Institutional Equivalent Education?

Ian,

I took the recent course by Ray. Pure genius, like you said. Nothing else like it. I appreciate your promoting it here, and advice on how to take it in.

I am presently going through the videos and studying them carefully and building Chartbooks in Sierra.Helpful to have David T. OFten indicators.

Three questions:

1. How do I join your support group for Ray's students?

2. Where does one find a TED spread signal to overlay a chart?

3. Where does one find a Discretionary vs Staples spread to overlay a chart?

Is anyone using these signals? And if so, where can I find such?

Thanks for your help.

David

Hi David,
A public forum like ForexFactory is not the right place to discuss the details of Ray's teachings - otherwise it will be giving away more than Ray would tolerate.

Any current or past student of a full course (not just the 3 day taster in 2016) can join the 'Self Help Group'.
All they need do is contact me via Skype and then agree to our rules. My Skype id is ianf0ster ...... that is a zero in my name.

But to give some information, so as to give a taster of what we use for correlations, :
2. As you will be aware, when the TED spread is a measure of Systemic Risk so when it is increasing, then Credit Risk is increasing which in turn implies that Volatility is increasing. The formula we use in TV for the TED Spread is : 100-QED1! + 100 -GE1! - US02Y -US05
David's Yield package also allows you to plot the TED Spread within Sierra Chart instead of having to use TV.

3. Discretionary vs Staples is NOT used as a SPREAD. It is used as a Ratio and is one way of looking at the Merill Lynch stock rotation method. You can use any suitable ETFs for those sectors from your chosen trading market (or similar market), but obviously their prices will only be accurate whilst they are actively trading.


'Are people using these signals'? - Certainly Ray's students (and more specifically members of the 'Self Help Group') are using them but not exclusively, since they ARE NOT SIGNALS. They are just pieces used to put together a picture in order for the Trader to be able to write the 'story' of what the market HAS BEEN AND IS DOING and thus paint the possible future scenarios which would present trade opportunities.

Here is an interesting email from Lance Beggs (of yourtradingcoach) which highlights why it is so very much easier to successfully trade when using Multiple Units than it is just going All-In and then All-Out.

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Applying a Degree of Confidence to Price Targets

I don't care how good your analysis is. There are NEVER any certainties that a target will be hit.

So let's look at a little technique which can help your decision making during both the trade planning and trade management phases.

This article idea was prompted by some great email Q&A I received recently.

Let's start with the email question and response. I'll then expand upon part of my reply, as I think it's an important topic that deserves further discussion.

EMAIL IMAGES:

The email included a 30-minute Higher Timeframe chart. It's not reproduced here. It's sufficient to know that the higher timeframe is in an uptrend.

The following is the 3-minute Trading Timeframe chart showing the prior day in the left half and the current day to the right.

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Let's zoom in now to show just the current session:

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EMAIL TEXT (sent to Lance):

As per chart on 17th I was long on the days range low also the price was above the previous day close. So decided to go long on range low (865 with sl 862) as the major trend in 30min was in up trend. So I was right in my analysis however and kept my position open even though price hit the range high of the day with the expectation of reaching the target of 874. However it didn't went as per the expected and my SL got hit and post my SL hit , price went till 875 and hit achieved my TGT. Sir if I m wrong and my SL get hit I can understand that, however if I m right and my SL space is right and my Sl get hit and post that TGT is achieved . How to handle these kind of situation?

SO HERE'S THE SITUATION:



I must say... I love the trade entry. From a YTC perspective it's a BOF of the low of day support, coinciding with the prior day's high resistance, in the direction of a longer-term uptrend.

Very nice trade idea!

The following was my response:

EMAIL RESPONSE (from Lance to the originator of the question):

You ask, "How to handle this kind of situation?"

There is no "situation" here. What has happened is completely normal in the markets. The nature of price is that it often involves tests, retests, probes, spikes and all manner of action that traps people and stops them out before going on to the target. This is completely common.

How I would handle it (accepting that this is hindsight analysis and I didn't actually trade this market):

(a) The market on this trading timeframe is ranging. You entered beautifully. But I would have taken at least partial profits at the range high. It's the nature of ranging markets that they will continue to range, until orderflow triggers the breakout. There are no certainties in the market. So while you identified a good target much higher than the upper range boundary, surely you MUST have in mind the potential for the range resistance to hold. In that case, take part of the position off.

(b) And then being stopped out on the remainder, why did you not get back in? There's a beautiful re-entry just after 14:00.

Look back through my site. There are numerous articles along the theme of sometimes trades take multiple attempts. Here's one of the recent ones - http://yourtradingcoach.com/trader/how-i-think-on-trade-exit/

Sometimes a trade takes two attempts!

LET'S EXPAND UPON ONE KEY POINT

This is the point of today's article.

As mentioned earlier... I don't care how good your analysis is. There are NEVER any certainties that a target will be hit.

So here's a little tip which can improve your decision making regarding targets. After selecting your target, apply a degree of confidence.

For the example above, instead of saying "the price target is 874", the trader might have said "the price target is 874, with a 70% degree of confidence".

Or whatever other percentage they thought was appropriate.

The thing is - it's NEVER 100%.

In fact, I'd go as far as to say you should never select more than maybe 80%.


How does this benefit you?

It forces your mind to accept the possibility that the target may not be hit. If we selected the target with a 70% degree of confidence, then this means there is a 30% chance it won't be hit. So in planning out the trade we might consider alternate IF-THEN scenarios involving possible exits at the range highs, should they fail to break.

Give it a try. See if this helps improve both your trade planning and your subsequent trade management decisions.

And for more advanced application... continue to update that degree of confidence as more data unfolds in real-time.

Good trading,

Lance Beggs
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My comments : 1. If the guy was trading based upon Lance's style and advice, then he had entered with 2 units and thus was a dumb-ass not to have taken a partial profit .
2. I don't like to give too much profit back, so personally I would have not only taken profit around the highs of the range, but also moved the Stop Loss on the remainder to Break Even at that point. But you only have this flexibility in your trade management if you trade multi-unit !
3. Plus like Lance says, I would have been looking for a re-entry after being Stopped out.

One of the things that both Lance Beggs (and Ray) teach is that before you trade and during a trade you should always have narrative about the Price Action.
Now the way that Lance does it is somewhat less sophisticated than Ray's in that he is mainly just looking for Trapped Traders, but it is still one heck of a lot more than the average Retail Trader does!

Here again is Lance's diagram from the email listed above:

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Now here it is marked up with my narrative:

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ianf0ster Why do 90% of day trader fail? Also, has Ray said anything about why they do?

Quoting Xvll

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ianf0ster Why do 90% of day trader fail? Also, has Ray said anything about why they do?

Ignored

Why do the vast majority of Financial Traders fail? - What a good, pertinent yet deceptively simple question!
And yes, Ray does have something to say on the subject.

It would take a very long time to fully answer it and several reasons would be either hotly debated, or rejected out-of-hand here in ForexFactory.

So I will use several posts to answer and I will start off with the less contentious reasons:

It is a similar question to 'Why do most wannabe authors never get published (unless they self-publish) ?

or 'Why do most of the kids who dream of being a professional Sports person fail?'

or 'Why do most professional sports athletes never make it to the very top levels?'

The answer is that it is a 'zero-sum game' and there just isn't enough room for that many people at those levels!

As with most well-rewarded sports, in trading the vast amount of the profit is shared between the elite. Those elite can make hundreds or even thousands of times as much as a journeyman. But in trading it is even worse because trading is not a zero-sum game - the Brokers and Market Makers take out their cut leaving all the traders (from the elite to the journeymen to the unlucky, undisciplined, untrained, ignorant, or incompetent) scrapping for the remainder.

Why do the vast majority of Financial Traders fail? - Post Number 2:

Most Spot FX traders and Day-Traders of stocks or Futures have been persuaded that trading is the way to easy money with little effort.
Many of them are overconfident in their 'natural' abilities because they are 'street smart' or because they have already been successful in a profession. Which is rather like expecting a good airline pilot to also be a successful surgeon, or vice versa! LOL!

Many of the already successful who are attracted to the financial markets have totally the wrong personality or skill set!
For example many computer professionals and engineers think that their proven logic skills will give them an advantage, when in fact this is almost always a big disadvantage! The reason for this is that when money and ego/pride is involved, almost no humans act rationally - not even Economists!
So, apart from retail goods trading ( market stalls etc.) one of the most useful professional backgrounds may actually be Psychology - because all financial markets are made by people, it is people who design the Computer Algos which are much complained about in stock trading (but they are also embedded into all other financial trading).

Why do the vast majority of Financial Traders fail? - Post Number 3:

Now we start getting to the more contentious part.
My Self Help Group had a small discussion about these different lists of the 10 key things in financial trading from different sources. Neither is complete, and some things are open to differing interpretations.

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Strangely the only discussion of the BK Forex list above, apart from trying to clarify the meaning of some items, was about the degree of Automation desirable.

Here is the other list which is missing some detail such as Stops should always be 'emergency hard Stops' and should hardly if ever be triggered. What this means is that your exit should be proactive , based upon Price Action, Value and perhaps on Order Flow rather than a pre-determined Stop Loss.

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Why do the vast majority of Financial Traders fail? - Post Number 4:

So how many traders actually implement either of these 'must-do' lists?
- Probably fewer than the number of those who don't fail!

There are probably other lists that work well for other styles of trading, but even when you have a checklist, do you always follow it? - I know that I don't !
Hence much failure is due to the trader's own psychological issues.

One of my own ideas for successful trading is that the trader should both design their Trade/Money management system plus automate things enough to at least partially compensate for their own trading psychology problems.

Here are my views about the BK Forex list of 'trader commandments'. I expect that this will be quite contentious, except possible for regular readers of this thread who already know my views.

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1. Automate all Logic and Execution. Ian F's view: Unless you are Scalping using Orderflow then there are many factors important to your potential trade which cannot be automated (at least not by an ordinary Retail trader). So personally I would (if I could) automate very little. I would always manually decide 'Go / No-Go' on my entry(s) - so I would never just leave an algo running unattended in case the Macro or Value situation changed. I might automate things like taking TP1 and moving the SL to BreakEven (just because doing it manually is too slow). I would also still monitor value and price action during a trade and modify my trade management accordingly. So automate Execution (within limits) , but certainly NOT ALL Logic !


2. Avoid Algos - Trade on the 1-hour Chart or higher. Ian F's view: Even without including Scalping, there are many high expectancy trades and trading styles which can only work on the smaller timframes 30min, 15min, 5 min, even 1 min. Even the Sammy style Oil Inventory trade is based on the 30min timeframe. Instead I say: understand the different types of Algo - what they do and on which timeframes they operate.


3. Focus on what the Market will Give you - not what you Want. Ian F's view: There is no disagreement here, however I can't see how Boris squares this rule with his rule 1. Since if you focus on what the Market will Give then you would be constantly over-riding your Auto execution for your exit(s)!


4. Make Reward at least 80% of Risk. Ian F's view: Here Boris is talking about having a pre-defined (i.e. can't be controlled, so just pray to God) TP to SL ratio of at least 0.8 to 1 . This is a fake crutch for those who can't/don't/ won't investigate the 'Expectation' for each type of trade they employ. Reward to Risk is immaterial - it is Expectation and %Win ratio that actually matter!


5. Aim for a 60% Win Rate or Better. Ian F's view: Same comment as for number 4 above. However it is pyschologically hard to trade a method/system which has less than a 50% win rate!


6. Lever through Turnover rather than Margin. Ian F's view: Levering via Turnover (making many trades) has some advantages over levering through Margin (trading larger), but it has disadvantages too! The smart trader knows how much to use both of these. Turnover beats Margin in that you are taking smaller trades and so reducing your 'Risk of Ruin'. But trying to take too many trades almost inevitably leads to taking more B, B- and C trades rather than all A and B+ trades - thus reducing the %Win Rate.

7. Lower Costs when Possible. Ian F's view: Duh! . But the key word here is 'POSSIBLE' - don't trade off security of your account against lower transaction costs !

8. Trade for Return NOT income - assume Uneven Distribution. Ian F's View: What Boris is saying here is that you can't make the same amount of money (or more) every month when trading - your returns will be unevenly distributed even when you are trading with consistency! - Why? - Because the nature of the market undergoes regular changes which affect how profitable your method/system will be.

9. STOP all Trading when down -5%. Ian F's view: While you should have a limit as to how big a total net loss you are prepared to suffer in a single day (or week if trading less frequently), 5% is an arbitrary figure and will be too low for some but possibly too high for others. Your risk Loss Tolerance should be determined by:
A). Your Risk Tolerance !
and B). How long (on average) it would take for you to make that amount back!

10. 200 Basis points per Month will make you a Trading God. Ian F's view: I'm not sure if I am interpreting this correctly , but 200 Basis Points is 2%. So what I think he is saying is that if you can make an average of 2% per month for a period of over (say) 1 yr without having to re-fund your account then you are an elite trader. I think that most institutions would agree with that provided that you are taking institutional sized risks (less than 0.25% per trade) and you are trading Institutional Size.
We retail traders have no comparative Liquidiy problems at the sizes we trade, which is a big advantage over the institutions. So I would consider that a Retail Trader (trading Full time and trading very small at around a 0.25% risk) would have to be doing between 2 and 5 times as well in order to be of the same standard. Note E**** and several other students of Ray's are at least at the level I describe. In fact E**** regularly makes more than +10% (using those low risks) in a Day - never mind making it in a Month !

Sorry for the later reply. Also, thank you and I really appreciate your help.

You could check out the EPAT certificate (Executive Programme in Algorithmic Trading) by QuantInsti that you could check out. It is a certificate 6-month course.
There are some short courses by Quantra that might also be able to help you out.

I'd like to add a couple of observations to Ian's post, having been with Ray for several months now.

The most amazing thing I've seen in my trading career is watching Ray teach how to trade off a naked chart with just volume on it. He shows how to recognize most order flow conditions - without indicators.

The most gratifying experience I've seen is having taken a trade, then seeing Ray tweet the exact same trade a couple of hours later - my entry was within a tick of Ray's entry. I've done this a couple of times now, and it never ceases to amaze me just how often this stuff just works. It's just amazing to take a trade, then have it take off in your direction, with a tick or two of back pressure, then hit a projected target. For someone who is used to having fairly wide stops (and hating it), this is nothing short of witchcraft.

Most people when asked would say that the best thing a trader can have is a big account, so they can sit through drawdowns without blowing up their accounts. I've got a couple of comments to that: (1) if you need a big account to trade, you're not doing it right, and (2) the best thing you can have as a trader is PATIENCE. Wait for that perfect entry - if you don't, and just jump into a trade because it "looks good enough", you will in all probability lose. Think about it this way - if you hadn't taken that iffy trade because you were bored or were trying to make something happen, you didn't lose money, did you?

One more thought: I have a friend of mine who has an account that starts off the first of each month at $2,000 - anything he makes over that, he draws out at the end of the month. He's never had a losing month.

Quoting n7ekg

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{quote} I'd like to add a couple of observations to Ian's post, having been with Ray for several months now. The most amazing thing I've seen in my trading career is watching Ray teach how to trade off a naked chart with just volume on it. He shows how to recognize most order flow conditions - without indicators................

Ignored

Talking of OrderFlow, Compass are talking about Ray probably doing an OrderFlow class in March ( or April ) - just Orderflow, but open to new students as well as current and ex-students.
Currently there are no details, but his last OrderFlow class lasted for 5 days and about half of it concentrated on using Orderflow Indicators - such as the OFten suite that David Tough has produced for Ray's students to use on Sierra Chart.

Warning: Although the free FXCM data feed (bundled into Sierra Chart) makes it possible to run Order flow indicators without a Futures account (or data feed), those indicators work very much better on the Futures because both Volumes and Delta are much more accurate from a good Futures data feed.

Here is a recent email from Lance Beggs (of Your Trading Coach):
It is spread over 2 posts because of the limit on the number of images I am allowed to upload in a single post.
As always, please note that all entries and exits on Lance's charts are from his own style of trading - which is quite different from my own or Ray's style.

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Hi Traders,

One of our key advantages in trading is that we get to decide when and where we will play this game.

So make sure you're playing YOUR game, not the market's game.

Especially when you find yourself in drawdown.

See below to find out what I mean...

Happy trading,

Lance Beggs.

Resume the Fight at a Time of YOUR Choosing

I sent the following post out via social media on Tuesday, prompted by some discussion with a trader who dug himself into quite a hole through doubling down on losses.

This message is so important I thought I'd share it with my larger audience here in the newsletter. And also take the opportunity to expand upon the idea a little.


This is one of the key advantages you have as a discretionary trader:

YOU get to decide when and where you will play this game.

If the current conditions are not to your liking, NO-ONE is forcing you to play.

Get out of there.

Take a break. Clear your mind.

And come back at a time of YOUR choosing, when the conditions are more suited to your style of trading.

Part 2 of Resuming the Fight at a time of Your choosing:

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ACTION ITEM:

Schedule some time to review or amend your Trading Plan.

Make sure to include guidelines or rules for the following:

(a) At what point intra-session will you stand aside and force a break from trading? What changes need to occur before you will allow yourself to resume trading?

(b) At what level of intra-session drawdown will you force a stop for the day?

And longer term:

(c) At what level of drawdown will you force a break from all trading, in order to review your performance and reconsider your plan?

Happy trading,

Lance Beggs

I'm sure its all very good, and Ray is a genius but this thread/topic is now over four years old and you are still on the course. During this time you could have studied for a degree, become a pilot, qualified to become a lawyer/accountant, renovated a property, or started a business. Serious question? When do the training wheels come off?

All good advice. My trading plan requires me to evaluate each trade, win or lose. What did I do right, what did I do wrong, how can I improve? I have a soft drawdown stop ($250) and a hard drawdown stop ($500) - when I hit the hard stop, I can't trade until the next day (enforced by my broker). Of course, there's no way I'm going to hit that drawdown on a single trade, and I trade with a 5-tick stop, 10-tick maximum (depending on the market). This forces me to look for the highest probability trades, instead of just jumping in because the trade looks "good enough".

That's a good question. I would say, when you're making 90% or more trades that are, at a minimum, break-even (or break-even + 1) trades. Ray doesn't let his interns trade real money until they are consistently making 95%+ non-losing trades.

There's always something new to learn. I've been trading for 5 years, and I learn something new every day. I've earned that trading is a journey, not a destination, and it's a mirror for our own fears, our own greed. Nothing wrong with continuing to learn. Ray is always coming up with new and better ways to teach.

Quoting hostwey

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I'm sure its all very good, and Ray is a genius but this thread/topic is now over four years old and you are still on the course. During this time you could have studied for a degree, become a pilot, qualified to become a lawyer/accountant, renovated a property, or started a business. Serious question? When do the training wheels come off?

Ignored

This is an interesting question because I am sure many retail traders think like you do, so I would like to pose one right back to you:

Would you willingly use an accountant who had undergone no training/education since they qualified over a decade ago?
How about a dentist? Or flying with a pilot untrained on the new aircraft he was now flying? Or a surgeon untrained on the newer medical techniques?

All serious professionals (in every serious profession) keep up to date by getting periodic training updates - often formally, but sometimes informally. Don't you think this applies to the employees of the big institutions?

This also applies to serious private traders even in the retail space. The guy I call Mr Carlsberg ( probably the best retail trader in the world - who has gone for over 4yrs with no losing days ) attends at least 1 course per year and has attended one of Ray's courses every year since Ray started. Would anybody consider him to still be using 'training wheels' ? - No he is just keeping up-to-date and refreshing his knowledge!

P.S. The cost of taking Ray's (constantly developing and improving) course multiple times is only the cost of a month or so in the Live Training room - so an additional $250 (or $125 if you are doing it via the recordings). Plus for the professionals, it is a business expense - so I presume Tax deductible.
In fact there are several other students who have taken every course since they started with Ray, Samidy in this thread is one of them.