Tom Hougaard live in London – IX Show
Trader Tom2024-03-05
Tom Hougaard#Trader Tom#TraderTom#Trading Psychology#Traders Mindset#Swing Trading#Scalp Trading#Day Trading#Day Trader#Live Trading#day trading psychology#Tom Hoogard#tom trader#trade mentor#trading mentor#trade education#trading education#cfd trading
82K views|4 months ago
💫 Short Summary
The video features a speaker sharing detailed insights on trading practices, emphasizing situational analysis over technical analysis. Strategies include analyzing candlesticks, letting winners run, and adding to winning trades. The importance of mental resilience, risk management, and self-control in trading is highlighted. The speaker stresses the need for self-awareness, journaling, and adapting to market trends. Personal anecdotes and statistical data support the strategies discussed, aiming to equip viewers with tools for successful trading outcomes. The importance of psychological skills, flexibility, and consistency in trading behavior is underscored, along with the significance of self-discipline and physical well-being for optimal trading performance.
✨ Highlights
📊 Transcript
✦
Presentation on Hardcore Analysis of Footsy Index.
01:05The speaker shared a PowerPoint presentation on his successful trading journey over the last three months.
The presentation included 801 slides detailing mistakes in footy trading and strategies for improvement.
The speaker aims to equip the audience with tools and strategies to enhance their trading skills.
The session was interesting and informative, providing valuable insights for traders.
✦
Importance of situational analysis in trading.
03:41Emphasizes the need for action and aligning knowledge with execution in trading.
Evolution of personal journeys and the discrepancy between knowing and doing in trading.
Deep insights into trading practices, including preparation and the use of situational analysis.
Speaker offers free PowerPoint presentation to aid viewers in their trading endeavors.
✦
Importance of self-care for traders.
08:15Good sleep and nutrition are crucial for traders to perform well.
Personal anecdote about how kombucha affected sleep due to caffeine intake.
Skepticism towards technical analysis in trading, mentioning patterns like higher highs and double tops.
Speaker has become cynical towards traditional trading methods.
✦
Importance of situational analysis in market movements.
10:57Statistical analysis shows 50/50 distribution of winning and losing days in a bull market.
Shift towards situational analysis for a more specific approach to market situations.
Emphasis on understanding context and situation over technical analysis or gut feelings.
Development of 'rule of four' to guide decision-making based on specific market conditions.
✦
Speaker reflects on trading performance, success in the morning but inconsistency later.
13:13Traded well during holiday by sleeping more, trading at specific times, and reducing trades.
Successful streak upon returning to office.
Emphasizes situational analysis and runs free Telegram group for insights and accountability.
Stresses differentiating oneself in trading, references coach Steve Ward's teachings on hedge fund fundamentals.
✦
Importance of self-control and situational approach in trading.
16:22Speaker shares personal experiences of success and failure, emphasizing honesty and accepting losses.
Value of learning from losses and 'best loser wins' concept in trading.
Emphasis on hardcore analysis and reviewing past performance for long-term trading success.
✦
Challenges of trading and the importance of mental strength and strategy execution.
18:26Speaker reflects on past income from trading and calculates points needed for replication.
Doubts arise regarding ability to consistently make two points a day.
Acknowledgment of stage fright but confidence in speaking abilities.
Questioning of actual trading performance results.
✦
Reflection on trading journey emphasizing discipline and risk management.
21:51Importance of consistent profits to meet financial goals, stressing discipline with winners and losers.
Challenges and considerations of leverage trading, including funding and broker options.
Analysis of trading patterns, with a focus on the first candle of the day.
Future discussions on detailed trading strategies and practices.
✦
Creating situational analysis based on the first candle of the day in trading charts.
26:02Better performance observed in trading the Footsie index when the first bar is negative.
Statistical outlier in the last 22 trading days with mostly negative first candles, deviating from the usual distribution.
Analysis led to improved trading performance in the Footsie index over the past four months.
✦
Trading strategies based on analyzing candlesticks and market trends.
29:26Shorting at the high of a negative bar and buying at the low is suggested, challenging conventional breakout theories.
Implementing actions that provide a statistical edge over time is emphasized, using historical data to illustrate different scenarios.
The focus is on making informed decisions based on market movements and potential outcomes.
Traditional trading norms are advised against in favor of a more strategic approach.
✦
Importance of letting winners run in trading.
34:26Different stop loss levels impact potential gains.
10-point stop loss led to a maximum profit of 153 points.
5-point stop loss resulted in a potential profit of around 100 points.
Emphasis on risk management and optimizing winning trades for successful outcomes.
✦
Transitioning from a bearish to a bullish mindset in trading.
36:34Emphasizing the importance of mental flexibility and behavior in adapting to market changes.
Sharing a scenario of potential profit through strategic trading decisions.
Highlighting the significance of situational analysis in trading.
Recounting an interaction showcasing the practical application of trading principles in real-life scenarios.
✦
Intense training in flight simulators and its relation to trading strategies.
39:26Pilots undergo simulation of emergency scenarios like engine failure and terrorist attacks.
Importance of being prepared for unexpected situations in trading.
Statistical data from years of trading shows effectiveness of buying low during market downturns.
Managing winners effectively to maximize profits is crucial in trading.
✦
Trading strategy involving buying at the low of the first candle if it is negative.
42:56Manual analysis of 1,049 charts revealed 50% had positive candles, leading to successful trading outcomes.
Emphasis on detailed manual analysis over automated processes for uncovering trading insights.
Strategy involves moving stop loss up by five points once trade moves in favor.
Benefits of hands-on analysis for successful trading outcomes highlighted.
✦
Importance of Professional Risk Management in Trading.
46:11Speaker analyzed 340 charts to optimize a 20 point stop loss strategy, emphasizing the significance of tracking profitable outcomes and potential losses.
Experience of potential points lost and gained over 4.5 years was shared, highlighting the impact of adjusting stop loss levels on potential losses and gains.
Encouragement was given to approach trading with a realistic mindset and utilize data-driven strategies for risk management.
✦
Trading strategy involving adding to winning trades.
51:08Emphasizes statistical analysis and risk management.
Potential for profit by increasing position size as trades move in desired direction.
Strategy involves 2:1 ratio of potential losses to gains.
Manual reference for further details on strategy and hypothetical scenario presented.
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Importance of Negative Candles in Trading
53:28Careful analysis is crucial before shorting at the high of a negative candle.
Manual analysis of 364 charts shows the market often moves against short positions by less than 10 points.
Thorough consideration of trading strategies is encouraged for making informed decisions.
In-depth analysis is highlighted as valuable for successful trading.
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Importance of understanding market trends and utilizing statistical data in trading.
56:17Knowledge of trading patterns helps make informed decisions and potentially avoid losses.
Significance of recognizing market reversals and joining profitable trends.
Uncovering specific strategies for successful trading.
Benefits of utilizing statistical analysis in trading to improve decision-making and maximize trading opportunities.
✦
Trading strategies focusing on the 8th and 13th candle bars in trading patterns.
01:00:44Importance of adding to winning trades and insights on moving stop losses for break even scenarios.
Analysis of the last 22 trading days of the Footsie index, showcasing a strategy independent of market trends.
Limitations in other markets like Dax highlighted, with findings presented for consideration.
✦
Trading strategy involving bracketing bars and moving stop losses.
01:05:23Emphasis on showing both winning and losing trades for a realistic view.
Strategy focuses on making small profits consistently instead of aiming for large wins.
Importance of the 13th bar in trading, marking an hour into trading and potential market behavior shift.
✦
Importance of confidentiality in the financial industry.
01:08:36Speaker's experience working with hedge funds, investment banks, and trading houses.
Role in assisting clients with decision-making and trading challenges.
Emphasis on individual uniqueness and the lack of a universal approach to trading success.
The need for personalized guidance and advice for individual traders.
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Key highlights for successful trading.
01:09:52Successful traders create their own process and find what works best for them.
Consistency is crucial, with traders putting in significant work and analysis.
Understanding the context and situation is important for analyzing behavior in trading.
Flexibly consistent approaches are needed due to the ever-changing nature of markets and life.
✦
Importance of context and flexibility in trading behavior.
01:13:05Traders must adapt to various market conditions and know when to avoid trading.
Consistency is crucial, but being too rigid may not always be beneficial.
Traders should assess their behaviors to pinpoint discrepancies between expected and actual returns.
Introduction of the 'behavioral gap' concept emphasizing the importance of identifying and addressing behaviors that could impede trading success.
✦
Importance of clear process and strategy in trading.
01:15:25Need for confidence, clarity, and congruence in approach.
Different trading styles suit different personalities (risk-seeking vs. risk-averse).
Success in trading linked to finding a style that aligns with personality.
Role of physiology in risk-taking and decision-making, including factors like sleep and diet.
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Importance of Factors in Decision-Making and Performance.
01:19:03Consideration of factors such as fatigue, stress, and sleep deprivation is crucial in understanding performance drivers.
Alignment of process, personality, and confidence can help reduce anxiety and stress.
Differentiation between psychological issues and reactions to poor processes is essential.
Self-assessment of process levels and decision-making preferences is valuable in improving performance.
✦
Importance of hit rate and payoff ratio in the success of portfolio managers.
01:22:57Data from high performing fund managers emphasizes the significance of being right more often.
Managing risk and understanding the psychological aspects of decision-making in trading is crucial for success.
The psychology of portfolio managers, whether quantitative or fundamental, can be toxic due to the high likelihood of being wrong and facing challenges.
Analysis shows a tight grouping in hit rate among successful fund managers.
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Importance of Psychological Skills in Trading
01:24:30Top portfolio managers need a specific psychological profile that can be trained.
Not everyone is naturally suited for success in trading and must work on developing the necessary skills.
Navy SEAL selection process emphasizes mental toughness alongside physical fitness.
Traders can enhance their performance by focusing on mental resilience and developing the right mindset for success in financial markets.
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The concept of psychological flexibility in trading is highlighted, emphasizing the importance of adapting to challenging emotions and situations.
01:28:34Traders are encouraged to focus on current market conditions and take appropriate action despite doubts or fears.
The misconception that traders will eventually reach a point of trading without fear or stress is challenged.
Experienced traders still experience emotions but have learned to manage them effectively over time.
The key message is to accept and work through emotional challenges in trading rather than expecting them to disappear entirely.
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Importance of Managing Emotions in Trading
01:30:16Emphasizes managing thoughts, emotions, urges, memories, and images to avoid hindering action.
Experiment shows challenge of managing verbal and physical tasks simultaneously.
Common thoughts and feelings discussed include reluctance to take losses and fear of missing out.
Managing emotions and thoughts is crucial for successful trading.
✦
The importance of psychological skills in trading situations.
01:33:09Opposing actions to thoughts are possible, challenging the misconception that thoughts always lead to actions.
Clients face challenges in tough years, emphasizing the need for consistency in behavior despite doubts and worries.
Three core psychological skills are outlined for effectively navigating trading situations.
✦
Importance of Psychological Flexibility in Trading
01:36:11Traders should focus on commitment and self-reflection to be successful.
Envision the type of trader you want to be: focused, constantly improving, and strategically aggressive.
Discomfort is necessary for growth, but having a clear purpose is key to overcoming the brain's resistance.
Balancing discomfort with a sense of purpose is crucial for maintaining commitment and psychological flexibility in trading.
✦
Importance of Personal Commitment and Consistency.
01:40:45A client exemplifies commitment to being masterful through coaching, training, and mentorship.
The power of personal commitment is demonstrated through dedication to chosen qualities.
Clarity in trading processes and adaptability in challenging moments are emphasized.
The concept of focus is introduced, stressing the importance of external and internal focus levels.
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Importance of external and internal awareness in mindfulness meditation.
01:43:10External awareness involves recognizing patterns and context changes.
Internal awareness is crucial for managing thoughts and emotions to avoid unhelpful behaviors.
The need to focus on what is important in the present moment is emphasized.
Practices like mindfulness meditation and journaling are highlighted as tools to enhance awareness and rewire focus.
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Importance of recognizing thoughts and feelings impacting trading behaviors.
01:46:03Internal awareness compared to a calm river for better control over behaviors during market fluctuations.
Observing thoughts and feelings from a detached perspective for making informed decisions and avoiding emotional reactions.
Differentiating between reactive emotions and intentional actions to maintain consistency in trading performance.
✦
Importance of awareness and identifying emotions in trading.
01:48:43Putting feelings into words reduces their impact and allows for better decision-making.
Goal in trading is to manage emotions effectively, not eliminate them.
Developing psychological skills to handle doubts, worries, and fears can lead to better trading outcomes.
The key is awareness, commitment, and willingness to be uncomfortable.
✦
Embrace discomfort in trading to achieve profitability.
01:52:05Avoidance behaviors can hinder market returns.
Accept discomfort as part of the trading process, similar to marathon runners accepting physical challenges.
Prioritize profitability over comfort for success in trading.
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Understanding and Managing Emotions in Trading.
01:53:41Remind yourself of potential discomfort at the start of trading and be open to accepting it without immediate action.
Emphasize that thoughts and emotions are part of the process and can be viewed as data for assessing their function and relevance.
Fear can indicate a need for action in the market, while emotions like fear and excitement are inherent and cannot be eliminated.
Key to successful trading is understanding and being aware of emotions to make informed decisions.
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Importance of Acknowledging Difficult Trading Situations and Emotions
01:56:56Acknowledging and breathing can shift one from a reactive to a responsive state, improving decision-making.
Three core steps for handling challenging moments: acknowledge, breathe, and choose a response.
These steps aid traders in navigating tough situations and making mindful trading decisions.
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Importance of Journaling for Traders
02:00:01Journaling allows traders to reflect, gain insights, and set actions.
It helps in training psychology, increasing awareness, and coping with challenges.
The process involves daily self-reflection and planning for improvement.
Trying journaling for three months can lead to positive changes in trading outcomes.
✦
Speaker's experience as a volatility trader in 2022 and 2023, focusing on risk management and mindset towards trading.
02:03:16Speaker expresses fear of losing money daily and emphasizes the importance of consistency in trading.
Speaker discusses managing changing moods and the need to adapt and evolve mindset towards risk-taking.
Speaker highlights the validation from other successful traders for his feelings and struggles in trading.
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Importance of Overcoming Fear and Doubt in Trading
02:06:34Traders are encouraged to operate without fear or doubt and understand the impact of comparison on self-worth.
Permission to feel anxiety and imperfection in trading is appreciated, emphasizing the need to take action despite negative feelings.
Reflecting on personal experiences, the speaker shares stories of devastating losses in trading accounts and the valuable lessons learned from such failures.
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Importance of self-control in trading.
02:10:35Emphasize on self-reflection each morning to avoid relying on the market for salvation.
Acting objectively and avoiding trading too big helps maintain control and avoid anxiety.
Using past trading decisions to feel disgusted as motivation for responsible and objective trading.
Self-discipline and control are highlighted as crucial for successful trading practices.
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Importance of visualizing trading strategies and analyzing past failures.
02:13:17Emphasis on studying charts and considering alternative actions in different scenarios.
Presentation of 186 charts where a 20 point stop loss didn't work to prompt reflection on decision-making process.
Encouragement for traders to imagine successful trades and constantly visualize profitable outcomes.
Key takeaway: learning from mistakes and using visualization techniques to enhance trading performance.
✦
Visualizing trades before they happen and challenges of adding to winning trades.
02:15:34Turning small moves into significant wins by visualizing outcomes and adjusting stop losses.
Emphasis on the difficulty of undoing the habit of adding to winning trades once successful.
Highlighting the mindset and skills required to succeed in trading, based on 10 years of experience on the trading floor.
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Importance of trading trends and executing trades based on specific indicators.
02:18:50Understanding trend days and the impact of spreads on trading outcomes.
Criteria for executing successful trades, including moving stop-loss to break even.
Examples and data provided to support trading strategies.
Encouragement for viewers to study the information presented.
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Importance of comprehensive education and practical exercises in developing trading skills.
02:21:33Speaker included 340 charts to educate viewers on trading strategies.
Emphasized training eyes to see patterns on charts, using the FedEx logo as an example.
Encouraged audience participation through an exercise involving raising hands and answering questions honestly.
Highlighted value of active engagement in the learning process.
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Trading Behavior Exercise
02:24:53Participants are prompted to raise their hand in response to questions about trading behaviors, like adding to losing trades out of anger or seeking revenge.
Reflecting on past behaviors and visualizing potential trading scenarios helps prepare for emotional responses.
The exercise encourages self-awareness and rational decision-making in trading situations.
The goal is to highlight common emotional pitfalls in trading and promote a more strategic approach to managing trades.
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Importance of controlling emotions in trading.
02:29:17Emphasizes that trading is not a hobby but a livelihood.
Shares personal experience of gaining and losing significant profits.
Stress on being cautious with big wins to prevent overconfidence.
Mentions the importance of focusing on trading goals and avoiding distractions.
✦
Importance of Healthy Lifestyle for Successful Trading.
02:32:15Physical exercise, adequate rest, and good nutrition are crucial for successful trading.
Blood sugar levels impact decision-making and performance in trading.
Engaging in exercise can improve trading performance.
Stable blood sugar levels lead to better decisions and positive results in trading activities.
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Importance of being well-rested and making decisions in a clear state of mind.
02:34:19Anecdote about a conversation with golfer Luke Donald regarding Tiger Woods' mental resilience is shared.
Emphasis on living in the present moment and having no recollection of past failures.
Ability to maintain focus and resilience under pressure is key to success.
Demonstration of Tiger Woods' mental strength on the golf course.
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Importance of Mental Coaching in Trading Performance Improvement.
02:37:21Luke Donald attributed his success in golf to his mental coach, prompting the speaker to draw parallels between golf and trading.
Understanding the instruments being traded and setting parameters for losses are crucial in trading.
Deep knowledge of trading products is essential for successfully navigating various markets.
The speaker underscores the significance of mental coaching and expertise in trading for optimal performance.
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Importance of trading strategies and performance aspect in trading.
02:39:57Personal responsibility is crucial for successful trading, as great strategies are ineffective without proper implementation.
Speaker shares a trading technique that led to wealth and aims to help others.
Value of practice and focused approach emphasized for successful trading.
Critique on conventional education in trading, focusing on the importance of seeing the full picture for decision-making.
✦
Importance of Quality Practice and Mentorship in Skill Development.
02:45:27Anders Ericson and Malcolm Gladwell popularized the 10,000 hour rule for expertise.
Ericson emphasizes that quality of practice matters more than quantity of hours.
Having a mentor is crucial for skill development according to Ericson.
Ericson uses eSignal for chart analysis and highlights the importance of problem-solving and true learning in skill development.
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Importance of a Good Teacher in Student Performance
02:47:33Emphasis on the role of a good teacher in improving student performance.
Practicing realistic scenarios is crucial for better understanding market behavior.
The fishing technique in trading involves placing stop losses based on instinct.
Market movements can signal buying opportunities or potential breakouts, with different types of orders being executed.
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The speaker discusses market scenarios, price retests, and buyer/seller behavior in trading strategies.
02:50:50Examples from NASDAQ are used to illustrate different trading strategies.
The importance of recognizing trends and using charts as part of a morning routine is emphasized.
The speaker mentions underestimating the number of slides in the presentation, but assures viewers of a full recording.
Despite the length of the seminar, the speaker expresses commitment to delivering comprehensive content.
✦
The speaker discusses the challenges of presenting hardcore statistics in a large assembly without the opportunity for questions.
02:54:38Despite the difficulties, the speaker aims to empower the audience with knowledge on what to do in different scenarios.
The goal is to provide a tool that can be applied to make informed decisions on 50% of all trading days.
The speaker expresses gratitude for the audience's presence and support, emphasizing the significance of their participation.
00:00I would like to give you uh some
00:01practical information first this is
00:04being filmed the reason it's being
00:06filmed is because I I I paid for it to
00:09be filmed because I wanted you to have a
00:11lasting memory of this day there's
00:13another reason why it's filmed and why I
00:15have handed out the PowerPoint
00:18presentation in the telegram group that
00:22I have created just for this because uh
00:27well by by way of a little story Steve
00:30Ward over there who will be coming on
00:32this stage in an hour's time he's got a
00:35PowerPoint presentation of just six
00:41slides and and he wondered if it was too
00:47much but then I told him that my
00:50PowerPoint slide was 801 slides and he
00:54looked at me like you might look at
00:57a lunatech
01:01but ladies and gentlemen the reason why
01:02I want to give you 801 slides is because
01:05I feel that I got something that will be
01:08of lasting value to you and I have
01:10chosen a topic which is of all the
01:14topics I could have chosen I chose the
01:16most difficult of ones I've chosen some
01:19hardcore analysis of the footsy index
01:22the reason why I chose that is because I
01:24felt that if I can trade the footy index
01:28successfully then I believe I can trade
01:30pretty much anything and I have had
01:32great problems with the footy index and
01:35I looked at well we'll get to that so do
01:38I think that I can go through 801 slides
01:42in the two hours that I have at my
01:45availability well do the math there's uh
01:487,200 seconds in a you can do the math
01:51we're talking about about 8 seconds per
01:53slide and I've already spoken two
01:56minutes about one slide so we can see
01:57we're already lagging behind
02:00the reason why there are so many slides
02:02is because of all the documentation that
02:04I have proven so I'm going to postulate
02:08something you know a professor will
02:09postulate a hypothesis I want to not
02:13postulate I want to actually take you
02:16through the entire Journey that I have
02:18been over the last three months from
02:21acknowledging during midye that my footy
02:24trading was not good to what I actually
02:27did about it and
02:30I feel that if I am able to give you the
02:34very
02:35tools that the strategy that I saw that
02:39I realized what was going on I actually
02:42think that you're going to come away
02:43from here going oh that was really
02:45interesting uh a little bit iffy in
02:48places but really really quite
02:50interesting but considering I got 800
02:52slides I think I'm just going to get
02:54going immediately and then in one hour
02:57someone is just going to give me a
02:58little notot and saying now it's Steve
03:01turn Steve is then going to take the
03:02stage for one hour and by the way Steve
03:05thank you so much for being here it's an
03:06absolute pleasure to share the stage
03:08with you
03:13then and then when Steve has done his
03:16hour H maybe we also need a f- minute
03:19break at some point I imagine and then I
03:21will carry on for an hour as well so um
03:24I won't spend too much time on a
03:26disclaimer it's just to say you know
03:27you're all ad adults and uh
03:31da good this is the temperamental little
03:35thing I got here so this is what I would
03:37like to go through with you today first
03:39of all I want to talk to you about what
03:41is situational analysis so we are so
03:43used to technical analysis moving
03:45averages Ballinger bands Fibonacci
03:48ratios and it gets more and more
03:50sophisticated now it's footprint charts
03:52it's uh what's that gentleman in uh in
03:54America uh Inner Circle Trader liquidity
03:58trap and uh and all of the these fancy
04:00things great I have the greatest respect
04:02for that however I I can't help but
04:04thinking that being really really good
04:07at technical analysis doesn't
04:09necessarily ensure that I will be a good
04:12Trader now that's what I got Steve Ward
04:15for it because he will somehow link the
04:17bridge between what I know and what I'm
04:20actually able to execute it's the old
04:22Liam niss scene with Christian Bale out
04:25on the pond in Batman Begins you know
04:27knowledge is nothing without the will to
04:29act you've heard me say it many times
04:32before I won't bore you to tears with it
04:33again but nevertheless I feel that often
04:36time in the evolution of mankind and
04:40especially our own personal Journeys
04:42there are things that we know and then
04:44there's things that we do and those two
04:46are not necessarily aligned and I think
04:48from a personal point of view but I
04:50think I I think many of you will share
04:52that sentiment that many of you know
04:54that you have within you the ability to
04:57be better Traders so partner parcel of
05:00me presenting an
05:01801 PowerPoint slide and there's only
05:04one of them that says Merry Christmas so
05:06that's 800 slides which really pertains
05:09to okay this is Hardcore research I
05:12didn't want to stand here on a stage and
05:14give you two hours of Li d da it's just
05:19not what I do and this will either be my
05:21greatest idea ever or I'm going to sink
05:24like the Titanic we will only know in a
05:26couple of hours time obviously I'm going
05:28to do my very best to make sure that
05:30these two fre hours will absolutely fly
05:33and but perhaps more importantly that
05:35you're are going to get a deep insight
05:37into in this case the footy index but
05:39more importantly you will get a really
05:42really deep insight into what a
05:44full-time professional High State Trader
05:47actually does behind the scenes and by
05:49there I'm not talking about what I had
05:51to for breakfast but I'm talking about
05:52the level of preparation that goes in
05:55and why I use something called
05:57situational analysis the the PowerPoint
06:00presentation will be in your possession
06:02and once uh the that gentleman over
06:05there called Alex he has actually edited
06:08the video it is yours to have for free
06:11no no no no no additional cost or
06:13something it is yours because I want you
06:15to have that as something that you can
06:17refer back to constantly in your quest
06:21to better yourself as Traders I also
06:24want to talk about uh how to relax with
06:27a little exercise and and well you can
06:30see the rest of it here so let's get
06:32cracking with what is situational
06:35analysis and how is that different to
06:37what we know as technical analysis so
06:41I'm mindful immensely mindful I'm just
06:44going to talk myself warm so I might
06:45just be reading a little bit from the
06:47slide I am mindful that day trading is
06:49immensely challenging and taxing on both
06:52body and mind I know that because I know
06:55that once the trading day is over is it
06:58been one of those really volatile days
07:00or even one of those you know Turtle
07:02quiet days that's been recently I find
07:05myself being overtly tired in my mind
07:09and also in my body so so I've come to
07:12the conclusion that the only way for me
07:15to do my job
07:17well is to attack it on all fronts it
07:20means I have to make sure that I sleep
07:23well a little funny f a little funny
07:26side story because we don't have that
07:28much time for Side Stories but I've
07:29learned to brew kombucha this year but
07:32what I really didn't know was the
07:33caffeine intake that kombucha presents
07:36so when I was Gosling down half a liter
07:38of Kombucha for dinner no one actually
07:40told me that I was Gosling the essential
07:43of 10 espressos just before before
07:45bedtime and I've been struggling with
07:47sleeping in the last couple of months
07:49not really realizing there was probably
07:51all the caffeine that was coagulating it
07:53through my my bloodstreams that kept me
07:55awake and all really jittery so I cut it
07:57out and I've been sleeping like a baby
07:59baby kombucha is good for you but
08:01apparently a half a liter before bedtime
08:03is not so good for you anyway joking
08:06aside I look after myself both
08:08physically and mentally I make sure that
08:10I sleep well I make sure that I eat well
08:13but I also incredibly mindful of how I
08:16eat and when I eat and I don't want to
08:18make this an exercise into diet because
08:21I am not qualified to give that kind of
08:23guidance however I I wonder if you can
08:27just imagine that you've just come from
08:29a lunch with a friend of yours and
08:31you've had the biggest bowl of pasta at
08:34that Lush Italian restaurant around the
08:36corner where from you live and then
08:37you're sat down for the US session and
08:40about 30 minutes into the US session no
08:42matter how volatile the NASDAQ is you
08:44simply can't keep yourself awake because
08:47your blood sugar just dive through the
08:49floor I will at all cost avoid something
08:53like that because if there's something
08:55that it does it kills my
08:57concentration now that that was the more
08:59personal front but I've also grown
09:01incredibly cynical about technical
09:03analysis technical analysis in any form
09:06that you can think of higher highs
09:08higher lows um double bottom double tops
09:12and it's not that it doesn't work
09:14because all of it works some of the time
09:17but nothing works all of the time a very
09:20famous Trader called tet on a on a
09:23bulletin board called Avid trade I've
09:25once said that and I've always remember
09:27it because there was someone who was
09:29immensely qualified immensely
09:31professional but he also had to
09:32acknowledge that even though he had all
09:34the skills and all the expertise and all
09:37the trading hours in front of the screen
09:39he too excuse me he would face things
09:43that he hadn't seen before or he simply
09:45was incapable of trading the market well
09:49that day so I felt that in order for me
09:53to truly optimize my time in front of a
09:56screen I actually had to be much more
10:00specific
10:03um Let Me cast your mine back a year
10:09maybe you can relate to this yourself
10:11the Dax has just opened and it does what
10:13it
10:14does and you're thinking oh I'm quite
10:17bullish or I'm quite bearish or whatever
10:20it may be what should I do should I be a
10:22buyer or should be a seller I was in
10:23those shoes as well and I've been in
10:25those shoes many many many times in my
10:27life but then I real realized actually I
10:30don't want to be that person I don't
10:32want to be the I am bullish or I am
10:35bearish because as I will show you in
10:37one of the slides I went through 30
10:40years of Dow Jones history ladies and
10:42gentlemen
10:447,000 500 trading days I investigated in
10:48the Dow Jones index and I statistically
10:52concluded that over the last 30
10:57years half of all Dow Jones trading
11:01sessions closed
11:03higher than the previous day
11:06close and the other half closed down on
11:09the day so I thought to myself what's
11:12the point in being really bullish or
11:14really bearish when actually even though
11:17the Dow Jones over the last 30 years
11:18have gone from a price level around
11:213,000 what's WR was trading about 10
11:24about 30 years ago the Dow Jones was
11:26trading around the 3,000 Mark to to
11:29today being at 35,000 so even though
11:31that we've had an absolutely exponential
11:33bull market over the last 30 years the
11:36distribution of winning days to losing
11:38days in the Dow Jones index is still
11:4150/50 so I felt well hang on if that
11:44really is the case I may as well just
11:45flip a coin and then decide whether to
11:47be bullish or bearish because the odds
11:50are that I'm dealing with Randomness
11:53anyway so that led me to a much more
11:57specific approach toch technical
11:59analysis which I have then coined
12:01situational analysis and that's not me
12:03being a snob or anything like that it
12:04wasn't because I wanted to stand out I
12:06just thought it's not quite technical
12:08analysis no it's specific to a situation
12:11and it actually started with the fomc
12:14research that I did where where I
12:15developed that that rule that I call the
12:17rule of four where you take the
12:1910-minute chart after the fomc day and
12:22then you say on the fourth 10-minute
12:25chart which coincides with when the
12:27press conference has has been 10 minutes
12:29into their session I'm actually going to
12:31bracket that I'm going to be a buyer
12:32above and I'm going to be a seller below
12:34and right now it's got a pretty Flawless
12:36treack Ro track record of either
12:38breaking even or making money at a 100%
12:41rate I'm sure we will experience a loser
12:43one day because of course nothing ever
12:45works all the time so I coined that
12:49situational analysis and what I want to
12:51introduce to you today is what do we
12:55do what do we do if the first first bar
12:59of the day in the footsie is negative
13:02how do we deal with that and we'll get
13:05to that I'm getting a little bit ahead
13:06of myself now I want to tell you just a
13:09slight little story which is in here uh
13:13I did a very thorough review of my
13:16trading abilities some years ago and I
13:20found that I was probably just the best
13:23Trader there was around but only from
13:268:00 a.m. to 10:00 a.m. if I judged my
13:29performance from 10:00 a.m. until about
13:322:00 p.m. UK time I would probably fall
13:35into the category of or kind of you know
13:39yeah bit hit and miss there very good
13:42from 8 to 10 not very good from 10 to 2
13:45and actually okay from 2 to 4 but not
13:49great definitely much better in the
13:51morning then I went on holiday and this
13:53is while I was working for a cfd broker
13:56called CD index and
13:59I was allowed to prop trade uh the
14:01company's account and during that
14:03holiday which was a 14-day holiday I did
14:05very well I did so well so when I came
14:07back to the uh uh to the office the boss
14:11called me and said someone's on a bit of
14:13a roll and the truth is ladies and
14:15gentlemen I actually didn't know how
14:18well I had done I had just traded and it
14:22kind of led me to think well what did I
14:24do that was so great because I was on
14:26holiday and I didn't trade that much and
14:29I kind of reverse engineered and I
14:30decided that one I slept more two I only
14:35traded at a very specific times of the
14:37morning and then I bucker off to the
14:39pool and as a result of it I placed far
14:42fewer trades than I would normally
14:48place so back to situational
14:52analysis I I run a telegram group I do
14:55it free of charge because I think it's
14:57fun it's nice to have have someone that
14:59you are responsible for and you're also
15:02accountable to that accountability is of
15:05great benefit because what what Another
15:08Side Story so but do you know how you
15:10separate yourself from for example some
15:12of the people that Steve Ward will no
15:14doubt discuss because Steve Ward he is
15:17the you know he's the coach to the you
15:19know the creme creme the really hedge
15:22fund phenomenals but you know what they
15:24have that we don't have they have
15:27someone looking over their shoulder
15:29saying hey Bob do you think you've done
15:31enough damage for one day maybe you
15:32should just take a break we don't have
15:34someone and coming and knocking on our
15:36shoulder say hey should you cut it a day
15:39and if you have completely unrestricted
15:41ability to do as much self-damage as you
15:44can possibly muster in one trading
15:46session and let's face it ladies and
15:48gentlemen we all sat there and said
15:50you da I'm going to short the out
15:52of you for no other reason for no other
15:55reason that you piss me off all of us
15:59have done that we've all found ourselves
16:01with that Red
16:04Mist but Bob doesn't have that Red Mist
16:08because he's got a compliance manager
16:10going enough for today Bob right it is
16:13it we don't have that so we not only
16:16have to have a Flawless strategy we also
16:18have to have a
16:20Flawless
16:22self-control so what I'm arguing here
16:25ladies and gentlemen what if we actually
16:27developed approach to tr waiting which
16:29was much more situational than just
16:31sitting there aimlessly throughout the
16:33day from early morning to late night
16:36thinking that we can maintain that level
16:38of concentration for that amount of
16:42hours that is what I want to talk to you
16:46about so I released the first H to you
16:49and I'm happy to do these things because
16:51I find and obviously I'm hoping that
16:53when I tell you about the first bar
16:55negative in the foot it's not going to
16:57have the same fate that my School run
16:59strategy which I've lost a school run
17:01was fantastic in in August I made a lot
17:04of money and I was on holiday which was
17:05the greatest part of it and then
17:06September all my performance nose dive
17:09and then October seemed to find another
17:11you know second breath and then all of a
17:13sudden November School run an aggressive
17:15School run I mean I might as well just
17:17sign over a Blanco check to the to the
17:19broker at the moment because nothing
17:21seems to be working my my FX trading is
17:24to pits as well but you know what I
17:27stand Here on a age being totally and
17:30brutally honest about it because I know
17:32that the worst thing you can possibly
17:34happen is to have some YouTube guru that
17:37never ever loses and it's frustrating
17:39because who are you kidding who are you
17:42kidding when you think that that you
17:45never lose of course you lose we all
17:47lose in fact I wrote a little book
17:49called best loser wins and it's all
17:51about how to actually lose well so that
17:54you are able to win in the long
17:57run
17:59so hardcore analysis so to to set the
18:01stage for the research I'd like to uh
18:04I'd like to present I want to go over
18:06the last month only and after I've done
18:08that I want to go back over the
18:10statistics for the last four years so
18:12over the last four years there's been
18:14approximately 1,300 trading days in the
18:17footy 100 I mean about 1,200 it's a
18:20little bit more than a year so before I
18:22I do that I want to talk to to to you
18:24briefly about the realities of trading
18:26because it is a
18:28difficult profession to master and I uh
18:33I say that as someone who has made it
18:35his living to do this um every single
18:38day and making his bread and butter from
18:41what I make but I also say that from the
18:44point of view of someone who has worked
18:46for a brokerage for 10
18:48years uh I'm about to present to you
18:51some research in the footy which I know
18:54has statistical
18:56significance but
19:00you some of you witnessed the uh uh the
19:03little Manda we did for David Paul well
19:06David Paul once said
19:10that if
19:12only I was as mentally strong as my
19:16trading systems are
19:17robust what he meant by that is if only
19:21I was able to
19:23execute my strategies flawlessly every
19:27single time because unlike me my
19:31strategies are very strong but I I'm
19:34just a feeble man and at times my
19:38energies will Vain and I won't be as
19:40consistent in my
19:42application if only I
19:45was so why am I bringing this up well I
19:48do that because I wanted to just run
19:51through some basic mathematics with you
19:54and that is when I left the city about
19:5710 years years ago 13 years ago I earned
20:00an income of approximately
20:02£1,000 a year I was very well paid there
20:05is no doubt about that in today's money
20:07that's probably
20:10£150,000 so if I trade the footsie in
20:14£300 a point which is the same as
20:16trading 30 Lots at a time in the Futures
20:19Market if I was going to replicate my
20:22income that I had back then I had to
20:25make 500 footy points a year is that
20:30achievable well break it down say you
20:32don't have any holiday at all you have
20:34to make two footy points a day if your
20:38life depended on it could you make two
20:40footy points I'm pretty sure that you
20:41would be able to find one way or another
20:43to find two Foie points in the fie 100
20:47index but you know I can stand here and
20:51I can talk a pretty good game once you
20:53have been standing on a stage watch and
20:55you uh you sort of get over the initial
20:57stage fright and the and you know the
21:00whatever apprehension you have in
21:02talking to a big crowd you sort of just
21:03you sort of settle into it and then you
21:05sort of begin to rely on the material
21:09so I can talk a good game but do the
21:13statistics on my performance actually
21:16add up am I as good as I say I am well
21:19let's like a look at it am I able to
21:22make two footed points a day well and
21:28January I did okay but it's not exactly
21:30two foot points a day is it it's one
21:32foot point a day February oh I didn't
21:37win two points I lost two points on
21:40average then in March I came roaring
21:43back but only to give a third of it back
21:46in April and in May I just didn't trade
21:48footy and in June losing again July
21:51losing again and that's when I thought
21:53this can't go on I am not as good as I
21:57think I am and that's when I began to
22:03really uh nail down on what I'm teaching
22:05you
22:06today and the results showed up 32 in
22:10August 68 in September 67 in October and
22:14I don't know where we are in November
22:17uh so with the right kind of
22:21preparation I think it is possible but
22:23there's many angles to consider do you
22:26have enough funding you know esma has
22:28made uh leverage trading difficult we
22:31can only trade with 30 to1 are you even
22:34able to handle leverage if you go with a
22:37broker outside the European Union there
22:39are Brokers out there that will give you
22:41200 300 400 to one but not everybody can
22:43handle that amount of
22:45Leverage and then can you actually trade
22:48can you be that focused to make two
22:50points a
22:51day and not get
22:56bored let's uh
23:00uh let's just look at the average salary
23:02in the UK is in the in the European
23:04Union here's the salary
23:08breakdown in different
23:11countries imagine that I wanted
23:14to make 5,000 a
23:18month and I wanted to make two points a
23:21day I would have to make 40 footy points
23:25every single
23:26month
23:28in order to do that I would have to risk
23:31€125 a point that will require about €
23:354,300 in my account to do so on a 200
23:38to1
23:39leverage no those are just
23:43facts why am I talking about this what's
23:45the point you knew this already it's
23:47what come
23:50next what is also a fact that in order
23:53to benefit from what I'm about to show
23:55you you need to be able to run your your
23:58winners and be disciplined with your
24:00losers you are most likely going to have
24:03a very big inverse looking extrapolation
24:05meaning that you will probably have many
24:08small winners and many small losers and
24:10some very big wins
24:16now what I want to do now is I want to
24:19go through the last
24:22month so now we're going to get specific
24:25ladies and gentlemen this was just the
24:27preamble now it's going to get very
24:29heavy as if it was a lecture at a
24:32university this is not an inspirational
24:34tour it's going to be very very
24:38heavy the focus is on the first candle
24:41of the day by first five minutes a day I
24:44mean that candle that takes place from
24:468:00 a.m. UK time until 8:05 UK time if
24:51you are in Europe you'll have to add an
24:54hour maybe two depending on where you
24:56are in Europe what's the setup
25:01well what you're seeing here are two
25:04different foottit charts they both go up
25:06but the first candle of the day to the
25:10left is
25:12positive and on the right chart the
25:15first candle of the day is
25:19negative so what we're doing now is that
25:21we are creating a situational analysis
25:25piece of
25:26research
25:30I asked myself a very simple question
25:33and this was prompted out of necessity
25:35you know the expression that necessity
25:37is the mother of all skill well every
25:41single morning I was presented with the
25:43foot to doing what the foot she was
25:44doing going up going down sometimes
25:47marching up sometimes just not doing
25:51anything and I thought to myself how do
25:54I create a piece of situational analysis
25:57out of the Foie
25:58index well I did School run I did
26:02aggressive School run on the fooie and I
26:04didn't feel that they statistically held
26:06up didn't feel that it gave me something
26:08of value then I began to explore with
26:11other
26:13options what I specifically asked myself
26:16is how shall I trade the footsie when
26:18the first candle at the open is negative
26:21should I be bearish should I be bullish
26:24is there an edge to be
26:26had
26:28as I stated on my last page my research
26:30is not completely done but I have looked
26:34back over the last 1250 trading days in
26:38the Foie index and I have
26:41separated every
26:43single I have separated every single
26:48chart from those where the first bar is
26:51positive from those where the first buy
26:53is negative and I have ignored every
26:56single one
27:00where the first bar is positive and I
27:03have only looked at where the first buy
27:07is
27:08negative and what I found ladies and
27:10gentlemen I felt has been the reason why
27:13I've had a much better performance in
27:16the foots index over the last four
27:18months now you can judge for yourself so
27:22over the last 22 days I trade with a
27:24broker we won't mention names because
27:26this is certainly not advertising for
27:28them but that broker on their five
27:31minute chart will only have 22 trading
27:33days so I look back over the footy ahead
27:36of this talk for the last two TW on the
27:39last 22 trading Days Seven of those 22
27:43trading days the first candle of the
27:46time frame was
27:48positive and 16 sorry 15
27:51days had at its first
27:56candle a negative negative bar
27:59now as I point out here this is a
28:02statistical outlier because when I did
28:05the research over the last four years
28:07ladies and gentlemen the allocation of
28:10the first bar being positive and the
28:12first bar being negative is 50/50 so why
28:15the last 22 trading days has got that
28:18kind of profile well it just goes to
28:20show that it
28:22happens
28:24now what I'm going to do now is is take
28:28you through very slowly and meticulously
28:31but not so slow that you fall
28:34asleep what I actually mean by this and
28:36how I trade it when you look at the
28:38first bar and you see that it's a
28:40negative candle then what can happen
28:42well the second candle or subsequent
28:45candle third fourth fifth candle can go
28:47below the low of the first
28:50candle or the second candle can go above
28:54the high of the first
28:56candle over over the last 22 trading
29:01days the market went below the low 10
29:08times and over the last 22 trading
29:14days it went above the high for five
29:21times conventional breakout Theory would
29:24say that we should buy the breakout high
29:26and sell short the breakout low but what
29:29if we don't ladies and
29:31gentlemen what if we turn that argument
29:33on its
29:37head let's start with what if I short at
29:40the high of a negative
29:43bar this Arrow the blue arrow highlights
29:47a negative bar what if I sold short
29:50there now I know what you're thinking I
29:51wouldn't do that because the Market's
29:53going up but you don't know that at the
29:55time we are talking about what kind of
29:58action can you begin to implement today
30:02that will give you a statistical Edge
30:05over the next many years I didn't know
30:08that that was going to happen if I did
30:09that I would have bet the farm to go
30:11along but what if you had shorted right
30:14there let's look at that or what if you
30:19had bought
30:22there this is the first bar what if you
30:25fought right at the low of that
30:28bar let's look at the numbers but before
30:31I do let's take you through the last
30:33month okay we'll do that relatively
30:35quick these are 22 charts coming
30:38up you might be thinking why is uh why
30:41were there only 15 observations well
30:43because out of those 22 seven of them
30:46had a positive candle so those I'm
30:48obviously not
30:50discussing here they are one by one what
30:53if I bought right
30:56there what what if I bought right
31:00there what if I bought right there it's
31:03not looking good right now does it but
31:04you just wait just
31:08wait what if I sold short right
31:13there what if I bought right
31:17there what if I bought right
31:20there what if I bought right there
31:23because that's at the
31:26low
31:27what if I bought right there because it
31:29goes below the
31:32low what if I sold short right
31:35there what if I bought right
31:39there what if I bought right there does
31:41go
31:43below what if I'd sold short
31:47here what if I bought right
31:51there what if I sold short right
31:56there what if I bought right
31:59there okay now we've gone through 15
32:03charts and you're thinking oh Jesus
32:05that's a lot to take in all of this is
32:06in your files but what actually becomes
32:08very interesting now is how does the
32:12stat add
32:15up well let's take a look at what
32:18actually happens first I'll look at what
32:20happens when the second bar goes above
32:22the high of the first bar over these
32:26last 22 trading days we had 15
32:29observations on the first one it goes
32:30three points above on the second one it
32:33goes nine points above on the third one
32:35it goes 48 points above then 27 and then
32:400.5 now how much does it Max go in your
32:44favor if you had shorted at the first
32:46candle high with a 10-point stop
32:49loss
32:51well on the first one you would had a
32:54maximum when I say maximum that's the if
32:58you had perfect perfect foresight you
33:01would have maximum gotten 39 footy
33:04points out of it so there's 39 points to
33:07be had there's 45 points to be had and
33:10then twice you lost 10 and then you had
33:12a Max profit of
33:1568 in other words you have an absolute
33:19debt certain 20 point loss absolutely
33:22dead certain nothing can be done about
33:24that but you have a potential oh what's
33:2768 + 45 + 39 is that about
33:32153 or so
33:35thereabouts if you had to make up you
33:39want to do the math
33:44you3 15 did I say 153 oh my God I was
33:48out by one
33:50jeez if you had a maximum of 1504 points
33:55you're not going to get50 54 points of
33:57course you're not are you going to get
34:00half you're going to get about
34:0476
34:06maybe but do you think you'd get a
34:10third would you be able to get a third
34:12out of 150 points that means You' get 50
34:16points so you have two dead certain
34:1910-point losers and you have potential
34:22of 150 of which you have to make a third
34:26of it now do you understand why it is so
34:30important that we learn to let the
34:33winners run because if we don't master
34:36that lesson we will never be able to
34:39make something as promising as this
34:43actually work out to be a fantastic
34:45strategy okay let's carry on what if you
34:49hadn't used a 10o stop loss what if you
34:51just used a fivepoint stop loss imagine
34:54it there we are it is Tuesday Morning
34:56the foot has just printed a big fat red
34:58candle and you have an opportunity to
35:01buy that low which is around say the low
35:04was 50 and you were able to buy it at 50
35:07or 49 perhaps and you put a stop loss at
35:1244 would you make money from this well
35:15you would you would stop out three times
35:18and then two times you have a profit
35:20potential of approximately 100 points so
35:22you lost 15 out of those 100 points I
35:25reckon all of you in here would be able
35:27to extract 15 points out of 100 proba
35:30you probably even do better now you
35:32might be thinking hang on this is very
35:33sweet but this is based on what research
35:36on what a month 22 trading days if I was
35:41going to do something like this I need
35:43that to be substantiated to a much
35:45greater extent than just 22 days and I
35:49agree with you I absolutely agree with
35:51you
35:52okay flip the switch do you know what
35:55flip the switch mean
35:58do you know what flip the switch
35:59mean flip the switch mean that you have
36:02been short the market and all of a
36:05sudden contrary to your otherwise
36:07brilliant you realize that this Market
36:09is probably going up rather than down so
36:12you flip the switch from being short to
36:14being long it is one of the hardest
36:17mental exercises to do consistently and
36:21diligently without actually losing your
36:24mind I know a gentleman called Larry
36:26avento who says to me I can't do that I
36:30can't go from being short to being long
36:32I need to have a step away from the
36:34market are you able to flip the switch
36:37I'm not saying you have to be to be
36:39successful but having that mental
36:42flexibility to go from I'm really
36:45bearish really bearish to I'm really
36:47bullish really bullish the sooner that
36:50you are able to create that kind of
36:52behavior in your Market this so in your
36:54in your behavior in your approach to the
36:57market the sooner you will stop
36:59agonizing over being on the wrong side
37:03of the
37:04market what if we had a a flip the
37:07switch after 10 points so you would
37:10still make money on the first one but
37:11those where you
37:13lost all of a sudden you have a Max
37:16profit potential of another
37:1838 or
37:2017 I'm not saying that you need to do
37:25this my immediate conclusion is that I
37:28can't draw a conclusion based on 15
37:30occurrences you just can't so we'll
37:33ignore that conclusion
37:35temporarily but can we conclude that if
37:38the first candle is negative it makes
37:40sense to short the high of the first
37:42candle well based on this sample yes but
37:45I would need more evidence than just a
37:47month worth
37:50okay what if I buy the low at a first
37:54negative bar you have to understand
37:56ladies and gentlemen this is situational
37:58analysis at its core on any given
38:01trading year you're going to have
38:05a25 days where the foot will open with a
38:09negative bar wouldn't it be fantastic
38:12that out of those 250 days that you're
38:15engaged with trading 125 of them you
38:18know with absolute Clarity and certainty
38:21what exactly you're going to do without
38:23any kind of hesitation or doubt you know
38:26okay this is a negative B I know exactly
38:28what to do when I was doing the uh when
38:32I was doing the uh after David Paul's
38:35Memorial I stood and I chatted with
38:36people uh for a couple of hours outside
38:39and there was a gentleman that asked me
38:41a question and and I answered him like
38:44this it was something to do with
38:46rehearsal and I said to him look I have
38:47a friend who is a commercial airline
38:50pilot he he I think he flies for for
38:53Thomas Cook or it could be Tui or or one
38:55of those anyway once a year he tells me
38:58they have to go into a flight simulator
39:01and in there they are put through their
39:02paces and so I said to him what what are
39:05you like you're taking off from herro
39:06and it's a nice sunny day and you're
39:08Landing in Copenhagen and said yeah you
39:10wish it's more like I'm setting off in a
39:12hurricane all of a sudden my co-pilot
39:14has a heart attack the steward this
39:16turns out to be a terrorist and by the
39:18way they're out of paninis and one of
39:20the engin is on fire now deal with it
39:23that's the kind of thing you are put
39:24through in a simulator you know put it
39:26through a a nice summer day so what if I
39:29could actually teach you something that
39:32happens approximately 11 times every
39:35single month so when you are there you
39:37know that's a negative but I know
39:39exactly what to do now just like my
39:42friend who's a pilot knows oh
39:44engine's on fire I know exactly what to
39:46do oh co-pilot has a heart attack I know
39:48exactly what to do oh terrorist sorry
39:51Steward this lovely Steward this turns
39:52out to be a malicious terrorist I know
39:54exactly what to do
39:57okay may not every situation here has an
39:59answer maybe the terrorist is from the
40:02steward this is a bit of a stretch but
40:03nevertheless what if I buy at the low of
40:06the first negative
40:08bar I will look at what happens when the
40:11second bar goes below the low of the
40:13first bar before doing anything else and
40:15here it is here's the statistic I won't
40:17read every single one of them because I
40:19am trying to get through this
40:21[Music]
40:23presentation to get to the the juicy bit
40:28my research has indicated that it does
40:31make sense to be a buyer it may not look
40:33like it but just allow me to show you
40:36the statistics not just for these last
40:3915 days but for the last 4 and a half
40:42years worth of
40:44trading this is what it looks like if I
40:48buy the low of the first negative candle
40:50at the lows of the candle using a
40:5210-point stop loss I would have two
40:55losers Min - 10 - 10 the third one I'm
40:59just able to move my stop loss up to
41:01break even before I get stopped out then
41:03I have a Max 43 footed points at a at a
41:07maximum I'm not saying I'm you can't you
41:10can't interpret that oh plus 40 Fe no no
41:12no no this is the absolute maximum that
41:15the market will give you but what I
41:17haven't factored in here ladies and
41:18gentlemen is that you adding to your
41:20winner haven't done that at
41:23all Max 43 Max 40 max 45 Max 25 Max 17
41:30then another loser and Max 40 I had I
41:34will have minus 30 points in clear
41:37losses over free trades and I will have
41:39a potential of plus 210
41:43points over seven trades this does not
41:47including the potential or risk if I
41:49added to the winning trade and for the
41:52sake of saving space if I used a
41:54fivepoint stop loss I would have had had
41:56four losers losing 20 points but with a
41:59Max profit approximately 40 points lower
42:02than whatever this added up to which I
42:04think is about
42:05[Music]
42:07190 okay so can we conclude that if the
42:10first candle is negative it makes sense
42:12to buy at the low of the first candle
42:14well based on this relatively small
42:15sample sample yes it does but now we
42:19want going to dive into the last four
42:21years so I know I could have asked my
42:24programmer to go and do this for how
42:26many am I doing for time by the way uh
42:2815 minutes 15 minutes brilliant I could
42:30have asked my programmer to put my
42:33thoughts through a rigorous automating
42:35tast tast testing process and probably
42:37would have saved me hundreds of hours
42:41however the reason why I do this
42:43manually is because the devil is in the
42:46detail and an old school teacher taught
42:48me that from here from he's actually
42:50present today the devil is in the eail
42:53and the proof is in the eating of of the
42:56pudding in other words by going through
43:00this manually I was able to discover
43:04aspects of trading that I never would
43:07have dreamed of that a programmer would
43:09find for me so what did I find okay out
43:14of 1,049 charts I found 523 charts that
43:19had a positive candle I simply dismissed
43:21them for research of another day not
43:25this time around
43:26that left me with and by the way that's
43:3050% of all outcomes so there was
43:33523 um candles with a positive candle
43:37and then there was
43:39526 that had a negative first candle and
43:42I went through every single one of them
43:45every single one of
43:48them as I said if the opening candle is
43:51negative I'll deploy one of two
43:52strategies I'll buy at the low of the f-
43:55minute candle and if a subsequent candle
43:57offer me a price that's better I'll take
44:00it so I will try and buy down here if
44:04the low was 7386 I'm going to try and
44:06get 7386 or
44:11better now there's an important Point
44:13here I will gauge this to be a
44:18success if I'm able to move my stop loss
44:22up for whatever stop loss that I've
44:24decided be it five points or 10 points
44:26or 20
44:28points I will move my stop- loss up the
44:31moment that the foot has moved Five
44:33Points in my
44:36favor and I judge that to be a
44:40success so out of the 1049 charts
44:44526 had at its first candle over the
44:48last four
44:49years 526 of
44:53them if I used and we are getting to the
44:57real hardcore Now ladies and
45:00gentlemen if I had used a 20o stop
45:03loss I would have a success rate of
45:0964.6% and I would have had
45:12a failure rate of
45:1535% now what I've done is I've gone
45:18through every single chart with a
45:19profitable outcome and I made a note of
45:22how much the footy went against you if I
45:25bought the low or shorted the high so
45:30out of those 340 charts that respected
45:33the 20 point loss the stop loss I
45:36actually wanted to find
45:38out do I want to spend 20 point stop
45:41loss on the
45:42foot do I really want to risk 20 points
45:45every single
45:46time how about I optimize it and the
45:50only way that I could do that was to go
45:52through every single one of these 340
45:54charts and that's what what I'd like to
45:56share with you
45:58now for each of the 340 charts with a
46:01profitable outcome I manually looked at
46:03how much the trade moved against me and
46:05how much I could have made with perfect
46:09hindsight I created a spreadsheet and
46:11that's what you're seeing here here we
46:14go uh I would like to just credit uh
46:17Andy uh who sat down here he actually
46:20helped me with this chart this is the
46:23profit
46:24potential
46:26this is how
46:28much these trades went against me and
46:31this is the profit potential that they
46:33offered me if it's a little clear
46:35unclear and I don't think this is so
46:37clear so I think I'm going to uh move to
46:40the next slide I want to break it down
46:42for you slightly
46:44different out of those 340 charts but
46:48again now out of a sample space out of a
46:50total of the entire
46:53because I don't know whether it's it's
46:55going to be one of those trade that
47:20will8
47:22points it means that
47:28526 out of 520 out of 526 trades I would
47:33be stopped
47:35out on 526 minus 146 whatever that is
47:40what's that
47:42380 I would lose
47:45380
47:47times or three times out of four doesn't
47:52sound very appealing does
47:54it
47:57but this is not an amateur seminar where
48:01some YouTube phenomenon is standing on
48:04the stage trying to sell you a strategy
48:07with a 90% success rate no hell 100%
48:10success rate you're never wrong this is
48:14how a professional Trader navigates risk
48:18with the actual data laid out in front
48:21of him or her I will have a certain
48:26740 points lost over 4 and 1/2 years but
48:30I have a potential of
48:324,000
48:36points if you then increase the stop
48:39loss to six points well obviously you're
48:42going to lose more when you lose so now
48:46you're going to lose
48:481944 for certain but you have a
48:50potential of
48:545,100 and and if you use 10o stop loss
48:58you'll lose more when you lose you'll
48:59lose 2,400 over 4 years but you have a
49:03potential of
49:087,200 I won't go through the rest but as
49:11you can see they Center very beautifully
49:14around a Max profit potential of about
49:1725 points so if you're puzzled why all
49:22of a sudden I add to my foottit trades
49:25like a Maniac in my telegram Channel it
49:27is because I know statistically we
49:31should get a 25 28o Runner and if I have
49:35bought the footsy with a six or eight
49:38point stop loss and I am now into the
49:42point where I'm breaking even and I add
49:45every Five
49:46Points well all of a sudden that if I
49:50get a 25o runner well I'm going to get
49:5325 points profit on one I'm going to get
49:5620 points profit on the second that's 45
49:59I'm going to get 15 points on the third
50:02that's 60 and if I'm able to move my
50:04stop loss by the time that you get to 25
50:07points you have actually clocked up
50:10three times as much in open profit it
50:12won't take many of those days to
50:16actually make a market difference in
50:20your trading performance by adding to
50:22your winning trades but do it with some
50:25statistical finesse actually knowing
50:29what lies behind the number if you just
50:32had a 340 out of the 526 you're going to
50:36get a 64% hit rate 64% is not bad is it
50:42I mean you know if I was talking to some
50:4520year old that is used to YouTube
50:47videos he's 64% he probably going that's
50:50not very good there's a guy down the
50:51road he does 95% you but that's not the
50:55company now I'm in here is it we we are
50:58not those people we're professionals and
51:01we know how to deal with Statistics if
51:03the statistics is presented to us so how
51:06do you feel about having what's
51:08basically a 2:1 ratio you will lose
51:123,720 footy points over a year but you
51:15will have a potential of
51:208,700 so I put
51:23here how much would you have to make on
51:25the 202 winnings if you had a Sixpoint
51:28stop loss well on average you would have
51:31to make nine points to
51:35counteract the ravages of the
51:39losses all of this is available in the
51:42manual that is being given to you so say
51:45we had a strategy that we always bought
51:47the foot as close to the first candle
51:50low as with a negative candle as
51:52possible what would that look like from
51:54A Loss making point of view well there's
51:56526
51:59trades there's 340 winners and 186
52:03losers in order to break even on this
52:06strategy we need to make 10 points so
52:08you'll have a 20 point stop loss you
52:10need to make 10.9 call it 11 points on
52:14average but what is the potential
52:17usually well actually on average you're
52:20going to get 25
52:24points
52:26how am I doing for time Steve is it
52:27getting close to your
52:30time
52:32okay
52:41so I then it's it's getting heavy I know
52:44it's getting heavy I also discovered
52:46something which I thought worth
52:48mentioning can we agree that when you
52:50have a negative
52:52candle we actually anticipate the market
52:55to follow through we anticipate that the
52:57low to be broken of that 5minute candle
53:01unless of course it's one of those
53:02negative candle that just closes like a
53:04a hammer I counted 32 times out of the
53:10186
53:11chars when the second third or fourth
53:14candle broke above the high of the first
53:16candle and there was none of those 32
53:19times when the foottit didn't go above
53:21by enough to move the stop loss to break
53:23even in other words ladies
53:25gentlemen we really have to think very
53:28carefully about whether we want to short
53:30at the high of a negative candle if the
53:34first candle is negative we have to
53:36think very carefully I'll get to that in
53:39just a
53:44second if I flip this argument on his
53:47head what happens if I sell short at the
53:50high of the first candle as I said I
53:52went through 364 charge manually and I
53:55was right to think that the odds of
53:57breaking through the low was much more
53:59likely than breaking through the high
54:01first I calculated only 80 instances out
54:05of
54:06364 when the foot broke through the high
54:09first and 284 cases where the foot broke
54:13through the low first this is the P
54:15percentage allocation I then looked at
54:18how much the market would move against
54:19me if I shorted the highs this is what I
54:24found
54:2567 times out of 80 the market moved
54:28Against Me by less than 10
54:32points in other words if you have a
54:35negative candle as the first candle of
54:37the morning in the footsie and it's one
54:41of those mornings where the footsie then
54:43actually goes above the high first in
54:4767 sorry 83% of the cases the foot will
54:51only move against you by less than 10
54:55points and 59 out of the 80 trades moved
54:58Against Me by less than seven
55:00points and 46 out of 80 it moved Against
55:04Me by less than five points it's heavy
55:07statistics I know I know I could have
55:09come here and I could have done many
55:11other things but I wanted to give you
55:13something that was of real lasting value
55:17and if you can sit through a two hour
55:19lecture with me throwing statistics at
55:21you you can do this in trading as well
55:24the this is what it looks like
55:26graphically again thank you to you Andy
55:28for producing this but this leads me to
55:30a real
55:32conundrum do I buy the low of the first
55:35candle which produces High setups like
55:40this isn't that just a beautiful one
55:43isn't it just beautiful to be a buyer
55:45down there and then you ride that yeah
55:49see now you come to life because now
55:50it's
55:52visual no I I don't I get it I
55:55absolutely get it it's also part and
55:57parcel of the of the of the person up
56:00here on the stage to try and make it
56:01entertaining but there's only so much
56:04you can do with Statistics I mean I can
56:06stand here like a parrot or a clown and
56:08trying to make an tting but I actually
56:10really want to get to is this is going
56:12to happen 125 days out of a trading year
56:17wouldn't it be absolutely amazing that
56:19you knew exactly what you were dealing
56:21with and the odds of success because it
56:24doesn't take any of these days to make
56:26an absolute killer difference on your
56:29account this is the kind of day where
56:32you're hoping that you buy down here and
56:35you have the good sense of just putting
56:37a stop loss at breaking even and then
56:39the market is just allowed to run why
56:42well because you know that there's a
56:43statistical chart you're going to get at
56:45least 25 points and then maybe when you
56:48get to 25 points you're thinking I'm
56:50just going to leave that running I'm
56:52actually going to do myself a favor and
56:53I'm going to go and play around of golf
56:55and then let's just see where we are in
56:57an hour's time I'll put my stop loss at
57:00so I get at least 10 whatever it may
57:04be or something like
57:08this where we're buying right here and
57:11there's very quick 20
57:13points or something like this where the
57:17market just goes and goes and goes and
57:20goes what because you risked 10 points
57:23here and you are rewarded with well
57:26whatever the market will offer you and
57:29sometimes it's less so is these are the
57:32are this what I'm going to go for
57:35or do I play for this trying to sell
57:38short the break below the first negative
57:41bar and get results like this you see
57:43this is the flip side and you might be
57:44thinking oh u f u c k e r why are you
57:47doing that to me well because that's
57:50what we need to be able to deal with we
57:53need to be able to know when the market
57:56is doing
57:58this it reverses or when it's doing
58:01things like
58:04this and that is what I've attempted to
58:08answer in the PowerPoint presentation or
58:12PDF file because right here if you
58:15bought
58:17here you would obviously have a loser
58:19you would have a losing trade but
58:22wouldn't it be nice to have that kind of
58:25knowledge of how often this happens and
58:28then at some point you'll be able to
58:30join this trend and if you're looking
58:33for something like this I have something
58:37that I have
58:38uncovered in this
58:40so I'm just going to skip through these
58:43a little bit because how long have I got
58:45Steve you got as long as you like
58:51but
58:53great
58:55okay would you mind if I just finish
58:57this passage time
59:01should
59:03okay I'm going to free flow for a second
59:06okay you know what I mean by free flow
59:08no
59:09notes so I am doing all this research
59:13and Lord knows it's funny to say Lord
59:15knows because I'm not actually believer
59:16but hey Forgive Me Maybe I am I refer to
59:20him often in off he must be thinking I
59:22have doubts about whether you really are
59:24an ath this or not you talk to me talk
59:26about me so often Lord knows I spent
59:29many hours on this are you
59:33me and you know when you you have a bit
59:36of an epiphany in life me there was an
59:38epiphany being in a hotel conference
59:40room with David Paul in 2007 and he said
59:43to me add to your winning trades you
59:44know and like like a good boy I added to
59:46my trades and it really made a
59:47difference in my financial life well as
59:49I was sitting going through the the
59:51footsie something occurred to me and
59:54this is about half a year ago and
59:56thinking hm surely that was a
59:58coincidence I realized sorry I
01:00:01discovered that the eighth bar and the
01:00:0313th bar in the foot seem to hold some
01:00:06rather valuable properties along the
01:00:08lines of school run and I'd like to show
01:00:10you so you you don't think I'm just
01:00:12fipping here I went through every single
01:00:16one of the 526 samples and I re
01:00:19investigated how often is the eighth
01:00:24candle
01:00:25if I bracket the eighth candle like I
01:00:27did with a school run bar how often will
01:00:30I make money if I bought above the high
01:00:32or I shorted below the low and the same
01:00:35with the 13th candle and I'd like to
01:00:37just show you uh what I
01:00:40found uh so here's
01:00:44the there's the the eighth candle if you
01:00:47bought above there then you would have
01:00:49nothing but fresh air above I'm sure
01:00:51it'd be very happy and if you if you
01:00:54follow the 13th well you wouldn't do too
01:00:57badly I judge a strategy success rate on
01:01:01something like this on how am I able to
01:01:03move my stop loss up for break even and
01:01:05just leave it if I get stopped out well
01:01:07I don't lose anything but what I would
01:01:09really like to do is I'd love to show
01:01:11you there again there the the the eighth
01:01:15bar it means I'm short
01:01:18here and here's the 13th bar well it
01:01:21means I'll be going long here but what I
01:01:23would like to show you
01:01:25is I would really like to show you the
01:01:27last 22 trading days in the foot because
01:01:29now it's not dependent on whether the
01:01:32the footsie is positive or negative just
01:01:35humor me for a second as I go through
01:01:37the last 22 trading days of the footsy
01:01:41index and before you ask I Tred to make
01:01:44this ingenious little thing work in the
01:01:45Dax absolutely doesn't work and I don't
01:01:48understand why it works but what I'm
01:01:51about to show you is the last
01:01:56month in the footsie index where I
01:01:58bracket the eighth and the 13th bar and
01:02:02I ask you do you think you could have
01:02:03made money from that are you ready and
01:02:06then we'll give the stage to Steve
01:02:10W I would have made money from that
01:02:12because I'll have a stop loss up here I
01:02:14would have made money from
01:02:19that I would have been a buyer here I
01:02:22definitely was able to move my stop loss
01:02:23up I would have been a buyer here oh Bit
01:02:26Of Heartache and
01:02:32happy would I been able to make money
01:02:35from bracketing the eighth bar on this
01:02:36day I certainly
01:02:53would
01:03:06decent
01:03:07trade decent trade I've been long there
01:03:10Bit Of Heartache Happy
01:03:13Days what I like about the way I present
01:03:17is that I don't handpick I take a full
01:03:20month and I'll show you everything good
01:03:23or bad
01:03:26these might not be enormous winners but
01:03:30they are enough to make your points
01:03:33every single
01:03:35day here's one that lost so here it wins
01:03:38do you see this one here do you see
01:03:41how I would short
01:03:43here and the market will certainly stop
01:03:46me
01:03:47out that was
01:03:52one this works this
01:03:57works this one doesn't work do you see
01:04:00how it will take me long
01:04:02here and then stop me out
01:04:05here but this one
01:04:09works this one
01:04:11works because I can move my stop loss up
01:04:14to break
01:04:15even I may not make money on it but I
01:04:18will get stopped for
01:04:19nothing this one will give me some
01:04:22heartache and then it will make me
01:04:26this one will make me this one here I
01:04:30may actually have some some money
01:04:31management to do here but down here I am
01:04:34able to move the stop loss because it
01:04:36moved five points with
01:04:39me this one here I'll have 20 minutes of
01:04:43hell and then I'll
01:04:45have about 13 points in
01:04:49profit this one here is very iffy but it
01:04:53just about works and this one here was a
01:04:55beautiful call I traded this yesterday
01:04:58afternoon sorry yesterday
01:05:00morning why it works I don't know even
01:05:03this one here it may not look like a lot
01:05:06but it's enough by five points to move
01:05:08the stop loss and then I would certainly
01:05:09get stopped out for nothing the same
01:05:17here not a lot in it here but enough for
01:05:19me to move my stop loss and then what
01:05:22I'm constantly hoping for ladies
01:05:23gentlemen is to get Runners always
01:05:25hoping to get Runners move my stop loss
01:05:28and just
01:05:53hope
01:06:03this is the 13th
01:06:04bar why the 13th bar in my opinion
01:06:08because the 13th bar is 1 hour into
01:06:10trading and I believe that that could be
01:06:12the reason why they trade from 8 to 9
01:06:14and then once maybe business is done by
01:06:179:00 and maybe all of a sudden it will
01:06:19present opportunity I'll do these very
01:06:21quickly and then we'll give Steve Ward
01:06:22the
01:06:23stage
01:06:26this one oh this one wasn't very good
01:06:30but you don't
01:06:31get you don't get short here if you use
01:06:34a Point offset and then you have a
01:06:36beautiful trade
01:06:38here beautiful trade beautiful trade a
01:06:43loser a beautiful
01:06:48trade beautiful trade a
01:06:51loser an absolute stonker of a trade
01:06:54trade offering approximately 30 points
01:06:56in the foot
01:06:57scene okay um that was the first part of
01:07:03my Foie research I will now give the
01:07:06stage to Steve Ward Steve do you have a
01:07:09PowerPoint or do you want to take your
01:07:10lapt yeah
01:07:12okay are you still awake oh bless you
01:07:20oh do do you remember do you remember I
01:07:24said this was either the best idea ever
01:07:26or the worst see I just felt like oh my
01:07:28God this is heavy and I realize it's
01:07:30heavy but at the end of the day what I'm
01:07:32hoping is that you're going to walk away
01:07:34from here and going actually this has
01:07:37real value going
01:07:40forward okay so some of you may know me
01:07:42some probably won't I'm not as famous as
01:07:46Tom um most of my work actually
01:07:49intentionally has to be behind well I
01:07:51guess under the radar uh um a lot of my
01:07:55clients I've probably signed more ndas
01:07:57in the last 18 years than any other
01:07:59document in my life but my clients
01:08:01typically are um world's largest hedge
01:08:04funds investment Banks Commodities
01:08:06trading houses many Traders you if you
01:08:10read the financial press you'll know of
01:08:11many you won't know of many the best
01:08:13Traders don't like to be in the Press if
01:08:16they ask J they've done something wrong
01:08:18which is not good news um and what I try
01:08:23and do for my clients is help them to
01:08:27essentially make better
01:08:28decisions and to navigate the challenges
01:08:32of trading the markets the highs and the
01:08:36lows I've been doing that for 18 and a
01:08:39half years uh working with Traders all
01:08:42over the world all different asset
01:08:44classes um 95% of the
01:08:47time thank
01:08:50you is uh institutional and then
01:08:54obviously got some good friends and
01:08:55colleagues like Tom where I like to come
01:08:57and if I get invited um to come and get
01:09:00my little Slaughter maybe share some um
01:09:03advice and guidance the one thing I
01:09:06always say when I'm working with anybody
01:09:08is there's no seven steps there's no
01:09:11five steps there's no three magic
01:09:13qualities um that sells books it gets
01:09:17people on courses but it doesn't make
01:09:19anybody better at what they do and the
01:09:21reason for that is because nobody in
01:09:23this room is like anybody else in this
01:09:27room I say that I was looking around for
01:09:29some twins but that's that's my Norm
01:09:31that's the normal sticking point I
01:09:32hadn't seen any earlier so um but even
01:09:35they are not identical even when they
01:09:37are identical so we have to recognize
01:09:41that part of
01:09:43becoming a successful Trader is shaping
01:09:48your own process you've got to find out
01:09:50how to make it work for you it won't be
01:09:52the same as for everybody else
01:09:54and that's probably the most important
01:09:57um piece of guidance I can give anybody
01:09:59is you start like everyone else does you
01:10:03go on some courses sorry no problem no
01:10:07problem it's
01:10:13fine and then over time you've got to
01:10:16work it out for yourself but the key
01:10:18thing in working out for yourself is
01:10:21work you've got to do the work there's
01:10:25no one I work with who's good at what
01:10:27they do and by good I would say we're
01:10:29talking about people that are world
01:10:31class who hasn't put in a large amount
01:10:34of
01:10:35work doing the
01:10:38analysis doing the work at the screens
01:10:41time at the screens and also working on
01:10:47themselves what I want to try and share
01:10:49today is just a few ideas also some
01:10:52techniques that I use utilize with my
01:10:54clients to help them really I guess to
01:10:56do what Tom's been trying to say is to
01:10:59close the gap between knowing and
01:11:01understanding what to do in any given
01:11:03moment and then being able to actually
01:11:05do that in some form so we might call
01:11:08that
01:11:09consistency so it's interesting for you
01:11:12to think about how consistent you might
01:11:14actually be with your own
01:11:16trading so when you see opportunity set
01:11:19up that you should be taking how many of
01:11:21them roughly do you take if you should
01:11:22be taking them in a certain amount of
01:11:24risk on those trades how often do you
01:11:25take the actual risk that your strategy
01:11:28suggest you should be taking exits do
01:11:30you get out when you should be getting
01:11:32out if you should be adding to your
01:11:33winners are you adding to your winners
01:11:36are you able to stay out of the market
01:11:37when you shouldn't be in the market
01:11:38that's also
01:11:40consistency in action is action
01:11:43everything is action everything is
01:11:47behavior the thing also about
01:11:49consistency is we have to be careful
01:11:52with any of these ideas that we don't
01:11:54get too attached to
01:11:57it because the Paradox is you need to be
01:11:59flexibly
01:12:03consistent because the market is made up
01:12:06as is life of many moments some which
01:12:08are familiar and similar but very few
01:12:11are
01:12:13identical and so part of what I'm going
01:12:14to talk about today and it ties in with
01:12:16what Tom's been talking
01:12:18about Tom calls it situational and in
01:12:21Psychology we call it context
01:12:24which is the situation a person is in to
01:12:27understand Behavior we've got to
01:12:29understand the situation the person was
01:12:30in when they were doing the
01:12:32behavior and we can only judge a
01:12:35behavior and in in my brand of
01:12:38psychology we don't talk about right
01:12:40wrong good bad we talk about is it
01:12:41useful is it
01:12:43helpful and if you think about in
01:12:45trading for example a very simple
01:12:46example if you have a trending Market
01:12:48versus a ranging
01:12:50Market it's quite likely the behaviors
01:12:52that we engage Eng in might look quite
01:12:54different because the context of the
01:12:56market is
01:12:58different and there can be different
01:13:00types of
01:13:01Trends and we might have different
01:13:03behaviors so some flexibility is quite
01:13:05important understanding the situation
01:13:08the context and what's required in that
01:13:11context and what the best Traders I work
01:13:14with are very good at is what we call
01:13:16context
01:13:17sensitivity or Market regime sensitivity
01:13:21they understand the nuances of what's
01:13:22going on in the market maret and how to
01:13:25adapt their behavior to maximize the
01:13:28opportunities in that context or
01:13:30sometimes to stay out of the markets
01:13:33because they know it's not their
01:13:35particular regime where they've got
01:13:36strengths or
01:13:39opportunities
01:13:41so when we think about how consistent we
01:13:43are consistency is a nice word it's what
01:13:46we call a mid-level term we all kind of
01:13:48understand what it means but consistency
01:13:51is going to be different over the course
01:13:53course of a year if we just did exactly
01:13:55the same thing all of the time what we
01:13:58would call rigidity we probably wouldn't
01:14:00maximize our market
01:14:03returns because not every behavior is
01:14:05going to work in every set of
01:14:08conditions and we might choose to be
01:14:10rigid knowing that overtime we win more
01:14:13than we lose and when we win we win more
01:14:16than we lose when we lose so we have a
01:14:18positive expectancy so we may make that
01:14:20choice but we might also want to have a
01:14:22bit of flexibility recognized in
01:14:24different contexts and flexing and
01:14:26adapting to those different
01:14:27context now all of us who have
01:14:31traded will realize that often if we
01:14:34look back and analyze our performance we
01:14:37might get a gap between what our system
01:14:40might suggest we could return from the
01:14:42market and what we actually do return
01:14:46and the reason for that Gap is normally
01:14:50Behavior what we did in those moments
01:14:54okay so all of you will have a
01:14:55behavioral Gap so it's interesting to
01:14:57think about you know how big that Gap
01:14:59might be for each of
01:15:01you for some Traders it might be quite
01:15:03narrow for some it can be very wide and
01:15:07also we can start to think about and
01:15:09what specific behaviors might it be that
01:15:12is creating my
01:15:14Gap are there particular behaviors that
01:15:17I know I engage in which are reducing my
01:15:20returns from the market so that's where
01:15:22we're going to kind of start with and
01:15:24then we can think about okay how would
01:15:25it be if I was more consistent if I was
01:15:28able to do that behavior on a more
01:15:30consistent basis what would the outcome
01:15:33be in my um returns and of course then
01:15:37what do I need to do about it how can I
01:15:39start to change this Behavior okay now
01:15:42when I'm working with clients we're
01:15:45often talking about trying to bridge the
01:15:47gap all of my clients like all of you
01:15:48want to maximize market returns
01:15:51fundamentally that's a goal whether it's
01:15:54in p&l terms or in other terms now there
01:15:57are four building blocks we can think
01:15:59about in terms of where this Gap might
01:16:00be coming from the first one we have to
01:16:02think about is process because some
01:16:05people's behavioral Gap is down to the
01:16:07fact they don't have a clearly defined
01:16:13process for some people the behavioral
01:16:15Gap is also process related they don't
01:16:17have any confidence in their process
01:16:19they don't
01:16:20know if from moment to moment and or
01:16:23over time that strategy has any kind of
01:16:25positive
01:16:27expectancy they're diving off a diving
01:16:30board into a pool they don't know how
01:16:32deep that pool
01:16:37is for other people and this links into
01:16:39the second point they may have a
01:16:42strategy that's clear it may have some
01:16:44positive expectancy but it may not suit
01:16:47them as a
01:16:50person so the strategy itself may work
01:16:53for some people and it may be able to be
01:16:55clearly defined but not all strategies
01:16:58work for all
01:17:00people and if you have to trade out of
01:17:03line with your
01:17:04personality that is difficult to sustain
01:17:07over time and it's definitely difficult
01:17:08to do when there's stress and pressure
01:17:11and we tend to revert back to
01:17:14type so we want to make sure we've got a
01:17:16process we understand the process we
01:17:18want confidence we want Clarity and then
01:17:19we want what we call congruence we
01:17:21ideally want that that um to be related
01:17:24to who we are as people some people are
01:17:26very risk-seeking by Nature they love
01:17:29novelty they love discomfort they want
01:17:31to get in get involved the bigger the
01:17:33better and for other people they're the
01:17:36exact opposite they're very risk and
01:17:38uncertainty
01:17:40sensitive they're cautious they're
01:17:42careful and I've got Traders world-class
01:17:44traders who fit both of those
01:17:48categories and when I look at their
01:17:50trading Styles and how they make the
01:17:52money they make it is very
01:17:54different both make exceptional sums of
01:17:57money in different ways in different
01:18:00markets that suit them and that's part
01:18:03of the working out how you become
01:18:04successful you've got to do it your
01:18:08way then we get to this kind of the
01:18:10underlay I noticed and I was interested
01:18:13to hear Tom talking about his you know
01:18:14the sleep and diet um I've done lots of
01:18:18research with my clients around the
01:18:19physiology the role of the body in Risk
01:18:22Tak and decision- making and it is um
01:18:24very highly correlated but we need to
01:18:27consider things like you know our level
01:18:29of fatigue if you're fatigued you will
01:18:30make different decisions to when you're
01:18:32not fatigued we all know that I've got
01:18:35hundreds of bits of data to show it in
01:18:37trading scenarios if you are highly
01:18:40stressed it will affect how you perceive
01:18:43risk how you make decisions and the
01:18:45results you
01:18:46get and your physiology will underpin
01:18:49your
01:18:50psychology people who are sleep deprived
01:18:53are significantly more emotionally
01:18:55reactive than those who have slept
01:19:01well so we have to think about the
01:19:03physiology in in performance we have a
01:19:05phrase called bio Psycho Social when we
01:19:10think about what drives performance bio
01:19:15biological psycho psychological and then
01:19:18social I often like for my clients we be
01:19:20working in a trading team in an
01:19:22organization what are the environmental
01:19:26influences and then we've got the
01:19:28psychological piece so maybe we've got a
01:19:30process maybe allign to our personality
01:19:32maybe we're looking after our physiology
01:19:35we also need to think about the
01:19:36psychology thoughts emotions where we're
01:19:39focused so cognition emotion and all of
01:19:41these processes and the part they're
01:19:42playing in this Gap so it's useful for
01:19:45you to be thinking about as a framework
01:19:48if you've got a
01:19:50gap where is the gap coming from from
01:19:53because I've sometimes had people come
01:19:55to me claiming some psychological
01:19:57Challenge and when we go back and we
01:20:00look at actually what's going on it's a
01:20:02process
01:20:05challenge if you don't believe in your
01:20:08process if You' got no confidence in it
01:20:09if it's not aligned to your personality
01:20:11you can get lots of anxiety and stress
01:20:13and frustration and Ill discipline but
01:20:16it's not a psychology issue it's a
01:20:19psychological reaction to poor
01:20:21process
01:20:23yeah so you can use this as just a bit
01:20:25of a self assessment assess the level of
01:20:28your process you can think about does it
01:20:30think about in life in general how do
01:20:32you like to make
01:20:33decisions I've got a he was a head of
01:20:37risk at a big hedge fund I can say a
01:20:38little bit but not too much but we were
01:20:40doing some risk profiling and he came
01:20:42out as adventurous in our kind of
01:20:45categorization which is quite
01:20:46interesting for the head head of risk in
01:20:48a hedge fund um but I I often say to
01:20:52people you know tell me about how you
01:20:53plan a
01:20:54holiday think about how you like to plan
01:20:57holidays here's what he does he say I
01:20:58pick an interesting country I've never
01:20:59been to before I pick an interesting
01:21:02City that I can fly to in that country I
01:21:05book a flight and I book one night's
01:21:07accommodation in the city that I'm going
01:21:08to arrive in and then it unfolds from
01:21:13there that isn't how I plan my
01:21:18holidays I like to do plenty of
01:21:21research take time plan consider look
01:21:24Alternatives
01:21:26prices that's a much more thoughtful
01:21:29deliberate
01:21:30process I don't want the risk of being
01:21:33in a bad hotel or being in an unsafe
01:21:36City or not knowing I'm going to be
01:21:37sleeping on day two that's uncomfortable
01:21:40for me for him that's what it's all
01:21:44about the thought of spending months
01:21:47planning a
01:21:49holiday with minimal risk or excitement
01:21:53would be the worst thing for him so we
01:21:55can think about in our lives how would
01:21:57we like to make decisions is an insight
01:21:58into our risk personality does that
01:22:00align with how you're trying to
01:22:03trade so we can do a bit of research we
01:22:05can think about
01:22:08physiological how are you managing sleep
01:22:11are you rested as rested as can be
01:22:14before you
01:22:14trade eating hydration Etc but today
01:22:18we're going to focus particularly on the
01:22:20psychology piece because that's what's
01:22:21Tom's ask me to do but I am always
01:22:24thinking about these four parts cuz when
01:22:26people are making decisions and they're
01:22:28taking risk in the markets it's these
01:22:31four things into playing
01:22:33together yeah we can't always assume
01:22:36it's one or the other we need to kind of
01:22:37have that the four pieces in our mind so
01:22:40what we do today is we'll focus on the
01:22:43psychology all of you that have traded
01:22:45and traded live I think that's probably
01:22:46most of you know it's pretty challenging
01:22:48trading live it's not easy and this is a
01:22:51a piece this is I'm I'm going to read it
01:22:52might not be clear to everybody in the
01:22:54room but this came from uh a podcast
01:22:57interview with Will England he's the CEO
01:22:59and CIO of Walley Capital so he said the
01:23:02job of being a PM portfolio manager
01:23:05whether you're quantitive or fundamental
01:23:07is psychologically extremely toxic
01:23:11because you're going to be wrong
01:23:12basically just as much as you're going
01:23:13to be right you're going to get kicked
01:23:16in the face a lot and you're going to be
01:23:18someone who's the smartest person that
01:23:19they've known their entire life and then
01:23:22they're going to just get beat up all
01:23:24the
01:23:25time now I'll pause there and I just
01:23:27this graph on the left hand side is some
01:23:29data of high performing fund managers
01:23:32collected by a company called Essentia
01:23:33analytics they collect data from a large
01:23:36number of of funds they analyze
01:23:38portfolio manager detail and what it
01:23:41basically shows us if you go across
01:23:42horizontally we've got hit rate so how
01:23:45often is the person right and then we've
01:23:46got payoff ratio so how much do you make
01:23:49when you are right versus how much you
01:23:51lose when you're wrong going vertically
01:23:53the most interesting thing obviously
01:23:55straight away is the fact if we look at
01:23:57it there is a very tight
01:24:00grouping and that range of hit rate in
01:24:03this data is between 45 and
01:24:0655% so the best performing worldclass
01:24:10fund manager in this group is right
01:24:12about 55% of the
01:24:15time and other people in this group also
01:24:17world class are only right 45% of the
01:24:21time but obviously we can see that some
01:24:24the big outperformers make a lot of
01:24:27money when they're right and minimize
01:24:30losses when they're wrong it's what Tom
01:24:33was alluding to earlier and that's the
01:24:35skill that we have to kind of work on
01:24:39but becoming a top performing portfolio
01:24:42manager and then he goes on to say takes
01:24:45a certain psychological profile and that
01:24:48requires training and I just don't think
01:24:51many human are wired that
01:24:56way and just goes back and I think Tom
01:24:58uses a phrase in in his book um about
01:25:01thinking differently I think Mark
01:25:03Douglas one of the first people probably
01:25:04to kind of bring that phrase about the
01:25:05best Traders thinking differently to the
01:25:09rest lots of our human instincts our
01:25:11biological responses are not the ones
01:25:14that are conducive to making money in
01:25:16the long-term in financial markets so
01:25:18we've got to be doing the work on our
01:25:20strategies we've got to do the work on
01:25:22our skills and we've got to do the work
01:25:24on
01:25:25ourself yeah the good news is we can
01:25:28rewire so if we're not wired correctly
01:25:31we can rewire one of my favorite
01:25:34examples of this is so what he's really
01:25:35saying here is psychologically trading
01:25:38is tough most of us probably go yeah
01:25:40that's probably true but actually then
01:25:42if we go to Navy Seals we go okay
01:25:44actually Navy SEAL selection is also
01:25:46really
01:25:48tough and what Navy Seals selects for
01:25:51initially particularly is
01:25:54Fitness a large part of selection is
01:25:57about how physically fit you are a large
01:26:00part of trading might be about process
01:26:02but to get to the end of selection what
01:26:04they realized was and this is true in
01:26:06all Special Operations it's not just
01:26:09physical and a large proportion of it is
01:26:12actually
01:26:14mental and in trading we may think it's
01:26:17all about having a great process but
01:26:19it's not it's also largely mental
01:26:23psychological and so when the seals
01:26:25realized that they were losing People
01:26:29based on physical testing but who with
01:26:32different psychological skills might
01:26:34have got through those
01:26:36tests they were faced with a choice
01:26:38either we keep things as they are or we
01:26:40do something different we start teaching
01:26:43Navy Seals psychological
01:26:47skills to enable them to pass the
01:26:49physical tests so we get a higher output
01:26:53of candidate per selection group and
01:26:56that's what they did they identified the
01:26:59skills that were required and then they
01:27:01taught them people learned them and
01:27:02selection rates went higher without any
01:27:05falling quality of
01:27:08candidate and we can use the same thing
01:27:10in trading if we know that it's
01:27:11psychologically
01:27:13toxic difficult challenging we can use
01:27:15our own language the question is is it
01:27:18possible to learn the skills
01:27:20required and to rewire and the answer is
01:27:24yes it is if we are willing to do the
01:27:27work to do the rewiring of course and at
01:27:29the last part of my work when I'm
01:27:31working with clients is helping them to
01:27:33understand more about themselves and
01:27:34kind of those four component pieces and
01:27:36where we can improve and optimize but
01:27:38when it gets into the psychology piece
01:27:40often we're trying to identify you know
01:27:41what can we do differently how do we
01:27:42need to think differently or how do we
01:27:44need to respond differently to when
01:27:46you're having those emotions whilst
01:27:48you're trading and I want to kind of
01:27:49share a few thoughts and ideas um around
01:27:51that in our session today so a large
01:27:53part of my work over the last probably
01:27:5610 years um has been helping traders to
01:27:59develop something called psychological
01:28:02flexibility and I picked this
01:28:05particularly I think it overlays really
01:28:07nicely with what Tom's um talking about
01:28:10today so the definition again just I
01:28:11know a few of you might find it hard to
01:28:12read to screen people's ability to focus
01:28:15on their current
01:28:17situation what's happening in the
01:28:19markets as I see them right now
01:28:23and then based upon the opportunities
01:28:25afforded by that situation take
01:28:28appropriate
01:28:29action so do the right thing for the
01:28:32situation you are
01:28:34in even in the presence of challenging
01:28:39or unwanted psychological
01:28:43events the reality of trading is quite
01:28:46often you may have to take action even
01:28:50though you're feeling some doubt or
01:28:52you're a bit anxious or you've got a
01:28:55slight sense of a fear of losing on that
01:28:58trade and I was chall to somebody before
01:29:00the session and something I think it's
01:29:02worth sharing is I think a lot of people
01:29:05in their mind and maybe it's how some of
01:29:06the early books were written or maybe
01:29:08it's just popular culture there's almost
01:29:10an expectation even in my institutional
01:29:12clients that at some point in their
01:29:14career they will get to a point where
01:29:17suddenly they're trading without fear
01:29:20there's no anxiety there's no stress
01:29:23there's no worry they're confident all
01:29:25the time it comes naturally and
01:29:28easily and it's almost like there's a
01:29:30hope that there's this point in the
01:29:31future and that will
01:29:32happen and what happens it doesn't
01:29:38happen and some of my clients have been
01:29:40in the markets for 25 30 years
01:29:42plus they still get some fear they still
01:29:45get anxious they still worry they still
01:29:47lack confidence they still find draw
01:29:49down
01:29:50painful of course they do because who
01:29:53wouldn't it is painful but what they
01:29:56have learned over the years is how to
01:29:58manage
01:29:59it so we have to accept this is part of
01:30:02the normal trading experience part of
01:30:05what I would call the trading condition
01:30:06there's ups and downs in life that's a
01:30:08human condition there's ups and downs in
01:30:09trading a lot of them that's a trading
01:30:11condition you can't change it and
01:30:13actually trying to hope it goes away is
01:30:16unhelpful because it isn't going to go
01:30:18away there's a good analogy a guy called
01:30:21John C in who's a mindfulness meditation
01:30:23practitioner has this great metaphor
01:30:25about that um you can't stop the waves
01:30:28but you can learn to serve
01:30:31them and that's exactly how I think
01:30:33about the trading experience you can't
01:30:34stop the emotions you can't turn them
01:30:36off you can't turn off the thoughts it's
01:30:39not how we're wired they come for some
01:30:41people stronger for others weaker for
01:30:43some more often for some less but it
01:30:45happens but you can learn how to manage
01:30:47those thoughts how to manage those
01:30:49emotions how to manage the urges how to
01:30:51manage the memories the images all pop
01:30:53up we can learn to manage that such that
01:30:56it doesn't get in the way of us taking
01:30:58the action we need to take time for a
01:31:01little experiment everyone put your hand
01:31:02in the
01:31:05air okay I'm going to demonstrate the
01:31:08experiment then you can do it for
01:31:09yourself
01:31:11now are you all good okay so just watch
01:31:16and then you can have a go yourself
01:31:18listen to what I'm saying and watch what
01:31:20I do keep keep your hand up keep your
01:31:22hand up keep your hand up keep your hand
01:31:24up have a
01:31:29go okay watch again keep your hand up
01:31:33keep your hand up keep your hand up keep
01:31:34your hand
01:31:42up I wonder Tom's tired teaching you all
01:31:44the time watch
01:31:47again
01:31:49okay keep your hand up keep your hand up
01:31:51up keep your hand up keep your hand up
01:31:53there's two things we're doing yeah I'm
01:31:55keeping it simple there's two tasks one
01:31:57is verbal one is physical action one is
01:32:02this and one is this keep your hand up
01:32:04keep your hand up keep your hand up put
01:32:06them both together keep your hand up
01:32:08keep your hand up keep your hand up keep
01:32:09your hand up okay good Next
01:32:12Level
01:32:14Advanced
01:32:16watch keep your hand down keep your hand
01:32:19down keep your hand down keep your hand
01:32:20down have it go
01:32:24okay great
01:32:28so here's what's interesting I hear from
01:32:31people quite
01:32:32often I had the
01:32:38thought and let's say for example maybe
01:32:40it's I can't afford to take a loss on
01:32:43this
01:32:45trade and so I stayed in the
01:32:49trade I had the thought that told me
01:32:52basically I can't take the loss on the
01:32:55trade and that thought made me stay in
01:32:58the trade or I might hear I had a really
01:33:03strong feeling of
01:33:05fomo so I got into the the market even
01:33:09though I knew it wasn't the right time
01:33:10to get in but I felt it and I acted on
01:33:12the feeling I thought it and it made me
01:33:15act in a certain way and this has been a
01:33:18misconception from cognitive psychology
01:33:20where we see diagram such as thought
01:33:22leads to action or feeling action or
01:33:25thought feeling action and we think
01:33:26that's how it is it isn't like that at
01:33:28all because if that was true how could
01:33:30you do this keep my hand up keep my hand
01:33:33up keep my hand up keep my hand
01:33:37up wouldn't be possible but that's
01:33:40opposing action to
01:33:42thought and we need to remember this
01:33:44because just because you're having the
01:33:45thought
01:33:47that you can't afford to take a loss on
01:33:50a trade it doesn't mean you have to stay
01:33:51in the trade you could have the thought
01:33:54that I can't afford or I don't want to
01:33:56lose on this trade and at the same time
01:33:59you could get out of the
01:34:01trade you can have the feeling of the
01:34:04fear of missing out it doesn't mean you
01:34:06have to jump into the
01:34:08market you can have the feeling with the
01:34:10fear of missing out and stay out of the
01:34:13market providing you've got the
01:34:15psychological skills to be able to do so
01:34:18of course yeah that's what I want to try
01:34:20and give you a bit off today
01:34:22so this is really important it's a key
01:34:24part of my work because I think a lot of
01:34:26trading situations happen where if
01:34:29you're going to
01:34:30maximize returns and you want to be
01:34:34consistent for many people it's the
01:34:36thoughts and emotions are showing up
01:34:38that are influencing too strongly the
01:34:41behavior and the thoughts and feelings
01:34:43that show up might be perfectly
01:34:45normal this year has been tough for a
01:34:47lot of my clients early part of the Year
01:34:49particularly first 6 months seven months
01:34:51a lot hedge funds in draw down some some
01:34:53some significant ones choppy markets
01:34:56difficult lots of thoughts lots of
01:34:58doubts lots of worries showing up mind's
01:34:59going crazy but each day you got to
01:35:02still come in and do the right things
01:35:04even though you're in draw down even
01:35:05though it's uncomfortable even though
01:35:07you're doubting yourself you still got
01:35:09to come in and do what you need to do
01:35:12execute the
01:35:13process yeah so consistency of behavior
01:35:16of what the visible behavior is often
01:35:19having to occur even though there might
01:35:21be internal thoughts and feelings that
01:35:24might be trying to sway us away from
01:35:26that yeah so this is where we need our
01:35:28psychological
01:35:31skills
01:35:34so I want to break it into three core
01:35:36component pieces there it's more nuanced
01:35:39than this but you know Tom has given me
01:35:41an hour which is pretty decent
01:35:43um so here are the three skills we'll
01:35:47talk through them and we'll actually do
01:35:48some of the skills as we go through you
01:35:51may be doing some of these things
01:35:52already if so great you can obviously
01:35:55just use them as a reminder some things
01:35:57may be new some things might be very new
01:36:00um things that you've not never done
01:36:02before or considered and you can always
01:36:03think about going away and trying them
01:36:05out okay so the first component of being
01:36:09psychologically
01:36:11flexible is actually
01:36:14commitment so here's a question for you
01:36:17before I explain more I want you to
01:36:19think about the type of Trader that you
01:36:22want to be and I ask this to all of my
01:36:25clients tell me about the type of Trader
01:36:27or the type of portfolio manager or
01:36:30analyst that you want to be or that you
01:36:31are trying to
01:36:33be just in your mind think about how are
01:36:37you trying to be think about some of the
01:36:39qualities you might be wanting to
01:36:40demonstrate so for one of my clients
01:36:43phenomenal Trader young guy probably
01:36:45late 20s now when we did this exercise
01:36:48he said okay it's really important for
01:36:49me to be focused okay great focused as a
01:36:54Trader then he said I want to have a
01:36:56word that's kind of learning based in
01:36:58the end he came kind of being sort of he
01:37:00chose Mastery this kind of sense of kind
01:37:02of learning continue to kind continue
01:37:04Improvement keeping going that was
01:37:05another one he chose he said I want to
01:37:08choose
01:37:09calm said choose whichever ones you want
01:37:13he how do you want to be as a Trader and
01:37:16then he said aggressive in Brackets when
01:37:20needed close brackets contextual not
01:37:24aggressive all the time but when I need
01:37:26to be aggressive be aggressive but
01:37:29that's important how he wants to be okay
01:37:32so that's in his mind we're creting
01:37:34here's how you want to be here's the
01:37:36qualities that you want to
01:37:38bring and then you need to be connected
01:37:40to that either daily or weekly based on
01:37:43your time frames but we need to keep
01:37:45that in mind who am I trying to be what
01:37:46are the qualities I want to demonstrate
01:37:48because when it's difficult when we get
01:37:50to part three when we get down to being
01:37:52willing to be
01:37:53uncomfortable for
01:37:56what if we want our mind and body to be
01:37:59uncomfortable the first thing they will
01:38:00ask us in return is
01:38:04why because
01:38:08the psychological default in the brain
01:38:10around Comfort discomfort is Comfort
01:38:13first discomfort where
01:38:17required so if you don't know why you
01:38:19want to be uncomfortable if you've not
01:38:20got a s of purpose a goal purpose the
01:38:23trader you want to be there's no
01:38:24commitment to anything then there's no
01:38:27purpose then the brain will be resistant
01:38:29to you being
01:38:31uncomfortable so we have to balance at
01:38:33least balance discomfort with some sense
01:38:35of purpose and I say in my model we tend
01:38:38to look at kind of how that Trader wants
01:38:39to be they find it a nice way of
01:38:41thinking about things so think about
01:38:44that for yourself how do you want to be
01:38:47and you might have some themes that are
01:38:49consistent and you might have somewhere
01:38:50you want to be certain ways in certain
01:38:52different conditions aggressive in
01:38:54Brackets where required when needed it's
01:38:56like rooms in a house some rooms we Ed
01:38:58regular some rooms in the house we go to
01:39:01when we need to but less frequently
01:39:03that's how we can think about these
01:39:06qualities now what I want you to do is
01:39:10if you've done that exercise just
01:39:11quickly in your mind you've maybe got a
01:39:13few ideas about how you want to be think
01:39:16about one of those so if I take from my
01:39:19client we might take um his idea let's
01:39:21take the Mastery idea being
01:39:24masterful it's okay doing the first part
01:39:26and knowing how you want to be but
01:39:28there's no value alone to that until you
01:39:31do the second part which is and what
01:39:33does it look like in
01:39:37practice and this is where we start to
01:39:39add into our trading process so for my
01:39:42client the his quality of being
01:39:45masterful what does that look like for
01:39:47him well a he has coaching every single
01:39:50month
01:39:51we check in via email every single week
01:39:54sometimes twice a week we're always
01:39:56talking about trading about performance
01:39:58looking for ways to improve he asks me
01:40:00regularly what I'm reading so he can
01:40:02read as
01:40:04well he does online training courses
01:40:07even though he's already phenomenally
01:40:09successful he mentors other people but
01:40:13much like Tom was saying also for the
01:40:16joy of mentoring but also that it keeps
01:40:18him
01:40:19accountable so doing a whole number of
01:40:22things that reflect that now he does
01:40:23them consistently not because he read
01:40:25them in a
01:40:26book not because I told him you must
01:40:29adopt the value of being masterful he
01:40:32chose that it's important to him it's
01:40:34how he wants to
01:40:36be and he's committed to being that way
01:40:39and then he is more consistent with the
01:40:42behavior he wanted to be more aggressive
01:40:45he chose that it's a way that he wanted
01:40:47to be that he cared about that mattered
01:40:49to him
01:40:52he's made that choice he thought about
01:40:54when he needs to be aggressive what it
01:40:56looks like and he's committed to doing
01:40:58that in practice and he's been very
01:41:01consistent he's got Clarity not just
01:41:04about the trading process how he wants
01:41:07to be while he's trading the process
01:41:09yeah and that's powerful because when
01:41:11you're in a difficult
01:41:14moment you can return back down to how
01:41:16do I need to be in this moment how do I
01:41:18need to be today as a Trader
01:41:22what qualities am I going to
01:41:28bring second part
01:41:31Focus two levels of focus external and
01:41:35internal so a little exercise we can do
01:41:36together first of all I want you to have
01:41:39a look around the room and find three
01:41:42things in the room that you have not
01:41:44noticed until this point in time so
01:41:47three new things in the
01:41:49room
01:41:56okay now have a little listen three
01:42:08sounds
01:42:10okay
01:42:12now just tune in to your breathing for a
01:42:17moment and just bring in Awareness just
01:42:19notice Maybe the speed or the rhythm of
01:42:22your breathing at the
01:42:24moment INB breath versus out
01:42:31breath take a moment now just to notice
01:42:34maybe what thoughts are in your
01:42:37mind what am I thinking right
01:42:42now take a moment to notice just how
01:42:45you're feeling could be emotionally
01:42:47could be
01:42:49physically
01:42:52okay so we did external awareness seeing
01:42:58hearing and we brought some attention
01:43:00inwards yeah and we want to have both
01:43:04both are trainable things like
01:43:05mindfulness meditation training
01:43:07awareness training attention training
01:43:10journaling these are all processes that
01:43:12we can do that can train and rewire our
01:43:16level of focus why is it important one
01:43:20the first part external awareness is
01:43:22when you're sitting in front of your
01:43:23screen that's external awareness your
01:43:25ability to recognize patterns to see
01:43:28context to recognize context changes is
01:43:31external awareness the better sorry the
01:43:34higher the better okay in that context
01:43:38we also need to work out what's the
01:43:40effective action and
01:43:42wiin is just what's important
01:43:46now what's important now so in any given
01:43:50moment Moment In This Moment right now
01:43:52for me as a presenter there are some
01:43:53things that are really important and
01:43:54others that are completely
01:43:56irrelevant and all I need to worry about
01:43:58is what's important
01:44:01now and some experience hopefully some
01:44:05element of skill and practice allow me
01:44:08to determine what's important now but I
01:44:10might still find thoughts and emotions
01:44:12showing up that I need to manage and
01:44:15bring my attention back to what's
01:44:17important
01:44:19now
01:44:21and then the internal awareness is
01:44:24critical because if we're not aware of a
01:44:27thought we're
01:44:28having how can we manage
01:44:31it what will happen is you'll have that
01:44:33thought you'll act on the thought you'll
01:44:36do a behavior which deems to be
01:44:38unhelpful then you'll realize it's
01:44:40unhelpful then you'll work backwards and
01:44:41go oh why did I do this oh that's
01:44:43because the market was doing this and I
01:44:44had this thought and that's why I did it
01:44:47and you might Journal it or you might
01:44:48not you might learn from it or you might
01:44:51not but you're still going to be in the
01:44:53same situation in the
01:44:55future until the level of awareness
01:45:00increases or you have an emotion and
01:45:03then you act out the emotion and you do
01:45:04the behavior you get the outcome of the
01:45:06behavior and then you try and track back
01:45:07as to why it happened what we want to
01:45:09develop is the ability to notice what's
01:45:12happening as it's
01:45:15happening I'm noticing in my mind this
01:45:19thought I'm having about I need to stay
01:45:22in this trade I can't afford to lose on
01:45:25this
01:45:26trade and that's a thought of client
01:45:28told me about in a coaching session
01:45:30about three months ago which led to his
01:45:33biggest ever career loss because he got
01:45:36very attached to the thought that he
01:45:38could not afford to lose money on this
01:45:44trade and in the coaching session of
01:45:46course it unveiled itself that the
01:45:48thought made him lose money no thoughts
01:45:53never made a Trader lose
01:45:56money feeling never made a Trader lose
01:46:00money because thoughts and feelings
01:46:03don't press the
01:46:05mouse that's an
01:46:07action so thoughts and feelings can
01:46:09influence those actions but the thought
01:46:12or the feeling itself does not take the
01:46:15action and again that's a really
01:46:17important distinction we need to be
01:46:19making if we're going to be trading
01:46:21consistently because consistency is
01:46:24what's the visible behavior I'm
01:46:28seeing and doing so I can't you know
01:46:31when I look at your behavior I see it
01:46:33when you look at your behavior OB you're
01:46:35doing it and the consistency of behavior
01:46:37that we want to get is is the action
01:46:39Behavior am I pressing the mouse not
01:46:41pressing the mouse when I press it what
01:46:43am I pressing it for that's the behavior
01:46:45but in a month or that the thoughts and
01:46:47feelings that are showing up could be
01:46:49very variable
01:46:51like the weather some days H happier
01:46:53more positive other days darker more
01:46:56gray wet and
01:46:57miserable that's how we work thoughts
01:46:59and and feelings very reactive to the
01:47:02market to
01:47:04experience transient coming and going
01:47:07and in amongst all that that's
01:47:09inconsistent not a lot we can do about
01:47:11it happening to us the behavior piece is
01:47:14where we've got more control
01:47:15ability if we can kind of unplug from
01:47:18that so we need this awareness this
01:47:20internal awareness the metaphor I often
01:47:23use is a river think about the river is
01:47:25your experience when the river is calm
01:47:27it's nice you float along all is
01:47:29good then we get into the
01:47:34Rapids then we move into the grade three
01:47:36four five Rapids now all you're doing
01:47:38now is struggling to keep your head
01:47:39above water and not drown can't admire
01:47:42the view you can't even make good
01:47:43choices you're literally just trying to
01:47:47survive but imagine if you were in a
01:47:49helicopter
01:47:51above the
01:47:52river the river can be calm you can
01:47:54enjoy the calmness you can enjoy the
01:47:56view the river can be grade five Rapids
01:47:58you can be looking down at the grade
01:47:59five Rapids you can see it's pretty
01:48:00rough down there but your perspective
01:48:03from here and ability to act to respond
01:48:05is very
01:48:06different and that difference between
01:48:09being in or out of the experience is an
01:48:14awareness it's focusing this internal
01:48:17ability to notice I'm having a thought
01:48:19I'm having a Feeling
01:48:21so there's lots of research in
01:48:22Neuroscience that when we put our
01:48:23feelings into words or we label them it
01:48:27reduces the impact naming and taming is
01:48:30the common phrase in the psychology
01:48:32literature so when I'm able to notice
01:48:33the feeling I'm having put it into words
01:48:36to identify the feeling which we often
01:48:39think actually will make it worse it
01:48:40doesn't actually reduces the emotional
01:48:43hold over us the goal in trading is not
01:48:45to get rid of
01:48:47emotions the goal in trading is to
01:48:49maximize market
01:48:54returns but to do that we might need to
01:48:56be able to learn to have the
01:49:00emotions but without those emotions
01:49:02having
01:49:03us I can have the fear of missing out I
01:49:06can have the fear of loss I can have the
01:49:07fear of leaving money on the table and I
01:49:09can still take the effective action if
01:49:12I'm sufficiently skilled I can have
01:49:15doubts worries anxieties I can have my
01:49:17ego screaming at me I don't have to act
01:49:20on it if I've got the psychological
01:49:22skills to be able to not act on it
01:49:25yeah so the awareness is
01:49:28key so we need some commitment we need
01:49:31some awareness and then we need most
01:49:34importantly to be willing to be
01:49:37uncomfortable quick exercise just
01:49:39everyone stand yourselves up for a
01:49:40minute little exercise slightly more
01:49:42challenging than the last one so just
01:49:44prepare yourselves for
01:49:46it if you've got any um knee injuries or
01:49:50back injuries then please be
01:49:52cautious um or any other kind of
01:49:55injuries you all look like sensible
01:49:57grown-ups so just manage yourselves as
01:49:58you need to so here's a little challenge
01:50:01I want you to get into a little
01:50:01squatting position you can go as far
01:50:04down or you can stay as high up as you
01:50:05want to go just just so just so you know
01:50:08it's going to maybe be a little bit
01:50:09uncomfortable okay it's not a
01:50:11competition some of you think it is but
01:50:13it's not you see a few of you settling
01:50:15into your gym squat positions okay but
01:50:19so all we're doing okay by adopting this
01:50:21squ at some point we all know if we hold
01:50:23it for long enough it's going to get
01:50:24uncomfortable okay and then we're going
01:50:26to have some
01:50:27choices so we can all start to make some
01:50:29choices about whether maybe I might
01:50:31adjust my position or maybe I just give
01:50:33up or maybe I'll go no
01:50:36actually I'm going to just be with this
01:50:38for a little bit longer how far can I go
01:50:40neither's right or wrong by the way this
01:50:42just different choices we've got in the
01:50:43moment yeah and then I might say
01:50:46actually well the person that holds this
01:50:47squat the longest gets £500
01:50:52and just I did say I might say that yeah
01:50:55I might say that it's hypothetic exactly
01:50:58exactly now we're thinking oh actually
01:50:59well for £500 maybe it's worthwhile
01:51:01suffering a bit more pain and then we
01:51:04might get to that a few of you might
01:51:05drop out and a few might stay and I go
01:51:06actually let's up the stakes let's make
01:51:07it
01:51:092,000 then people go you know actually
01:51:11yeah for 2,000 I'll take a lot more pain
01:51:14just hand over the money right now okay
01:51:15so we're balancing aren't we how much
01:51:17discomfort for what reason take part in
01:51:20you know one of Steve's crazy exercises
01:51:22I don't really understand or for 500
01:51:25quid or for 2,000 or whatever it might
01:51:28be so we're starting the brain we now
01:51:30we're thinking about okay for what am I
01:51:32willing to be uncomfortable for and how
01:51:35uncomfortable am I willing to be for how
01:51:37long for okay thank you very much thanks
01:51:40for your participation much appreciated
01:51:42thought we were go well you can go for
01:51:44as long as you like yeah just take just
01:51:45take your chair away um so but this is
01:51:49really important because when we choose
01:51:53to engage with the market as newer
01:51:56Traders we often don't appreciate we're
01:51:58also
01:51:59Contracting unconsciously to put
01:52:01ourselves into situations of
01:52:05discomfort if you choose to run a
01:52:07marathon we expect it to be
01:52:09uncomfortable the training is going to
01:52:11be uncomfortable the event can be
01:52:13uncomfortable trading is the
01:52:16same people that run
01:52:18marathons they make that
01:52:21choice probably because they've either
01:52:23got a goal they want to achieve they're
01:52:25raising money for charity there's some
01:52:26purpose some sense that makes the
01:52:28Comfort
01:52:30worthwhile but it will be uncomfortable
01:52:32so we need to appreciate the fact that
01:52:34we are we need to be open to that
01:52:36discomfort because if we're not open to
01:52:38it what happens is we become aversive to
01:52:40it if I think discomfort is negative if
01:52:43I see it's being bad anything we label
01:52:45as bad bad emotions bad thoughts
01:52:48negative emotions negative thoughts
01:52:50discomfort negative bad if we label
01:52:53anything bad or negative guess what we
01:52:55try to do avoid
01:52:59it and then I do the behaviors of
01:53:02avoidance of
01:53:05discomfort holding my winning trades for
01:53:07longer to avoid the discomfort of taking
01:53:09a loss getting out of my winning trades
01:53:11early to avoid the discomfort of the
01:53:13market maybe reversing or to get instant
01:53:18gratification and then the behaviors I
01:53:20do to avoid the discomfort are the ones
01:53:22that actually reduce my market
01:53:24returns so am I willing to be
01:53:28uncomfortable but
01:53:31profitable or am I playing for Comfort
01:53:35but acknowledging I'm going to be less
01:53:39profitable that's the choice so one
01:53:41thing we can do at the start of the
01:53:42trading day or the start of the week as
01:53:44a strategy and I have many clients doing
01:53:46this is we actually remind ourself of
01:53:48the discomfort we might be facing facing
01:53:50that day or that week and that we are
01:53:52willing and open to accept that
01:53:54discomfort and there might be particular
01:53:56thoughts or emotions that we know might
01:53:57show up in that day in that trading
01:54:00session but we just remind oursel it's
01:54:03part of the process and we're willing to
01:54:05be
01:54:10uncomfortable and again this is where we
01:54:12can then also think about if we have our
01:54:15thoughts that un that are difficult we
01:54:18can unhook from those thoughts just
01:54:20remind ourselves these are thoughts I'm
01:54:22having I don't have to act on
01:54:27them third person oh Steve thinking he
01:54:31can't get out of this trade because he
01:54:33needs to make money okay well Steve
01:54:35thinkinking that doesn't mean Steve's
01:54:36got to act on
01:54:38that Steve thinking he can't afford to
01:54:40miss this this next move in the market
01:54:42this is the big one okay well Steve's
01:54:44thinking that doesn't mean Steve's got
01:54:45to dive in the market right now so once
01:54:47we start to think about our thoughts as
01:54:49what they they are which is thoughts we
01:54:51get some
01:54:52distance once we start to notice
01:54:54feelings as
01:54:55feelings oh okay I'm feeling some fomo
01:54:58here
01:54:59okay but I'm just having the feeling of
01:55:03fomo do I need to act on it maybe I do
01:55:06maybe I don't this is the next Point
01:55:08function data when we have thoughts and
01:55:10emotions they have a function they're
01:55:12there for a reason do I need to act on
01:55:14it if I've got some fear showing up
01:55:17maybe I've detected something in the
01:55:19mind Market I might need to act on it
01:55:21might be worthwhile acting on that but
01:55:24not always but we can assess is there
01:55:26some is there some uh some function is a
01:55:28the word we use in my world is emotions
01:55:31as
01:55:32data emotions as data and I like that
01:55:34because if emotions a data there's no
01:55:36need to get rid of them when you collect
01:55:38data like Tom's doing his analysis
01:55:40earlier made it very clear that he
01:55:41hasn't taken bits out to make it look
01:55:45better he's not selected the best
01:55:48bits to impress you he's given you the
01:55:50whole
01:55:52lot and that's how emotions are we can't
01:55:55kind of just pick the emotions we want
01:55:56to
01:55:57have doesn't work that
01:56:00way emotion is a data risk the emotion
01:56:04of risk
01:56:06is fear the emotion that relates to
01:56:11reward and opportunity is excitement
01:56:13these are primary core emotions deep in
01:56:16our biology can't get rid of them but we
01:56:19can be aware of
01:56:21them we can think about are they telling
01:56:23me anything of interest do I need to act
01:56:25on them or I can just have the emotion
01:56:28and take action as is
01:56:31required and I want to put into sort of
01:56:33I guess all of that into a relatively
01:56:36usable framework such that if you were
01:56:38in a moment where you needed to maybe
01:56:41there was a situation where you might
01:56:44not follow through with your trading
01:56:46plan or you could follow through this
01:56:48might be a technique we could use so in
01:56:51a situation where you know maybe it's
01:56:53going to be uncomfortable or difficult
01:56:55there are three core steps that I teach
01:56:56my clients and this is literally as easy
01:56:58as ABC obviously so first of all we
01:57:01could acknowledge this is a this is a
01:57:03tricky situation this is challenging
01:57:06just acknowledge sometimes this is hard
01:57:08draw down is
01:57:10hard we don't have to deny it draw down
01:57:14is
01:57:15difficult sometimes pulling the trigger
01:57:17after a series of losing traits is
01:57:21difficult we might acknowledge a
01:57:23particular thought we're having we might
01:57:24acknowledge a particular emotion we're
01:57:26feeling but we can just acknowledge
01:57:28what's going on could be external could
01:57:29be internal could be both depending on
01:57:31the time frame how long we've
01:57:33got but what we do in that first step is
01:57:35we get the shift from here to
01:57:39here we might at this stage if we've got
01:57:42time take a breath or two or three or
01:57:45four CU if the emotions and the
01:57:47physiology is all increasing if we're
01:57:49getting that stress response going as it
01:57:50builds in the body it wants an
01:57:54outlet and that's why we get reactive
01:57:56and impulsive it's a dispelling of
01:57:59energy in our physiology so we could
01:58:01take a breath or two just a slightly
01:58:03longer slightly slower slightly deeper
01:58:07breath put the brakes
01:58:10on and then we can choose now how we
01:58:13want to respond in that situation the
01:58:15question could e could be as easy as how
01:58:17do I want to be in this moment or it
01:58:21could be what's the effective action to
01:58:23take in this
01:58:25moment what do I need to do right now or
01:58:28it could be what would my best trading
01:58:31self do in this
01:58:33moment could even be what would a role
01:58:36model do in this
01:58:38situation and we're just getting into
01:58:40what's the effective response but we can
01:58:42be more responsive here because we've
01:58:44done the acknowledging and the breathing
01:58:46if we try and take action before we get
01:58:48to this a
01:58:50up here this is where we are likely to
01:58:51be more reactive stuff's going on and we
01:58:54react to it or we can acknowledge what's
01:58:56going on external internal take a breath
01:58:59or two or three or four and then we can
01:59:01choose from here how we might want to
01:59:11respond
01:59:13okay all of you and this is thanks to
01:59:16Tom by the way this is an early
01:59:18Christmas present from Tom for you I've
01:59:19got a Traders mind
01:59:20Journal um that's a great example of
01:59:23doing the work by the way and the reason
01:59:25we put that journal together is because
01:59:27lots of my Pro clients asked me about
01:59:29how to journal how you how do we
01:59:30structure it what goes in it so it's
01:59:32kind of a bit like a a blueprint it's
01:59:33not the perfect Journal there's no such
01:59:36thing unless an individual div designs
01:59:38it for themsel but you've all got one
01:59:40there's three months worth of journaling
01:59:42you can do in there um when I wrote that
01:59:44journal I thought it would' be pretty
01:59:46useful U but I genuinely been surprised
01:59:49by the people that have done that for
01:59:50three months diligently the amount of
01:59:52feedback that I've received from people
01:59:54how much it's changed them and their
01:59:56trading is phenomenal but what again
01:59:58it's a reflection of is journaling is an
02:00:01active process of training your
02:00:04psychology increasing
02:00:07awareness reflecting gaining insights
02:00:10thinking about how to set actions it
02:00:12asks you about how you want to be each
02:00:13day it ask you to think about how you
02:00:15have been it ask you how well of you
02:00:17traded not how much money did you make
02:00:19how well did you trade how have you been
02:00:22this week what will you do differently
02:00:23next week what challenges are you going
02:00:25to face how are you going to cope with
02:00:27those challenges so it's an active
02:00:29process of actually training your
02:00:31psychology through that process so my
02:00:33invitation to all of you is give it a go
02:00:37yeah it won't be for everybody but for
02:00:38those of you that work your way through
02:00:39it and do the three months I think it'd
02:00:41be worthwhile uh and the only Reas
02:00:42that's on here at the moment um you've
02:00:44got a free one but if you liked it and
02:00:46you wanted one another one for yourself
02:00:48or for a friend or whatever they're half
02:00:50price at the moment if you wanted one um
02:00:53so feel free and then bulletproof Trader
02:00:55which is my last book I wrote again
02:00:56Harman house doing a special Christmas
02:00:58offer so you can have that a bit cheaper
02:01:00if you want it as well uh slides I will
02:01:03send to Tom so you can have the slides
02:01:06um for free as well so if you I know
02:01:07some of you been writing notes which is
02:01:08great but but you can have the slides as
02:01:10well um other than that thanks for your
02:01:13attention hopefully some things to think
02:01:14about some things to go away and do um
02:01:17I'll hand over to Tom I think you've got
02:01:18another 700 32 slides to
02:01:22go I was sitting in the back and uh in
02:01:26and I I was here and
02:01:29okay I was think I was glad I'm in the
02:01:32back because if I'm in the front I was I
02:01:33was I could feel that squash match from
02:01:35yesterday still in my thighs but I
02:01:38thought it was
02:01:39incredibly helpful to hear Steve Ward
02:01:43and there was a couple of things that I
02:01:44picked up on with Steve Ward and
02:01:47obviously uh
02:01:49from his very vocation Steve travels in
02:01:53a uh in an environment which uh it's
02:01:57fair to say that there there are a lot
02:01:59more norts behind their Stak size than
02:02:02many of us is that fair to say
02:02:09Steve I don't I don't think I asked an
02:02:11incriminating question disparaging
02:02:15attention maybe you're not committed but
02:02:18it it would for me very uh reassuring in
02:02:23a way to know that
02:02:26that a couple of things one that they
02:02:28have had a bit of a a horrid time in
02:02:312023 and uh when I compare my
02:02:35performance in
02:02:362023 to my performance in
02:02:392022 I I was obviously thinking oh I
02:02:42wish that I could go back to
02:02:452022 um but then I also acknowledged
02:02:48that I am a volatility Trader and I I
02:02:52really quite thrive on the volatility
02:02:54and when the market becomes more uh
02:02:57docile so to speak I am certainly not
02:03:00the the kind of trade that's okay I'm
02:03:03certainly not the kind of Trader that I
02:03:05would like to be but then I also picked
02:03:08up on Steve saying and I thought that
02:03:10was tremendously uh reassuring
02:03:16again it would it would mean a lot to me
02:03:19if I could tell you what I experience
02:03:23dealing with
02:03:24you um but it didn't really matter
02:03:27whether I was dealing with you or I
02:03:28wasn't dealing with you but when I when
02:03:31I when you hear me in the morning go Hi
02:03:33how are you doing and bl BL blah that
02:03:35there's quite a lot of work that has
02:03:37gone on before I start talking to
02:03:41you but
02:03:43um but then as as as we get into the
02:03:47process of the trading more morning and
02:03:49we begin to look at and interact with
02:03:52the footsy and the Dax and also in
02:03:54America in the US
02:03:57hours what you what you don't know is
02:04:01that I have this uh paralyzing
02:04:06fear of losing
02:04:10money uh every single
02:04:13day maybe I didn't use the right word
02:04:16because paralyzing mean that you can't
02:04:17do anything about it I'm not quite there
02:04:20but every single day I have to kind of
02:04:26reinvent the Tom hugot that you hear the
02:04:30the Tom hugot that you hear is the I
02:04:33assume is at times
02:04:38grumpy you should see the aggressions I
02:04:40get sometimes my grumpiness is warranted
02:04:43but at times I'm fatigued at times I am
02:04:46despondent at times I'm enthusiastic
02:04:48itic but whatever the mood I try to be
02:04:52consistent in my trading however and I
02:04:55think this is the really important point
02:04:58that I wanted to get across to you
02:05:00because I think it might help you is
02:05:02that I actually have to go like through
02:05:05a h a process of changing how I think
02:05:10about taking risk every day I I I wish
02:05:15and and that's why I was really grateful
02:05:17that you then said almost you gave me
02:05:20permission to feel that way when you
02:05:22said that some of those
02:05:26real Top Class traders in the world they
02:05:29are still hoping for that day where they
02:05:32can trade without fear where they can
02:05:35trade without anxiety with trading
02:05:38without doubt and I have until you said
02:05:42that and verbalize it you know have you
02:05:44ever heard that um uh that the
02:05:47comparison is the thief of of Joy it's
02:05:49an English expression and essentially
02:05:51saying that if you compare yourself with
02:05:53someone else you're most likely going to
02:05:55feel pretty about yourself at some
02:05:57point depending on who you compare
02:05:59yourself with but if I compare myself to
02:06:01someone of the calibers that you are
02:06:04coaching and they are still searching
02:06:05for the day when they can trade without
02:06:07fear or anxiety or whatever else of a
02:06:11range of emotions they're feeling well
02:06:13if they're like that you in turn have
02:06:15also given me permission to feel like
02:06:17that that that's not necessarily what
02:06:19I'm aiming for is the Perfection where I
02:06:22never ever feel any kind of trepidation
02:06:24before I execute a trade and that was
02:06:27really reassuring because I've always
02:06:29sort of wondered to myself well why
02:06:32can't that day I know I'm I'm I'm the
02:06:34auor of this bestselling book and yet
02:06:36here I am and I'm still thinking yeah
02:06:39I'm good at losing but for crying out
02:06:41loud I wish I didn't have to go through
02:06:42it so often but what you actually what
02:06:45you actually giving me permission say
02:06:47hey do you know what every body else
02:06:49even the high performers they're
02:06:51actually waiting for that day where they
02:06:53can trade without any kind of fear or or
02:06:55doubt or hesitation and I wanted to
02:06:59thank you for that because it feels
02:07:01quite a good to be able to know well
02:07:04yeah they feel that as well as well but
02:07:06you still go ahead and do it you just do
02:07:08it even though you feel that kind of
02:07:10level of of degree of anxiety but hey
02:07:13but it's okay you feel like that because
02:07:14everyone else is feeling as long as it
02:07:16doesn't stop you from doing what is the
02:07:18right thing to do and having worked on a
02:07:21trading floor for 10 years of my life
02:07:24what I have witnessed are thousands and
02:07:27thousands of you and and and I could see
02:07:31it myself where it's actually not the
02:07:34it's it's rarely 100 different trades
02:07:38that kills our accounts it's usually
02:07:40always that one trade that kills our
02:07:42account and then when you spoke about
02:07:44that gentleman who was verbalizing
02:07:47something but he didn't actually
02:07:49act upon it or whatever the the context
02:07:51was well actually he had the biggest
02:07:53loss of his career it was a career
02:07:55defining loss well how many of us can
02:07:58hand on heart say that we've never gone
02:08:01through that experience where one single
02:08:03loss absolutely just decimated our
02:08:06account to the point where we had to go
02:08:08refund it because I'll be the first to
02:08:10hold my hand up go oh yeah I have
02:08:13absolutely done that but I also learned
02:08:16something from it but perhaps what I
02:08:19hadn't learned yet until you verbalized
02:08:21was that actually it's okay to feel that
02:08:24degree of of Doubt every single day so
02:08:28uh the way that I go about this and
02:08:31again i' would like to tell you about it
02:08:32and it's completely unscripted but I
02:08:34have a a process that I follow every
02:08:38morning and that process essentially is
02:08:40just I've described it some to some
02:08:43extent in my book but it's essentially
02:08:45just this puking process where I get so
02:08:48disgusted with how I have treated in the
02:08:51past and I look at that and I'm very Vis
02:08:55I'm a I'm a I do you know what I say I'm
02:08:57visual as if I was talking to aliens but
02:09:00you're all bloody visuals as well
02:09:02because we love charts it's like the
02:09:04chart is like but also part of the jeice
02:09:06yeah I love looking at chart so we are
02:09:08visually uh orientated and I find that
02:09:13there is no better way in getting me in
02:09:15the mood for the right kind of trading
02:09:17is to look through at some of my bowos
02:09:21you know the big losers like for example
02:09:24visualize if you want a market that is
02:09:26just steadily trending lower maybe I got
02:09:28one here like for example this one would
02:09:31be a perfect example imagine that I sold
02:09:34short here you you can't blame me for
02:09:37selling short there it's above pry bar
02:09:39high in a defined downtrend absolutely
02:09:42nothing wrong with selling short right
02:09:44there but the problem is if you are then
02:09:47adding to to the short there and then
02:09:49you're adding a little bit more there
02:09:51and you're adding a little bit more
02:09:53there and then you're getting into the
02:09:54point where you no longer have your
02:09:55lunch hour because hey you're still
02:09:57short you better keep an eye on this and
02:09:59every single white bar becomes this
02:10:01source of anxiety in your body in your
02:10:05physical body and every single black bar
02:10:08becomes this Beacon of Hope where maybe
02:10:12they are able to yeah oh you're laughing
02:10:15but that means you're feeling it as well
02:10:16don't you you know where we get to that
02:10:18point where every little signal tick up
02:10:22or down becomes a source of yeah of
02:10:26no oh no and all I wanted to say with
02:10:30that little anecdote is that I don't
02:10:33ever want to be there actually that's
02:10:35not the right place for me to be I don't
02:10:38want to feel that place because if I'm
02:10:41reliant on the market for my salvation
02:10:45which in inventa I am but I want to be
02:10:48in control so while I trade big I will
02:10:51never trade so big that it gets out of
02:10:53control I want to look at the market and
02:10:56I'll be able to act objectively saying I
02:10:58want to do this because of this I don't
02:11:02ever want to not be in control of what I
02:11:06do
02:11:09and having that what I call that disgust
02:11:12feeling in the morning might seem a
02:11:14little bit uh undue punishment to
02:11:17yourself but when Steve Ward I'm sorry I
02:11:21keep referring to him but I I thought it
02:11:22was very good when you really begin to
02:11:24think deeply about what he saying he's
02:11:26saying well what kind of traiter is it
02:11:28that you want to be you know he was
02:11:30talking about you know what kind of
02:11:32trador and how will you demonstrate that
02:11:34do you remember that slide how will you
02:11:36demonstrate that well I always look at
02:11:39something like this and whilst you and I
02:11:42we are only together for an hour and a
02:11:45half in the morning and an hour an hour
02:11:46and a half in the afternoon but I always
02:11:49when I go through these slides I always
02:11:51think you know what you sell short here
02:11:54and then you get stopped out here and
02:11:55then you contemplate flipping the switch
02:11:57you flip the switch and the market goes
02:11:59in your favor and now every single black
02:12:01bar is an opportunity to get in and
02:12:03every single white bar confirmation
02:12:05you're doing the right thing I always
02:12:07think of these charts that were there
02:12:09were past failures and I now turn them
02:12:11into okay what if You' done the opposite
02:12:14you would have had the trading day of
02:12:16your life those trade days where we
02:12:19absolutely obliterate our accounts if we
02:12:22somehow can portray them visibly and we
02:12:25will take the time to actually go
02:12:27through it as a preparation for the
02:12:28trading day can turn into the most
02:12:30magnificent fuel for our trading
02:12:33performance I think that the the the the
02:12:37Hallmark of a good Trader is someone who
02:12:39can actually hold on to the trade and I
02:12:43I sat in the back and I was thinking
02:12:45okay I had hoped that my foot statistics
02:12:47was going to you know raise the roof and
02:12:49you'll be so excited but that was not
02:12:51quite the effect that I got and and I
02:12:53get it because it's quite it's quite
02:12:56heavy-handed it's a lot of numbers and
02:12:58perhaps not so much visual to stimulate
02:13:01you and then it gets a bit hot and then
02:13:04then oh the Dow has just opened and and
02:13:06let me just I understand that but of
02:13:08course I'm hoping that that immense
02:13:11amount of material that I have provided
02:13:14for you for example what I'm doing here
02:13:17is so I've just displayed all 186 charts
02:13:20where the 20 point stop loss didn't work
02:13:23now the reason why I've included all of
02:13:25those was because I wanted you to have
02:13:28an opportunity to if you are like me if
02:13:32if you are like me and I think many of
02:13:33you are then you actually also quite
02:13:36like the chart work you actually quite
02:13:37like to just study them and feel like
02:13:41well what could I have done here what
02:13:42could I have done differently and I
02:13:45think I think it's also not not a bad
02:13:48idea to hold this thought in mind can
02:13:52you imagine yourself one day to buy a a
02:13:57a a a a pry bar pry bar low that see
02:14:00that one there sorry but where it says
02:14:03imagine that one day and this is a
02:14:06thought that I have constantly imagine
02:14:10that I actually bought it
02:14:11there because it just goes below all the
02:14:15PRI bar lows and then it actually Clos
02:14:17goes back into the range do you see that
02:14:19is such a tiny little thing that is very
02:14:22difficult to to spot but that low bar
02:14:25there it goes below the three prar lows
02:14:28and then it closes halfway up okay that
02:14:31in itself doesn't actually at all
02:14:34predict that we're going to head up here
02:14:36over the next two hours it doesn't at
02:14:39all but part of of me my
02:14:43preparation visualizing I call it as it
02:14:46is I and and with visualization ladies
02:14:49and gentlemen it's nothing more than
02:14:50imagining it's nothing there's nothing
02:14:54Eastern meditation practice about it
02:14:56there's nothing chanting about it there
02:14:58is just I imagine myself and I'm feeling
02:15:02myself actually buying what turns out to
02:15:04be the low of the day but I don't know
02:15:06that and then the market begins to move
02:15:08my way and then I think to myself I
02:15:10imagine this I'm just going to move my
02:15:12Stu L to break even so now I can't lose
02:15:14on that and then I will I'll buy one
02:15:18more okay well that has gone 10 points
02:15:21in my favor I'm just going to put that
02:15:23stop loss to break even and now I'll buy
02:15:25one more and I I and I've done it a
02:15:29couple of times in my life where a move
02:15:32like this which is nothing more than
02:15:34approximately what is it uh 50 points
02:15:37that 50 point move turned into like a a
02:15:40220 Point winner just on a but of course
02:15:45it's not for everybody to want to add to
02:15:47their winning trades but the problem is
02:15:50ladies and gentlemen that once you had
02:15:52the taste of that forbidden fruit once
02:15:54you have once you have once added to a
02:15:57winning trade and it actually continues
02:15:58in your favor it is very difficult to
02:16:02undo and if we're talking
02:16:06about if if we're talking about what
02:16:09separates us as the 5% of the 10% from
02:16:13the 90% then just hold this thought that
02:16:16I spent 10 years on the trading floor
02:16:19and I know I've said this before but
02:16:21it's worth
02:16:22repeating is that bothering
02:16:26you you think it's
02:16:30me I'll turn it off I think
02:16:45it's yeah many things
02:16:49but I'm definitely
02:16:55[Music]
02:16:58not never know you know when uh you know
02:17:01when you're outside your comfort
02:17:10zone no no no no
02:17:13no
02:17:16I
02:17:21get back on stage
02:17:24okay well no I think I'll turn that off
02:17:28is that okay yeah okay I'll turn that
02:17:31off and hopefully I'm able to speak loud
02:17:34enough as it is and maybe that will pick
02:17:36it up can you still hear me good okay um
02:17:42oh my word I lost my trail of thought
02:17:43because of of that the T on thank you
02:17:46very much
02:17:49[Applause]
02:17:53who said that you're smarty
02:17:57pants she listens yeah
02:18:00yeah I feel called out now as if I can't
02:18:03remember 10 years on the trading floor
02:18:06and perhaps five or six
02:18:09times over a 10year period did I see
02:18:12people add to a winning
02:18:15trade five or six times over 10 years
02:18:20Peter uh but tell me how many times did
02:18:23you see people add to their losing
02:18:25trade oh every
02:18:27day every hour of the day because that's
02:18:30what we do anyway so what I'm hoping
02:18:33that I would have achieved with this is
02:18:36that I actually give you an
02:18:40enormous sample
02:18:42space an enormous opportunity to see how
02:18:47the foot reacts when it goes more than
02:18:5020 points from the first negative bar
02:18:54because do you know what ladies and
02:18:55gentlemen when as you flick through
02:18:57these there are a lot of trend days on
02:19:02these do you know what I mean by a trend
02:19:03day a trend day being it opens in one
02:19:06extreme and it closes in the other end
02:19:08of the extreme and actually seeing these
02:19:11and having a physical database about it
02:19:14has in immensely improved my
02:19:17understanding of how to trade Trend days
02:19:19now could I just talk to you slightly
02:19:22about the eight and the 13 I've had no
02:19:24feedback so I don't really know what you
02:19:26what you're thinking about it maybe
02:19:27you're thinking or maybe you're thinking
02:19:29well that'sit exciting obviously I hope
02:19:31it's the latter because I spent quite a
02:19:33lot of time and I wasn't even sure
02:19:34whether to disclose it or not but if my
02:19:38mission for trading is to just earn my
02:19:42keeps not making the big ground swell
02:19:46million pound years but if it's just to
02:19:48earn my keep I'm hoping that having
02:19:51brought this to your attention do you
02:19:53see how every single one of these out
02:19:56here have actually got characteristics
02:19:59so it's the time of the month whe I did
02:20:01the reversal and I unfortunately haven't
02:20:03been able to fill out every single one
02:20:06of them but look how frequently as I
02:20:09flick through
02:20:11this how the it actually works the eight
02:20:14and the
02:20:1513 and so what I have done on all 186
02:20:19slides for you is to indicate whether
02:20:23and when it says yes it means that you
02:20:25have executed a trade probably with a
02:20:28point and a half um do you know what I
02:20:31mean by officers so imagine the high of
02:20:34the 13th bar was was
02:20:3610 that doesn't mean you then buy at 10
02:20:39it probably means you should buy at 11
02:20:41and a half or
02:20:4211.6 that's why it's so important that
02:20:45whoever you trade with I don't care who
02:20:46you trade with but you need to make sure
02:20:48you trade with a broker that has tight
02:20:50spreads that's why it's so important
02:20:52because otherwise their spread is just
02:20:54going to fill you and when it says yes
02:20:58it means that you on this particular
02:21:00case were able to execute a trade and
02:21:03the market moved at least five points in
02:21:05your favor so that you could move the
02:21:07stop- loss to break even and I've done
02:21:10that for as you can see quite a
02:21:13lot and I obviously hope that you will
02:21:16study that okay maybe I did go a little
02:21:21overboard yeah I probably did go a
02:21:23little bit overboard but it it was for
02:21:26your benefit so then we get to the point
02:21:29where the setups actually worked and
02:21:31then I included all
02:21:33340 uh charts so that you had the
02:21:36opportunity to go and study this for
02:21:38yourself because obviously that's who I
02:21:40hope that you are I hope that you're
02:21:42like okay I show you all the evidence I
02:21:44haven't just shown you a handful of of
02:21:47charts that go oh look at how great this
02:21:49is I've actually shown you the entire
02:21:52sample space of every chart that worked
02:21:54and every chart that didn't work so that
02:21:56in the hope that you would sit there
02:21:58when you have a quiet afternoon away
02:22:00from whatever is uh the boss the
02:22:04children the husband the wives whatever
02:22:06me you sit there and go okay how would I
02:22:08have traded that how would I have traded
02:22:10that how would I have traded
02:22:12that my my earliest Mentor was a
02:22:16gentleman called Bri
02:22:18Gilmore and Bryce always said that you
02:22:22only ever learn to appreciate what's on
02:22:24a chart what you have trained your eyes
02:22:27to see and I I often Illustrated that in
02:22:30the early days where I I took the the
02:22:32logo of the fedal express FedEx and then
02:22:36I said to people can you spot the arrow
02:22:39uh in FedEx and there's an arrow between
02:22:41I think it's the D and the E and and
02:22:43people like where's the E and it it just
02:22:45once you see the the arrow in the FedEx
02:22:48logo you can never unsee it it's the
02:22:49first thing you see you see that Bloody
02:22:51truck on the street oh that's the arrow
02:22:53but for people who haven't seen that you
02:22:55can drive the notch if you say where's
02:22:56the arrow and they have no idea what
02:22:58you're talking about and I hope that by
02:23:02including this database here that you
02:23:05will have something of lasting value to
02:23:07you and yes I admit that perhaps I just
02:23:10thought I'll give really good value and
02:23:14maybe I've just overkilled it a little
02:23:15bit I I know so uh I think it's page 66
02:23:22okay so I don't know if this is the
02:23:25right word but would you like to relax
02:23:27with an exercise and I'm not going to be
02:23:29as cruel as Steve Ward is he there no
02:23:32okay he's not there I'm not going to do
02:23:34a thigh Buster of an exercise but I am
02:23:37going to do an exercise which I think is
02:23:38quite fun and I did it in Frankfurt um
02:23:41back in September in a moment you'll be
02:23:44asked to raise your hand and you can
02:23:46raise your left hand hand or you can
02:23:47raise your right hand I'm very nice like
02:23:49that I'm I don't actually argue which
02:23:51hand is uh it's up to you if you get
02:23:54tired then rest your hand but please do
02:23:56participate to the extent that you able
02:23:58to okay uh you will then be asked a
02:24:02series of questions in reality you're
02:24:05going to be asked six questions if you
02:24:07can honestly and I think the key word
02:24:09here is honestly not to your fellow
02:24:12Traders or your friends or the ones
02:24:14sitting next to you but to yourself okay
02:24:16just to yourself s if you can answer yes
02:24:19then you keep the hand raised and of
02:24:22course the whole point of this exercise
02:24:24is I'm going to ask the questions and
02:24:26then slowly I'll filter away all the
02:24:29raised hands until hopefully I have
02:24:31proven my point is that all right and
02:24:34it's also quite entertaining but if the
02:24:36answer is no then you must lower the
02:24:38hand and you're now out of the game and
02:24:40you can simply sit and observe so let's
02:24:42do a trial just for practice everybody
02:24:45please raise your hand hand your choice
02:24:48of hand one hand only and wait for the
02:24:50question and remember this is just a
02:24:53trial have you ever added to a losing
02:24:56tradeit out of anger or desire for
02:24:59Revenge oh really there's actually
02:25:01people who actually took the hand down
02:25:03because I was expecting a sea of a hand
02:25:06I was expecting every single hand to be
02:25:08up there because we've all I hope no not
02:25:12I hope I think that most of us at some
02:25:14point are you telling me you never added
02:25:17wow you little
02:25:21Sate oh miss do goody over here has
02:25:25never added oh look at you
02:25:30what all
02:25:33right okay you can take your hands down
02:25:35are you ready for the real exercise
02:25:38everybody please raise your hand
02:25:40question one ahead of the trading day
02:25:42have you spent time going over a
02:25:44selection of old trades these old trades
02:25:46are examples of behavior which are most
02:25:48damaging to your emotional well-being as
02:25:51well as the balance of your account it
02:25:53could be examples of you being impatient
02:25:56seeking Revenge chasing the market so if
02:25:59you have gone as a your part of your
02:26:01pre-flight routine you've gone through
02:26:03some some sort of a visual aid slid
02:26:09PowerPoint I call it the book of heror
02:26:12then please keep your hands up if you
02:26:14haven't done that on a pretty regular
02:26:16I'm not saying you maybe every single
02:26:18morning but most mornings you actually
02:26:21have a little a reminder to yourself of
02:26:23how badly you've actually done in the
02:26:25past then please keep your hands up but
02:26:28we filled it out quite a few question
02:26:30number two ahead of the trading day have
02:26:32you quietly contemplated on the trading
02:26:35day ahead for example for me I'll go
02:26:37through a pre-flight routine which will
02:26:39include some time and just closing my
02:26:41eyes imagining me losing
02:26:44money imagining losing money so that
02:26:48when I actually come to it I don't begin
02:26:50to act like an irrational 5-year-old
02:26:53that is throwing my toys out of the pram
02:26:56and I'm doing irrational things so that
02:26:58I am fully prepared not expecting to
02:27:01lose but I am prepared for what would
02:27:04happen if I was to fight myself into a
02:27:07losing position and I imagine myself
02:27:10walking away from the screen your
02:27:12visualization is yours but have you
02:27:15spent a little bit of time just
02:27:16imagining what you are about to get into
02:27:20because for most of us if not all of us
02:27:22the trading is not a hobby it's actually
02:27:25something where we derive our bread and
02:27:27butter and I know that every single day
02:27:30I will have lots and lots of
02:27:32opportunities to make money but I will
02:27:34have equally as many opportunities to
02:27:37fck up my
02:27:41account question number three well
02:27:44done ahead of the trading day have you
02:27:47processed the previous day trading I
02:27:49find it I find it odd that when I went
02:27:52through losing periods I could break the
02:27:54pattern by taking some time away from
02:27:55the screen I began to realize about
02:27:57myself that when I was losing I wanted
02:28:00to make the lost money back really
02:28:01quickly and I would be even more
02:28:03Reckless and impatient with my entries
02:28:05and trading too big now I am mindful of
02:28:07that and ahead of the trading day and if
02:28:10I feel there are on resolve emotions I
02:28:12will stop trading this also applies to
02:28:14days after big win I had an opportunity
02:28:18to show off my immense trading skills by
02:28:20making
02:28:22123,000 in little less than 46 seconds
02:28:25at the first inflation number last year
02:28:27I documented it well only to
02:28:33then piss it away over the ensuing few
02:28:38months not particular interesting
02:28:41trading and I use that as a fuel of
02:28:43whenever I have big wins I need to be
02:28:46just as careful with big wins as I am
02:28:48with big losses because both of them
02:28:51have the absolute propensity
02:28:55to shall we say unhinge even the best
02:28:59laid plans I know I can be Reckless and
02:29:03annoying if I'm losing but I never
02:29:05really expected that I would become
02:29:07complacent because I felt like I could
02:29:10walk on water so part of my pre-flight
02:29:12routine absolutely has to include
02:29:15whenever I have good day
02:29:17I am reset the day after being confident
02:29:21is good being overconfident not so
02:29:24good okay question four during the
02:29:27trading day do you look at your
02:29:33p&l you
02:29:35see what I really wanted to do with this
02:29:38is do you look at your p&l and your
02:29:40account balance and I suppose actually I
02:29:42got this wrong it actually should be
02:29:45that uh if you look at that that's
02:29:48probably something where you should put
02:29:49your hand down the reason being is that
02:29:52when I open my account obviously it's no
02:29:54secret to me what's on my account but I
02:29:57place a big fat something that I never
02:29:59trade it could be platinum or and but I
02:30:02place a trading ticket over my p&l and
02:30:06my account balance because I simply
02:30:09don't want to know how much I am making
02:30:12or losing on the day I know how many
02:30:14points I'm making and I can I got to
02:30:16calculate later but having that account
02:30:19balance beaming back at me oh my God
02:30:21you're up 4,000 or you're up 14,000 on
02:30:23the day it's actually not particularly
02:30:27uh serving for what it is I want to
02:30:29achieve why well because I know myself
02:30:31well enough my to know that if I'm
02:30:34losing I'm going to get into a certain
02:30:36kind of mindset it's somewhat impatient
02:30:38and it's Keen to find my equilibrium by
02:30:42m i mean if I'm down say X th000
02:30:47at in the morning I will subconsciously
02:30:50whether I I admit it or not I will look
02:30:52to make that back so now I'm no longer
02:30:54trading the market I'm actually trading
02:30:57my account balance which is not exactly
02:30:59conducive because when you're trading
02:31:01account balance you want to you have
02:31:02Tendencies to be impatient you have
02:31:05Tendencies to want it to get even
02:31:07so my question for should actually been
02:31:10you should take the hand down if you're
02:31:13looking at it because I'm trying to get
02:31:15to the point where what your account
02:31:17balance is doesn't really matter as long
02:31:20as you can of course trade and as long
02:31:22as you're still prudent and you're
02:31:23holding your your your stop
02:31:27losses what is that that Kenny Rogers
02:31:29he's saying Steve you got to know when
02:31:32to hold you got to know when to fold and
02:31:36don't bother looking at your balance
02:31:38count your your you count your winnings
02:31:42when the day is gone I I won't embarrass
02:31:44you with the actual Rhythm you know
02:31:49David Paul would have sung
02:31:51it question number five are there still
02:31:54any hands
02:31:56left nice do you regularly engage in
02:31:59physical exercise to burn off the stress
02:32:01hormones from your trading activities do
02:32:03you make sure you get sunlight into your
02:32:05eyes every day and you get fresh air
02:32:07into your lungs and apart from me
02:32:08sounding like your Bloody Mother do you
02:32:11actually look after
02:32:13yourself do you make sure that you
02:32:15adequately rest making sure you sleep
02:32:17soundly or deeply if it's a yes then
02:32:21keep your hands up but if it's a no then
02:32:24you probably also would benefit
02:32:26immensely from actually beginning to
02:32:29engage in exercise and I am not some
02:32:32kind of Health gur but I do know that
02:32:35when I am out there and I am really
02:32:38using my physical body I trade so much
02:32:41better the day
02:32:45after final question ahead of the
02:32:48trading session are you making sure you
02:32:50primed your body with good nutrition to
02:32:52ensure your blood sugar is stable and
02:32:57your you were doing so well I mean
02:33:01serious I thinking what will it take to
02:33:04get this guy off the podium what are you
02:33:08coffee on a bagel no just a cup of tea
02:33:11cup of tea first thing morning I'll do
02:33:12intermittent fasting well intermittent
02:33:15fasting but you can still I know I'll
02:33:17admit that no I'll admit that anyway but
02:33:19there's a there's an element to it is
02:33:22that uh look diabetes is Rife in society
02:33:27and I again you live your lives I live
02:33:30my life but I do know that if my blood
02:33:33sugar goes like this so does my
02:33:36p&l but if my blood sugar goes like this
02:33:40I'm not saying my blood sugar won't have
02:33:42some swings but I am much much better
02:33:45able to make good tough decisions do you
02:33:48know why I want to get all the sleep
02:33:51that I get it's not because I can't
02:33:52trade well under the circumstan I had
02:33:55less sleep but it's always when I really
02:33:58need to make tough decisions usually
02:34:01about cutting losses I find Steve that
02:34:05if I'm rested I can take those losses
02:34:08without remorse I just take them and
02:34:10it's job done and so when you said that
02:34:12the decisions that you make when you are
02:34:14fatigued versus the dec decision that
02:34:16you make when you are refreshed can be
02:34:19very different decisions I absolutely
02:34:21resonated I didn't want to say anything
02:34:23but I want to shout yes Steve you're
02:34:26absolutely right and I so agree with you
02:34:28that when I am rested and I've exercised
02:34:31and I've eaten well you can put me flu
02:34:33BR anything I'll take on that
02:34:35seal I'll take on that seal challenge
02:34:39but if I'm tired oh Jesus then a school
02:34:42run where I'm going the wrong way can
02:34:43sort of make my my mood go all
02:34:47foul okay I hope that you enjoyed it and
02:34:50I'm not saying that you have to become
02:34:51Gym Rats all of you either not at all I
02:34:54don't say that you have to follow a a
02:34:56certain kind of diet but I just want you
02:34:59to be at least mindful that a a say a
02:35:02professional tennis player I I've told
02:35:05you this story before but just in the
02:35:07off chance that I haven't a few years
02:35:10ago 2007 I was invited to uh the VIP
02:35:14tent of Ralph Lauren in Wimbledon I'm
02:35:16not Nam dropping because it had
02:35:18absolutely nothing to do with me I
02:35:19wasn't there because of my dress scent
02:35:21not at all I dressed like a hobo in the
02:35:23best of days no I was there because I
02:35:25was a plus one of someone else who is
02:35:27far better dressed than I am and there I
02:35:29got to sit next to a gentleman called
02:35:31Luke Donald and Luke Donald at the time
02:35:34was the 19th best golfer in the world
02:35:36stward 19th best golfer and when you sat
02:35:39in the company with the 19th best golfer
02:35:42in the world and Tiger Wood is the best
02:35:44golfer in the world what do you ask
02:35:45number
02:35:4819 why are you not as good as Tiger
02:35:50Woods that that's what you do isn't it
02:35:52Steve you why do you why are you not as
02:35:55good as why are you not as good as tiger
02:35:58and to his credit he took the question
02:36:00really seriously and he said Tiger Wood
02:36:02is a goldfish he has no memory of what
02:36:05just happened to him and that very much
02:36:08brings us back to David Paul's whole
02:36:10aspect of the Power of Now that you live
02:36:12in this moment you have no recollection
02:36:16of the 15th hallway you did a double
02:36:18Bogey and what Luke donnald said to me I
02:36:23thought and it also made it into my book
02:36:25he said you know on a good day I can hit
02:36:27that ball further than Tiger Woods I can
02:36:29hit it straighter than Tiger Woods but
02:36:31Tiger Wood just has this amazing mental
02:36:34resilience that if I screw up on the
02:36:3715th hole and tiger wood screws up on
02:36:39the 15th hole it's as if he doesn't know
02:36:41it by the time we get to the 16th hole
02:36:44while I'm still I'm still tormenting
02:36:46myself with how badly I did on the 15th
02:36:48hole and I thought it was beautiful set
02:36:50but there's a side story to that and I
02:36:52didn't know that until I did a research
02:36:54for U I did a speech uh for uh CMC
02:36:58Markets earlier this year and I and I
02:37:02actually looked up hey how did Luke
02:37:04Donald actually do after I met him I'm
02:37:06not saying that because of me he
02:37:08actually changed his behavior but I was
02:37:10just curious what happened and then I
02:37:11found this uh headline in the The
02:37:15Guardian news paper the independent new
02:37:17and it said Luke donnal celebrates his
02:37:21number Luke donnald celebrates being
02:37:23number one of 2012 so it was five years
02:37:27later and then there was a strap onene
02:37:29he credits his mental coach for his
02:37:31meteoric rise to me that was such an
02:37:36important little side snippet of
02:37:38information because we all think of
02:37:41golfers as just these mechanical
02:37:42creatures and there they are I don't
02:37:44play golf uh but you know there they are
02:37:46and there like the further the better
02:37:48and and you're you you're working on
02:37:50different aspects of your game never did
02:37:52I think that someone like Luke donnald
02:37:56would hire a mental coach but then again
02:38:00he did and it sort of leads me to
02:38:02believe well what's the difference
02:38:04between Golf and trading surely there
02:38:07must be so many
02:38:09similarities and so if it's good enough
02:38:11for the world's number one at the time
02:38:14why wouldn't we at least begin to pay
02:38:16some attention to how how we're actually
02:38:19feeling and the r fact that that Steve
02:38:21is here and that that you seem to have
02:38:23all bought my book because it couldn't
02:38:24have been my sister that bought all
02:38:26those copies it would actually mean that
02:38:28you are becoming mindful of of the
02:38:31possibility that your performance could
02:38:34be improved significantly Beyond just
02:38:36learning more Fibonacci and more
02:38:37Ballinger bands and more trend lines and
02:38:39and more moving averages that perhaps
02:38:41actually your true success really comes
02:38:44from amalgam of really intense
02:38:47situational research on certain
02:38:50instruments that you like to trade and
02:38:52you trade them really well but you
02:38:54couple that with well when you are in
02:38:56losers you have these parameters because
02:38:58you have a deep understanding of the
02:39:01instrument and you caught your losses
02:39:02but you have also such a deep
02:39:04understanding of how this product tends
02:39:07to operate because the footsy in the Dax
02:39:09they are two different things Al
02:39:11together you can't say that the footy
02:39:13can be traded the same way as the Dax
02:39:14you just AR so that's what I was hoping
02:39:18so I expect no hands up how many hands
02:39:21actually did make it up in the end so
02:39:23out of 300 I count one I count two I
02:39:25count three and maybe but the yeah so
02:39:28out of 300 perhaps at best at best there
02:39:33were 10 raised hands what does that tell
02:39:37you and I don't think that the things
02:39:40that I asked you what out would be out
02:39:42of the ordinary for someone who who is
02:39:46pretending to be a professional Trader
02:39:48and that who actually wants to make
02:39:50their monthly and their yearly income
02:39:52from Trading is it so much that you look
02:39:55after yourself because this is a
02:39:57performance sport it is a performance
02:40:00sport you are relyant 100% on your
02:40:06own you can have the best strategies in
02:40:09the world but if you are incapable of
02:40:11implementing the strategies what good
02:40:13does it do you okay so
02:40:17um da if not now then oh my word how how
02:40:21what time is
02:40:24it
02:40:27what
02:40:37oh
02:40:40oh well that's not so good is it
02:40:44okay
02:40:47uh one
02:40:51second um
02:40:54okay
02:40:58right okay A little bit of a quick
02:41:02thinking here is
02:41:05needed Steve Ward has provided
02:41:10a thank you a phenomenal
02:41:13Insight I would like to give you a
02:41:15trading technique that I have made
02:41:19myself a very wealthy man
02:41:21on look I I I don't want to stand here
02:41:25and make a promise but I'm
02:41:28thinking you have
02:41:30this I know who you are that's not meant
02:41:33in a in a in a in a I know who you
02:41:36are but I could I could run a web
02:41:39seminar for the rest but I I really feel
02:41:42like I want to give you my fishing
02:41:45technique unque because it has been such
02:41:48a game Cher for
02:41:51me I admit that uh when we started I
02:41:56knew that I wasn't going
02:41:58to be able to do all of it but if you
02:42:02look at this
02:42:11here I think I'm going to go with does
02:42:14practice make perfect
02:42:15and then fishing stops and then
02:42:17hopefully hey if they come and throw me
02:42:19out they'll throw me out right so this
02:42:21is Page
02:42:31768 you're not laughing at my
02:42:33presentation are
02:42:44you
02:42:49and this will tie neatly into the
02:42:51fishing technique does practice make
02:42:54perfect
02:42:58uh I think the problem with charts is
02:43:01that the conventional education is that
02:43:04we always see the full picture so I'm
02:43:06mindful that I'm being filmed but I have
02:43:08to be true to myself uh take someone
02:43:11like Al Brooks I deeply admire the
02:43:15volume of work deeply admire it but I
02:43:18have one problem and it's not
02:43:20necessarily without Brooks it's just the
02:43:22industry as a whole they always give us
02:43:24the whole bloody picture and I believe
02:43:27that that will sway the education I
02:43:30believe that when you write about a
02:43:33chart but you already know what has
02:43:36happened that will sway your writing
02:43:39it's almost impossible not to because to
02:43:42be able to be 100% objective is
02:43:45practically
02:44:09impossible here this one here is Malcolm
02:44:12Gladwell he's a Canadian journalist and
02:44:15this is Anders Ericson a researcher in
02:44:18humans in human performance and what I
02:44:20found was so profoundly interesting is
02:44:23that you have this gentleman here Anders
02:44:25Ericson he's talking about a concept
02:44:28which is wildly popular called the
02:44:3010,000 hour Theory the idea here is that
02:44:33if you do something for 10,000 hours you
02:44:36will be an expert at it and this was
02:44:39popular popular you know the word I was
02:44:42looking for by this gentleman here
02:44:44called Malcolm Gladwell and and he wrote
02:44:45a book called The outlier you're
02:44:47standing there looking at me as if I
02:44:48have to get out do I have a bit of does
02:44:51that mean I have to
02:44:58go can I can I can I not just can I have
02:45:01five
02:45:10minutes five
02:45:14minutes
02:45:15he wrote a book it became wildly popular
02:45:18about the 10,000 hour rule everybody
02:45:20grabbed a calculator going oh my God
02:45:21this is amazing I'll be an expert in
02:45:23chart analysis by July the 15 2026
02:45:27because I I've done 10,000 hours Anders
02:45:30ericon said hang on there for a second
02:45:32that is not at all what me and my team
02:45:34were researching in fact we said
02:45:37something completely different we said
02:45:40okay fine it's very good that you
02:45:43practice but it's the the quality of the
02:45:46practice that actually counts so I
02:45:49believe that the reason why I am good at
02:45:52chart analysis is because I don't just
02:45:54look at a full chart but I actually have
02:45:56a piece of software and by the way don't
02:45:59be swayed by me I use something called e
02:46:01signal but you can do whatever I think
02:46:02there's something called ninja Trader
02:46:04that will do it free of charge but I
02:46:07like to actually teach myself like this
02:46:11what's going to happen now what's going
02:46:13to happen now what would you do
02:46:16now that is true learning and true
02:46:21problem solving so what was so
02:46:24interesting about when I when I did the
02:46:26research here is I actually found that
02:46:28more and more people beginning to read
02:46:30uh to to write about the great practice
02:46:32myth debunking the 10,000 hour rule what
02:46:35does it take to become an expert on
02:46:36Market performer Master performance in a
02:46:39given field 10,000 hours of practice
02:46:41it's a common rule of thumb popularized
02:46:43by Malcolm Gladwell in his best sell out
02:46:45roers it's a catchy easy to remember and
02:46:48more or less completely
02:46:52false and it actually turns out that you
02:46:55know what is the
02:46:56greatest angle to the 10,000 hour rule
02:47:00it's the mentor you use and so I felt
02:47:03well hang on if you see me as one of
02:47:05your mentors I can't stand up here and
02:47:08say you should just have a lot of chart
02:47:10analysis time no it's the way that we
02:47:12actually go about the chart analysis
02:47:15that really decides whether you coming
02:47:17an expert or not so to read here and it
02:47:19turns out his study shows that there's
02:47:21another important variable that Gladwell
02:47:23doesn't focus on how good a student
02:47:26teacher is now I can't be your teacher
02:47:29like a for example a music teacher but
02:47:31what I could say to you is that how
02:47:33about if we started practicing like this
02:47:37like this like this so that it actually
02:47:41resembles the
02:47:43real thing that you you see when the
02:47:45markets are unfolding so that you're not
02:47:48just getting the full
02:47:49picture but you're beginning to Unreal
02:47:52it one little element at a time it is
02:47:55about as realistic as it comes okay have
02:47:59I got five minutes from here because I
02:48:00really want to teach them the fishing
02:48:03technique listen I'm going to make a a
02:48:07and I please don't just be be quiet now
02:48:09okay this is not good enough on my part
02:48:12it's not my fault that Steve W just
02:48:14carries on to and talking and
02:48:17talking right can't shut up the man and
02:48:19he he clearly he clearly went over his
02:48:22allocated
02:48:23time I counted definitely 62 or 63
02:48:27minutes and that has done all the
02:48:29difference I'm going to create a a
02:48:31recording about this okay because you
02:48:34really really need to hear what I have
02:48:36to say about this so this is so you're
02:48:38going to get the recording of this but
02:48:40I'm going to do a web seminar that I
02:48:41record so that you can so you can hear
02:48:43this the school sorry the the fishing
02:48:46technique is
02:48:48this when the market goes fishing for
02:48:50stops under old lows or over old tops
02:48:54the
02:49:13essence
02:49:20who has bought here will instinctively
02:49:22put their stop loss under the old low
02:49:24when you think about your own behavior
02:49:26where do we
02:49:29always where do we always place our stop
02:49:31losses we always place it under the old
02:49:33lows or the or above the old highs it's
02:49:36Instinct isn't it whether it's two
02:49:38points or four points or 10 point it's
02:49:40just what we do the fishing technique
02:49:44essentially
02:49:45says that the market if it comes down
02:49:49here it will just probably go below the
02:49:51old low but the moment the market closes
02:49:56above the bar that is the lowest low
02:50:01that's a Buy Signal it would look like
02:50:03this Market makes a low goes up goes
02:50:07down it goes below the low down here
02:50:10four kinds of orders are taking place
02:50:12there are people that are short that
02:50:14would like to take profit there are
02:50:15people who are long who want to be
02:50:17stopped out there are people who think
02:50:19this is going to be a breakout and we're
02:50:22going to go much lower and then there
02:50:23are people thinking I want to buy be a
02:50:25buyer below the priv low very much like
02:50:28the foot technique said you can take
02:50:31pictures of you want but all of this
02:50:33will be distributed to you in the uh the
02:50:36telegram Channel that I have set up for
02:50:38this and I I think what I will do uh
02:50:41tomorrow is I will also send you an
02:50:43email with a downloadable link just to
02:50:45make sure that all of you actually get
02:50:47this presentation so I want to see a
02:50:50market where a low is made because of a
02:50:53retest of a price area and I want or I
02:50:57want to see a market where a top is
02:50:59about to be made because of a retest I
02:51:02want to see that previous buyers or
02:51:04sellers short are now being stopped
02:51:13out
02:51:36low Market goes below the low and this
02:51:39bar here closes above now this might be
02:51:43a daily chart but it could could just as
02:51:44well have been on a 5-minute
02:51:48chart here the market goes above PR bar
02:51:53high and it closes
02:52:00below it could also be more interim if
02:52:03you
02:52:07want show you a few more examples NASDAQ
02:52:11today when I did
02:52:13this it's just to show you that it's
02:52:15certainly not a perfect strategy but it
02:52:18works very well in getting
02:52:23Runners do you see how how the market is
02:52:27trending lower makes a retracement and
02:52:30here it goes below it closes do you see
02:52:34how it went above the prior bar high and
02:52:36now it closes
02:52:39below well didn't quite work out did
02:52:43it
02:52:46what about this one what would you do
02:52:49here see the psychology behind the
02:52:51fishing technique can be taxing it can
02:52:54be taxing
02:52:56because when if I asked you to sell
02:53:00short here well why would I do that
02:53:02because this bar here is the highest bar
02:53:04do you see this red bar and do you see
02:53:07how the market there closes
02:53:09below if you sell short there what do
02:53:12you think you'll be thinking why am I
02:53:14trading against the
02:53:16trend and that's why it's really good to
02:53:19have as part of your morning routine
02:53:21charts like
02:53:23that to actually remind you how at times
02:53:28you can end up risking very little and
02:53:30get disproportionate
02:53:36rewards anyway I have vastly
02:53:39underestimated the amount no that's not
02:53:42the word I vastly overestimated the
02:53:44amount amount of slides I can get
02:53:45through
02:53:49um Steve thank you for wanting to do
02:53:51this with me and to all of you uh I wait
02:53:56wait wait wait wait wait wait wait just
02:53:58a second I just want to lay the
02:54:00groundwork okay because I'm a man of my
02:54:03word and I hate to underd deliver just
02:54:06the way I am and so when I put out an
02:54:10801 slide it might be that you're
02:54:12thinking that's a little bit over the
02:54:14top
02:54:14not to me it's just not how I work and I
02:54:19I just want to let you know that I will
02:54:22have a full recording of this that I
02:54:24will send to you over the next week or
02:54:26so so that whatever I didn't cover in
02:54:29this two-hour seminar that probably
02:54:30should have been an 8- hour seminar at
02:54:32least you will have that in your inbook
02:54:34at some point um and then all I really
02:54:38have to say is thank you for coming out
02:54:40I knew that this was going to be
02:54:42difficult okay I knew
02:54:44that presenting that kind of Hardcore
02:54:47statistics in such a big assembly and
02:54:51not in a schoolroom format that could
02:54:53allow you to ask questions I knew that
02:54:55was going to be tricky but nevertheless
02:54:57I went ahead because I felt that if I
02:55:00could give you a tool that you'll see
02:55:04125 days statistically out of 250 then
02:55:07you're going to actually have something
02:55:09where you can say hey I know what to do
02:55:11in that that's the first negative Buy in
02:55:12the foot I know exactly what to do here
02:55:15and that's what I wanted to because I
02:55:16felt that that was not something that
02:55:18would come every now and then it will
02:55:19come 50% of all trading
02:55:22days otherwise I just have this to say
02:55:25and that is uh thank you so much it
02:55:27means a lot to
02:55:28[Applause]
02:55:38me
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