Introduction Hello and welcome to the 30 Day Trading Transformation. Buying this program means that you are serious about making changes. Congratulations because that’s a good enough reason to make the next 30 days a true success. Everyone begins trading at a different point in their life and, hence, everyone has a different journey. Most of you reading this now are already good traders and some of you might even be better than me. However, that’s not the topic of this program because, for some of you, you don’t need any more lessons on patterns, technical analysis or even fundamental interpretations. In fact, all you really need is to learn about YOU and yourself, then using that to propel forward. That’s right. The purpose of this program is to help you discover yourself and the things that you know about trading. By “things”, I’m not only talking about your trading system. In fact, you are about to discover many parts of yourself that you don’t already know. This can be done by breaking down the knowledge that you hold inside already and to allow yourself to see it from a different perspective. Being hungry for money is great and a brilliant start. Nonetheless, in order to achieve long term success, you need something more than that – something that all successful traders have and you should have it too.
Working from a Small to BIG Trading Psychology Imagine placing a trade and feeling uncomfortable, feeling fearful, angry or stressed. Some of you might even start rationalising the trade irrationally and convince yourself to trade more, trade less or not trade at all. When asked about your trading rules, you’ll go from A to Z but always a different answer. While these are just simple examples, you do know what I’m talking about, don’t you? I refer to this situation as having a small Trading Psychology. Trading Psychology is just a terminology that I use. While you can call it whatever you want, I believe that many trading issues (including those not mentioned here) are just symptoms of the main problem, and the real problem goes beyond your emotions or trading rules. Don’t get me wrong, this program is not about fixing your emotions. Because you are a normal human being, emotions are part of being a trader. With that, the objective of the program is to go much deeper than the symptoms, fixing the things that are truly important to your development.
From that point onwards and using the new found information, you can a bigger and better trading plan, as you move from a small to BIG Trading Psychology. And when you overcome all that, turning into a discipline, confident and successful trader is going to be easy.
The Power of the Mind Now let’s take this another step further. If you want to move from a small to big trading psychology, I strongly believe that traders need to understand how their mind works. You should already know this but in case you don’t, be clear that you don’t need to be an Ivy League or Oxbridge graduate to have a powerful mind. In fact, all you need is to have is the right attitude, some guidance and the willingness to learn, and you’ll do great. You see, a trader’s mind is the most resourceful tool that we have. In fact, for most traders, it is an untapped asset. I use the word untapped because many traders don’t understand how the mind works and, without that knowledge, they are unable to fully utilise that special resource that you and I have. While this program is does not cover detailed understanding of how the mind works, it fully applies the knowledge here to help you achieve better and more effective trading. This program has been designed to help you find your Trading Edge and to guide you to maximise on that edge. Remember that a trading edge is unique to you and only you, and there are many tasks within this program designed to help you access the knowledge required to building your edge. With that, I wish you nothing but success in your journey from here now.
Day 0 Before You Start Think of this program as a work-from-home boot camp where you can learn useful information and then apply the lessons immediately. More importantly, once you start, you are likely to carry on until the end. The momentum of program grows from one day to another and you want to ensure that it flows smoothly throughout. Hence, Day 0 is a bit like your pre-boot camp session where you get everything ready and to ensure that you can go ahead towards finishing the program as soon as you start. Here are a few things that you should know before you start. These areas include: 1. What to Expect? 2. What NOT to Expect? 3. Eight False Trading Myths 4. How do I benefit from this program? 5. The Blueprint
What to Expect? 1. One task A Day You will get one task a day for the 30 days. As I mentioned that you are responsible for your own success, that responsibility should start now and that can be expressed by having the right mind set in place today and throughout. More importantly, by having an expectation that you are prepared to complete all tasks, you can expect your reward at the end of the program.
2. Conventional and Unconventional Learning I am attempting to help you explore areas that you have not done so in your trading career so that you can align your trading plan with your beliefs. Mind you, I’m not just talking about trading beliefs because you have more beliefs than you realised. While you can expect to see conventional methods used here, you should expect to see unconventional methods too – like visualisation techniques, accessing of your emotions and etc. Even though I don’t know which one you prefer, I believe you would enjoy both of them.
3. Some Discomfort Most people want to stay within their comfort zone because they are so comfortable in there. Unfortunately, some of them are reluctant to move even though they are unhappy there and they rather go through the same thing over and over again. This program is designed to help you make changes in your trading and in order to make effective changes you should expect to go through some discomfort. You will be asked to do
8 False Trading Myths Before starting the program, it is important to start on the right foot from the beginning. The following is a collection of trading myths that you may or may not know. Since these are only myths, it is essential to put all these behind you before starting here, as false assumptions or preassumptions may distort your decision as well as your learning process.
1. Holy Grail Every system is unique and every system has it’s strength/weakness. No system is able to win all the time as market conditions changes. A system may perform very well in one market condition but will have drawdown during other market conditions. Hence, there is no such thing as a Holy Grail system. However, a Trader could have a Trading Edge. An Edge is a unique skill set possessed by the individual Trader that gives him/her superiority over the market. Using his/her edge, the individual trader is able to overcome a system’s weakness and leverage on it’s strength. This means the trader is able to execute the system without trouble and, hence, making consistent and profitable trades as expected from the system.
2. 90% of trading is about the system The act of buying and selling an asset class in the financial market takes up only 30% of your trading career. The rest of the time is spent on managing trades, analysing the market, money management, risk management and mind management.
3. You need to know everything The financial market is a big and complicated market place. Hence, learning is a never ending process. However, some retail traders have a professional upbringing and have a tendency to be a perfectionist. That’s absolutely fine except that you really don’t need to learn everything to be a great trader. Nonetheless, it is vital that you know everything about your trading edge. A trading edge is something that gives you an advantage over the market. This is inline with Point4 below.
4. When I lose money, it is the market’s fault Unfortunately, the financial market presents us with opportunities that are equal and unbiased to everyone. Using that as the basis, the market is actually fair to all the traders who trade it. If that’s the case, then it is by no means the market’s fault, if you are the one who decides to enter it.
In fact, it is probably the lack of experience or the lack of knowledge, which causes a trader to lose beyond the expected parameters of his/her system.
5. Fundamental, sentimental or technical Essentially, these are the three major types of trading analysis. They say the best traders are those who master all of them. However, in my trading career, I have also seen many traders who only stick to one of the above and have still been consistently profitable. With that, I strongly advise novice traders to keep only to one of the above. You can become profitable as long as you master just one of the above. Don’t become a jack of all trades but master of none. Once you are consistently profitable, then you may choose to develop yourself further.
6. I need to be in multiple markets I can see and understand the need to be trading multiple markets. However, as the saying goes, all you need is one profitable system to be profitable. In laymen’s terms, it means that one system in one market is actually sufficient. There are no hard and fix rules to the number of systems you should, or can, have and the truth is, it’s really down to you as an individual. However, I strongly encourage you to off your trading career with only one or two markets and you can increase it later. You can learn, in this program, some systematic and easy ways to build your portfolio of trading systems.
7. I need to be at the charts all the time Many traders get confused between being at the charts at the right time and being there all the time. It’s true that many traders start learning the markets by observing the market constantly. From a learning point of view, that’s a good attitude to have. You’re pretty much trying to understand the behaviour of the market and, in due course, you’ll learning to filter the market hours that are useless to you trading system.
Some Pro Traders only take 3-6 Trades a month.
There are many ways to trade the Financial Market. Some Traders choose to be constantly in the market and some Traders choose not to. Nonetheless, these two type of Traders can be equally profitable. Some Pro traders only take about 3-6 trades a month. They probably have open trades but they are not watching the market that often. I’ve also met traders who spend between 30 min to 4 hours per day trading. I believe that is a reasonable amount of time required by professionals and still be profitable.
The Blueprint
I believe you are now ready to start the program. However, before we get there, here are some concepts that you will find useful when going through the program. For anyone who wants to achieve trading success, there are three main pillars that you need to conquer in order to achieve consistently profitability. These pillars are the Market, the Method and the Mind. In case you don't know what they mean, a simple analogy to represent them would be a map, a vehicle and the driver:
1. Market Learning how to navigate in the market is like learning how to navigate the road, some use road maps and some use road signs. Neither is right nor wrong because those who get to the destination of the market are the winners. Once you're capable of navigating, you’ll be able to make an educated guess of where price will go next.
2. Method Once you understand the “map” and you're capable of driving it, you then pick a vehicle to bring you to places. The vehicle is your trading system, it follows your command and, like any ordinary car, it has unique specifications. When you start to trade, it does not matter what car you drive, just learn to drive one that moves your bank account to profit. Once you are consistently profitable, you can decide to change the specification of the car.
3. Mind The driver is the most crucial part of your trading journey. In case you don’t realise, I’m referring to YOU, the trader.
The Best Fit Because the integration can be a challenge, it only makes sense that every trader should simplify each pillar based on the idea of Best Fit. The trader wants to drive a vehicle that he is most familiar and use road signs he is more comfortable. In trading, that’s the line of least resistance. However, that is only 1 dimensional. When you combine the Market, Method and Mind, it becomes 3 dimensional. With that, the objective of this program is to help you create a Trading Plan that has the Best Fit in all 3 dimensions. That’s because once you identified a path that has minimal resistance in all 3 dimensions, trading according to your plan becomes an easy task. In the process of finding the path of least resistance, it is important that we need to understand each pillar according to how the YOU (the trader) see it. What are you beliefs? What do you understand about it? Do you belief it enough to take action without hesitation?
Goals Trading Plan
Know Yourself
Mind Trading System
Money Matters Routine
Diagram 1-1: The Planning Model
The diagram above shows the core structure here. As shown above, the blueprint (or trading plan) revolves around recognising and evaluating yourself – the trader – and indirectly leads to the pillar of the Mind.
Glossary This is to test the system using historical data. You’ll treat the market as if it was live and you can evaluate the performance of your trading system at the end of it. Day/Scalp Trading Traders with no trades held overnight. This relates to manual trading where the trader needs to place trade Discretionary orders or to open a market position manually. Trading A decline in capital during a specific record period of an investment, Drawdown fund or commodity. A drawdown is usually quoted as the percentage between the peak and the trough This is a program coded in MQL4 – a type of programming language. Expert Advisors This is sometimes known as automated trading or robotic trading. This is to perform the trading system using live market data. Forward Testing Essentially, this is to trade a demo account as if you were to trading it on a live account. Traders who hold trades for weeks or months. Position Trading This is used to express the multiple of the initial risk (R) taken. For R Multiple example, a 5R multiple is a profit that is 5 times the initial risk. Reward: Risk (Ratio). RR Ratio This is a common ratio when investors use when measuring the amount of potential return against the amount of risk that is inherited in the investment. Reversion to Mean A theory suggesting that prices and returns eventually move back towards the mean or average. The mean or average is usually calculated using historical average price. Back Testing
Scale In Scale Out Sub-System Swing Trading System
Trading Plan
Win:Lose Ratio
This refers to the act of increasing into of an active trade position. This refers to the act of reducing out of an active trade position. This refers to different parts of a system which contributes to the main system. For example, Exit Rules/Strategy is a system component. Traders who hold trades for days or weeks. A specific set of rules, or parameters, based on a specific market condition that determine entry and exit points for a given equity. Sometimes also known as trading strategy. This includes discretionary trading or automated trading. A detailed plan of one’s trading career. This is essentially a business plan which includes trading objectives, financial/non-financial goals, implementation etc. This is the ratio of the number of winners over the number of losers in a series of trades. This is similar to a probability of winners or an inverted probability of losers.
Section 1: Your Goals
Day 1 Dare to Dream Successful people, irrespective profession, have a clear vision of what they want, where they want to go and how they want to get there. Knowing what you really want is just a starting point to help you identify your destination. Your trading plan is a route map to a specific destination. Knowing your goal and have a clear picture of what you want to achieve at the end of the road is important as this is the key driving force behind your success. More importantly, this is your fuel for motivation and energy when things get tough. Identifying your personal goals, as opposed to financial goals, is crucial because many traders forget that trading is just a tool to achieve their ultimate dreams and goals that are beyond financial numbers. Also, our living environment and circumstances change all the time. Our goals and desires change as well. When we meet our goals, we need new ones to keep us going. Hence, it’s always useful to re-establish our goals on a frequent basis.
Day 2 The Destination A to B
As mentioned in Day 1, a trading plan is a route map that shows you how to move from A to B. You can’t move forward without knowing where you want to go. Many intelligent and capable individuals often struggle with this and that’s because they don’t have a crystal clear idea of what they want. However, you are in for a surprise when you find out how powerful your goals are once you set it. If you have a clear vision of where you want to go, you are able to filter out any unnecessary detours, procrastination and inefficiencies. This, in turn, means you’ll get there faster – just like drawing a straight line.
Day 3 Vision Board A vision board is typically a poster board or plain back drop with a collection of images. These images usually work as a quick reminder for all sorts of things. Since the vision board is really for the benefit of the viewer(s), it really can come in all forms, shapes and designs, so be creative! For my personal development, I’ve always used a vision board to help me in different stages of my trading progress. I use the vision boards to remind myself of:
Long term goals and desires (main reasons)
Short term opportunities or threat that I need to focus or improve on
My daily routine
System rules etc.
All in all, I use the vision board as a motivator and quick reminder of important issues that I may face on a daily basis.
The Power of Images Visual images on our minds are very powerful tools and have the ability to help us overcome trading psychology issues. They are, however, the same reason why many traders fail to become profitable in the long term. Hence, it is important to start visualising the right images.
Section 2: Know Yourself
Day 4 Know Yourself In this day and age, everyone is busy trying to make ends meet. Some are chasing after dreams, while others are caught in the rat race. Unfortunately, many people rarely take a break to review themselves – to find out where they are, what they can do and what they can improve on. In short, they do not understand themselves as much as they should. With that, the next focus of this program is to start a due diligence on YOU.
Knowing yourself is to identify where you are now and what you have available to grow.
Day 5 Beliefs We take actions because of certain beliefs that we have. For example, if you believe that a car works, you accept whole heartedly and you drive it. That’s it – your belief led you to action. Traders trade the financial market because they have a belief as well. Above and beyond that, traders who have strong beliefs about trading will fully appreciate, understand and execute their trades without any doubts or hesitation.
The bigger the BELIEF, The bigger the ACTION
So, having the right belief is the core reason why one would be comfortable in taking action to achieve specific goals. The bigger the belief, the bigger the action will be. Another important thing to note is that …
Day 6 Market Beliefs Market Beliefs Before you start trading the financial market, you need to accept and appreciate that the market is random but it behaves in repeatable patterns at the same time. If you cannot accept this, then it will be nearly impossible to progress in trading. Once you have accepted it, you should learn to establish a clear understanding of these habits and try to identify the patterns that exist in these markets – they can be in the form of chart patterns, news patterns, or even investor reactions.
Day 7 Investment Investment (Money) Belief Please note that this section is slightly different from “Money Matters” which we will be discussing later. As mentioned in my free eBook (click here), money is a unique asset and each trader has a personal and unique relationship with money. More often than not, the relationship has been established at a very young age through family values and teachings. Those teachings were probably repeated to you by your mum (or anyone close) on numerous occasions until, one day, it rooted in your subconscious mind. Typical examples of money beliefs are:
Day 8 Risk Trading Risk It is a well-known fact that all investments have inherent risks associated with them, and that goes without saying when trading the market. So, if you want to continue to trade the financial markets, learn to accept, embrace and learn to love calculated risk. Before we go any further, I think it’s only fair to ask yourself: “Am I a risk-taker?”
Day 9 Strengths & Weaknesses Strengths, Weaknesses, Opportunity and Threats – SWOT We have included this analysis here because we truly believe that your SWOT represents you. It’s similar to writing a resume during job applications. The only difference is that this is business and you are the only employee. Unfortunately (or fortunately), you can quit but you cannot be fired. If you cannot be fired and you’re committed to trading, then let’s make the best of what you have. That includes:
Day 10
Opportunities and Threats
Ok, we’ve now got a strengths and weaknesses list. Great! But that’s really only the first step. Merely doing that is really not enough. So, what do we do next? In this section, we’re going to find ways to utilise and/or leverage our strengths as well as identifying ways protect our weaknesses. Remember that opportunities and threats are
Section 3: Money Matters
Day 11 Supporting the Goal Money Does Matter Money can make or break you. As money is such a personal matter and everyone views it differently. Some people love money, some need money and some see it as a means to an end. With that, we need to be crystal clear about what we want and also be able to have a clear distinction between what is required and what is beyond that. Once we have a clear idea of what we want, we proceed to pursuit and management. Very often, this can be achieved through financial returns.
Day 12Desired Financial Position Long-Term Finance If you’re serious about trading, then what do you want to achieve financially in the long term? Short-term finances are important but that’s mainly for temporary survival. Aiming for the desired financial position is the real deal in trading.
Tip: Always include a buffer. Finance is not perfect science and calculations are not meant to be perfect.
Many people sort out their short-term finances and start trading with a “Let’s try and see” attitude. In all honesty, that really shows the lack of commitment in achieving their goals and it’s no different to working in a day job and burning the salary in a casino, since all you want to do is try your luck. As Tim Ferris says it, asking the question: “What do you want?” or “What is your Goal” is relatively inefficient. Instead we need to break it down a little further and identify tangible financial goals.
Day 13 Action Plan Now that you know how much income you need to maintain your livelihood (short-term finance), and you can start working towards your short term and long term goals – as discussed on Day 2 in your SMART plan. Because you have a short term financial plan now…
Section 4: Routine
Day 14Ideal Lifestyle Routine “The secret of your future is hidden in your daily routine.” - Mike Murdock There are many ways to be self-disciplined and one of the ways to achieve that is by building a solid routine. Here are the few reasons why a routine is crucial:
1. Task Focused In order to excel as a trader, there are certain tasks that you need to perform. Unfortunately, many traders spend all their time in building technical and trading knowledge only. They often forget that being a professional trader, you will need a collection of experiences. Even a F1 racer don’t drive every day, they need to workout physically and mentally as they prepare for the next race.
Day 15 WIP Lifestyle Now that you know the kind of life that you want to live in the FUTURE, let’s come back to the PRESENT. We will now need to work out a WorkIn-Progress (WIP) lifestyle which will bridge the Present lifestyle and the Ideal lifestyle.
Key Considerations 1. Effectiveness and Efficiency If you want to achieve long-term success, you need to start working more efficiently. Start thinking of activities that have less value and replace them with activities that are more important e.g. building market experience. In the process of doing this, please think of the 20/80 rule (also known as Pareto principle). According to this rule, roughly 80% of the effects come from 20% of the causes. In other
Section 5: System
Day 16System 101 Trading System Market Condition
Trade/Exit Managment
Entry Criteria
System
RR Ratio Requirement
Risk Management
Diagram 16-1: Trading System and Sub-Systems
A trading system is a logic driven and stage-by-stage method of entering and exiting a specific market place. Each trading system is made up of multiple sub-systems (see diagram above). This is an area that is often unexplored by novice traders. They often inherit a trading system, either through education or through their own research, which is a great starting point, but they do not make the effort to understand how and when their system and sub-system work. In other words‌
Sub-Systems The following are some simple descriptions of what you can expect from the various sub-systems:
Market Analysis For any financial market, a market analysis is generally categorised as: 
Technical analysis
Amateur traders do not know the strength and weakness of their system.
Relationship Between Win Probability and Reward:Risk Ratio
Win Probability Vs Reward: Risk Ratio (chart not to scale)
100%
0%
0.5
1
2
3
4
5
6
7
8
9
10
11
12
13
Reward:Risk Ratio Diagram 16-2 Relationship between Win Probability and Reward:Risk Ratio
The diagram above shows the relationship between the probabilities of success of a trading system against the reward:risk ratio that the system could produce.
Day 17 System Belief Like your self-belief and market beliefs, a trading system is also built based on certain beliefs. Hence, to have strong beliefs in your system means that you understand and appreciate your trading system thoroughly. That includes accepting its strengths and limitations.
Example Let’s elaborate on this using some examples:
1. Entry Criteria Entry Style
Win:Lose Ratio
Reward:Risk Ratio
Aggressive
Low
High
Conservative
High
Low
Table 1: System Entry Style
The belief in the table above shows that your entry style can potentially affect the performance of the trading system.
Day 18
Options
Design & Build Your Own System Let’s start building a trading system. As you can see, all the sub-systems are inter-related and they will contribute to the results of your trading system. Of course, like every system in the world, some sub-systems will carry more weight than others. Once you’re aware of this, we can now begin to design a suitable system for yourself. The design process goes something like this:
Technical and/or Fundamental Options Let’s start by pouring out all the knowledge that you have – specifically on systems and/or sub-systems. In order to pick and choose the best combinations, we first need to know what options we have. This is not a learning exercise, so please do not add anything that you have not already learnt. The following is an example of how a Forex technical trader would list out his options:
Day 19Design At this stage, you have spent the last 18 days understanding yourself, your beliefs and the various components within a trading system. The outcome all that hard work can now be used to maximise your potential trading system. Remember that there is no right or wrong answer but ultimately understanding yourself, as well as the system, is the key to successful trading. So, do take your time working in this area if you have not already done so. Some of you with little trading experience will find today’s task pretty easy and straight forward. Meanwhile, those with more experience will find this exercise a little more tedious. If you are the latter, do not be discouraged, because the more experience you have, the more options you can generate and the more you can start filtering moving forward. For some traders, having too many systems is an issue. Hence, this exercise is a great way to help you focus.
Day 20
Testing
System Testing Now that you have designed your own trading system, we need some form of quality control. To do that, we need to test it. In order to identify the quality of the system, the only way forward is to test the systems. Essentially, there are two ways to test it and they are:
Forward Test Forward testing is to perform the trading system using live market data. Essentially, this is to trade a demo account as if you were to trading it on a live account. The entries and exits should be done exactly the way you would have done in a live account. Once you have a sufficient sample size, you can collect and evaluate the trading performance of the systems from there.
Day 21Review Performance Review Once the testing is complete, proceed to review the performance of the trading system. In general, the objective here is to check that the system is performing as you would expect in the logical design stage (discussed on Day 19). More importantly, irrespective of the design of your system, is the performance favourable? Another key indicator is the expected returns as described on Day.
Day 22
Keep It Simple
Now that you’ve established the trading system, you should put it down in writing. Putting it in black and white leaves no space for being subjective or for dispute. In other words, you should make sure that your trading is as mechanical as possible. The more mechanical is it, the simpler it becomes.
Day 23
Rewards and Punishments
Rewards and Punishments Once you’ve finalised the trading rules for your system, you can start thinking of ways to keep yourself disciplined.
Section 6: Putting Them All Together
Day 24
Section Recap Goals Trading Plan
Know Yourself
Mind Trading System
Money Matters Routine
Diagram 24-1: The Planning Model
Now that you’ve completed the five sections of the trading plan, you should be able to get a much clearer view of your trading goals, finances, routines and system. More importantly, you will start to see how all the various parts of this program interlink with one another and why it is important to invest effort in understanding yourself.
Day 25
Ultimate Trading Plan
As mentioned in the glossary, a trading plan is a detailed plan of one’s trading career i.e. it’s a business plan for traders. Essentially, that’s what we’ve been doing all this while - we have been building bits and pieces of a bigger plan. Before we start putting our business plan together, let’s have a look at how a typical business plan will be structured. The following is an example of a standard business plan layout:
Business Objectives: A page or two of highlights or summary of the entire plan. Also called an executive summary. Company Description: Legal establishment, history, start-up plans, etc. Product or Service:
Section 7: Fine Tuning to Perfection
Day 26
Understanding Certainty
What is the feeling that you would have if I say:
“The sun will rise tomorrow morning.�
Day 27
Identify Your Certainty System Reward & Punishment
Trading Plan
Routine
SWOT
SubSystems
Risk
Money Matters
Short Term Finance
Market Beliefs
Goals
You Values & Beliefs
Diagram 27-1: Different Parts of You
System Beliefs
Dreams Self Beliefs Investment Beliefs
Day 28
Closing the Gap
Awareness
NonAwareness
Diagram 28-1: Awareness and Non-Awareness
“What is necessary to change a person is to change his awareness of himself.� – Abraham Maslow
Day 29
Creating the Trading Zone
Creating your ultimate trading plan with certainty is just the start of your amazing trading journey. You know that you have put in the effort required and you deserve to be a successfully trader because you have been honest and diligent in the last 28 days. According to Mark Douglas, there are two most important elements to become a successful trader and they are:
Day 30
Before It Begins
By now, you should be clearly aware of what I mean when I say that the trading system is only a small part of trading. Many amateurs place too much weight on the system and too little on themselves or on their trading plan. More importantly, if you truly want to become a professional trader, do not stop developing your trading plan after the end of this program. With that, I strongly encourage you to consider the following: