How To Get Richer Than an Arab Sheik Working from
Your Home Office When You Feel Like It
I stared at the check for about 20 seconds. I couldn’t believe it was this easy to make $12,300!
But that’s not all…. this was my second check from this goofy business.
The business I’m going to show you may be a surprise. But believe me it’s absolutely true. If you Google information on this market you’ll find hundreds of stories, testimonials, case studies, tutorials, and a ton of value add services and software packages.
The business I’m referring to is heating oil futures. I started working this business from my home office “on the side” while I worked other ventures.
Now hang on…..
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I know what you’re probably thinking; in fact I received an email from an entrepreneur and it’s probably close to what you’re thinking…..
E.B. from Castle Hayne, NC writes:
“Are you kidding me? Heating oil futures? I thought this was super risky. Please advise”.
A lot of people think this market is super risky. And don’t kid yourself…there is some risk involved. But there’s risk involved when you open a car wash or a 7-11 convenience store too.
You’ve probably heard about the crude oil and gasoline futures market.
Heck…the oil rig explosion in the Gulf of Mexico recently has propelled this market to the front page. The heating oil futures market is similar to the crude and gasoline market but not identical.
I’ll show you the difference.
But more important, I’ll show you how to make money and reduce (or in some cases eliminate) your risk in this market.
First of all…it’s important to understand the heating oil futures market is a highly leveraged market. Please listen closely….this means you can lose your initial investment and much more.
Please don’t report me to the authorities or chase me down because I didn’t warn you about the risks….. You can lose your initial investment and deposit when you trade heating oil futures.
On the other hand, you could also make 10 or 100 times your initial investment (and more). Leverage works both ways in the futures market. That’s something to keep in mind.
There are basically two groups of people trading heating oil futures:
Group 1: Large professional traders, money managers, mutual funds and institutions
Group 2: Small speculators and/or beginners
One of the greatest challenges of this business will be to understand how this particular market moves. But here’s a closely guarded money making secret…..
There’s always an opportunity when competitors lack understanding.
Everyone has access to the same information, statistics, charts, and advice. But novice traders and investors will trade almost anything that moves.
As soon as a stock, currency, commodity, or real estate property moves to a new high, it seems everyone wants to buy it! On top of that, novice traders tend to jump from one market to another.
The most successful futures trader I ever met made a statement I’ll never forget:
You can lose several fortunes if you don’t focus on specific markets
What he meant was its important to focus on the nuances of the market you are trading.
In addition, new traders rarely take the time to gain an understanding of each commodity market – such as how it moves, trading ranges, cycles, seasonal changes, and where the “big hands” (hands which control large sums of money) are trading, etc.
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The heating oil market is easy to learn
For example, let’s say that you expected heating oil prices to rise during the winter months. Let’s also say that you purchased one March heating oil contract “at the market” (which means at the current prevailing market price) at 2.05.
Your expectations proved correct and the heating oil market moves up to 2.65 over the next few weeks. You decide to sell your one March heating oil futures contract “at the market” and lock in your profit.
Each contract of heating oil on the NYMEX exchange consists of 42,000 gallons. When you opened the trade and bought one heating oil contract it was worth $86,100 (2.05 x 42,000 gallons = $86,100). Several weeks later, when you sold this contract “at the market,” it would hypothetically be worth $111,300
In this example you would have made a profit of $25,200 (less commissions and fees).
That’s a lot of money for most people.
But get this… Most of the people, companies, and traders who participate in the heating oil futures market do so by trading dozens, or even hundreds of contracts. This can mean huge amounts of money.
One thing to keep in mind though:
In order to purchase a heating oil futures contract you will need to have a deposit – or a margin – in your trading account. The amount of margin fluctuates daily – but it is currently around $1,000.
What the Heck Are Heating Oil Futures?
Heating oil is a flammable liquid petroleum product normally used to fuel furnaces and boilers. It’s similar to diesel fuel, and both of them are classified as distillates. Heating oil is also known throughout North America as No. 2heating oil. This market receives a lot of media attention every winter.
In finance, a futures contract is a standardized contract, traded on a regulated futures exchange. It is a contract to buy or sell an underlying instrument at a certain date in the future, at a specified price.
The future date is called the delivery date or final settlement date. The pre-set price is called the futures price. The price of the underlying asset (in this case heating oil) on the delivery date is called the settlement price.
A futures contract gives the holder the obligation to buy or sell. This differs from an options contract, which gives the holder the right, but not the obligation. (Options are an entirely different market and I’ll cover different ways to profit from these in upcoming issues.)
An important thing to remember about futures contracts…
Both parties of a “futures contract” must fulfill the contract on the settlement date. The seller delivers the commodity to the buyer. Or, if it is a cash-settled future, then the futures trader who sustained a loss transfers cash to the one who made a profit.
To exit the commitment prior to the settlement date, the holder of a futures position has to offset his position by either selling a long position or buying back a short position, effectively closing out the futures position and its contract obligations.
The majority of futures contracts are exited BEFORE the settlement date. Most of the people, entrepreneurs, and traders involved in the heating oil futures market have no intention of taking physical delivery of the commodity. The only people or companies interested in taking a physical delivery of heating oil are those involved the heating oil business.
You can watch heating oil futures prices on all of the major financial news networks, such as Bloomberg, CNBC, Fox Business, BBC, and others. You can also track heating oil futures on the most popular financial websites, such as Bloomberg.com, CBOT.com, FT.com, and Yahoo! Finance and others.
How to Make Money Trading Heating Oil Futures without Losing Your Shirt or the Kitchen Sink
One of the best ways to make money by trading heating oil futures is to avoid losing money.
I know this probably sounds like a tricky play on words. But I can tell you from personal experience that avoiding losses is a very big deal. It can make you very wealthy over time if managed properly.
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As I showed you earlier, the heating oil futures market is fairly easy to trade and understand. However, just because it’s winter time and temperatures are at historic lows, blizzards are at historic highs, and there’s trouble in the Middle East doesn’t mean heating oil futures will rise.
That’s where the infamous “rub” comes into play.
In other words, it will take some effort on your part to understand how this market works. You’ll need to observe the ebb and flow of the heating oil market. Historical price charts are a great way to do this. Here are two places to obtain historical price charts:
On top of that, you’ll need to know when the major players are buying or selling heating oil. You can get this information from the Commitments of Traders Reports.
It’ll also be helpful to know the actual cash price (or dock price) for heating oil.
Some heating oil traders make a handsome profit specializing in the “spread” – or the difference between the current futures price and the cash (dock) price.
Three of the best ways to avoid losses are as follows:
1) Understand the nuances of the heating oil market (Typical trading ranges, where the “big money” is committed, cash prices, historical price charts, etc.)
2) Under trade. Trade less than you can actually afford to lose. When your positions are profitable, even super profitable, systematically remove profits and start over again small.
3) Use stop losses and options. A stop loss is an order below or above where you entered a trade. It enables you to “get out” of a trade if you are wrong. DO NOT CHANGE stop orders. Call or put options can be purchased above or below your entry points.
You can make a living in this business. And there has never been a better time to learn this incredible market and business opportunity.
In no time, you’ll be warming up with your own heating oil profits.
(Ed Note: Marc Charles is referred to as “The King of Business Opportunities” ….and for good reason. He should be known as “The King of Legitimate Business Opportunities”…because he’s launched, bought, sold reviewed and advised on hundreds of businesses and money making opportunities. He understands legitimate opportunities. Marc has agreed supply League of Power members with crucial updates regarding legitimate business and money making opportunities.)
*** Action Plan ***
Set a goal of two hours per week to research and investigate the heating oil market.
Start paper trading! There’s no risk.
You can practice this business before you commit any funds.
Simply enter a trade “on paper” as if you actually purchased the heating oil futures contract. You can obtain actual, real time heating oil futures prices at NYMEX and hundreds of financial websites.
Try pyramiding your positions to see how much money you could make on paper.
But limit your pyramiding to four contracts when you’re starting out.
Open a commodity trading account with a reputable (financially viable) brokerage.
Start trading heating oil futures when you understand the risk and market.
If you do not have the capital, patience or capacity to trade futures contracts, you can trade heating oil exchanged traded funds or ETFs.
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