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Rapid Fire Equity Builder!: Your Cash Flow Magnet Trading Plan
Rapid Fire Equity Builder!: Your Cash Flow Magnet Trading Plan
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TABLE OF CONTENTS
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1. INTRODUCTION
2. YOUR BALANCED SIMPLIFIED PORTFOLIO
3. FOUR COMMODITY GROWTH RISK GROUPS
Slow Growth Commodities
Aggressive Growth Commodities
Ultra-Aggressive Growth Commodities
Hard Core Speculative Growth Commodities
4. COMMODITY SECTORS
CURRENCIES SECTOR
INTEREST RATES SECTOR
GRAINS SECTOR
INDEXES SECTOR
MEATS SECTOR
SOFTS SECTOR
METALS SECTOR
ENERGIES SECTOR
5. HOW MUCH SHOULD I INVEST?
6. ESTABLISH DIVERSIFICATION WITHIN YOUR GROWTH RISK
CATEGORY
Interdiversification
Intradiversification
7. REALLOCATING YOUR PORTFOLIO
8. CHART TRADERS PREFERRED EQUITY ALLOCATION STRATEGY
9. MARKET MENTOR
-1-> LEVEL ONE (Bronze Trader)
-2-> LEVEL TWO (Silver Trader)
-3-> LEVEL THREE (Gold Trader)
10. DAILY HABITS OF PROFITABLE AND TENACIOUS CHART TRADERS
11. A QUICK THOUGHT ON EXITING THE MARKETS
12. TACTICAL RULES OF ENGAGEMENT
13. THE CHART TRADERS 43
14. BECOMING AN IMMORTAL TRADER
15. EFFORT GET'S THINGS DONE
16. INCLINATIONS OF A WEALTHY MIND
17. POPULAR CONTRACT SYMBOLS
18. MONTH SYMBOLS
19. RESOURCES FOR BETTER TRADING RESULTS!
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INTRODUCTION
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We are so grateful to have you here with us as a Chart
Trader. In the days, weeks, and months to come we believe
you will have one of the most incredible experiences of
your entire lifetime. Being a Chart Trader is more than
about winning in the markets... it's about winning in life!
It's more than about insights into the markets... it is
about insights to self! It's more than about making money
from the markets it's about making love to the markets.
The road ahead for you is truly one less traveled. Perhaps
never known by you. Yet, with many of the less traveled
roads comes the reason why it's less traveled. The
inconvenience, the pain and the unknown.
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Think about the movie the Karate Kid. The young boy wants
to learn how to fight. Better yet, he wants to learn how to
defend himself. So, the teacher accepts the young boy as
his student and then sends him about doing what appeared to
be nothing more than house chores the old man had no time
to do for himself. The youngster didn't know at the time
that the seemingly unassociated tasks were directly
associated with his future as a fighter and a defender of
himself.
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Even with the Market Mentor, the request to keep your daily
journal. How unfortunate for the trader who thinks this to
be a useless task of creating a paper trail. My friend, it
is that trader's equity that you will capture and enjoy as
your own.
You will not only begin to see your equity increase, you
will see your level of unconditional love for the markets,
for your family, for your friends and for life itself begin
to increase. As your unconditional love for the markets
increases so does your equity. By unconditional love for
the markets, we mean you celebrate each trade for the
opportunity it presents. Not the outcomes and end results.
Win, lose or draw... celebrate Her and she will reward you
massively. Disrespect her and she will scorn you and have
your equity wiped away like a straw house in the path of a
tornado.
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You will have losing trades while you are here, you will
feel some pain, you will have some doubts, you will get
uncomfortable... and guess what? That's all a part of
shedding that old skin... the old ways... those losing
ways.
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Let us now begin with some of the basics to ensure that you
are able to stay around long enough to meet and greet Her
and to build the kind of relationship with Her that brings
a life showered with your greatest desires and your
storehouse filled with treasures.
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YOUR BALANCED SIMPLIFIED PORTFOLIO
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The basic idea is this: we want you to run your portfolio
the way a professional private fund manager does. With the
exception of being a loser. We want you to win. ☺
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FOUR COMMODITY GROWTH RISK GROUPS
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Now let's take a look at the four risk groups of
commodities available to us Chart Traders:
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Lumber
CRB Index
Copper
Platinum
Palladium
Silver
Gold
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COMMODITY SECTORS
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Following are the Commodity Sectors and individual
Commodities with their Point Value and Initial Margin
Requirements. Be mindful that you are responsible to know
the current margin requirements for each contract as they
can change without notice.
CURRENCIES SECTOR
Swiss Franc
1 Pt.=$12.50
2,160
Deutschemark
1 Pt.=$12.50
1,620
Mid-Am Deutschemark
1 Pt.=$6.25
810
Japanese Yen
1 Pt.=$12.50
4,212
British Pound
1 Pt.=$6.25
1,823
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Canadian Dollar*
1 Pt.=$10.00
608
Australian Dollar
1 Pt.=$10.00
1,316
Euro Currency
1 Pt.=$12.50
4,050
Mexican Peso
1 Pt.=$5.00
5,000
US Dollar Index
1 Pt.=$10.00
1,330
Eurodollar
1 Pt.=$25.00
675
Treasury Bills
1 Pt.=$25.00
236
Mid-Am T-Bill
1 Pt. =$12.50
149
Treasury Bonds
1/32 = $31.25
2,025
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1/32 = $15.62
1,013
10 Yr T. Notes
1/32 = $31.25
1,350
GRAINS SECTOR
Corn
1/4 Cent = $12.50
675
Oats
1/4 Cent = $12.50
270
Soybeans
1/4 Cent = $12.50
1,215
Mid-Am Soybeans
1/4 Cent = $2.50
243
Soy Meal
10 Cents = $10.00
810
Soybean Oil
1 Pt. = $6.00
608
Wheat
1/4 Cent = $12.50
743
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Rough Rice
1/2 Cent = $10.00
675
INDEXES SECTOR
NYSE Composite
1 Pt.=$5.00
15,000
S&P 500
1 Pt.=$2.50
29,298
E-mini S&P
1 Pt.=$0.50
5,855
Value Line
1 Pt.=$5.00
13,125
CRB Index
1 Pt.=$5.00
1,625
Nasdaq 100
1 Pt.=$1.00
43,125
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Russell 2000
1 Pt.=$5.00
22,950
Dow Jones
1 Pt. = $10.00
8,485
MEATS SECTOR
Feeder Cattle
1 Pt. = $5.00
675
Live Cattle
1 Pt. = $4.00
473
Lean Hogs
1 Pt. = $4.00
1,080
Mid-Am Hogs
1 Pt. = $2.00
540
Pork Bellies
1 Pt. = $4.00
1,620
SOFTS SECTOR
Cocoa
1 Pt. = $10.00
840
Coffee
1 Pt. = $3.75
3,150
Cotton
1 Pt. = $5.00
998
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Orange Juice
1 Pt. = $1.50
700
Sugar #11
1 Pt. = $11.20
700
Lumber
1 Pt. = $1.10
1,350
METALS SECTOR
Copper
1 Pt. = $2.50
1,350
Gold
10 Cents. = $10.00
1,350
Platinum
1 Doll. = $50.00
2,160
Palladium
5 Cents. = $5.00
20,250
Silver/5000 OZ
1/2 Ct. = $25.00
1,350
ENERGIES SECTOR
Crude Oil
1 Cent = $10.00
3,375
Unleaded Gas
1 Pt. = $4.20
3,375
Heating Oil
1 Pt. = $4.20
3,375
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Natural Gas
1 Pt. = $10.00
4,725
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HOW MUCH SHOULD I INVEST?
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How much of your available liquid cash should you allocate
for trading? Well, that depends on your appetite for market
volatility, how much money you can lose without changing
your lifestyle, and how much time you are going to spend on
your portfolio (slow growth least time, speculative growth
most time).
So, after deciding how much equity you can start with,
let's say $5,000.00, and allocate 50% for initial margin,
which will be $2,500.00. Now, make up your mind how much of
your commodities portfolio you want in each risk category:
We know at this point you are not able to take trades from
the Speculative Growth Commodities. Also, if you want to be
able to diversify properly, you are not able to take more
than one large contract trade from the Aggressive Growth
Commodities.
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ESTABLISH DIVERSIFICATION WITHIN YOUR
GROWTH RISK CATEGORY
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This portfolio management idea is simple but powerful.
Since under-diversification can slaughter your equity
growth potential, the idea here is to diversify your
holdings within your growth risk categories as mentioned
above. There are two forms of diversification.
Portfolio Example:
Long Corn ($657 initial margin)
Short Feeder Cattle ($675 initial margin)
Long Midam Canadian Dollar ($351 initial margin)
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REALLOCATING YOUR PORTFOLIO
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When one of your commodities takes off and becomes 25% or
more of your entire account value, it's time to trim some
profits off the top and add them to your out-of-balance
investment categories.
This is a good thing. This is how you get richer and richer
without getting a riskier and riskier portfolio.
The key to getting wealthy from trading, once you know HOW
to trade, WHY to trade, WHAT to trade and WHEN to trade ...
becoming wealthy becomes only a thing of having more than
one contract. As well, by consistently reallocating your
portfolio and staying within your trading plan parameters,
you have the greatest equity growth and cash flow
opportunities.
What we mean by "it's time to trim some profits off the top
and add them to your out-of-balance investment categories"
is this. Once you exit the positions as mentioned above and
the equity gains have been added to your account. Have a
check sent to you for that amount. Give 10% to your church
or favorite charity and place the remaining in your high
interest savings account or in your stock trading account
for long term stock holdings.
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CHART TRADERS PREFERRED EQUITY
ALLOCATION STRATEGY
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Here's our preferred allocation:
LEVEL 1:
50% - Slow Growth Commodities
40% - Aggressive Growth Commodities
10% - Ultra-Aggressive Growth Commodities
LEVEL 2:
50% - Slow Growth Commodities
25% - Aggressive Growth Commodities
25% - Ultra-Aggressive Growth Commodities
LEVEL 3:
20% - Slow Growth Commodities
35% - Aggressive Growth Commodities
35% - Ultra-Aggressive Growth Commodities
10% - Hard-Core Speculative Growth Comm.
RULE #1: Since you are investing short term, do not plan to
hold positions for longer than 1 month with 2 months tops.
RULE #2: Use both swing targets for faster profits exits
and use stringent protective stops to protect your
immediate equity.
Rule #2 above will get you stopped out more often than not.
However this keeps you in a rapid-fire position where you
can quickly and continually use your equity to seize fast
opportunities.
If you are trading for the LONG TERM capital gains. Which
is the best thing for larger gains to smoke out volatility.
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It's when you look at the longer-term picture that you see
where todays smoke fits in.
It's this holding that will allow you to capture the insane
profits.
You get excited when you win… even a little bit. You almost
blow your eyes out of the socket if you win more than a
little bit.
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The mass media has you thinking THAT'S what this game is
all about.
NOT SO!
The more you try to win... the more you will continue to
lose. Also, the more you try to avoid losing. The MORE you
will lose.
The more money you give back to the markets. The more proof
you have that you don't understand.
The more money you gain from the markets. The more proof
you have that you do understand.
Understand what?
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It will shine the light in your dark areas. You are not
able to run or hide. You are sure to suffer losses of a
great magnitude... as long as your ATTITUDE is one of greed
and fear.
Of course not. So, what makes you think the market likes it
when all you want is money?
She's no fool. She knows everything. She can help you. She
can also hurt you.
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The more you feel you got to have it. The more it will
elude you.
Money has NEVER made any one happy, at least not long term.
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DO NOT let fear and greed be the rudder of your ship. There
are better, proven and sound ways to reach the pinnacles of
your dreams
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MARKET MENTOR
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The Market Mentor well help you to get the most of the
Chart Trades while progressing through the ranks of traders
and maximizing your trading potential.
So, let's look at levels One, Two and Three. Please read
the details of your Trading Level so you fully understand
what you should and should not being doing.
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-1-> LEVEL ONE (Bronze Trader)
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Starting Equity:
$5,000.00
Goal:
To reach Level Two (Silver Trader) Status in one year,
while drawing 10% of net monthly profits and placed into a
high interest bearing savings account.
# Of Contracts Traded:
One
Trading Rules:
Level One Traders, when your Chart Trade is sent place the
order according to the chart (Stop, Limit, Day, GTC, etc).
Once your entry is filled IMMEDIATELY place your "Level
One" protective stop as issued. If the Market stops you
out, IMMEDIATELY and WITHOUT HESITATION place the order
again two ticks above/below the initial trade as issued,
UNLESS other wise notified via email. If the market moves
into profits and you have not been stopped out HOLD your
position with your "Level One" stop UNLESS otherwise
notified via email to exit with profits.
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Otherwise you are finished trading for the week and will
wait until the following week to enter new trades.
LEVEL ONE TRADER’S DO NOT TAKE LEVEL TWO AND LEVEL THREE
TRADES!
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-2-> LEVEL TWO (Silver Trader)
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Starting Equity:
$50,000.00
Goal:
To reach Level Three (Gold Trader) Status in one year,
while drawing 10% of net monthly profits and placed into a
high interest bearing savings account.
# Of Contracts Traded:
Two
Trading Rules:
The same rules that apply to Level One Traders apply to
Level Two Traders. Except Level Two Traders will use the
Level Two Protective Stops. LEVEL TWO TRADERS DO NOT TAKE
LEVEL THREE TRADES!
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-3-> LEVEL THREE (Gold Trader)
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Starting Equity:
$100,000.00
Goal:
To reach Platinum Trader Status of $500,000.00 in two
years, while drawing 10% of net monthly profits and placed
into a high interest bearing savings account.
# Of Contracts Traded:
Four
Trading Rules:
The same rules that apply to both Level One and Two Traders
apply to Level Three Traders. Except Level Three Traders
will use the Level Three Protective Stops.
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DAILY HABITS OF PROFITABLE AND TENACIOUS
CHART TRADERS
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As we progress forward in our journey. It's very important
that you keep a daily record or journal if you will.
Not only did they become more profitable. They became more
centered and at peace with trading, the results of trading
(win-lose-draw) and with life.
Following is the format for what you should do. It's very
simple
--> AM:
How great do I feel this morning?
How can I make today more productive than yesterday?
***Tell two people close to you that you love them more
today then you did yesterday.
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--> PM:
What did I do today that was right?
What did I do that was totally awesome?
What's most important in my trading?
What has to happen in order for me to feel like I traded
well?
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A QUICK THOUGHT ON EXITING THE MARKETS
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If there's one thing that's basic to trading commodities is
the fact that whenever you enter a market, you always have
to exit.
Where the world of traders divide, split hairs and the line
is drawn between the +90% losers and the less than 10%
winners… is WHEN and HOW you exit the markets.
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"WINNING TRADERS DO NOT EXIT WITH THE TREND,
THEY EXIT AGAINST IT!"
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What do we mean?
We'll explain!
Therefore you avoid bottom picking and allow for the market
to decline as long, as far and as much as it likes.
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TACTICAL RULES OF ENGAGEMENT
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"Verily, thou art not paid for thy methods, but for thy
results, by which meanest thou shalt extract profits from
the market before the markets extracts equity from you...
by any means available."
-Stephen Pierce
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One factor that may cause us to limit our training and thus
limit our ability to engage market targets profitably is
dogma. I am always leery of flat statements that include
the words "never" or "always." (Perhaps I should have said
I'm usually leery of such statements, as we do use some
ourselves. In my opinion the Rule of the Golden Mean should
read, "Moderation in most things.")
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THE CHART TRADERS 43
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If I can smell your scared money, so can the markets.
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BECOMING AN IMMORTAL TRADER
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The greatness of our yielding to the markets is illustrated
by water: Nothing in the world is more yielding and softer
than water, yet it penetrates the hardest. Insubstantial,
it enters where no room is.
To be in want is to posses.
To have plenty is to be confused.
Become water my friend.
Yielding to the markets.
Then let the markets take care of your profits.
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EFFORT GET'S THINGS DONE
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Effort gets things done. Patience sees them through. Both
are crucial to success. Without patience, the passing
setbacks and disappointments would soon overwhelm even the
hardiest effort. Without effort, patience would accomplish
very little.
You must put forth the consistent effort to relax and feel
the flow of the market regardless of the direction.
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INCLINATIONS OF A WEALTHY MIND
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A wealthy mind?!?! What on earth is a wealthy mind??? Is it
the brain of a genius that has a huge price tag? Is it the
ideas of someone who has amassed great wealth?
When you see a wealthy person you more than likely look at
this person as an owner of many assets and money. Has this
person always been like this? We don't know but let's
assume that she hasn't. A few years earlier this person was
seen strolling down the same street but wasn't jumping out
of a Rolls Royce and didn't have anything visible that
warranted attention.
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Is she not already thinking wealthy? Has she not just made
one of the biggest decisions in her life by deciding her
career move and possessing the dogged determination to
realize this dream? You better believe she has.
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POPULAR CONTRACT SYMBOLS
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The following symbols are some of the most popular symbols
and are the format as used by CQG. These symbols may vary
from service to service and it will be a good idea to get a
symbol list from your quote service provider.
LC = Live Cattle
FC = Feeder Cattle
LH = Lean Hogs
PB = Pork Bellies
W = Wheat
C = Corn
S = Soybeans
SM = Soy Meal
BO = Bean Oil
CT = Cotton
CC = Cocoa
CF = Coffee
SU = Sugar
CL = Crude Oil
HO = Heating Oil
NG = Natural Gas
GC = Gold
SI = Silver
CP = Copper
PL = Platinum
OJ = Orange Juice
SP = SP 500
EP = E-Mini S&P
DJI = Dow Index
DF = Dow Futures
ND = Nasdaq 100
NC = NYSE Index
US = 30yr T-Bonds
MU = Muni Bonds
TY = 10yr Note
FV = 5yr Note
TU – 2yr Note
ED = Eurodollar
DX = Dollar Index
CR = CRB Index
SF = Swiss Franc
JY = Japanese Yen
BP = British Pound
CA = Canadian Dollar
DA = Australian Dollar
EU = Eurocurrency
EM = Libor
DM = DMark
RC = Rough Rice
HU = Unleaded Gas
LB = Lumber
PA = Palladium
MX = Mexican Peso
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MONTH SYMBOLS
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F = Jan
G = Feb
H = Mar
J = Apr
K = May
M = Jun
N = Jul
Q = Aug
U = Sep
V = Oct
X = Nov
Z = Dec
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RESOURCES FOR BETTER TRADING RESULTS!
==========================================================
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