Institutional Equivalent Education?

Normal Service is resumed.

Back to trading issues:
Looking back through old(ish) emails I came across this from 'The MAX' giving some old information as to how Eusebio chose a Broker.
Several of the questions he wanted answered will not apply to the majority reading this thread, but I think that it is still a good example of thinking and pre-planning

Shocked to see compassfx sending out emails to Ray's students promoting an alleged crypto currency 'arb bot '. It has all the hallmarks of a Ponzi scheme. Has compassfx no shame in promoting, what a number of crypto forums conclude as very suspicious? It's nonsensical to have a company working with Ray on the one hand and an alleged Ponzi on the other.

Agree. Its a pity that Ray does his thing though Compass as it paints him with the same brush.

As far as I understand, the Crypto Arbing Bot is being handled by the other Compass partner, rather than Kim Pingleton.
I didn't attend the Webinar, though have heard good things about it.
But the problem with Arbing Bots is that they quickly put themselves out of business unless they are working on a huge market.

Even if they work in the first place, their success means that more capital is put to work through them until the size available is swamped by the amount of trade trying to get on.

Boris Schlossberg is talking a little (but blindingly obvious) sense in this week's email.
He is advocating that retail (day) traders use multiple targets because we don't have the guts to take the number of multiple sequential losses that we will inevitably face unless we are taking much smaller Targets than Stop Losses.

I have seen him advocate multiple targets before, but he rarely mentions it.
Of course Ray says we should use multiple targets even when we are scalping! Because that helps us catch an occasional 'runner'.
He also advocates using a 'drill' on a demo account to help us get used to maintaining our cool when losing quite often.
Although he does not teach trading psychology, he recognises that it is a huge factor for retail traders.

As well as habituating oneself to the inevitable sequential losses, I am a strong believer in designing a personal trading plan specifically to reduce the impact of one's own trader psych flaws.

Here Boris' email:
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Trading can be deconstructed into three parts -- analysis, setup, and structure. We spend an inordinate amount of time on the first two components, but it may be the third part of the process that is most important to long-term success.

Analysis be it fundamental, technical or both is of course crucial to making good trades, but in the end it all boils down to handicapping human behavior. Every trade is an implicit IF/THEN statement that assumes some sort of causation. In a highly dynamic environment like the market where a new input could upend the underlying thesis anytime (just ask anyone who has ever run into a news bomb or some massive order that completely flipped the supply/demand balance) noise is a huge problem for anyone who trades. The shorter the time frame, the greater the noise. That’s why day trading is such a challenge and why I’ve been arguing that the 1-hour time frame is the shortest reasonable period for retail traders to consider.

Of course, we all want to trader shorter because longer-term charts are boring, signals are few and we have to practice the most dreaded four letter word in trading -- WAIT. The issue is further complicated by a seemingly sensible but highly deceptive assumption we all make -- shorter-term trading needs smaller stops, therefore we can use larger leverage. On the face of it, it makes sense. After all, a 10 pip or 20 pip stop is nothing! We can trade on 10:1 lever and still only lose 1% to 2% of equity max. But we always forget the noise factor. A choppy, intraday market can seduce us into false breakout three, four, five even ten times in a row. That’s how most traders lose 10-20% of an account in a day even they hold tight stops. The only way to survive the vicissitudes of daily price action is to actually risk just 10 basis point per trade, but who amongst us does that?

Pulling away from the endless discussions of day trading which often remind me of medieval debates about how many angels can dance on the tip of a pin, we need to realize that what really matters in trading is structure. By structure, I mean the risk/payout factors on every trade. Conventional wisdom always argues for a 2 to 1 risk reward approach. That’s nice in theory where you can argue that you need only to be right 40% of the time to make money, but in practice, it is impossible to do. 40% win rate implies a 60% loss rate -- and that is under the best circumstances!


Imagine losing six trades in a row before you hit a winner. Now imagine doing that five, ten, twenty, fifty times a year. The human psyche is just not designed for so much consistent disappointment. My personal experience with retail traders is that most people can tolerate three losers in a row. After that, they either get angry or depressed, but in both cases, they walk away from the setup -- even if it proves to be profitable in the end.

The only way to overcome this problem is to create a structure that is both logically and psychologically robust. And the only way I know how to do that is with a two target exit. You need a short target that can be hit frequently and long target that will be hit rarely but will pay for your losses when you hit it. By definition, such a structure calls for a 2 unit entry and therefore doubles your risk on every trade. That’s why this final part is KEY to making this structure work. In order for your trades to have a long-term edge, the sum profit of your target must be larger than your risk. For example let’s say you are trading with a 50 pip stop, a short target or 40 pips and long target of 100 pips. There are three outcomes to this trade. You lose 100 pips. You make 40 pips and the second unit stops out at break even. Or you hit both targets and make 140 pips. Notice that in scenario number three your total profit of 140 pips is greater than your risk of 100 pips. That’s exactly what you want. If you have strong set up a third of the trades will stop out at -100. A third will bank 40 pips and the final third will make 140 pips and pay for all the losses.


Almost every quant will tell you that scaling out of a trade is not a logically optimal strategy. And they are absolutely right. And absolutely wrong. To succeed in the markets you need a plan that is both logically sound and psychologically optimal which is what makes this structure so robust.

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Are there any more workshops planned with Ray?

@Corintha: There are no workshops with Ray planned at present. There was a 1 year gap between the last 2 he did. But he continues to teach every day for those who subscribe to the 'continuing education' and have taken one of his courses - except for the 3 day intro last year which is insufficient to be able to follow everything he does.

He seems quite pleased with how the last course went, so I expect he will probably do another one sometime next year.
However if you have a lot of spare time to dedicate to a trading education then you could learn from the recordings of his last course. Several students did that in late 2017 and early 2018. This may not seem like a good deal but really it is, because you can plan your time and so arrange to have sufficient time allocated rather than trying to arrange enough time while he is teaching a live course.

Once you have taken a full course, either live or via recordings, then you may (if you wish) subscribe to
A). His daily Tweets plus his SmartAlpha educational website.
And/or B). Continuing education is his live room i.e. commentary plus 'Daily Focus Sessions'.
or C). The recordings of his 'Daily Focus Sessions' (delayed a few days, since they are uploaded to the Compass Members Area twice per week).

Having taken a full course, either live or using the recordings, then subsequent courses only cost the subscription rate (either live or recordings only).

Some useful ideas from Lance Beggs (of Your Trading Coach):
Note that the following trade entries and management are NOT those taught by Ray, but the concept of always looking for re-entries is something that Ray teaches.

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Hi Traders,

No doubt we prefer trades to move straight to the target. But it's not always going to happen that way. Today's article shares a key ingredient in my trading - a mindset shift that you won't often see shared elsewhere - the idea that an exit is never final.

Happy trading,

Lance Beggs.

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An exit is never final... until the market SAYS it's final.

Happy trading,

Lance Beggs
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Hi Traders,

Today we look at one way I manage mindset when I take some good profits but leave a whole lot more on the table. I hope it helps.

Happy trading,

Lance Beggs.


Continued in next posting

Continued from posing above:

The end result is that I still have a profit. And yet I feel crap. And my mind starts beating me up for not doing better.

All part of being human, I guess.

But not ideal if you wish to be an effective trader.

There is very little to be gained by carrying negativity into the rest of the trading session.

So here's what I do.

FIND A POSITIVE. ANY POSITIVE.

Break the cycle of negativity as soon as you can. Actively, consciously, seek out and focus on something positive.

Here's one I use in situations like the above trade example, where I've taken some good profits but left a whole lot more on the table.

Immediately... look left and find an earlier multiple-trade losing sequence.

Does the trade I just took completely cover that multiple-trade loss and still provide profits? If so, that's awesome. Great trade. Move on.

Let's check the charts...



If there isn't an earlier losing sequence, then find something else positive. Anything.

Even if it's just something basic like, "There was a time in the past when I wouldn't have caught that at all. I did today. Awesome! Great Trade! Move on!"

Whenever you find yourself with some negativity... break the pattern!

Find a positive. Any positive.

Enjoy the positive.

And consciously declare, "Great trade! Move on!"

There are more trades coming and they need your full attention, with a positive and focused mindset.

Happy trading,

Lance Beggs
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*** NOTE: Any good student of Ray's would never normally have got into the state of missing out on the second part of that trade, because:
1. Those who trade as I do enter with 3 units (rather than the 2 that Lance uses) - then TP1 to lock in a profit(or at least no-loss), TP2 at the first objective and then the 3rd unit as a runner in case the move continues.

2. All of Ray's students know to enter/re-enter/scale-in on that 'Wobble' at the resistance area.

3. All students of Ray would be eyeing a TP3 at the 'measured move' which just happens to be right at the top of the move that Lance shows!

(Disclaimer: The above statements are based upon the charts as shown - i.e. without taking Volume, Value, or OrderFlow into consideration - since Lance Baggs doen't use those concepts!).

Thanks for the reply. Will check out the recordings from the last course.

Another piece from Lance Beggs:

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Hi Traders,

Today's discussion... Why any particular trade idea didn't play out, is not important. What is important is recognising it fail and adapting.

Happy trading,

Lance Beggs.

Nothing "Always" Happens

One of the essential breakthroughs we need to make in our journey involves learning to think in probabilities.

It's something that all traders say they understand. But, for most new traders, their behaviour and decision-making shows that it has not been accepted.

This came to mind when I received the following email question:

- - - start of email excerpt - - -

I’ve circled the “Spike Low”. You can see from the Volume that it spiked as well.... my understanding is that this is a “test” for higher prices. When I’ve observed this very thing (over several years) Price Action “always” moves HIGHER... Today, it Moved LOWER and wanted to educate myself on WHY...

Else, maybe I have the whole thing wrong...

If you can comment and/or direct me to something on your site, that would be great.

- - - end of email excerpt - - -

Here's the chart using my usual display format. I've added a higher timeframe support level and positioned the spike at the right hand side.

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The question again - "When I’ve observed this very thing (over several years) Price Action “always” moves HIGHER... Today, it Moved LOWER and wanted to educate myself on WHY..."

My big problem is with the word "always". Yes, it's in quotes. But it still concerns me.

Here's an excerpt from my reply (noting that at this stage I had no idea of the market or timeframe and was replying based upon the original black-background chart image above).

- - - excerpt from my email reply - - -

I can't really answer as to why this move went lower, being unsure of which market and timeframe and whether this price move coincided with any news event (planned or unplanned).

Typically we can't ever know with complete certainty the reasons for any price movement. Price moves where it does based upon the orders that hit the market. Why did it go lower? Because the net effect of all the orders was bearish. Any discussion as to why trade decisions were net bearish, is simply speculation.

The error in your thought process is when you use the word "always" in this sentence - "When I've observed this very thing (over several years) Price Action "always" moves HIGHER."

Does it really always move higher? Or were there actually some occurrences where it moved lower?

We're dealing with probabilities, not certainties. Nothing "always" happens.

Even if this was a 99% probability of moving higher (which it's not because nothing is that close to certain) then there would still be 1 out of 100 cases where it moves lower. This example was that 1 occurrence.

Let's say the pattern has actually 55% probability of moving higher, which might be more realistic. This example then simply sits on the 45% side.

So it's nothing unusual. And nothing that needs understanding "why".

What is important is firstly that you shift your thinking away from certainties to probabilities. And secondly, that if you're trading something like this and take a position LONG in expectation of movement higher, that you recognise as quickly as possible that this occurrence is falling on the losing side of the probabilities, and you adapt quickly and get out.

"Why" is not important. Recognising and adapting is important.

- - - end of reply - - -

Subsequent discussions confirmed the market as EURUSD, 1 minute chart, on 26th November 2018.

So let's finish up with two additional important points:

1. Knowing the market, date and time, I was then able to confirm that the price spike occurred just two minutes after 09:00 US Eastern Time (two minutes after midnight my time). Two minutes prior to that spike there was a scheduled speech by the ECB President. Given the high-impact potential for such an event (especially given the current Brexit negotiations) it's reasonable to expect that such an event could completely shift the sentiment in the market, rendering any prior analysis and levels as irrelevant. Just something to consider!

You have to be aware of scheduled news events. You can find the economic calendar I currently use on my Resources Page - http://yourtradingcoach.com/resources/

2. For those interested, I actually have no problems with someone entering LONG from that spike. The following are my thoughts regarding the price movement following the spike, looking purely from a price action perspective.




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Now my 1 min chart doesn't quite go back that far, but Just to give a flavour of how advanced Ray's teaching is - even just the Price Action and Volume part (so still ignoring Value and OrderFlow), here is my 5 min E/U chart for that ECB Press Conference.
The arrow points to the actual spike candle (5min in this case):

Attached Image (click to enlarge)

What a student of Ray would know from this chart when going into the Press Conference time:
1. we have had an institutional SHORT Accumulation in the European Open - thus we are expecting to be taking Short trades, not Longs.

2. We have Price Action suggesting the start of a down Trend.

3. We have just had a 'Spring' trade (short) off the Major IMA (blue/mauve) out of Level 2 liquidity.

4. At the time of the news spike we are squeezing the downside L2 liquidity since still in the 'Spring' short.

5. Both applicable Measure Move targets show that our full TP3 should be around 1.1335 to 1.1330

There is no way that any decent student of Ray would have traded that news spike to the long side!

Nothing happens 100% of the time, but following Ray's teachings we are not messing around with the 555% probabliity that Lance is talking about - LOL !

The latest email from Boris Schlossberg is below. Although I agree with most of what he says, I feel he is rather harsh on 'Passive Investing', because to my mind there is nothing wrong with passive investment for the long term - and by long term I mean 10yrs or more. Obviously even in the long term is is unwise 'to place all your eggs in one basket' - you need diversification of your passive strategies because in some markets/sectors there will be long period when prices will just fluctuate around a zero return or even a loss.

Here is the email:

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Dear Ian
Three Trading Truths I learned This Year


1. “Never” and “always” are the two most dangerous trading words in the English language.
Idiotic statements like “smart money is never wrong” or “this setup always works” are a straight path to a blowup. The other day I was watching a YouTube video with more than 150K views where the guy was arrogantly pitching as his own the SSI strategy that K and I helped develop back in our FXCM days. Basically, the FXCM SSI index measures the client positioning in any given currency pair and then takes the opposite side especially as the positioning goes to the extremes. Now generally that is mostly a good idea. Most of retail is usually on the wrong side of the trade most of the time. But not always. In the case of SSI the FXCM brass was so sure of their new little indicator that they convinced a large French bank to trade the model with a very sizable prop account. Unfortunately, at that time the euro went on about a 3000 pip slide with no stops along the way and as retail kept getting shorter, the bank kept getting longer and blew out more money than you can imagine. So no. The “dumb money” is not always wrong and you can lose even on “never-gonna-happen” bets. The only proper way to use those words in trading is: “There is always a chance I am wrong,” and “I will never bet my whole bankroll on this one trade idea.” In short, the most important things I learned in 2018 is to be humble. Always. And arrogant. Never.

2. Robots trade better than I.
After years and years of resisting rules-based trading, I finally realized that my strategies are much more profitable when they are executed systematically. Robots don’t hesitate on entries. Robots don’t pull stops. Robots don’t sleep and miss out on trades. Robots don’t accidentally hit a buy instead of a sell button and robots don’t trade ten times the intended position size (unless you configured them wrong). None of this means that systematic trading will automatically make you profitable, but it does offer you a multitude of advantages over point and click trading. One of the traders in my chat room noted that we should view our trading robots as assistants -- and I think that a perfect analogy for how we should view the systematic process. There is no such thing as set it and forget it trading. Robots help you with execution and logical structure, they free you from the tyranny of looking at every tick on the screen but it is still up to you to analyze and adjust the strategy and always be aware of the market. The future of retail trading is robot. The sooner you realize that the better a trader you will become.

3. F- passive. After several years of ranting against the mindless advice of Bogleheads that passive investing is the only way to get rich, we are finally seeing the disaster that it truly is as we close out the worst December in market history. The pain is just starting. If you have all your retirement money in equities prepare to possibly lose 50% of your money, just like Bitcoin traders. The worst part is that passive investors couldn’t do anything about it even if they wanted to because they don’t have the skills to manage risk. They’ve been taught to ask no questions and drop money in their retirement account every month, with the same monolithic fervor of a North Korean people’s rally. Even if I am 100% wrong ( and I certainly can be -- see #1) most passive investors will not survive this dip because they are completely unaccustomed to risk and they certainly capitulate at the bottom. On the other hand, we retail traders live and breathe risk every day and at very least know a thing or two about position sizing and stops. So let the passives enjoy a few more months of illusion. As market regime changes from an unending one-way rally, we retail traders will be ready to surf the price waves and keep risk under control. Here is to a great 2019!
Happy Trading everyone.

*********************************************************************************************************************************************************************************

The usual uneducated, ill-informed comments on the overnight (for GMT) 'Flash-Crash'.

I have just been looking user comments here in ForexFactory, reminding me about how many opinionated people there are who are at the same time almost completely ignorant about the subject they are shouting about!

1. Action like that is NOT caused by a 'Big Dog' or a Central Bank - those guys CAN'T trade during periods of such low liquidity BECAUSE THEY CAN'T GET ENOUGH SIZE ON ! So all it was is Stop-Loss cascade.

2. There were so very many risk factors already known about: US Shutdown, UK PM May's dead-duck Brexit deal, US -China trade war impact, Apple's poor forecast .
NONE of those were big enough to make much impact during normal liquidity, but last night we had a combination of :
A). A low liquidity week because many desks not fully back from holidays.
B). After US close
c). Japanese Holiday - and the Yen is the obvious hedge (apart from Gold) for all those events

3. It only takes a sell order of 2 lots to move price 100's of pips if there is only a 1 lot below it on the limit Order Book.

4. In such circumstances a normal Stop Loss (even a Sell Stop) in the market will not protect you because there are no matching Buy orders and you need Buyers to Sell your position to!

5. In extreme cases, all Guaranteed Stop losses will do is to bankrupt your Broker, because they can't find anybody to take the other side of the trade either! Not in this case because it mostly reversed quite quickly.


The number 1 rule of trading is 'Don't lose your Account'!
Nothing will protect you if you are on the wrong side of a low liquidity move like last night, so don't trade during such low liquidity - it is even more dumb than opening a trade just before NFP or an Interest Rate announcement not knowing the announcement is due out!

Post Script: Some may ask why the Aussie Dollar moved as well as the Yen. The answer is that the AUD is a Commodity currency, hence it is strongly affected by Risk On/Off sentiment and because of the local time, the Australian Traders were at their desks !

Well at least 2 people like my post (above) about the flask-crash.
One person clicked the like button and I had the following Skype conversation with another person:

A........: Hello Ian
Thank for the explanation about the yesterday crash on forexfactory... It is much clear

ianf0ster: It is nice to know that at least somebody read it and understood it, thanks.

A.......: yes this is so far the best and clear explanation ......i was wondering yersterday what caused this huge drop because one of friend lost
70k because of that

ianf0ster: If a trader feels they are tempted to trade in the very low volatility periods around public holidays or over week-ends,
then it is best if they consider the risks in terms of the chance of highly Risk ON (= 'good news', bullish equities)
or highly Risk OFF (= 'bad news' , bearish equities).

In most cases you will find that the chances of a Risk Off (= 'bad news') event that can move markets is higher than that of a Risk On
news event. Thus being long Risk Off is usually a better strategy during periods of low liquidity than being long Risk On.

Latest email from Boris Schlossberg of BK Forex (with which I partially agree): My comment in Blue
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Dear Ian
WillPower is Bulls-t
https://ecp.yusercontent.com/mail?ur...WeGvmOhJ9w--~C
Willpower.
Discipline.
Self-control.

For decades we’ve been told that these are the foundational principles of successful trading.
I am here to say that these are all lies. * I prefer to say exaggerated

Now I come from a family that survived rape by the Cossacks, Hitler’s killing fields in Stalingrad, Stalin’s killing fields in Siberia and endless rounds of interrogation by KGB.

My mother, at the age of 80, when told by doctors to lose weight in order to help her malfunctioning heart valve, lost 30 pounds in 6 months by literally eating a single prune every day until dinner without so much as a single peep of complaint. So you could say that I am quite familiar with the power of willpower. And yet I am here to tell you that its bulls-t.

Don’t get me wrong. Willpower is important. The more you have, the better are your chances of success, but the latest evidence from scientific studies shows that willpower is a finite resource and if we squander it on too many decisions we will inevitably fail to control ourselves. * 100% agree

Think about it. How many times have you told yourself you will honor your stop, honor your setup, honor your size -- and actually did so for a week, a month or perhaps even a year -- only to succumb to one false temptation of a trade an unwound all of your gains in a matter of hours?

It’s not your fault. We are simply made that way. Every single person has a breaking point. Everyone. To paraphrase a billboard I once saw -- its a matter of chemistry, not character. The more scientists study human behavior, the more they realize that we all have only a finite amount of mental and physical strength to resist the stressors in our life. Some have more, some less -- but the bottom line is that the romantic notion of a cowboy trader, completely self-contained, self-controlled and immune to any and all pain -- be it physical or psychological is complete nonsense. Willpower requires immense mental focus and we can only sustain that focus for so long.

Have you ever traded 30, 40, 50 times in a day? You are inevitably mentally exhausted and almost always at breakeven or barely profitable by end of the day.
* Yes, those have been some of my biggest days, though not always. Most times rather than feel mentally drained or tired after such a day which would usually mean having 20 to 40 winning trades , I feel exhilarated. Though obviously if I traded as Boris apparently does, that would not be the case - LOL !

Why?


Because you’ve made too many decisions which almost certainly made you lose focus and make errors. No matter how much willpower you applied, I bet you made more money on days when you just made 1 or 2 well-chosen trades.

I’ve been thinking a lot about willpower over the holidays after I handed off all of my trading execution to my EA robots. Here are just of the things I did not have to do. I didn’t have to check the size or the entry side of my trade. I didn’t have to manage risk or take profit. I didn’t have to select the pairs. I didn’t have to time my entries or check quotes every two hours of my sleep. I outsourced a massive amount of clerical decision making to my computer, which never tired, never made a mistake and actually managed to trade through the flash crash with panache while I was having a blissful dinner with my eldest child only vaguely aware that USDJPY dropped 500 pips in 50 minutes for essentially no reason. If I was at the screen at the time, I can almost assure you I would have done much worse than my algo, as the emotion of the moment would no doubt overwhelm my willpower. * On the other hand, I have been taught how to trade stop run cascades caused by sound bites which hardly change underlying value at all. So I would do much worse at these times of greatest opportunity by leaving my trading up to an algo!

I am not arguing that algos are some magic success formulas that print money on demand. Algos can and do lose money all the time. There is no such thing as a set it and forget it strategy. But it is a truly massive difference in both focus and performance when all you need to do is manage the algo rather than the dirty work of managing the trade. By using our willpower on only the most important functions of trading we conserve our focus and apply the discipline where it matters most.

With my algos humming away in the background, today’s NFP was one of the least stressful sessions of the year for me. I was able to see the field of play with much greater clarity, much to the delight of the BK chat room members who banked very decent pips off my calls.

So while I can’t promise you that algo trading will make you profitable, I can guarantee you that it will make you a better trader. Which is why I am hoping you can come to our FREE MT4 Traderfest next weekendand learn about the advantages of rules-based trading. It’s time for the machines to help us conserve our willpower for times when we need it most.
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Boris has some good point here, and I agree that willpower is finite and that automation is a way to help preserve it. But automation isn't the only way - instead you can procedurealise your trading to a large extent, still leaving some room for discretion but only when you have already locked in a no-lose (under normal liquidity situations) position.

However is is just plain silly to offload responsibility to a computer at precisely the time of greatest complexity when you have been trained and are confident on how best to exploit it!

And if you haven't had the required training to exploit such situations- what is your excuse? - Unless you make darned sure that you are never caught trading in those situations!

An email from Lance Beggs of Your Trading Coach stating the obvious (but often ignored). [Note that the trades marked in his charts are HIS style of trading - not mine or Ray's! My comment in Blue]
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Hi Traders,

Today... why I'm completely comfortable with my current trade losing (and you should be too).

Start off your trading year by examining your relationship to risk. Because too many traders are operating with size they're not ready for and risk they're not comfortable taking. Fix this, and you will go a long way towards making 2019 a year of real progress and growth.


Pre-Acceptance of Trade Risk

I will NEVER take a trade without having pre-accepted the potential for trade loss.

Because the fact is that MANY will lose.




Pre-acceptance of trade risk means that I am comfortable with taking the loss and will do so immediately without hesitation.

Pre-acceptance of trade risk means that I'm not overly concerned with the monetary loss and can keep my focus on the process of analysis and effective decision making.

My focus remains on process, rather than outcome! *As Ray says, you can control the process, but not the outcome! *



Ask yourself before entry, "Am I comfortable with this trade losing?"

If you're not comfortable with this trade losing then you've likely not yet achieved sufficient confidence in your strategy, or you're trading with too much risk.

You will likely hesitate to take the exit, ensuring a greater than necessary loss.

And you will likely carry some psychological baggage into the next trade, increasing the chance of poor analysis or decision making and greatly increasing the chance of further losses.




Before any trade, pause to confirm:

1. A full loss on this trade will not break any session drawdown limits.
2. A full loss on this trade is PERSONALLY acceptable. I am completely comfortable taking the loss and moving on to the next trade.

Because if either of these are not true, then you have no business taking the trade.
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This week, Boris Schlossberg is going on about 'trading robots' again.

While I am in favour of automation for some of the trade management tasks , setting initial Profit Take levels, initial Stop Loss levels, moving to Break Even at a certain point etc. These are not things that should just be abdicated to a computer, which is why I emphasise the 'initial' nature of them.
It just isn't possible for a computer to do discretionary trading like a human being. Neither can the sort of simple EA that Boris is pushing calculate relative value and work out what discount/premium to that value there currently is.

But automatic trade management (with the trader able to over-rule it) can ease the task of trading, of course it can. It can also help with good trading habits such as always entering with a suitable Stop Loss, but I am not going to just let it loose unsupervised with all my trade management, much less let it decide on trade entries for me!

Anyhow, here is Boris' email:

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Habits are Hard. Robots are Easy
According to social scientists most of you who made New Year’s resolutions have already abandoned them.

That’s perfectly normal.

James Clear - the author of Atomic Habits recently published an article telling his readers that they need to create an “activity tracker” to record all the things they wanted to improve in their life on a daily basis.

I nearly spat out my coffee after reading that. “A habit” for your habits. Seriously?

That wouldn’t even last a day doing that. I refuse to even record my daily trades into a spreadsheet. I did it like once and then got bored with it. And if you are honest with me you probably did too.

In our Anglo-Saxon-Protestant-ethic society personal responsibility and discipline are sacred beliefs. How many daytrading Youtube videos have you watched where the host earnestly urges you to practice “mindfulness”, always honor your stops, record every thought that goes through your mind as you trade and for good measure meditate, work out 90 minutes every day and only drink “herbal tea”.

Come OOOOOOOON!

In real life I am actually a pretty disciplined person. I bet I live a much more ascetic life than you. I basically just eat carrots and cucumbers and peanuts. I take a walk for an hour each day. I wake up in the middle of the night for the past 20 years running. But the older I get the more skeptical am about the idea of “discipline”. After all I still lift my stops. I still chase trades. I still fight the market.

Bottom line is that we humans suck at “discipline and habits”. We are pleasure seeking animals. Want to know what we are really like? Look at bonobo monkeys.

The fact of the matter is that all progress of human civilization has been achieved not through personal self sacrifice and discipline but by making machines do all the dirty work for us. Who does your dishes? Who does your laundry? Who cooks your food? The 19th century man and woman were much more virtuous and disciplined than you. But you - the lazy 21st century citizen of the world - can achieve a thousand more tasks in 1/1000th less time.

Which brings me to trading. If you are not using robots to help you trade you are basically like one of those hippie farmers of the 1960’s who decide to give up the modern world and “live on the land”. That’s a nice romantic image that would be shattered in about 10 minutes if you ever actually had to till the soil, feed the animals and joy of all joys repair the septic tank all by yourself.

But the image of a cowboy trader - surrounded by 6 screens and his mouse alone against the market - is just as romantic and no less stupid these days.

Here is what a robot will do that you can’t.
It will find trades 24 hours a day.
It will always keep its stop and always take its profit.
It will always size up properly.
It will always stop trading when told.

You will never do that. No matter how hard you try No matter how much you want to. You will always fail at all of those tasks eventually. The robot never will.

That’s why I am dubbing 2019 the Year of the Robot for Retail Traders and I hope you join me on our journey to conquer the markets.
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Writing this thread means that I get asked some questions by potential students of the markets.

Here is the latest one:

To: ianf0ster | From: m**** | Sent: Jan 19, 2019 9:34pm
---------------------------------------------------------------------------------
Hi Ian,
I've enjoyed reading your posts and can see you hold Ray in high regard. I've been tempted to join his courses for a while as it appears he really knows his stuff and gives retail traders an insight into institutional trading that is rare to find anywhere else.

Does his smart alpha site just link to his twitter feed and not actually have webinars etc?

Also, are there any other ways of joining his classes without a $1500 fee to compassfx as I can't really justify that spending right now?

Best regards

M*****

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And my reply:


Hi m*****
There are no video recordings on Ray's SmartAlpha website. There is a fairly small amount of education, a tiny fraction of what he covers in his course. But neither the website nor the Tweets which together comprise the SmartAlpha subscription package are of much value unless the reader has already done Ray's course.

So there is no way around paying for the course.

Now I will add one other thing that you probably won't want to hear:
The biggest problem a retail trader can have is to be under-capitalised. Because it is being under-capitalised that causes then to be over-leveraged such that even a good profitable trading system/method/technique can wipe out their account before the law of large numbers kicks in.
If you can't easily afford the course fee then you are definitely under-capitalised! Which means you should not be trading a live account until you get BOTH of the following:

1). Lots of practice in a practice account of trading using a proven (by your own practice results) system/method/technique.

2. Enough capital so that even 20 consecutive losses won't damage you account enough to prevent you trading with sensible % risk.

Meanwhile, don't waste what little capital you have, watch free videos By those few people who can explain not just how the markets move, but WHY they move in that way. And if their explanation doesn't seem clear and so stupidly obvious to you (after you hear it), then they are not the teacher for you!

I wish you the best of luck because I know how tough the journey is.

Ian

I had some follow-up messages from that guy M***** who was asking about a cheaper way to get Ray's education:


m*********

RE: Ray and Compassfx

 

1. Jan 20, 2019 8:17pm

Hi Ian, really appreciate your honest answer thanks. It's not the money per se. It's just I have thrown money at other courses that although I deem useful, I also deem fairly retail. Mauro's BTMM and ICT mentorship etc. I can see how price moves and can see it's all about supply/demand and "reading the tape" and foreseeing the manupulation enough to gain an edge with good money management. I however feel I need that little bit extra that 99% of guru's don't teach (because I feel most are failed traders). I believe neither Mauro nor ICT actually trade but may be wrong.

What attracted me to Ray was his solid background and i've not seen anything like his compassfx webinars you linked to thanks.

I have a solid income and am now able to work part time to go down the trading path so the money is not the issue, justifying it to my wife may be another challenge entirely though!

maybe I need to bite the bullet on this one then....thanks again


He then went on to ask about what exactly he would get if he signed up right now
- since the only details are for last year's course i.e. August-September.

Well, I don't know, though I have just contacted Compass to ask.

What I do know is:
All Ray's courses are recorded, as are his daily 'Focus Sessions' which constitute his 'ongoing education'.
All previous (full course) students can who want to continue studying have a choice of 2 different monthly subscriptions
either subscribing to his live room sessions (plus recordings);
or subscribing to have access to just the recordings (courses plus past and ongoing 'Focus Sessions') at half the price of the live room.

Now so far as Ray's courses are concerned, he is notoriously unwilling to participate in any marketing.
-Just the opposite of all those retail guru's out there.
So when they start preparing for a forthcoming course, it is invariably held much later than originally planned.
So what they do is that all Students for a course they are planning get immediate access to the past recordings plus the live room
and eventually the new course. This lasts from when they sign-up until the end of the course!

They call it the 'Early-Bird' deal, and it is a fantastic deal because if you are sensible,
you can not only ignore the live room and learn from the recordings at your own pace.
You can join the Self Help Group and ask any trading content questions of the experienced students.
Plus you may find you actually are well prepared enough to enjoy some free weeks or even months
in the live room before the actual new course even starts!

What I don't know is how early Compass are prepared to offer that 'Early Bird' deal
- but I will find out and when I do, I will mention it in this thread!

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Update from CompassFx
What I have been doing since I am not sure when our next class will be I give at least 60 days included of the room and encourage them to start with the August-September class recordings.
Have him reach out and I can see where he is and make a plan that fits him and his schedule etc.

That was what I got from Kim Pingleton in response to my question
Her email is [email protected]
Her Skype ID is forexkim
or you can phone her (the office number is 800.577.3600 )

For those who are unwilling to scroll back in the thread, here is where you can find various recordings of Ray's free webinars plus some snippets from his 'Focus sessions' , diagrams etc. It even has some of my stuff in there. Well worth looking to find out what Ray is all about:

https://www.compassproptraders.com/blog/