Hidden Danger

Corona Del Mar, CA

Howdy Friend!

Nancy Keenan was demolishing an old bathroom when she made a shocking discovery...the wall was full of razor blades!

In another remodel, a contractor was horrified as the ceiling began to rain razor blades.

Turns out that discarded razor blades had worked their way from the upstairs bathroom to the first floor ceiling.

Luckily no one lost an eyeball.

So what gives?

Houses made before 1970 often times would have bathrooms with a special slot installed so you could discard your used razors after shaving.

Throwing them in the trash wasn't really an option because most people burned their trash back then and scattered the ashes in their yard.

You wouldn't want to walk around and step on a razor blade right? So instead, they just chucked them into the space between the walls.

And that brings me to today's topic: Are there hidden dangers in your portfolio?

I was talking with a buddy that recently shut down his introducing broker business. He would set clients up with a broker and a fund manager to make trades on behalf of the client...stuff I don't do because I'm not licensed.

What he realized is that he's on the hook for his clients.

He guaranteed their account at the brokerage house.

Meaning that if an account went negative -- which can happen -- then he has to cover the losses.

When oil futures went negative in 2020, he realized that he was in a very fragile business model. He was given the 3rd degree by the CFTC. "Why did you shut down? What's going on," said the agent.

"Look, I realized that if these contracts keep going limit down, then I have to cover client's losses. So that's a risk I'm not willing to take anymore."

Smart move.

I realized the same thing in 2010 during the Flash Crash. I was trading 100 S&P 500 e-mini contracts at a time. All of a sudden the tape went crazy while I was in a position.

The quotes were completely jammed, and my stop loss order wasn't executed for something like 10 minutes. The bleeding stopped when the S&P 500 hit limit down.

And then on the crazy ride back up, my entry order was delayed another 5 minutes. It was a blur, but I actually made money that day because of that rebound. But I swore I'd never do that kind of day trading again, and decided to completely cut out leverage.

What good is leverage if it makes you go bankrupt? Look at traders of all those short volatility ETFs like XIV, and SVXY. Years of work down the drain because it's a flawed ETF.

I wouldn't touch those things with a 10-foot pole. And why in the world would you short options? Probably because the win rate is so high...but then your risk is completely asymmetrical.

Just like the turkey that's cared for and fed by the farmer...then right before Thanksgiving -- whack! Off with its head!

So dear reader, I implore you not to fall for these get poor quick schemes...Or your portfolio might get torn to shreds by a hidden razor blade.

Watch this sobering video of the 2010 Flash Crash >>


Trade smart,

Dan "Prince of Proof" Murphy

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Wondering how to get started?

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Step 5: Additional Resources

The Relaxed Investor (The simple strategy proven to work since 1926. Downloaded by over 200,000 readers)

The Ghost of Bernie Madoff is Not Yet Dead (Is your broker on the naughty list? Many traders have no idea they're being sold out)

The Ultimate Crash Detector (The strange weekly report that helps predict crashes. LIVE trading signals since 2006)

Portfolio Boss User Guide (Our flagship strategy building platform User Guide. See what it can do to help you on you quest for F U money)

Trading With Other People's Money - Coming Soon!

Bit-coin for Busy People (How to get started with Bit-coin in under an hour without the complicated new exchanges, high fees, and complicated wallets)

Disclaimer: The results listed herein are based on hypothetical trades. Plainly speaking, these trades were not actually executed. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under (or over) compensated for the impact, if any, of certain market factors such as lack of liquidity. You may have done better or worse than the results portrayed.

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