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March 2, 2022
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Finding Opportunities In Wild Markets

Wednesday, March 9th
4:30 pm ET / 1:30 pm PT

With the Russian invasion of Ukraine, the markets have gotten wild. Russian stocks are plummeting, commodities are spiking, and the US markets are searching for direction.

Chief Options Strategist, Keith Harwood, will explain how he finds opportunity in uncertainty thanks to using the defined risk and leverage of options. Don't miss out on the next great trade!

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Sign up now to take advantage of this great trading opportunity. All attendees will receive a FREE GIFT, Keith's Options Trading Checklist.

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TradeWins Author Team

 

 

Tomorrow, you could begin doubling your account every single month starting with one letter.

The letter will come from a 20-year trading professional named Ian Cooper. He says, “In 2022, following my trades you would be doubling even tripling your account some months. Let me show you how.”

He will show you exactly what to do... and he’ll give you the blueprint for just $1.

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Risk: Speculation versus Gambling
by Keith Cotterill

Without wanting to insult the millions of people who gamble every week, there’s only one way you should approach gambling and that’s to discount any possibility of winning right from the start! By all means see it as a bit of fun, but don’t expect any form of gambling to provide you with a solid basis for long-term wealth.

How can I be so sure? A question I am often asked goes something like this:

“Keith, I understand that Futures Markets depend upon speculators for their existence. And these speculators attempt to profit by predicting the rise and fall of prices. But from what I can tell, there’s little or no difference between this and gambling.”

Is there a difference? I believe there is and so do all successful traders.

Gamblers create risk. The risk associated with a card game does not exist until one or more players up the stakes, with the possible chance of making money. Of course, there are gamblers in the Futures markets too. People who lose because they become liable to use guess work, and those who do not fully appreciate what is really happening. You are gambling when you do not have all the information to satisfy yourself that your actions do not carry unnecessary risk.

Speculators control risk. In any market economy there is always a risk that prices will change according to supply and demand. Although volatility exists, it is not created by speculators, but by the underlying dynamics of the market. A speculator is merely taking on the existing risk in return for the chance to profit.

If you want to make money fast and with a very high return on your money then you must consider speculation as your only option. And if you want to speculate, the best place to do it is where the market is strictly regulated and structured. The market must allow you almost total liquidity (the freedom to buy and sell quickly and at the price you desire). It would also help if it were volatile. That is, prices fluctuate.

The Commodity Futures markets allow you to speculate quite freely on a wide range of markets. Most of all, they offer you the kind of leverage which can take a small deposit and multiply it many times – sometimes in a matter of days. Of course, every form of speculation involves some element of risk. However, the big difference between this and gambling is that there are empirical and cogent ways in which you can almost completely eliminate risk from your trading.

How to Control Risk and Increase Your Chances of Success

Imagine that you decided that you’ve learned enough about Futures to begin trading in the markets with your hard-earned money. Let’s assume that you set up your margin account and decide to buy a gold contract. Within days of entering the market your first trade makes you a nice profit. Let’s say you DOUBLE your money. How would that make you feel?

You’d be excited. You’d be proud of yourself. You’d be confident. And you’re likely to develop a burning desire to want to do it again. Of course you would. It’s human nature. Naturally as a sensible trader, you would have the sense to bank your original stake and trade with your profits. But just stop and think about it for a moment and you’ll realize the fundamental error in this behavior. Ask yourself the following questions…

What is the probability of this winning trade turning into a winning streak? Was your trade repeatable, and if so, what are the odds of it happening again? And these questions naturally lead to others…Are the odds against you becoming a long-term successful trader? What are you up against and why do some traders win consistently, whilst others don’t?

If you want to continue your successful trading then you must have as much as possible stacked in your favor before and when entering the markets. All that you need to make successful trades is the universally available data released at the end of each day’s trading.

Risk Is Everywhere

From the moment we are born to the day we die – every pursuit we follow or action we make involves some degree of risk.

Thankfully, speculating in the Commodity Futures markets is far from a deadly pursuit. However, as the potential rewards we can gain from any pursuit rise, so too does the element of risk. It is a simple fact of life. And it is just as much a fact of life in the Futures markets.

Of course if there was no RISK involved in speculative activity – if it was really so easy to DOUBLE your money – then the concept of wealth and its pursuit would be redundant.

For me, risk is a welcome part of making money. Risk is only a matter of perception. It’s all part and parcel of the challenges and opportunities Futures trading presents you with. To overcome the odds through your own intellectual efforts and come out not only with a sense of accomplishment, but to come out considerably wealthier than when you started.

When you succeed it means that you have identified the best time to act when risk is at its lowest. It’s what makes reducing risk the number one challenge of every trade. And to do this, we must understand what risk really means.

If risk is at all present, then we must assume that there is a level of VOLATILITY or UNPREDICTABILITY. For me, the term ‘risk’ is merely a different way of saying that your data is limited. That is, there is not sufficient information to make a decision which is comfortably free from the risk of failure.

So, risk is only reduced by obtaining more and better quality information, so that as many of the possible outcomes are known.

 
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