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Enigmatics

Struggling and Aggravated

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Enigmatics

 

People get into trading without ever realizing what they are actually doing. On the surface it looks like all you have to do is learn a system to create an edge, pay your dues in really learning how to use that methodology, and sometime later -- you experience success in trading.

 

They totally miss that trading is also brain surgury. There is no silver bullet solution to your trading problems (or anyone's elses). It is simply a myth that you bought into -- particularly from indicator educators rather than methodology educators. Just like you have to train to a methodology that moves trading from gambling to risk management -- so must you develop your psychology, your mind and beliefs, to design the state of mind that brings a psychological edge to your methodological edge. It has to be built because few traders come psychologically equipped off the shelf for success in trading. That you have come to a moment of not being able to figure it out is the beginning part. Your perception of money and risk has much to do with success. Most fail because they tie their performance in trading to their sense of adequacy, mattering, worth, and power. Their performance becomes an indicator of their worth and not simply their trading competency. That's a faulty belief system. I encourage you to look at the beliefs you hold about your efficiacy in life. The patterns of performance in trading are eerily similar to more global patterns found in other areas of your life. Trading is not a silver bullet to cure them. But it will sure point them out.

 

If you happen to be going to the Dallas Trader's Expo this month, I will be speaking about this very thing.

 

Rande Howell

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You've lost your nerve in trading due to error. You sound like you changed your trading style -- by going after small profits ---then changing back to swing style.

 

You have to go with one style ---and stay with it. I know a day trader who pulls 1-2 cents a day from corn and soybeans. And when he does ----and it goes up 18 cents after he got out ---- he could care less. Why ? Because he has a system that works ---and makes money for him in his style. He is focused on dollars per day ---- and not what the market does otherwise. He could care less. Each set of trading must have specific rules ---- and if you have them documented --- in order to change --- you have to change the trade rule ..................... Bottom line ---- you can't change trading tactics without rules ----- and if you have no dicipline ---- TURN OFF THE SCREEN after you put in the stop. If you have a good system ---you'll prosper. If you have no discipline to see it through --- it will be a tuff road. Hope this helps --- i've been in your seat before.... thats the only reason i mention this.

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Enigmatics

 

People get into trading without ever realizing what they are actually doing. On the surface it looks like all you have to do is learn a system to create an edge, pay your dues in really learning how to use that methodology, and sometime later -- you experience success in trading.

 

They totally miss that trading is also brain surgury. There is no silver bullet solution to your trading problems (or anyone's elses). It is simply a myth that you bought into -- particularly from indicator educators rather than methodology educators. Just like you have to train to a methodology that moves trading from gambling to risk management -- so must you develop your psychology, your mind and beliefs, to design the state of mind that brings a psychological edge to your methodological edge. It has to be built because few traders come psychologically equipped off the shelf for success in trading. That you have come to a moment of not being able to figure it out is the beginning part. Your perception of money and risk has much to do with success. Most fail because they tie their performance in trading to their sense of adequacy, mattering, worth, and power. Their performance becomes an indicator of their worth and not simply their trading competency. That's a faulty belief system. I encourage you to look at the beliefs you hold about your efficiacy in life. The patterns of performance in trading are eerily similar to more global patterns found in other areas of your life. Trading is not a silver bullet to cure them. But it will sure point them out.

 

If you happen to be going to the Dallas Trader's Expo this month, I will be speaking about this very thing.

 

Rande Howell

 

I know exactly of which you speak. I look back at when I first came into the market about 10 months ago and see just how much I've learned that extends beyond charts and indicators. Indicators were for first foray into the market, but I cut my dependence on them off about 4 months ago after I had gotten my hands on that Tom Williams book "Master the Markets" ..... I also started noticing just from my day to day experiences that I was going to have to pay much more attention to the kind of market I'm trading in that particular day. Patterns are just patterns unless they get the right combination of price/volume and sector/market conditions. For example, the past month I've followed the dollar like a hawk as the equities market had been trading quite inversely to it for weeks.

 

Position sizing has always been something I've been well aware from in the beginning. My whole set objective originally was to try to snag $300/day by using $5,000 position sizes (with my margin) looking for 3-4% on a trade. I always knew that looking at a chart and seeing a huge mover thinking I could have all of that might be the wrong way to approach because of the natural ebb and flow of a stock o a particular day. I just wanted chunks. My set up was good for that particular because of the supply/demand of shares that get dumped into the marketplace on a dipper.

 

On one hand this experience has taught me a lot about myself and how I've always wanted to smash my pragmatic ways in life. I said this earlier, but for once in my life I've felt purpose, like something fit. I picked up on charting as quickly as any ..... and people who've seen my blog will tell you this. I've helped many-a-people. I'm just still learning how to evolve in my "risk management" abilities and how that translates to the psychology of trading. Unfortunately I'm just under more pressure because I didn't come into this thing set up the way I would've preferred with enough capital, reserves to pay bills, etc. etc. Hate to say it but perhaps I bit off more than I could chew in that regards.

 

I've seen the possibilities and what I could do with this setup with continued market experience and working towards getting my psychology in-line. This I have absolutely no doubt. At first when I was really strict and stuck to my rules I was up in the account 20%. It was when I started experiencing various market conditions is when I started breaking them because I really didn't have experience in how they effect them.

 

I just wonder if I'll be able to dig myself out of this hole and re-instill some confidence one trade at a time. It's really that on the edge for me. The person who helped get me started with all of this knows no boundaries with money, but he's also the type who thinks nobody can figure this stuff out. Not to confident I could work out another arrangement in that regard ..... which reminds me of how hard it is to break into this when it takes money to make money.

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You've lost your nerve in trading due to error. You sound like you changed your trading style -- by going after small profits ---then changing back to swing style.

 

You have to go with one style ---and stay with it. I know a day trader who pulls 1-2 cents a day from corn and soybeans. And when he does ----and it goes up 18 cents after he got out ---- he could care less. Why ? Because he has a system that works ---and makes money for him in his style. He is focused on dollars per day ---- and not what the market does otherwise. He could care less. Each set of trading must have specific rules ---- and if you have them documented --- in order to change --- you have to change the trade rule ..................... Bottom line ---- you can't change trading tactics without rules ----- and if you have no dicipline ---- TURN OFF THE SCREEN after you put in the stop. If you have a good system ---you'll prosper. If you have no discipline to see it through --- it will be a tuff road. Hope this helps --- i've been in your seat before.... thats the only reason i mention this.

 

That's definitely a part of it. At times, I've found myself bending my rules because of what another trader I taught was doing when he did. I found myself bending them even further after I'd find myself in a string of failing trades or market conditions I didn't quite grasp .... not to mention trading for income. I don't have huge expenses and I swear if I just stuck to even $100 day I could be really far along by now.

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Stop trading.Step away from the keyboard.Get your financial house in order.Take the time to learn to read the market.Learn to anticipate the market "turns" in all market conditions.The market will be here when you have done the work.hth

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That's definitely a part of it. At times, I've found myself bending my rules because of what another trader I taught was doing when he did. I found myself bending them even further after I'd find myself in a string of failing trades or market conditions I didn't quite grasp .... not to mention trading for income. I don't have huge expenses and I swear if I just stuck to even $100 day I could be really far along by now.

 

Have acouple of suggestions for you.

1 get a job.

That way you are not trading with "scared money" as your rent is covered. Years ago I was in the same position and looked at what kind of job I could get and still trade. The answer was easy (for me) I work weekends as a security guard (no bouncing but corpoate security). After Sat and Sun I've done 24 hours (2 x 12 hour shifts) so i know the bills are covered and that gives me monday to friday to trade IF I feel like it. I still do the security work because most of the time its fun and I'm not a hermit anymore. On a side note it's also good to keep the ego in check.

2. Stop teaching others

How on earth can you be authentic and teach others something you are failing at yourself. Get real ... and honest with yourself. Trading happens between the ears.

Ash

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Maybe you should trade pennies on the real stocks. I was in a class that was teaching trading and they wanted us to trade 10 stocks at a time and make a log of what you traded and review it at the end of the day why you took the trade. I am not one to preach because I have just became profitable (some). I have learned to trade price. and I am reading the book reading price bar by bar. It might help. I am tired of people that have been helped by others and then they want $10,000 to teach you.

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Have acouple of suggestions for you.

1 get a job.

That way you are not trading with "scared money" as your rent is covered. Years ago I was in the same position and looked at what kind of job I could get and still trade. The answer was easy (for me) I work weekends as a security guard (no bouncing but corpoate security). After Sat and Sun I've done 24 hours (2 x 12 hour shifts) so i know the bills are covered and that gives me monday to friday to trade IF I feel like it. I still do the security work because most of the time its fun and I'm not a hermit anymore. On a side note it's also good to keep the ego in check.

2. Stop teaching others

How on earth can you be authentic and teach others something you are failing at yourself. Get real ... and honest with yourself. Trading happens between the ears.

Ash

 

Oh I hear you about the job thing. Just really wish I had done that from the beginning.

 

As far as teaching, I'm not sitting here saying I've turned everyone into winners. There's clearly a gap in my own psychology but that doesn't mean I don't recognize it. I spent the better part of 2 years prior to my day trading learning technical analysis and charting. I put together many picks based on my setups and chart tutorials. I've earned the respect of many long term traders I've come across (not on this site). So I know it's not flukey in that regard. The example I gave of that guy I helped gain 45% on his account - well clearly there's a difference in his psychology and mine.

 

I just have to get it right "between the ears" like you said. You can "know things" but are you doing it yourself? That is the issue here with me and trading psychology. However I have plenty of learning to go.

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Maybe you should trade pennies on the real stocks. I was in a class that was teaching trading and they wanted us to trade 10 stocks at a time and make a log of what you traded and review it at the end of the day why you took the trade. I am not one to preach because I have just became profitable (some). I have learned to trade price. and I am reading the book reading price bar by bar. It might help. I am tired of people that have been helped by others and then they want $10,000 to teach you.

 

I'm almost exclusively trading volume and price. I've given up indicators as a basis for my entries/exits. They are simply symptoms of a trade.

 

I am actually working a short set up (because it's something I've clearly been lacking only playing only bouncers) and tomorrow one of my goals was to put it in action with tiny money like you said.

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Have acouple of suggestions for you.

1 get a job.

That way you are not trading with "scared money" as your rent is covered. Years ago I was in the same position and looked at what kind of job I could get and still trade. The answer was easy (for me) I work weekends as a security guard (no bouncing but corpoate security). After Sat and Sun I've done 24 hours (2 x 12 hour shifts) so i know the bills are covered and that gives me monday to friday to trade IF I feel like it. I still do the security work because most of the time its fun and I'm not a hermit anymore. On a side note it's also good to keep the ego in check.

2. Stop teaching others

How on earth can you be authentic and teach others something you are failing at yourself. Get real ... and honest with yourself. Trading happens between the ears.

Ash

 

I think teaching is good... it forces you to think and explain yourself you otherwise would not.

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Take NOK today. I had a position at 6.57 on the second 5min candle after the first had shown reversal on larger than average sell volume.

...

It dips on me to 6.50 and I get stopped out. Went away from it when low and behold it filled it's sell gap from the morning and tested demand around 6.60, upon which it absolutely rocketed up. Hit a peak of 7.02 I believe.

 

from taking a quick look at the 1-June-11 5 min NYSE:NOK chart, I can see that the most obvious likelihood for a trade executed as you described is to buy at about 10:00 EDT and get stopped out shortly after. (if that is not correct then ignore the rest of this...)

 

Were you trying to trade the bounce off the big overnight drop?, I am not sure what the fundamentals of the trade were as it was against the trend.

 

There was some price and volume action at about 11:00 EDT, but i generally don't see that there is any evidence that the price and volume action is anything but random during the time period of your trade.

 

V0BxY.png

 

If you look at the Price normal and volume normal plot, there is no reason to believe that there was any information that could not plausibly be explained by randomness.

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To jump into trading and make it your primary source of income right out of the gate is terribly hard (well I imagine it is). One think is for sure is you will need a lot more capital than someone that has an alternate revenue stream too. The primary reason starting businesses fail is under capitalisation. That's assuming you have a workable business model (trading plan).

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Agreed, the best outcome is to trade for a trading house that way you get a salary and when yoiu hit the ball out of the park you get a huge bonus. Win win situation.

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Oh, it doesn't seem like I can edit posts on this forum, which is odd. (lol maybe to stop users going back and fixing their poor calls)

 

If you look at the Price normal and volume normal plot, there is no reason to believe that there was any information that could not plausibly be explained by randomness.

 

If you expand the consideration of the NYSE:NOK on 1st June to include the interesting price/volume trades later in the day, you get the following charts;

 

BL1Oo.png

 

here you start to see in the price/normal plot, that there is some movement that is not entirely as what would be expected by stochasticity. eg see the data points +/- 2 standard deviations.

 

However the key thing to consider here, with regard to the trade strategy that Enigmatics gave an example of, is that within 1 standard deviation, the price changes are plausibly random. 1 standard deviation here corresponds to about 0.06, which is close to the OPs stop loss distance.

 

The noise to signal ratio here is very high, so that particular strategy is unlikely to be fruitful under these conditions.

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from taking a quick look at the 1-June-11 5 min NYSE:NOK chart, I can see that the most obvious likelihood for a trade executed as you described is to buy at about 10:00 EDT and get stopped out shortly after. (if that is not correct then ignore the rest of this...)

 

Were you trying to trade the bounce off the big overnight drop?, I am not sure what the fundamentals of the trade were as it was against the trend.

 

There was some price and volume action at about 11:00 EDT, but i generally don't see that there is any evidence that the price and volume action is anything but random during the time period of your trade.

 

Yes, I was just looking for a bounce. Again, my approach is based off the supply/demand of shares as they hit the open market on a drop like that. I watch to see if it looks like they're being absorbed (removal of supply) and a bounce. That huge volume though came out of freaking nowhere and after looking back at the chart a few times recently, I guess there was really no way to know.

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Agreed, the best outcome is to trade for a trading house that way you get a salary and when yoiu hit the ball out of the park you get a huge bonus. Win win situation.

 

Not sure if we have trading houses out here. How does one even break into those anyways?

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Not sure if we have trading houses out here. How does one even break into those anyways?

 

there are 2 types of trading houses....

 

the legitimate ones, where they give you the training, then set you free with their capital.

(banks, funds, etc).

 

then there are the shady ones... most of them are called "prop",

where you have to bring an initial capital to the company,

pay an initiation fee, a monthly desk fee, software fee, data fee, training fee, etc.,

they give you next to no training, (talking to the guy next desk is training)...

when you are done with your own money, they boot you out.

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there are 2 types of trading houses....

 

the legitimate ones, where they give you the training, then set you free with their capital.

(banks, funds, etc).

 

then there are the shady ones... most of them are called "prop",

where you have to bring an initial capital to the company,

pay an initiation fee, a monthly desk fee, software fee, data fee, training fee, etc.,

they give you next to no training, (talking to the guy next desk is training)...

when you are done with your own money, they boot you out.

 

I'm with a prop firm right now .... needed 5k as as deposit to start. I signed up because it allowed me the ability to day trade. I looked into another one yesterday I saw posted on a job add, unfortunately it's just another one that needs 5k to start and startup costs they said could be anywhere between $0 - 9,000 depending on my level of ability .... which I'm sure they judge fairly. :roll eyes:

 

Wish I could find a place that was a legit house. I want so badly to make this my career. I've never said that before about any job I've had.

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I'm with a prop firm right now .... needed 5k as as deposit to start. I signed up because it allowed me the ability to day trade. I looked into another one yesterday I saw posted on a job add, unfortunately it's just another one that needs 5k to start and startup costs they said could be anywhere between $0 - 9,000 depending on my level of ability .... which I'm sure they judge fairly. :roll eyes:

 

Wish I could find a place that was a legit house. I want so badly to make this my career. I've never said that before about any job I've had.

 

daytrading in a prop is a sucker's game.

 

you are only generating fees for the firm.

 

:-(

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daytrading in a prop is a sucker's game.

 

you are only generating fees for the firm.

 

:-(

 

I know .... but what choice did I have? I couldn't get PDT status at any of the retail operations. You know how hard it is to trade for a living with a cash account? You have very limited opportunities to trade because of settling times. My commission per trade now isn't so bad ($4.95 after they lowered it).

 

That new place I checked out though seemed pathetic. I wanted no part of it.

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I know .... but what choice did I have? I couldn't get PDT status at any of the retail operations. You know how hard it is to trade for a living with a cash account? You have very limited opportunities to trade because of settling times. My commission per trade now isn't so bad ($4.95 after they lowered it).

 

That new place I checked out though seemed pathetic. I wanted no part of it.

 

first, you have to learn to trade.

 

if you know how to trade, you don't need no freek'n firm.

 

with the futures leverage, you can start with a small account, and still make a decent living.

 

but you have to know what you are doing.

trading is not gambling.

trading is not luck

trading is not a wishful thinking event

trading is not for everybody.

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but you have to know what you are doing.

trading is not gambling.

trading is not luck

trading is not a wishful thinking event

trading is not for everybody.

 

I never said it was any of those things and I've never treated it that way. Again, my goal is to make this my career, not a casino.

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I never said it was any of those things and I've never treated it that way. Again, my goal is to make this my career, not a casino.

 

no, the post is not an indictment of you... these are just thoughts that came to my mind.

this is a public forum... although you are quoted in the post, the discussion is general in nature, and the conversation is open to the public.

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I tried posting this before, but it didn't go thru ....

 

Trust me, I'm not trading pennies. I got out of that wasteland about a year ago. My efforts have been focused entirely on small and mid-caps.

 

Maybe your approach needs some fine-tuning? Are you focused on a sector so you can become an expert at it? Are you just looking for opportunities across all instruments? Maybe its time to step back and review everything your doing. This is what I did after a couple years of fruitless trading and now I've been fairly successful trading technology and energy\resource stocks ONLY. I like technology and I live in a place with a lot of energy\resource companies so the environment I'm in makes these two sectors a good fit for me. Plus, I've started to factor in some fundamental data into my trading. I believe being correct on the bigger trend will help trading the smaller ones. See the other thread about this: http://www.traderslaboratory.com/forums/f34/advice-all-stop-fighting-trend-9763.html

 

Good luck!

MMS

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I think one of the issues that arises from traders who were inspired after reading Reminiscences of a Stock Operator, or after learning strategies and styles from people who are from that tradition, is the idea of being able to "learn to read the tape"

 

Livermore is characterised as a free-wheeling sort, who is both talented and lucky to learn from many of the great stock players of the period.

However the tape is characterised as though it is a secret language that can be understood by piecing together strands and clues from here and there.

 

However the reality is that a hundred years ago, the markets were less efficient and the stories are fanciful.

 

The reality is that in order to have any success you have to understand why you are making a trade, what is the information that you are trading on, and have a process for evaluating each strategy objectively.

 

I think understanding noise to signal is very important, and also having a tool like the Sharpe ratio in order to evaluate whether you are actually picking wins, or just being lucky

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This marks a sharp jump from the 35% risk estimated just last month—and more than double January’s 20% projection. J.P. Morgan issued a bleaker outlook, now forecasting a 60% chance of recession both in the US and globally.   Global Leaders Respond as Trade Tensions Deepen   The dramatic market sell-off was triggered by China’s sweeping retaliation to a new round of US tariffs, which included a 34% levy on all American imports. Beijing’s state-run People’s Daily released a defiant statement, asserting that China has the tools and resilience to withstand economic pressure from Washington. ‘We’ve built up experience after years of trade conflict and are prepared with a full arsenal of countermeasures,’ it stated.   Around the world, policymakers are responding to the growing threat of a trade-led economic slowdown. Japanese Prime Minister Shigeru Ishiba announced plans to appeal directly to Washington and push for tariff relief, following the US administration’s decision to impose a blanket 24% tariff on Japanese imports. He aims to visit the US soon to present Japan’s case as a fair trade partner.   In Taiwan, President Lai Ching-te said his administration would work closely with Washington to remove trade barriers and increase purchases of American goods in an effort to reduce the bilateral trade deficit. The island's defence ministry has also submitted a new list of US military procurements to highlight its strategic partnership.   Economists and strategists are warning of deeper economic consequences. Ronald Temple, chief market strategist at Lazard, said the scale and speed of these tariffs could result in far more severe damage than previously anticipated. ‘This isn’t just a bilateral conflict anymore — more countries are likely to respond in the coming weeks,’ he noted.   Analysts at Barclays cautioned that smaller Asian economies, such as Singapore and South Korea, may face challenges in negotiating with Washington and are already adjusting their economic growth forecasts downward in response to the unfolding trade crisis.           Oil Prices Sink on Demand Concerns   Crude oil continued its sharp slide on Monday, driven by recession fears and weakened global demand. Brent fell 3.9% to $63.04 a barrel, while WTI plunged over 4% to $59.49—both benchmarks marking weekly losses exceeding 10%. Analysts say inflationary pressures and slowing economic activity may drag demand down, even though energy imports were excluded from the latest round of tariffs.   Vandana Hari of Vanda Insights noted, ‘The market is struggling to find a bottom. Until there’s a clear signal from Trump that calms recession fears, crude prices will remain under pressure.’   OPEC+ Adds Further Pressure with Output Hike   Bearish sentiment intensified after OPEC+ announced it would boost production by 411,000 barrels per day in May, far surpassing the expected 135,000 bpd. The alliance called on overproducing nations to submit compensation plans by April 15. Analysts fear this surprise move could undo years of supply discipline and weigh further on already fragile oil markets.   Global political risks also flared over the weekend. Iran rejected US proposals for direct nuclear negotiations and warned of potential military action. Meanwhile, Russia claimed fresh territorial gains in Ukraine’s Sumy region and ramped up attacks on surrounding areas—further darkening the outlook for markets.   Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Andria Pichidi HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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