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Tuesday, March 25, 2008

Challenge Project: Business Plan for Phase 1

Challenge Accounts:

Investing Account Balance: $201.46

Stock / Futures Trading Balance: $684.39
Online Savings Balance: $12.07

Personal Trading Thoughts: Cash. No positions. Short - bearish outlook to sell rallies in stock market, but extremely wary as this market remains very volatile. Looking only for long positions in the Commodity Futures arena.

Personal Investing Thoughts: Cash. Bearish outlook for the market. I should say that I'm prepared for a 35% drawdown from the highs. Recent rallies has been on very light and descending volume, which is a cause for concern. But who knows, as bottoms are a process, not an event.

Ok, we've had the Challenge Project going now for a while now. We started out with $500, and we now have about $897.92 in various accounts. But what, exactly, is the 'plan' for the Challenge Project? I've discussed the need to have a business plan, or money management strategy for your account. So what is the current 'business plan'?

Well, it's going to be run according to 'stages' or 'phases'. The Challenge Project currently has one goal at the moment. And that goal is not trading. At least not while it is in the current 'phase'. As I discussed in this video, the infusion of capital to the low-funded account is absolutely critical. Therefore, the goal is to increase the amount of trading capital. That's the first priority at this stage. I'll take trades from time to time, so long as the risk from those trades do not hurt the month to month goal of increasing the account equity in the stock / futures options trading account.

Herein, I present the outline for the Challenge Project while it is in the current "Tiny" phase.

As I stated before, the first priority is increasing account capital. Trades will taken in this stage, only so far as the risk from those trades do not interfere with that goal.

* * *

Investing Account Balance: $201.46
Stock / Futures Trading Balance: $684.39
Online Savings Balance: $12.07

Total Trades and Investments: 3
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $82.56
Average Loss: $82.56
Accuracy Rate: 33%
Average Reward: $179.75
Risk : Reward Ratio: 1 : 2.02

This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 12 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research and tolerance for risk.

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