Exchanging Ideas & Sharing Success
Last week I took a business trip to beautiful Boston, Massachusetts. I attended a marketing conference
which was wonderful! If you can go to a work related conference and get pumped about doing your job… then it was worth every company penny spent.
Funny Side Note
Just to give you my background… I really haven’t traveled too much. I was terrified of the airplane ride and even more terrified of navigating a new city on my own. Also to note… I am clumsy and often times very “unlucky.” Boston was no vacation from my “unluckiness.”
-Had a 1 hour delay leaving MD.
-Flew on the smallest airplane imaginable.
-Cab driver overcharged me from the airport to my hotel (unknowingly overcharged $20).
-Cab driver conned me into taking a ride to the conference when I could have walked (1.5 block walk - 5.5 block drive).
-Flagged for full security check at Logan International.
-Had a 5 hour delay leaving MA.
-Accidentally screamed on the plane because we had minor turbulence. Very embarrassing.
Regardless of the minor problems on my trip, I am extremely excited to attend another conference. I learned many marketing tips from others which will help me do my job better, and that was most more important thing I learned.
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What do I mean by that and why does it apply to trading? Why can’t it apply to trading?
As a trader, you have made the conscious decision to be a full time student as well. You can learn from professional traders and trading systems, but an untapped resource could be just another self-directed trader sitting at their computer screen.
We know that a common trading practice is to test theories, indicators, and systems… however this takes time and patience. Wouldn’t it be nice to get the skinny from someone who has already completed these tasks? Or ask, “Hey does anyone know what MarketClub tools would best work with “X” trading style?” Of course the MarketClub staff has a suggested techniques… but what if you want to hear it from a MarketClub trader themselves. “What do you think about the news feed,” or “Do you know any charting or navigational tricks?”
Well, I think I can help you out. Our technical director has just added a new feature to our MarketClub Help Section. It is called “Open Questions.” Propose a question to MarketClub members and hopefully someone will give you a response. If you are a niche style trader, there may be another trader of the same style that can give you some pointers.
If your question has already been answered you can find it by using the search tool on the left hand column. I do my best to answer these questions with our suggested technique, but I will be adding member answered questions if they are in good taste and are in compliance with our content policy. To see currently posted answers use the instant response box and type in a general description.
If you’ve never been to the MarketClub’s Help Section, consider this your “lucky day.” This section will break down MarketClub’s tools and suggested techniques. I would recommend you visit this section even just to browse around.
Please visit MarketClub’s Help Section to help traders answer their questions and perhaps post your own.
Bookmark this URL: http://club.ino.com/help/faq/index.php?action=show
P.S. - You don’t have to be a MarketClub member yet to view the Help Section. Everyone is welcome to look around.
The Number One Secret To Diversification
Here is the number one secret to market diversification, spread the risk and trade in non correlating assets.
Here’s an example of a non diversified portfolio.
Say you are bullish on Crude Oil and you buy a futures contract in crude, but what if the rest of your portfolio was full of energy stocks?
What you have created is one basket of eggs. In this case a basket of energy eggs. Your portfolio is dependent on one sector and that is energy. This is just too risky for the average investor. No matter how many stories you hear from the various experts saying that energy is going through the roof you don’t bet the farm on one market … ever.
You need to have as many non correlating asset classes as you can follow. This short video illustrates diversification perfectly.
The other key to diversification is cash. You don’t have to be in all the markets everyday. Cash is a way of diversify … Swiss Francs, Canadian Dollars, Euros, etc etc.
Here’s an example of how a well diversified portfolio.
Stocks, bonds, futures and cash.
Out of those four asset classes, you have a multitude of choices. Stocks allow you to cover a broad spectrum of different domestic and international sectors. Bonds do the same thing, and the futures markets cover everything from raw commodities to financial instruments.
You can divide your portfolio into different percentages and allocate then to various asset classes. The more you divide into non correlated asset the less your risk will be.
Here’s what I am suggesting. I call it the Will Rogers approach to trading.
The American humorist Will Rogers (1879 - 1935) had a special way of making a point. Here’s another one of his insights about trading and investing.
Here are two of Will Rogers most famous quips.
“I’m more concerned about the return of my money than with the return on my money”.– Will Rogers
“Don’t gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don’t go up, don’t buy it”. – Will Rogers
Will was right!
Only buy sectors when they are going up. (Here’s how to tell if markets are going up). When they turn down, get out and move into cash. Then look for another non correlating market sector for your portfolio that’s moving up. For sophisticated traders you can even short different asset classes which is a way to turbo charge your returns.
Learning when a market is moving higher or lower is not as difficult as you might think. Take a look at how you can tell if your favorite market is going higher or lower here.
Enjoy,
J. Adam Hewison
President, INO.com
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