and then sell them
Buy 4 contracts - and then sell them (Level 4)
Remove profits and start over again small