traders secret

8/8/2019 Traders Secret

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ContentsContents

Overview.

Warning .(The.Information.Gatherer).

WIIFM.(Whats.in.it.for.me?).How.to.make.a.Small.Fortune.(VERY.QUICKLY).

The.Big.Secret.

Eating.an.Elephant!.

The.Reason.Most.Traders.Fail.

S W O T.

The.Passion .(Playing.the.Game). 0

Whats.your.Goal?. 3

The.Method. 4

Summary. 5

Conclusion. 6

Previous.Clients. 8

About.The.Author. 0


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Overview Overview

Within this report I intend to expose the profession of trading to you. You may be oneof the numerous hedge fund managers, professional traders, nance professionalsor market amateurs I have had the opportunity and pleasure of training. On the other-

hand you might never have heard about me.

Regardless of your background, within the next few pages I intend to share informa -tion, which will be pertinent to your future success in trading in the nancial markets.There will be ample time to nd out more about me, if you are interested enough toknow.

I want to provide you with crystal clear guidance on the life of the trader outlining ex -actly what it is we do and why. I also aim to communicate the ups, downs and pitfallsof the life we face daily. In addition to this, I also intend to share my successes aswell as my failures to illustrate scenarios that are readily experienced in the turbulent

world of nancial markets trading.

The reasons for my actions and my decision to put this down on paper are many foldand will become clearer as you read on. Suf ce to say you will be given a clear ideaof what you will need to move forward and take your trading to a much more pro t -able level.

The reverse effect of this report is to provide you with enough information to helpyou to decide whether or not to trade. However, in order to do this, you need to beaccurately armed with the right information of what is involved without the barrage of sales pitches that one usually has to weave through to get access to a genuine and

unbiased view of trading.

Finally, on reading through this report, if trading is not for you, I will explore avenuesenabling you to still capitalise on the opportunities afforded by trading, without youpersonally having to trade.


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Warning(The Information Gatherer)

Warning(The Information Gatherer)

Do.not.put.this.report.off.to.read.at.some.later.date There.is.no.better.time.than.now!

In the fast pace of todays information age, everybody obtains reports, e-books, Vid -eos, MP3s, pod casts, etc to read, download, listen to, play back, etc in their sparetime.

To cope with this ever-increasing information explosion, we have devised new andclever means of coping. The inevitable Right mouse click -> Save as -> with thegood intention of Coming Back to it, is a common behaviour in popular culture. Theunfortunate thing however is that we never seem to be able to come back to our back -

log of stored information.

Usually in less than 5 minutes after saving the document, we are immediately ontothe next piece of information, in search of the ever-elusive secret key that will guaran -tee long-term happiness or success.

I am willing to hazard a guess that on your computer, there are anywhere between5 - 50 articles that you have downloaded with these good intentions, but never gotround to reading.

There is no intrinsic problem with such intentions, except for the fact that they seldom

if ever, give the results one so desperately desires. There is an old saying, which goesThe Road to Hell is paved with Good Intentions.

As proof of fact, run a quick mental check of the E-books, reports and articles, whichyou have downloaded, still waiting to be read.

An honest assessment of the status of things will quickly show you that like severalother people in society today, you are more likely to be suffering from informationoverload, rather than the lack of information, which used to be the case a few shortyears ago.


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As a consequence of this overload, we often become overwhelmed preventing usfrom being able to take action. This is due to the inability to process the barrage of information being thrown at us.

If you are suffering from this problem, I urgently advise you to print a copy of this re -port, grab your lunch break and sit free for at least thirty minutes and in return,

I.GUARANTEE.THAT.THE.INFORMATION.WILL.BE.WOITS.WEIGHT.IN.GOLD .

I will go over things that will save you a lot of time and effort and help you to avoidsales gimmicks of every nature, so ensure that you read this now.

All I ask for in return is a few minutes of your time, in order to communicate my tradinginsights, and to give you speci c answers to questions you may have been lookingfor.


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WIIFM (Whats in it for me?) WIIFM (Whats in it for me?)In this section, I will attempt to enumerate every single thing I plan to share withyou.

There are a few ground rules which were set for this report, and it is important I ex -

plain them now.

.YOU.ARE.THE.REASON.I.HAVE.WRITTEN.THIS.DOCUMI will show you how to think about the markets, by delving into what it takes to be asuccessful trader, and in the process equip you with the very same methodology andmindset, that I use to trade daily.

There are no hyped up results here, no cleverly worded gimmicks, no special prod -ucts etc. So what exactly are we going to be going over?

1 The BIG SECRET nobody will tell you2 The single question you need to ask yourself before you commit your funds to

any trading activity3 How all of your good intentions might actually do more harm than good4 The exact blueprint for accumulating wealth5 The speci c techniques I use to trade6 The Secret to acquiring great wealth7 Money management rules and why they are important

8 What type of software you need9 How to make a small fortune very quickly (Not what you may think)10 Learning to deal with the stress of trading As a special thank-you for taking the time to read through the entire report, I will re -veal a brand new concept that will clarify a lot of issues you may currently be dealingwith. More so, it will show you how to quickly and radically leverage your efforts withinthe markets.

There is much more that I can share with you on this topic, however for the time be -ing, lets move onto the next section.


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How to make a Small Fortune(VERY QUICKLY)

How to make a Small Fortune(VERY QUICKLY)

If you are like the hundreds of clients I have previously trained, the question How doI make a fortune is probably one you have burning in your mind, one to which youwould like a straight no BS answer to. The usual underlying assumption being, tellme, so I can go out and, Do it! .

I would love to give you an answer as straight as a sped arrow, so I will do it in theform of an old market makers joke which goes as follows;

Question: How do you make a small fortune very quickly?

Answer: Start with a large one, and trade your way down! (An answer far straighter than most are willing to accept)

Note: For those who do not know, the Market Maker is the fellow or institutionwho quotes the prices at which one buys and sells in the Stock Markets. Theyalso control something called the order book, which details the levels at whichmarket participants intend to buy or sell and how much of each product.

The essence of this joke is to help nip in the bud the type of thinking that severalpeople come into the markets with. This type of thinking approaches the markets witha very amateurish mindset, forgetting that they are going to be playing the gameagainst highly trained professionals and institutions with much deeper pockets. (This

threat, will be discussed in more detail later on)It is this same opportunistic thinking which allows several people to get suckered outof their money by the lure of the markets, by tales of great wealth made by others inthe seemingly short space of time. The vision of living on easy street, driving ashLamborghinis, sipping ne champagne and eating caviar usually pays testament tothe egotistical opportunist.

Regardless of whether or not the underlying desires are the same, the actual thoughtprocesses leading them to the markets remain the same.

The fact remains that most people tend to look at trading in the nancial markets asa way out of the proverbial rat race. One in which they can suddenly make quickwealth with very little, if any investment in time, effort and in some cases mon-ey.

In holding this opinion, they cannot be further away from the truth, and very quicklynd themselves out of pocket and thoroughly disillusioned.

A cursory look at the adverts to do with trading, brokers, training providers, soft -ware vendors etc ALL MARKET TO THE SAME BASE EMOTION - EASY STREETGREED! Each one offers one system after the other; with results so amazing, it iseasy to be fooled into believing them. So, right here and now, I will share with you the

ABSOLUTE SECRET YOU NEED TO KNOW TO SUCCEED IN TRADING IN THEFINANCIAL MARKETS


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The Big SecretThe Big Secret

There is a THREE PRONGED secret to trading and making a lot of money in the mar -kets over the long-term. I call it the TRADERS TRINITY. When thoroughly graspedand understood, it will signi cantly add to your bottom line.

The secret is something you should write out on a small card, and keep with you atall times. Review it regularly until it gets thoroughly ingrained in your sub-consciousmind by reading it at the start of your trading day. It goes as follows:

Trading success is obtained by diligent and concerted action. Repeatedly carryingout actions, which have a statistically positive expectancy, and constantly monitoringthe results obtained, for deviations in this expectancy.

Secondly , clearly understanding that a positive expectancy does not intrinsically im -ply certainty i.e an event where the probability is one. The trader must allow the rules

of proper money management to keep him/her in the game, long enough to allow themathematical principles of time and compounding to take their natural course.

Finally , leverage must be judiciously applied, with an acute awareness of the pos -sibility of black swans. Otherwise the trader will have no real chance of making it intothe big leagues where they will have more opportunities to trade signi cantly bigger sizes, different markets and different products.

This principle above is really important and deserves you spending a few min-utes to closely study.

The.reverse.side.of.this.trinity.quickly.reveals.the.following.to.youTRADING SUCCESS IS NOT DEPENDENT ON ANY SPECIAL SOFTWARE (Thoughyou may discover you need software to work with.) It is also not dependent on anyspecial course (Though you might need some training for the speci cs of what youplan to trade),

Below is a list of some of the other things which are often marketed as what you ab -solutely need to succeed, which the trinity, clearly stated, helps to dispel.

You may want to add your own observations to the list belowSpecialised hardware,

Closeness to the Exchange

Speed of Execution,

Special Trading System,

Yet another trading book

Or any other such gimmicks that may currently be on offer

Though all of these things may increase an Already Developed EDGE.

Did you get all of that? If you did, BRAVO! If not, please read it again.


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I am hoping it raises a lot of questions in you. Questions such as:

What speci c actions should I take next?What is a positive expectancy?What is proper money management?Is there really a role for Software?What course if any, should I take?How do I develop consistency?How can I learn about determining if a method has a positive expectancy?How can I monitor deviations of the system?How do I even determine what actions to take before even considering doing themdiligently?What the hell are Black Swans?How do I determine which amount of leverage is judicious?Where do issues like liquidity, timing, scaling, market depth and any other such termsyou may have heard of, that t into this trinity?If consistency is so important can I automate this? If so, how do I achieve this?Would it be the correct thing to actually automate this?If it is all automated what do I do then?

Get the overall picture?

With the traders trinity clearly stated as the way to succeed in the markets, you mayassume that several traders are making a huge fortune. Unfortunately the fact is that,this is not the case and a quite often cited statistic goes that; 90% of all traders losemoney overall.

The point I am making is that, in order to discover the answers to all of these ques -tions above, several people lose sight of the essence of the secret to trading successand the opportunity afforded by trading correctly.

They start with good intentions, discover their despair and in trying to remedy the lossof clarity, in terms of what to do and how to proceed, end up digging a deeper nancialhole by being stuck in the trap of seeking out more and more information, courses,systems books, software etc.

The TRADERS TRINITY can be referred to as META STATEMENTS. In other words,they are very broad statements, which should serve as some kind of homing beaconto all key trading actions.

Re ecting on these META statements before trading should serve as a kind of anchoring mechanism to the appropriate actions you need to engage in.

By delving deeper into the meanings and applications of the Meta Statements, youare better able to keep focused on the goal you are trying to achieve, and each timeyou feel lost, overwhelmed, fatigued, confused over yet another offer, etc, the METAstatements should help you to remove the wool from your eyes and the cotton fromyour brains.

I use the META STATEMENTS regularly, and strongly recommend you do the same.


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Mathematical.Expectation.

Given a certain number of events which have probabilities of occurrences assignedto them, and assuming a certain payoff is assigned per event, the sum of all the prod -

ucts of probabilities and payoffs, is referred to as the EXPECTATION.Given a fair coin toss (Fair to imply the coin is NOT been tossed by Tricky Joe!),where two possible events can occur, heads or tails, the probability of the coin comingup either heads or tails is 50%

Consequently, if we pay each other $5.00 each time the other is right (You betting onheads, and I betting on tails) the expectation of this game for either of us is exactlyZERO. In other words, neither of us would win any money from the other over the longrun. From coin toss to coin toss, money would change hands, but the game remainsbalanced. The calculation for expectation is shown below:

Expectation = Amount Won * Probability + (-Amount Lost) * Probability

Expectation = 5 *0.5 + (-5) * 0.5

Expectation = 0.

Now if we assume that the coin is Tricky Joes, and that by some means unbeknownstto us, he is able to get the coin to come up more heads than tails, indicated by theprobabilities that follow; (With Joe betting on Heads)

Heads = 55%Tails = 45%

Our new expectation is simply;

Expectation = 5 *0.45 + (-5) * 0.55

Expectation = -0.5Therefore if you persist in playing this game with tricky Joe, disregarding the well-intentioned pleas of our loved ones to stay off the streets and keep away from suchunscrupulous characters as tricky Joe, over the long-term you are likely to lose thegame. True, you may win from time to time, but statistically, a game this biased islikely to eventually pan out in favour of the one who the mathematical expectation

supports.


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Time used here involves allowing the long-term effect of statistics to play out.Combined with compounding where your proceeds are re-invested, the magic of timecontributes to the accumulation of great wealth.

. Money.Management

Everybody has heard of money management in one form or the other. As kids whenyour parents gave you money and told you to spend it wisely, they were alluding tosome measure of money management. Teenagers go through the same advice interms of gadgets they buy; adults do the same in terms of their salary and budget.University undergraduates also have to be aware of the importance of money man -agement. Consequently, most amateurs and even some professionals enter into the nancial -markets assuming they know what money management is and conse -quently underestimate the vital importance of this aspect of the trinity.

To show just how far removed from the markets, this know it all opinion is, and yet toillustrate its importance. Below I have listed a few of the techniques several profes -sionals, professors and studies have considered. In trying to answer the followingMoney Management related questions:

Firstly , How much of a product, given a certain account size should I buy?

Secondly , When I experience a loss what do I do next?

Thirdly , What if it is cheaper now, than it was two weeks prior should I buy more,clearly representing a saving?

A few of the techniques market professionals have attempt -ed to utilise are things such as Ralph Vinces Optimal F, TheKelly formula, The Martingales Formula and several others.Each of these techniques have certain merits and demerits,but the crucial thing you need to know is that money man -agement is both defensive and offensive. You need to Tradebigger as your account grows, and you need to radicallyreduce your trading size rapidly as you lose money. This isNOT NEGOTIABLE.

There is a school of thought that teaches a concept called AVERAGING DOWN (Buy -

ing or selling more when the price moves adversely against you forcing your aver -age entry price down). However, be warned as this method is the one that brought

In ALL the games in casinos, the House hasa positive expectation, however minute, andin some games e.g black jack the house on aspeci cally dealt hand, may not have the Edge)

Expectation really adds up when we factor in time and compounding into the equation.

The idea is that by buy-ing more as the pricefalls, the average priceyou started buying atis reduced, represent -ing a saving IF the pricemoves back up. How -ever that is really a big IF


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Barings to its knees by Nick Leeson. Rather than accepting a small loss, he addedto his positions, compounding his losses even further.

Others teach you to keep DOUBLING UP with the certainty that WHEN the marketsturn you still make a pro t. This clearly VIOLATES the second aspect of the TRINITY,which addresses the concept of certainty, within probability.

AVERAGING UP (The opposite of Averaging down) and increasing scale when themarkets prove your analysis right, is something that is de nitely encouraged as it isthe equivalence of REWARDING EFFICIENT WORKERS WITH A BONUS.

Judicious.use.of.Leverage.

The last aspect of the trinity is the judicious use of leverage, which utilises the age-old concept of wealth building known as using OPM (Other peoples Money). Mostwealthy people obtain their riches by not only investing through only their own nan -cial means. The likes of Donald Trump used this concept to great extent to build hisproperty empire.

The concept of leverage is to use the little you have to control an asset thatis of much higher value than you actually have.

To understand how it works. Assume you have two investors; Levi who uses lever -age, and Jack who does not.

They both have $10,000 to invest.

Jack spends his $10,000 on a $10,000 investment that rises by 10%. From $10,000to $11000, Jack consequently makes $1000.

Levi on the other hand understands using OPM and decides to control an assetworth $100,000. If, just like Jack, you assume his investment goes up by 10% as wellfrom $100,000 to $110000. Consequently he makes $10,000. This is the awesomepower of using leverage.

However it is important to be aware that this formidable tool has led to the downfall

of several institutions, private traders and banks.To understand why this is the case if you assume that both Jack and Levis invest -


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ment has dropped 10% rather than risen by 10%, Levi would be completely WIPEDOUT. He would lose his entire $10000 investment stake, while Jack would live to ghtanother day with his $9000 left over.

There is a sweet spot , which exists between trading like Jack (No Leverage) andtrading like Levi (Too much Leverage), and I wish the answer was a simple one. Un -fortunately the answer is slightly trickier. The correct answer to the question of HOWMUCH LEVERAGE depends on a whole bunch of things.

This includes factors such as risk tolerance, volatility of the speci c product you aretrading, size of the entire equity at hand , risk normalisation parameters, etc.

Even banks have entire departments, (Risk Management and Control) dedicated tomonitoring and keeping traders on the right side of leverage. The bulk of their timeis spent trying to predict and mitigate the negative effect of the occurrence of BlackSwans. Black Swans are events that are totally un-expected, carry in their wake anextreme impact, but yet we try to explain it away after the fact. For this de nition of Black Swans, I have borrowed from Naseem Talebs fantastic book on the subject

The Black Swan and the more advanced readers of this report, may want to includethis book, in their must read section.

However, for the purpose of this report, the main warning I will give you, is that le -verage is a double edged sword. It cuts both ways and can leave a lot of harm in itswake, when placed in the wrong hands, or utilised incorrectly.

The availability of leverage facilities within the markets is not a ticket to make fool -hardy assumptions about what is and what is not possible in the movements that themarket can generate given a unique set of random events.

Having considered the Trinity in closer detail, the question now remains, is it possiblefor you to still fail once you have learnt and understood the traders secret? The an -swer is a resounding yes. For those who already understand and consciously attemptto apply the META statements and still nd themselves struggling, below I have illus -trated the reason why most traders still fail.


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The Reason Most Traders FailThe Reason Most Traders Fail(Even.after.grasping.the.Traders.Trinity)

Very early on in my trading one of my mentors Eric taught me something I will never forget. What he said to me, will be shared with you in the next few sentences.

I guess I paid signi cant attention to what Eric said, because in the three years inwhich I had known him, he had made cumulative pro ts of over 23 million USD!

I also observed him closely with respect to how he behaved, during trading hours,after trading hours, when he made a loss, when he took a gain, and how he analysedmarkets, etc. I could not think of anybody better to pick his brain and learn from, thanhim. The conversation led to several other similar conversations in which he verygenerously showed me fallacies in consensus thinking and conformist opinions. Thisdiscovery led me down a very different route than that which is often travelled by mosttraders.

Do.you.treat.your.trading.as.a.business???Eric had quickly realised that though I thoroughly understood trading, nancial prod -ucts, markets etc. and that he could see that I also had a rm grasp of the trinity(By the way, understanding, not necessarily applying the trinity is what makes mostprofessionals feel separate from the amateurs) he had patiently waited to drop hisbombshell on me!

The question made me immediately understand what I had to do and the rest as theysay is history.

Each time traders are told to treat trading as a business, it is often with respect toinstructing the trader to do one or more of the following;

a) Develop discipline with respect to their trading actions; (For the record, nomention is made of exactly HOW to develop discipline. See the second Scroll,Mastering the Traders Mind)

b) Learn to accept losses as a business expense, and nally,c) To freely purchase software, training courses, e-books, etc as they can be writ

ten off as legitimate business expenses

The insanity of this de nition comes to light when we draw an analogy to a realcompany such as Nike, de ning their business simply as .......

* Lets make sure we have discipline in creating our products,* Understand lost revenues as business expenses, with no real effort to mitigatethese losses,* Who cares, lets rack up our business expenses, since we can write them off aslegitimate business expenses anyway!

Of course as soon as this is clearly illustrated we immediately see the folly of thistype of thinking.

NOT TREATING TRADING AS A BUSINESS IS A FATAL MISTAKE


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To trade successfully you must rst understand clearly what it means to treat your trading as a business, then go on to develop a plan of action based off this under -standing derived, and nally go on to IMPLEMENT this plan, with provisions for regular revisions to the plan.

In essence I am saying it is not enough to only be aware of the Traders Trinity, but toalso know how to implement it in the same manner as a business such as Nike, or

Microsoft would.Before beginning to trade, a plan of action MUST be created (This would be equiva -lent to developing a business plan). During the mentoring I do with my clients, this isone of the most useful exercises I carry out with them. The development of a conceptthat I have labelled, as the traders blueprint is a very unique aspect to what we doat TwoScrolls.com. It encompasses a very effective and uniquely tailored programbuilt to the clients requirements, which applies in-depth knowledge of the markets,psychology and NLP. You will learn a little more about this later.

A SWOT (Strengths, Weakness, Opportunities and Threats) analysis must be carriedout.

As stated earlier, most people start off with a real slant towards the opportunisticthought of trading, without a clear understanding of the other aspects of this type of detailed analysis.

After commencing trading, they then begin trying to develop strengths and are oftennot even aware of the underlying threats to themselves or their trading business.In the table below, I have highlighted a few of the similarities between running a com -pany and trading, that traders must be concerned with:

Companies Traders

Product Creation Develop and bring tomarket new products

Investigating the availability of newproducts, and incorporating them intotheir current trading regime.

Market Dominance Companies areinterested in developingtheir brand awareness,establishing deeper market reaches

Traders would be looking to developfurther strategies, to mitigate risks viadiversifcation across product classes andstrategies.

Behaviour in

Negative EconomicCycles

Good companies DONOT often-initiate newproduct launches whenthey are doing badly;rather they carry outcost cutting operations

Most traders on the other hand,immediately start researching newmethods when the strategy they knowor thought they knew seems to be failingthem, this is clearly a mistake, andExperienced traders however KNOWand UNDERSTAND the concept of aDRAWDOWN in their system, and tendto stick with it through its drawdownperiods. They survive by the samemechanism companies do, strict moneymanagement.

Growth andExpansion

Companies also tend tohave strategies in placefor handling growth andexpansion

Traders, who have the good fortune of becoming successful, also have to dealwith trading larger accounts and correctlyutilising leverage at this scale. Be aware

that the properties for large accounts varyfrom that for smaller account sizes. Afundamental aspect of tailoring a trading

Companies Traders

Product Creation Develop and bring tomarket new products Investigating the availability of newproducts, and incorporating them intotheir current trading regime.

Market Dominance Companies areinterested in developingtheir brand awareness,establishing deeper market reaches

Traders would be looking to developfurther strategies, to mitigate risks viadiversifcation across product classes andstrategies.

Behaviour inNegative EconomicCycles

Good companies DONOT often-initiate newproduct launches whenthey are doing badly;rather they carry out

cost cutting operations

Most traders on the other hand,immediately start researching newmethods when the strategy they knowor thought they knew seems to be failingthem, this is clearly a mistake, and

Experienced traders however KNOWand UNDERSTAND the concept of aDRAWDOWN in their system, and tendto stick with it through its drawdownperiods. They survive by the samemechanism companies do, strict moneymanagement.

Growth andExpansion

Companies also tend tohave strategies in placefor handling growth andexpansion

Traders, who have the good fortune of becoming successful, also have to dealwith trading larger accounts and correctlyutilising leverage at this scale. Be awarethat the properties for large accounts varyfrom that for smaller account sizes. Afundamental aspect of tailoring a tradingprogram has to deal with determining theequity at hand and tailoring the tradingstrategy to suit this account size as well.


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Performance.improves,.when.accountability.is.demanded

There are several other aspects to running a company, which should be mirrored inthe thinking and the strategies of a trader. Traders who really want to move to the nextlevel in their trading should pay close attention to these parallels

Now that I have addressed one of the major reasons I believe most traders still fail,I will now address one of the key tools that will help develop you into a successfultrader.

IdiosyncraticRisk (Emotional and personalcomponent)

Since most companiestend to be larger than one man, theidiosyncratic risksassociated with onepersons emotionalstate , is more evenlydistributed around thedifferent members of a

company.

However, in the case of the trader, thewhole burden of this risk closely mirrorsif not EXACTLY MATCHES the trader himself. Consequently, it is of vitalimportance that the trader developstechniques to be fully aware of the risksincorporated into his trading by virtue of his emotional frame of mind and learnshow to bring them in full congruence with

the direction of the trading account. Thisis another aspect to which close attentionis paid during the development of atailored coaching program.

Accountability Companies particularlypublic companies,have accountability,predominantly totheir shareholders,consequently thesecompanies have toact in a manner thatstrives to protect andgrow shareholder value. There is alsoaccountability toregulatory bodies ,which demand theseinstitutions maintain asort of prudent manrule , the consequenceof this helps to reinforcea positive type of behavioural and fscaldiscipline.

The trader who intends to do well shouldincorporate some kind of reportingmechanism into their trading. A famousquote goes,

Performance improves, whenaccountability is demanded.

So promise to report your fgures to anexternal person (Preferably one wholooks up to you or a colleague And dobe honest).


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S.W.O.TS.W.O.T.(Strengths,.Weaknesses,.Opportunities,.Threats).

As I am hoping you begin to discover, there are several things which a trader, profes -sional or otherwise must consider before venturing into the world of trading, and here

I will very brie y show you what a S.W.O.T analysis is, and how carrying out such ananalysis can improve your trading education and consequently career.

A SWOT analysis is a detailed assessment of your Strengths, Weaknesses, Opportu -nities and Threats. A proper analysis should help you identify several biases you maycurrently have and also direct how you can move forward.

Below I have tried to indicate some elements you might want to consider whilst carry -ing out a personal inventory of yourself and your trading business.

Not everyone will have ALL the strengths, or carry the burden of all the weaknesses

below, but as soon as you to look at the list, you will be better placed to understandthe risks presented to your account, by virtue of this analysis.

At the end of the lists, I have also directed you to a personality type test, which youcan do, to help with understanding yourself in closer detail.

Strengths

PersonalPatient.Dedicated.Hardworking.Consistent.Meticulous.Can think laterally.Ability to synthesize vast amounts of information.Good Handle on Emotions.Humble.Thoughtful.Intelligent.Focused.Decisive.

TechnicalGood knowledge of various investment products/strategies.Strong Macro Economic Understanding.Good knowledge of relevant data.Good knowledge of Software requiredGood knowledge of Various Money Management Rules.Clear understanding of risk factors.Good understanding of Capitalisation issues and is properlycapitalised for the products you intend to trade.Understanding of required maths, probability theory and isable to take decisions in the face of uncertainty

And Several others

Weaknesses

PersonalImpatientComplacent.Lazy.InconsistentHaphazard.Myopic vision.Gets confused in the face of vast amounts of data.Overly Attached.Arrogant.CarelessDim-witted.( Sorry , No softer way to put this)UnfocusedIndecisive.

TechnicalWeak knowledge of investment products/strategies.No understanding of macro economic triggers.Unaware of relevant and vital data.No money management or only a basic awareness of moneymanagement rules.Fails to cater to risk.Inadequately capitalised.No technical knowledge of the quantitative aspect of tradinghence cannot develop or implement a trading system.No knowledge of required software

And several others

SWOT elements:


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These various lists above are by no means exhaustive, but their aim is to show youthe bene ts of doing a detailed inventory of yourself.

It is only through a detailed inventory of your skills set of what you have and what youdont with respect to trading, are you be able to determine what is truly lacking andconsequently, what EXACTLY you require to begin or continue trading.

Several tests exist which allow you to run an inventory of your personality for the softskills required. One such test, which exists, is the Myers BRIGGS test. For the techni -cal skills and requirements however a bit more work has to be done.In thinking and trying to acquire these technical skills several traders (or potentialwannabes) develop a complex path, which leads them further away from the goalof becoming excellent traders. Later on in this report, I will be looking closely at theTraders blueprint, and offering you an opportunity to discover your own map of themarkets.

Opportunities

PersonalSelf ImprovementPotential Financial bene tPersonal Financial freedom.

Technical

Borderless trading opportunities.Near In nite amounts of products to trade.Ready availability of data.Tremendous amounts of information on systems,methods, courses, etc.Ability to trade in highly regulated markets.Ability to trade from home.Low set-up costs,

Low barriers to entry.Availability of well developed markets, such that rel -evant news is rapidly integrated into market prices.

And several others

Notice that an opportunity is NOT the ability toMAKE A LOT OF MONEY! Rather the potential of what is actually possible

Threats

PersonalLarge Financial constraints.Unexpected expenses.Illness.Unsupportive spouse, family or friends.External Distractions.

TechnicalPossibility of being wiped out or persistently longdrawdown in the trading system.Degradation or downright failure of trading system.Autocorrelation across diversi ed position.Market Crashes. (Though correct trading shouldcater to these)Black Swan events.

Fictitious or Falsi ed data (Such as ENRON)Unscrupulous Brokers/Market MakersStop Hunters.Erratic Data.System Crashes.Connectivity problems.Overly large Slippage.Overly large fees.Limit situations, where you are caught out on thewrong side.Bull/Bear Traps


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The Passion.... (Playing the Game)The Passion.... (Playing the Game)

Trading.is.a.tough.profession.I am probably one of the few people who will tell you this. The brokers will tout talesof the last person who made $30,000 in one trade, and fail to tell you about the 2000or so clients who cumulatively lost multiples of this amount.

The Software vendors will tell you how their speci c system raked in hypothetic resultsof 98 % winning trades, where the word hypothetic can be replaced with IMAGI -NARY or Fictitious?

Trading arcades (Places that charge you a fee to trade using their systems and pro -vide a buddy environment) tell you how easily you can make money, because of their extremely CLOSE proximity to a speci c exchange or the Strength of their tradingplatform.

Newsletter sellers generate a series of trade ideas such that any monkey would havealso gotten a pass rate. They then go on to spout their recent gains with the claim of superior knowledge of the markets, and why you should subscribe to their newslet -ter.

The list goes on and on, from data providers who claim that their data would by de -fault give you the best results, to training out ts which claim that their new techniqueis the next best thing since sliced bread.

Some of these play to FEAR, whilst others play to GREED.

In light of this here are a series of three facts:

Fact One: NOBODY KNOWS THE FUTURE,Fact two: NO SYSTEM, TECHNICAL OR OTHERWISE PREDICT IT.Fact Three: NO COURSE CAN TEACH YOU HOW TO READ THE FUTURE.

So why should you keep playing a game in which you need to have an idea of howfuture events pan out, when it is PAINFULLY OBVIOUS that the future will alwaysremain uncertain?

The true craft of trading is to be found in the following:

1) The evolving process of learning how to effectively understand and utilise thelaws of probability.

2) Striving to constantly stack these laws in your favour, as pertinent events occur;3) Maintaining uniformity whilst trading across different product sets by normaliz-

ing these products for volatility.

Different products exhibit different swings in the markets, and your trading style shouldnot be affected by these swings, but should rather cater correctly to them.


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4) Perfecting the craft, requires that you ensure you are taking appropriate positionsizes when you trade i.e. Risks which are proportional to a relatively small portion of the entire account equity.

Correctly utilising diversi cation, which is trading products suf ciently uncorrelatedsuch that when a Black Swan occurs, the effects are not as devastating as theycould be.

Historically some extreme events have caused product sets which were theo -retically uncorrelated to suddenly become highly correlated e.g The RussianGovt bond default in 1998.

The passion of this game lies in the constant recall and application of therules of the trinity, whilst correctly translating and acting in accordance with

these probabilistic events.By doing things this way, losses become exactly what they are, the correct

playing out of improperly translated events.

In other words, nobody is out to get you (Ok yes there are stop hunters and dubiousbrokers/market makers). The universe is not gunning for you, and the markets do notcare speci cally about you. Appreciating and understanding this fact, enables you tocontinuously improve. By doing this, the evolutionary impulse found in all human be -ings towards growth and development is thus satis ed, and with time you too learn tobe on the correct side of most trades, utilising the correct leverage and growing your knowledge and understanding.

The passion is what keeps you playing. It is what keeps you striving, even after aseries of losses. Learning more about yourself, the markets, the global factors, themarket movers, the speci c nuances of the instrument you decide to trade, etc.

Most experienced traders will tell you that winning should not be euphoric, and losingshould not be depressing, or you would not last the long haul. I wish I could say I feltneither of these emotions when I trade, but that would be a lie. I still feel damn goodabout aligning myself with events in such a way that when the events play out as mysystem predicted, I make a substantial pro t. On the other hand, I also feel downrightpissed off when I suffer a substantial loss. (Sometimes I am pissed off at myself, atthe markets or anything that happens to bear the burden of being closest to me at thepoint of frustration.)

Be aware that here, I am NOT talking about the quick type of scalping loss in whichone quickly and ef ciently nips a bad trade in the bud. Rather, I am talking of thosetrades where the probabilities are so aligned that I DENT an axis in the TRINITY(Money Management) so badly, that I cannot help BUT KICK MYSELF, WHERE THESUN DONT SHINE causing me to pay the price for this mischief.

However due to having correct mental training, I have developed the ability to quicklypinpoint which axis needs immediate attention. In addressing the point of failure, I amable to move back into a resourceful and productive state and consequently, go backto generating steady pro ts. (This includes having proper losing trades).


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There are two type of losing trades, one in which youobeyed the trinity and one in which you disobeyed the trinity.

In order to develop a strong passion of the game, focus and clarity are of extremeimportance.

First focus on the right and relevant things, and then consider clarity in terms of thedestination in which you are headed.

As I stated at the top of this section, trading is a tough game, but one which is veryrewarding in a lot of ways. Developing the right attitude, skills and processes will bringrewards far greater than nancial bene ts alone.


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Whats your Goal? Whats your Goal?

Most people think the goal is very clear and that it is to make money, however thesub-conscious mind plays a very vital role in how we behave particularly with respectto the decisions we make when we trade.

In the words of a trader made famous by the book Market Wizards:

Everybody.Gets.what.they.want.Ed.Seykota,.Market.Wizards.(Jack.Schwager).

Not clearly de ning your intent, or being incongruent with it when de ned, is a major

obstacle blocking the path to success, which several traders face. The real unspokenissue however is that we are now dealing in the realms of the sub-conscious, andregardless of the giant leaps made by the likes of Freud, Jung, Milton Erickson , etc,the entire eld of psychology much less talk about behavioural nance , is still verymuch in its infancy.

This section is to encourage you to think about the reasons and the goals which youhave from trading, in order to attach a big enough responsibility to your psyche tocause you to retain the trinity always within you, whilst you trade. The bigger andmore passionate you are about your goal to trade successfully, the more pressingyour need to excel at the game becomes. This creates an immediate dynamo effect,

one that becomes clearly re ected in your account balance.

Dismissing the effect of psychology and the mind on your trading is tantamount todriving whilst drunk. This is the whole ethos behind the Two Scrolls training program.The exacting belief being, regardless of all the trading information you have, theincorrect application of your mind will yield imperfect results . The ip side of thecoin being, all the discipline in the world will not give you the ability or knowledge of markets. Therefore to fully succeed in the markets you need both Scrolls. Scrolls giv -ing you the vital information you need to control the mind, and scrolls giving you vitaltrading information. Feel free to visit twoscrolls.com for more info on this methodologyof training.

Regardless of all the trading information you have, the incorrect application of your mind will yield imperfect results.


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The MethodThe Method

As I promised at the start of this article, I will tell you exactly how I trade. But before Ido so I want to issue a quick disclaimer.

This is how I trade. It may not be suitable for you. Futures and Options carry a sub-stantial amount of risk and you can lose more than your initial investment. I would advice you read the full futures and options disclaimer at the website of any reputableexchange or broker.

Secondly, it is important that you know that as earlier stated, I do not believe in anyone speci c trading system as the panacea to all ills.

Thirdly, I trade at least three different systems, dependent on the nature of the mar-ket, and the speci c product I am trading. The method I am going to brie y go over below is one for my options account.

Finally, I am aware that you might not fully understand what I am writing about if youare a beginner, but everybody must start somewhere and I have tried to write assimply as I can, to ensure the information being shared does not go over anybodyshead.

In a nutshell, I sell options or their spreads, when they are overpriced. The options Isell have a delta of less than 25. This implies a greater than 85% chance of me mak -ing money (Expectation). I often use appropriately distanced strikes (Money Manage -ment) and dependent on the Implied Volatility (A Measure of the expensiveness or cheapness of an option) I apply a suitable range of leverage that enables me to still

survive when markets behave in an unexpected manner from what the pricing mightindicate. The relationship to the trinity as described here is very loosely done.

In summary, and for those who might not be fully aware of how the options marketswork, through my trading I attempt to replicate the business of an insurance com -pany. I do so, by providing insurance services through the use of the options markets,and I get paid a premium to do so. When the risks are incorrectly assessed and thescenario unfolds against me, I lose money. When I correctly assess the risks, I getto keep the premium. Now, though this sounds very simple, believe me, it is not. Andthere are a whole bunch of other things I have to look at to support my risk analysis,which I would not fully go into here.


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Summary Summary

In conclusion, and as I have tried to highlight several times over the course of thisentire document, trading is a very challenging venture. A lot sales gimmicks, letters,un-scrupulous brokers, magazines, exchanges, etc all try to paint a picture that trad -

ing is only very easy after one obtains their product and all your money worries or trading nightmares would be over.

On the other end of the spectrum, there are those who think that trading is so easy,you just have to read a couple of books, attend a couple of courses, and hey presto,you are on easy street!

In my opinion, neither of these two extremes is correct. There is a middle ground,which I call the Traders blueprint, allows the trader to determine what areas theyshould focus on to support their trader-development.

The blueprint includes:

The terrain it maps *

The studying of the correct books (Correct being a function of the direction in whichthe traders SWOT analysis shows him). *

The correct coaching which has the ability to correct the weak areas and strengthenthe strong ones.*

The development of the correct mindset. *

Concerted action and a mechanism for translating and understanding feedback, thatis both technical and psychological.

However once the is clearly discerned, dissected and understood, the aspiring or hardened trader will begin to catch glimpses of how trading can be experienced as aneffortless and instinctive pursuit.


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ConclusionConclusion

I have taken time out to put down as much as I can to help you move towards achiev -ing your trading goals. I have very deliberately not discussed all the opportunitieswhich are there for everybody who learns to correctly analyze and trade in the mar -kets). The reason I have not done this and also not spent any time discussing exactlyhow much you stand to make in the markets is because I would rather have you think -ing correctly from the very beginning.

A constant mindset that one of our top psychologists enforces is to focus on the pro -cesses, and not the outcome. Consequently if the processes are correct, then, posi -tive outcomes naturally follow.

Focus on the processes and the results take care of themselves.

As I mentioned above, if you are still interested in nding out a bit more about meand my previous clients to date then the section below would be relevant otherwise,I hope you enjoyed reading this report. Please let me know your thoughts and howyou plan to utilise the information in it. Feel free to visit the Two Scrolls website ( www.twoscrolls.com ) trading blog and give your feedback. I would also love your feedbackeven if you disagree with me. Let me know why, and what you think I can add to thisinformation.

I promised earlier, on in this article, to provide you with more information on how toidentify your trader blueprint. To obtain it, sign up for the free mini course on develop -ing your traders blueprint.

This mini course will go into more detail of exactly what a traders blueprint is. It ex-amines why it is very important, and will help you identify how you should be spend -ing your time and resources. Also, if you nd you have the knowledge, but cannot


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translate the knowledge into a pro table account balance, then you need to lay your hands on this information. I urge you to sign up for the mini course on developing your traders blueprint.

In addition to the mini course on the traders blueprint, you will get the chance to re -ceive more free trading/psychology tips from us on a regular basis.

Thanks for taking the time to read this report, and I wish you continued success, in allof your future endeavours.

Thank you.

Ty Canning Ty Canning

NB: Please feel free to forward this report to any of your colleagues who may bene tfrom this.


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Previous ClientsPrevious ClientsI have had the opportunity of training several clients. My clients range from profes -sionals who need to hone their skills or cross into new markets or develop stronger strategies, absolute novices and newbies who cannot tell the difference between ashare and a CFD to individuals who do not know how to make money when the mar -

kets are crashing.Several people fear crashing markets, not realising market crashes offer a sig-ni cant opportunity to make a lot of money really fast.

The results obtained are always the same. Incredibly focused, mentally toughenedtraders, with a speci c plan of action, who know exactly what is required from them towin at trading and go on to blaze a path for themselves.

Some of these traders now work for some of the largest trading rms in the World,(And have asked to remain con dential) others now manage their own hedge funds,and in some other cases , others just choose to continue to consistently extract prof -its from the markets. Their successes give me immense pleasure particularly whenI consider the amount of time which was spent with them, nurturing and developingprograms built speci cally for them. I would be remiss if I fail to mention that after the SWOT section, or gaining some experience, some discover that trading is not for them after all, and still prefer to exploit the markets via the trade recommendation ser -vice which is occasionally offered. In all these cases, I do not want you thinking aboutall the money you stand to make, but rather, I prefer you stay focused on developingyourself, and becoming the best that you can be at whatever it is you choose to do.

Becoming the best you can be, requires as a rst step brutal honesty with yourself.

And the process begins by rst having the right mentors and coaches (those who arestraight with you and give you speci cs and not vague generalisations). You wouldalso require proper training and detailed market knowledge. Making the decision toattend a trading program, and following through on utilising such a program, shouldserve to make you a happier and more balanced individual. In other words, a tradingprogram must revolve around you, as trading affects your life as a whole. This pointis so important that it is worth re-emphasizing. Here is what not to do.

Do not think about all what you stand to gain by jumping onto a course just becauseit is offered, do not now become xated solely on the idea of making a lot of money,or the opportunity to have a lot of time off work, more time with the kids and all other

bene ts which are bound to accrue when you train and trade correctly. Instead I amasking you to stay focused on one single question: Which is How can I be the Bestthat I can be?

I wish we could provide training for every single person who requests it. However for the training we provide, I deliberately restrict the training to a handful of clients at anyone time. This ensures that those who get in on our training programs receive their ownunique and tailor built trading programs and obtain the attention which developing aunique traders program requires.

IF you are not able to get into the program when one is offered, then I sincerely apolo -gise in advance. My advice to you would be to still get the free mini course on devel -oping a traders blueprint and carry out the exercises in it. On completion of the minicourse you would need to nd yourself someone to help you with the implementationof this plan.


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Ty is something of a maverick when it comes to breaking down essential nancial and trading information that may be deemed somewhat esoteric by the common,uninitiated individual. Not only does he teach with conviction and passion, he alsostimulates the optimistic feeling that enables people to hold positive thoughts about the realities and potential of success. I have been duly challenged and provoked by Tys tutelage over the years; he has been more than a mentor -. I highly recommend anything he produces.

Alex Adewole

As European Director of Prestin International, and Head of the European-Chinese MediaTrade Association, my personal interest in the nancial markets found con rmation inthe need for our group to strengthen our corporate nance dept, and satiate a deep hun -ger for the Markets. Ive always been personally very fascinated in the Stock ExchangeEquity Trading Market, but nor my university years nor my work experience as nancial controller gave me the right tools to understand and actively become a trader. Reading

books about trading also did not help, since I was missing the fundamental basics to properly understand the argument. And this is exactly what I was given by TwoScrolls. Asolid, clear basic understanding of what trading is, how the markets operate, and most important what kind of trading would suit me and my company best. I was delighted by the follow ups after the course, as questions arose the more I got involved in trading. I can only recommend to anyone interested in trading to take the TwoScrolls courses inorder to understand the basics, learn the tools, and most important understand how and in what proportion one can trade.

Currently owner and manager at Prestin International (www.prestin-international.com)and Axess Direct (www.axess-direct.com) which is responsible for delivering viable and explosive consulting content to mature and developing businesses.

David Von Pressentin

I have only really started using the training material over the past three months and havebecome an avid follower of it. I have found your course to be excellent in every way. Itdeals with a complicated subject in great depth while remaining crystal clear and stimulat -ing to follow. And for me it crucially takes you step by step from the theory to real trading.My knowledge and con dence to trade has improved dramatically...it taught me to bepatient. I would advise you soak up as much as you can from the advice and recom -mendations. I can only fully endorse what Ty taught as it is clearly the best coaching andmentoring I have seen anywhere in this area. The recommended software and tradingtools enable you to make informed decisions based on your own analysis, personalitypro le and appetite for risk which, in my humble opinion, is the optimum approach. Our relationship grew into one of trust which is needed when trading and the self positive be -lief in what risk is taken. My experience before was minimal and as a careful risk taker, ittook some good coaching to make me trade. I would recommend Tys training to anyone since it provides the core ingredients tounderstand most trading strategies understand and solidify your belief systems andalso gain the value from taking correctly quanti ed risks in trading. The course is veryeasy to understand - an absolute must for anyone wishing to trade!

Nigel Guy


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About The Author About The Author

Ty Canning runs a private fund for a handful of investors. He has a charter as an Alter -native Investment Analyst. Alternative assets cover, hedge funds, quantitative tradingstrategies, private equity, mezzanine nancing and real estate investing, amongst

other things. He is also a licensed NLP practitioner.

TwoScrolls.com has been founded after nearly a decade within Investment Bankingand the techniques covered (trading and behavioural) are immensely applicable toboth professionals and amateurs striving to make progress within nancial markets.

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