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Planning Ahead: 3 Tips to Cure a ‘status quo’ Portfolio

It’s not too late to fix an ailing portfolio, Rick Murphy shows you how it’s done in this guest post. Photo by: gerlos


According to the financial experts, ways to duck the stationery trend of the financial markets will be the most interesting talking point amongst traders as well as investors. The environment is all the more grim since the U.S. government is trying its best to make the economy debt-free or at least contain it within the specified debt ceiling.

As a trader, you’ll need to figure out the necessary investment strategies in order to manage your finances well in 2013.

Investment tips for traders

Following these investment tips will help you to put your finances in the most profitable use:

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The Trading Plan

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Everybody is saying you gotta have one, right?

They’ve told you how important it is and why you can’t trade without it…

They’ve told you what it should contain and that it is resembles a business plan…

If you’re lucky, they might’ve even told you how it is structured or what it should focus on…

But rarely do they ever tell you what it really looks like, or give you a real-life example!

See, a long time ago, I combined what I’ve learned from one of my trading mentors Todd Brown, and then added stuff I found in the great trader Peter Brandt’s book Diary of a Professional Commodity Trader, and my trading plan was born. With all the information and trade ‘secrets’ it contained, it became my own trading how-to booklet.

I printed it out, kept it on my trading desk at all times. I’ve read it every night to myself every night before sleeping…

I’ve even put a name on it. And I owe it to you to have a look.

Please feel free to make it your own, changing where it’s necessary so it completely fits your trading approach.


The Basics

Trading Philosophy/Values/Beliefs

  • My priorities are
    • Preservation of capital
    • Consistent profitability
    • Pursuit of superior returns
  • My trading style is Aggressive to Medium
  • My trading time frame is Short to Medium-term
  • I trade real markets in real time with real money with a real performance record
  • The Congruence trading plan governs my trading activity and is based primarily on the Elliott Wave principle discovered by R. N. Elliott and introduced to the world by Robert Prechter
  • I believe that the markets are 100% psychology-driven. Patterns are  a reflection of the collective psychology of a large number of participants
  • Price is to be respected above all else. I trade what I see.
  • I always follow and act on the higher probability outcome or Elliott Wave count – this way I keep my edge
  • Only part of the data is required to make trading decisions. Probabilities are weighed thereafter. If my rules are met, then there is a trade for me
  • I execute with speed and precision when my rules are met
  • I make good trading habits by associating pleasure to following my rules and using the right trading language (ex. stop executed, target met, etc)
  • I understand that my equity curve can be a wiggling line that is overall pointing upward
  • My goal is to trade the plan successfully, when I am happy with my performance in implementing my plan, I take some time away to rest for the day
  • I believe that there is always another day/month/week in the market with many potential opportunities. The market was always there and most likely will be
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Finally – a Bullish Setup Somewhere!

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So, guess who was quietly picking up momentum while the rest of the word dealt with the shitstorm?

The Sensex index!

That’s right.

You know it took a beating in 2011, but things have been changing for the Indian index lately. And since we only look at the hard data and trading setups according to our rules, here is the setup:

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Risk vs. Reward of Markets with Highest Potential

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Markets are collapsing mode except for the Volatility Index (the Fear Index) and the US Dollar. Top risk rewards for the best potential markets are:-

USD 1x: -3% vs. 12%

EUR 2x: -8% vs. 14%

Silver 2x: 28% vs. 67%

Italy 2x: -30% vs. 47%

VIX 1x: -36% vs. 83%

Gold Miners 3x: -65% vs. 98%

VIX 2x: -73% vs. 167%

Natural Gas 2x: -74% vs. 89%


Here they are (Yellow line for volatility, green line for current price and for targets):-

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What Zynga Can Teach Us About Facebook IPO

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Sometimes IPOs flop.

And they often do that with style.

Especially when the bear market is raring it’s ugly head.

If you think Facebook is the sure thing.. Well, all I can tell you is:

Don’t be too sure!

You don’t have to go that far back in history (December, 2011) to see what happened to Zynga. This was supposed to be the “hottest social networking game IPO in history”… and what happened to it? This chart will tell you:

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