I once hired a trader with an excellent track record, built on short term trading. Even after pro-rating higher commissions, we perceived that our clients could earn 50% or better annually with no surprises, or so I thought. The trader's basic analytical foundation included intra-day data and daily price charts. He ended one days' trading with an unrealized gold profit of $400 per contract. The next day’s market opening, our profit swiftly became a $2500 per contract loss. If the trader added weekly bar charts to his analytical process, he would have seen a different picture, therefore taken different actions. If I had considered his perception, I would have been aware of the risk.
A subtle variation in perception can dramatically alter the material result.
FACT: Years ago, the New York Times reported a $1.3 billion loss taken in the oil markets by a bank. The bank was hedging on behalf of a metals and oil conglomerate. Upon audit, an independent team concluded that losses were taken because managers panicked at the size of the unrealized profit and loss statement. A domino effect of mistakes caused by inaccurate fear based beliefs, creating bad decisions, resulted in disaster. They said, if the hedge was properly managed, losses would not have occurred.
FACT: The New York Times reported an unfortunate incident of a man from Connecticut. He heard a radio commercial about big profits to be made trading commodities. After some discussion with a small brokerage firm, he opened an account with $18,000. In less than one week his $18,000 shrank to $6,000. $8,000 of his loss went to commissions. TRUTH: Greed and ignorance got him into a situation he chose not to manage. He caused his own losses than blamed the environment.
The previous facts reflect beliefs and actions that caused a negative material reality. Knowledge of how natural law or universal intelligence works can be applied to building a fortress of material wealth that extends beyond money.
FACT: If internal perceptions and motives are clear, ONLY correct actions can follow.
Poor decisions are usually the most frequent reason for any material loss. In each instance, the environment was feared or blamed by participants.
An environment does not even exist and can never act without our participation.
Opportunity for a successful outcome was always in the environment however, models for perception did not allow seeing it. If something is amiss within our perceptive abilities, it will eventually manifest in our material world.
A Profitable Alternative
1. Being a long-term trader with a strong focus on weekly chart patterns, I could have shared a perception of a major top formation. At the very least, the trader may have considered the data and made a different choice. Maybe he would have taken the $400.00 profit as a day trade. I chose to remain silent and not interfere with his process.2. When hedging with futures, unrealized profits and losses are always balanced with the opposite yet equal cash position. If the position was a true hedge, relief rather than panic exists with most transactions.
3. The Connecticut investor allowed himself to get nabbed. Nobody can ever do anything to us without our permission. He could have researched and developed a successful plan for a prudent approach to the futures markets.
Our Fortress of Strength Lies Within
We may be drawn to the profit potential and logical application of managed futures or any alternative investment, yet own a conflicting belief that futures are dangerous. Look at the statement and see the conflict. "I like the potential yet the strategy is dangerous." Since beliefs, intentions and meaning always dictate actions, therefore material experience, we are setting ourselves up to lose. Before the strategy is even applied we are constructing a scenario for failure. If conflict is resolved, risk of physical loss associated with the conflict is automatically removed.
This is the power of natural law or universal intelligence as proven by physics. Conflict free beliefs and intentions can only produce powerful accurate actions. There is no other choice, therefore less to worry about.
QUESTION How many times have we felt upset about something, afterward discovered that we didn't have all the facts. We then realized how misguided it was to get so upset? Our belief about the situation caused us to become upset. When we believed something new, the upset vanished. Keep reading!
QUESTION How many times have we acted on the above scenario? (I turn blue thinking about my past!) How often have we made poor decisions based on fear, incomplete information and inaccurate perceptions? As time passed or our beliefs, meaning or perception shifted we realized that better choices were available?
Both questions offer understanding that it was only our belief, perception and meaning applied to the situation, followed by action that caused the material reality. Belief, meaning and reactions we attach to events or information is always at the root of every decision.
At times, emotions result in actions that create a painful and expensive reality. Applying natural law proven by physics to all decisions gives us freedom from unwanted fear. The ability to resolve conflict and negative emotion without action allows a positive material experience to evolve.
FACT: Millions of dollars are successfully hedged and traded in the futures markets daily. The explosion of volume, new contracts and open interest over the past 30 years easily supports the statement. We can just as easily become part of the success.
FACT: The Managed Futures industry alone has grown from $ 1 billion in 1980 to over $230 billion in 2010. Something right is being done!
Strength of Opposition
Market volatility brings a smile to any professional's face.
WHY? Only with price movement can potential profits be garnered.Market volatility brings apprehension to many investors' heart
WHY? Fear of being victimized by the same volatility.
If we teach our selves to perceive and act like commodity professionals, we can add stability to traditional investments and bring peace to the heart. The following is taken from A Course in Miracles, text page 96.
"A wise teacher teaches through approach, not avoidance. He does not emphasize what you must avoid to escape from harm, but what you need to learn to have joy. Consider the fear and confusion a child would experience if he were told. "Do not do this because it will hurt you and make you unsafe: but if you do that instead, you will escape from harm and be safe, and then you will not be afraid." It is surely better to use only three words: "DO ONLY THAT!" This simple