Saturday, July 11, 2009


Shooting pigeons with a sling shot. This is Ray today in summer of 2009. Creaky, but still kicking.
*** My kind of yachtie adventurous crowd, down in the Rio Dulce marina bars of Guatemala and Lake Izabel on this Spring's trip ( 2009 ). Going back Silvia and I, in September, on the 69 ft Winnie Estelle, my old boat now at the marina in the Rio Dulce. Traders know how to have fun!
Rio Dulce sailing has REAL pirates, not fictional stuff. This year's trip in the Spring of 2009.
One of Ray's experimental tropical vegetable nurseries.

Ray and Silvia on 30 ft sailboat yacht in the trading years. Went through a dozen boats or more in my life. Remember the old joke, that only BROKERS had yachts. Not true!

Ray and Silvia Auxillou in the earlier trading years. Oh to be young again! ( sigh! )


By Ray Auxillou, June 11th, 2009

Things are progressing steadily with the Financial Center. We have the floor space, and building, rent free, ( we own the building ) but none of the infra-structure yet. Was thinking of running an ad in the STAR newspaper.

We need a backup electric supplier for when BEL turns off the electricity. Was thinking of running an ad in the STAR newspaper locally, for such a person, or company to supply electricity.

Back 15 years ago when we did this on Caye Caulker, the electricity would go off and cut off my data feed. We would be left with open contracts, that were being traded by the 5 to 15 minutes time frame and exposed to thousands of dollars and not knowing what the markets were doing. Volatility and a reversal can wipe you out in a hurry that way. The lack of reliable electricity killed it back then. We lost about $10,000 usa and that was the end of that experiment, of living on the beach in paradise and trading the financial markets. I went to Miami and did it from there where they had the telecommunications connections.

Another infra structure newspaper advertisement would be for seeking an INTERNET PROVIDER for the FINANCIAL trading floor CENTER. We cannot get internet here, for a data feed and trading by computer programs. At the moment we have feelers out for seeing if we can get somebody in the USA to pay the monthly fee, for a Hughes satellite service, then we would reimburse them here, or in the USA. We don’t deal in credit cards, only cheques. If this problem can be resolved, we will go for the satellite system. Or we put an ad in the STAR NEWSPAPER for an internet supplier. We are about a quarter mile from the Western Highway.

At first we were thinking of two floor traders and one supervisor for a pilot project startup. Been running the numbers and start up capital is a big thing. This is my personal RISK VENTURE CAPITAL and while in financial jargon we call it investing, or speculation, my wife calls it gambling. She of course is quite right. The trick in cash instrument speculation is to go ULTRA CONSERVATIVE, which is not so financially rewarding as more volatile higher leveraged systems. You need to put all the odds in your favor. Returns on an ultra conservative methodology system is around 265 % maximum a year per trade type amounts used. Not backup base capital available. There are a lot of things involved like MONEY MANAGEMENT, trade size, entry and exit theory. One loss can wipe out seven WINS and the idea is to avoid losses by being ULTRA CONSERVATIVE in system trading. Currently doing hypothetical paper trading this past week and for next 90 days, to refine a couple of conservative systems I’m well familiar with from 20 years ago. No matter what you do though, it is always a directional play and there is always a possibility of loss. Mechanicizing a trade can at least minimize losses. Hence I need floor traders to remove myself from the emotional involvement using my money. Floor traders are only dealing with numbers, and computer screens, not using their own money, which makes it easier for a mechanical system to work. The EXIT when you have a dicey losing trade is the hardest thing, which the floor trader is supposed to do mechanically. I’m weak on EXITS, when losing; as fear and hope interfere with the habit of second guessing, which is normally fatal to a bank account.

Right now am doing a refresher 90 day course on what I want to do. Or part of it anyway, for the initial startup. We are choosing options for starters for the first year of operation. Then we would move into S&P500 futures, then currencies and commodities. Thankfully I wrote a few books on option trading 16 or so years ago, and re-reading my reference library of the books I wrote, is bringing it all back to me. Of course, if I lose my shirt, paper trading in the next 90 days, then the whole operation is OFF.

Have been reviewing potentials and drawbacks and think we are going to start very, very, very, VERY small and treat this as a hobby, which after one year could expand if the trial operation succeeded. Startup trades will be in the $2000 to $3000 USA range. $2000 usa should increase to $8000 usa in one year. A lot less than working for the Belize government as a department administrative head. So nobody in Belmopan should be thinking in terms of millions of dollars. ( grin! ) Jealousy we don't need. I might even just do the first year alone. Though I have been thinking of running an ad in the STAR NEWSPAPER EMPLOYMENT SECTION.

WANTED: trainee floor trader, with high school education, quick with mental calculations doing percentages, decimals, long division to four places. Decimals and percentages to two places of decimals. A test will be given. No paper, pencil or calculator allowed. Time per test question allowed is ten seconds. Trainees are independent contractors and get paid a DRAW on expected earnings and a bonus at the end of the year on performance of their account. If I get more capital coming in, we would expand of course if things were going well, into more trades being carried.

Don’t know if Sacred Heart College out Western Belize here, or Eden High School teach this arithmetic skill? Computer savvy of course.

Got to set up an account on the Chicago Board of Trade and will do that over next few months. Back and forth mail is slow. Though it may be possible to re-activate my old account cutting short the slow international mail business.

The question of RISK is very high on the agenda. Due to limitations of start up risk capital we shall probably start with $2000 straight directional simply buying of PUTS or CALLS. The goal would be to have no losses until we can go over the $5000 usa mark and then re-invest that $5000 usa into SPREAD TRADING. Simple BULL SPREADS and CALL SPREADS. Not figuring on doing ratio spreads, channel spreads, or vertical spreads. Spreads are the options traders ultimate in; risk free, conservative trading and about 15% less risky than a straight directional trade on which we will start. It takes however about $7500 usa to do a single spread trade. There are a lot of different strategies in using SPREADS, but we intend to keep it simple. Will start the first paper trades in SPREAD TRADING this week using the Internet CafĂ© down town. Already have long PUT options running in a test of the methodology. Trouble with paper trading is that without the emotional involvement of real money, you never really know how you are going to react in a trade fluctuation. It’s still fun of course without the money reward gratification, and mentally stimulating. During retirement it is something interesting to do.

You can of course increase total income revenue by parallel trading, staggered trading and alternate strategies. That is why I would need floor traders to be able to run different stuff at the same time on different market conditions. However, I think I’ll start off very small, as I’m 72 years old and don’t need money. Don’t want to throw it away either, but I can sure blow $3000 usa without any trouble. If any of you want to give it a try, let me know, and for $3000 usa invested, we shall run your money in parallel with mine, with your own floor trader. Mind you, don’t send money you cannot lose. There are no guarantees in this business. I feel excited about all this, so that is a positive win-win situation, without any viagra. ( grin! ) What else you gonna do when you are 72 years old?

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