The Ape Bot

April 16th, 2008

Build Wealth From Home

Posted by admin in Universe Of Investment

As you sit in traffic, inching along between irate drivers, you think to yourself, “there must be a better way.” You get to work, you endure another tirade from an incompetent boss, and you think, “there must be a better way.” You work hard, you’re underappreciated, underpaid, and fed up. After all this, you can barely pay the bills, and haven’t taken a real vacation in years.

There must be a better way.

Now there is!

You can be your own boss, work from home, and earn more money than you ever thought possible.

Benefits of Working At Home

Many people have a romantic vision of working at home, doing chores while making money, working at their own pace, sipping coffee poolside with laptop nearby. For most people, that dream will never come true because of unrealistic expectations and poor planning. But all of the potential benefits of working at home are in fact possible to achieve, if you choose the right business and plan properly.

How do you choose the right business? First, you must avoid a retail business where customers expect you to be available during normal business hours; it means avoiding a business that requires stocking or shipping products; and it means avoiding a business that requires any serious degree of production, which is usually not practical in a home environment. So what’s left?

What about a business that requires no product, no shipping, no customer service, and no regular hours. Does such a business exist? Yes! It’s called trading futures. Wait! Don’t be intimidated by something you don’t know about. Trading futures is the most profitable skill you can ever master. Trading futures is the world’s fastest way to riches and freedom. This is one of very few models that meets all the realistic requirements for a successful home business. And you can trade from home even if you have absolutely no experience, and don’t even know what trading is, or what futures means right now. You will soon.

Here are just some of the incredible benefits of working at home:

  • Make more money than you ever thought possible

  • Every penny you earn is yours

  • Why make somebody else rich with your labor?

  • Work from the beaches of Hawaii or a villa in Europe

  • Work your own hours

  • No boss

  • No commute

  • No employees

Where Do I Start?

We will start at the beginning of course! Like any new subject, at first the ideas might be a little intimidating. But we will walk you through at a gentle pace. We will start by explaining the basics of futures, then describe some old trading systems that brokers recommend but don’t work. We will reveal the myths and lies on Wall Street that you have to get past to start really trading successfully. Finally we will lead to the STARS method of trading futures. STARTS stands for Securely Trading A Revolving Spread. Right now that will make no sense, but you will see later how this will change your life.

What the Heck is a Futures Contract?

To understand what we mean by a futures contract, let’s meet Trader Bob. Our friend Bob is a buyer, meaning he wants to purchase a widget today because he believes that the widget will have more value in the future. If all goes well, Bob will buy the widget now, wait for the price to go up, then sell the widget for a small profit in a month. But where can Trader Bob obtain the widget? It so happens that Trader Sam (a seller) has in his possession the widget that Trader Bob wants. Trader Sam would like to sell the widget today because, unlike Trader Bob, he believes that the widget will have less value in the future than it does today. Trader Sam is selling today because he believes that he will make more money now than if he waits to sell in a month.

So Trader Bob and Trader Sam get together and agree upon a price for the widget. Trader Bob is now the proud owner. If the value of the widget indeed increases in the future, then Trader Bob can become a seller and part with the widget with a profit. If the value of the item decreases in the future then Trader Bob will have to sell the widget for a loss.

This basic relationship between buyer and seller is the foundation for all commerce. Futures are simply a variation on this theme, where instead of buying a widget now, Trader Bob contracts to buy the widget in a few months at a fixed price. The transaction still relies on the buyer believing the price will go up, and the seller believing the price will go down.

Trading Critters

Futures traders fall into two categories: hedgers and speculators. The primary economic purpose of the futures market is for hedging, which is buying or selling futures contracts to offsets risks of changing prices in the cash markets. Hedge traders, such as large commercial firms that may actually take delivery of certain commodities, like coffee or wheat, use futures contracts to protect (hedge) themselves against changing cash prices.

Speculators, however, make up the majority of futures traders. Speculators have no commercial interest in the underlying commodity and have no interest in taking delivery of the commodity. The potential for profit is what motivates speculators to trade commodity futures. Speculators buy when they believe that prices will increase and they sell when they believe that prices will fall. Futures traders using STARS would be considered speculators.

Basic Basics

If a trader is a buyer, he has taken a long position. A long position involves the purchase of a futures contracts in the hope that the price of the contract will increase in the future. Let’s say our friend Trader Bob contracts in March to buy a widget (a long position) in June for $10. June rolls around, and the price of a widget is now $13. That means Bob now has the right to buy the widget for $10 even though the going rate is $13. Bob goes ahead and buys the widget for $10, then turns around and immediately sells it for $13, pocketing the difference.

A trader who is a seller takes a short position, which involves the sale of futures contracts in anticipation of prices falling in the future. Trader Bob in this case contracts in June to sell a widget in September for $13. Fall comes around, and the going rate for widget in September turns out to be $9. Trader Bob buys a widget for that going rate of $9, then immediately turns around and exercises his right sell the widget for $13, profiting from the difference. At first, it might seem odd that Trader Bob is contracting to sell something he does not yet own. But look at the situation this way instead: in June, Bob makes a commitment to sell a widget to Sam in September for a guaranteed price of $13. If Bob can buy the widget for less than that sometime before September, he will make a profit.

All of this is made simple and easy in Trading Futures: Only One Way to Win. Like Bob, you too can make huge profits by trading the STARS method. Let us show you how to trade the right way, the only way, and a lifetime of prosperity can be yours. Just go to www.tradetofreedom.com.

©Copyright 2004. This work is copyright. You may download, display, print and reproduce this material in unaltered form only (retaining this notice). All rights are reserved

About The Author

Jeff Schweitzer received his Ph.D. from UCSD in 1985. Jeff was appointed as a science advisor at the White House under the Bush and Clinton Administrations for three years before devoting attention to generating wealth through trading futures. He has published more than 60 articles in diverse areas, including neurobiology, marine science, international development, environmental protection and aviation.

April 8th, 2008

Shakeouts

Posted by admin in Universe Of Investment

This phenomenon occurs in the realms of day trading as well as longer-term investing. In both areas, the masters of the market try to “shake” other traders out of promising long or short positions by precipitating quick reversals in the prevailing trend.

For example, news plays are the foundation of day trading where speed is essential. A positive headline for stock ABC is usually followed by a spike in buy volume that shoots the price higher. This can last five minutes or less. The spike is often followed by a shake in which the price falls sharply as the surge in volume subsides and early birds sell and pocket their profits. A typical retracement is 50%. So if ABC jumps from 10 to 11, it tends to drop to around 10.50.

This is usually enough to scare out traders who came late to the party and bought ABC around 11. The shake is usually followed by another substantial move higher, and that’s where savvy traders jump back into the stock for further profits.

In longer-term positions, a shake often triggers the stop losses that wise investors place below their entry price (or above in the case of a short). They “trail” the stop behind the stock as the price advances. We usually recommend using a 10% stop loss; if you buy ABC at 10, you place the stop loss at 9. If ACB rises to 11, you adjust the stop to 10 or so. If it hits 12 you adjust to around 11, and so on. Using a stop protects your position against severe loss and locks in profits.

But market makers have an uncanny ability to judge where the majority of stops are sitting for a particular stock. If ABC is at 12 and loads of stops are at 11, it’s usual to see enough selling hit the stock to take in down to 11 and trigger all those stops. That shakes investors out of their position as the stock is sold.

It is frustrating to be shaken out of a good position only to watch the stock resume its winning move, but it is the way the game is played. It’s no reason to quit using stops, because all too often a reversal can whack 20 or 30% off the price of a stock before it regains its footing. We don’t want to be around for that.

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