TRADING BASICS

FOR RETAIL TRADERS

TO BE A SUCCESSFUL TRADER

YOU NEED TO KNOW YOUR WORKING SPACE

-THE MARKET

YOU NEED TO KNOW WHO ARE YOU TRADING WITH

AND YOUR POSITION IN THE SYSTEM

-WE CALL IT "THE SPACE ORIENTATION"

YOU NEED TO GET A HELICOPTER VIEW OF YOUR REALITY


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LEARN THE FACTS

NOT THE OPINIONS

Do you know what every fresh-employed Institutional Trader is taught?
-“Forget everything you know, we will teach you the truth”.
It’s because the reality of trading is way different than the opinions about it. If you want to become a Quantitative Trader, you must take trading as your profession – not as your hobby. Or you will stay in the Amateurs World. You must understand that you need to look at the facts - not at the opinions. Facts are solid, opinions are subjective. We have prepared a pack of facts for you below.
 

WHO ENGAGES IN TRADING?

IN THEORY THERE ARE TWO- IN REALITY THREE TYPES OF TRADERS

THE MOST PROFESSIONAL TRADERS ON EARTH

This includes Investment Banks, Hedge Funds and other institutions that trade in 6 and more figures amounts. Zero risk mainly because they are too big to fail - someone will always bail them out.

PRIVATE -BUT PROFESSIONAL TRADERS

This group is what you should be willing to join. Large amounts of money - medium risk.  

MAJORITY OF MARKET'S POPULATION

This is a starting point for everyone. This group fuels the Markets with money, that others take home

LOREM IPSUM

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TRADERS WORLD

 -WHO IS ENTILTED TO WHAT

INSTITUTIONAL TRADER

- has constant influence over the traded asset price, draws the majority of the candles among the markets

- uses small leverage, only to reduce the risk (1:3 maximum), no large leverages available

- knows that power comes with responsibility, one bad decision can pull the world into misery of crisis

- has very slow execution speed as the amounts of the traded assets are not always available from one source - trades in "red army" style*

- uses pro-tools, like cluster neural networks, unavaliable to others

- sets his/her mind toward the total success from the very morning

- knows that emotions don't go along with markets


RETAIL TRADER

- has little influence over the price, can draw candles in the small cap sector*


- uses wide range of leverages (1:5-1:1000), to reduce the risk and maximise the profit

- does not have that much power, but trades active styles, understands the responsibility*

- has very fast execution speeds, but can meet the broker's limits - trades in "partisan" style*

- uses "what is the best is their reality", knowing his needs*

- sets his/her mind to success from their first coffee

- suspects that emotions can be an obstacle, eradicates emotions in time


AMATEUR TRADER

- doesn't even know what the "drawing of a candle" is*



- uses the maximum possible leverage, does not anticipate the results

- no power, no responsibility, only passive trading style

- has acceptable execution speeds, trades in both styles without taking the advantage of any*

-uses phones, small laptops and other toys 

-sings "Cumbaya" throughout the day

-wishes for magic events and profits due to his amulet




* PLEASE SEE OUR FREE PROGRAMME

SO WHERE ARE YOU

IN THIS CROWD?

CROWD- AND YOU

Within the tools at the Retail Trader's disposal, we can teach you how to jump up to the very top of Retail's possibilities. You will not become an Institutional Trader without sufficient experience - as for that, some large institutions would have to employ a newbie, which is (let's be honest) as possible as winning the Lottery. But we can teach you how to utilise your resources to trade with Institutionals on fair rules right away, by using what is available to you - it's just the matter of your ability to adopt to new data. We have hand-picked the most important information for you, skipping the one that is not applicable at the beginning.

Example: for the Institutionals, being a Quant always means possessing some programming skills. That’s not a must for Retails, as a Retail Trader you can do it much easier. The so called “population” of Retails is actually so ignorant that 80% of them don’t even realise how perfect tools they have at their disposal.
To participate in our training programmes you don’t need to know any programming whatsoever, as we will give you everything you need. To pull data from the Market and analyse them, the majority of Institutional Traders is using MS Excel alone – and this is what we teach in our Training Courses as well. They don’t fall for magic future-teller software, even with sophisticated neural networks. They know what is real, and they go down that path.

LET US BEGIN

LEARN FROM PROFESSIONALS - LET US BEGIN

Every Trader must start by making a few choices to adopt the theory to their own circumstances. Let's go through some of them:

Timeframe: There is no point of learning “value trading” (a very long timeframe style that relies on finding undervalued assets and assessing the time period in which that asset must get its value back – an example of a Value Trader is Warren Buffet) for someone who has small or medium capital, and can’t wait for years for the profits. Similarly, there is no point to learn day trading strategies for an Institutional Trader – the timeframe of investment is always longer than one day. So, the first choice is to decide what type of trading to follow. As this Website is for people who just want to become Retail Traders, we advise you to start with intraday trading. This will teach you the Market’s behavior in a visible way. The same phenomenon can be seen of longer timeframes, but it’s less visible. Intraday is best for learning.

Assets: You have to decide which assets you will be trading. The easiest is Foreign Exchange (Forex for short), which means currencies with conjunction with some commodities. That is to say, the assets that are traded 24/7 and have usually large leverages.

Capital: Next choice is the amount of money you are willing to invest. This is entirely your choice, however, let us just mention that the proper starting point is the amount you can afford to lose, but it should also be large enough for you to feel the emotions that winning or losing invokes. It’s a practical way of finding out your limits. Everyone has particular mental strength that has its limits. A simple example - after losing 50% of your capital, you must be strong enough to make that up tomorrow. If you overuse your mental strength, you will not be able to do so. There are very aggressive strategies, and there are very passive ones. Before you get to choose your strategy, you must know how much pressure you are able to take. We will provide you with the tools and methods of doing that, but the capital you choose for a start must be large enough to let you experience that pressure - but not too large - it’s still a training for you.

Strategy: There are a lot of useful strategies out there, no one expects you to re-discover the wheel. Unfortunately, the majority of beginning traders doesn’t understand that it’s just the matter of choice of a right tool - as a strategy is nothing more than a tool. Every strategy that gives more than 51% of profitable trades per 100 is good enough for quantitative trading – and there is no Holy Grail that will give you 100%. Every business has some “business costs”, right? Thinking in a quantitative way, you have to take that into consideration and just pick the strategy you will adopt naturally, i.e. for “alpha-males” aggressive strategies are fine, but for intellectual personalities an aggressive strategy is a killer.

Finally, the broker: After you make all the above choices, it’s time to choose your broker. Amateurs usually follow the choice of other people, being pulled by advertisements. That’s a big mistake. A brokerage company must provide the environment to meet all of the above criteria for you in particular, not just for an average trader. A broker must let you trade your chosen assets with the leverage appropriate for your capital. At the beginning of the training as a Quantitative Trader, the Brokers must allow Forex + Commodities + large leverage + capital of your choice.


AVAILABLE MARKETS

LEARN FROM PROFESSIONALS - AVAILABLE MARKETS

Please, understand that every Market has its own pros and cons. Every asset class is different, and lets you trade other styles. As our Programmes are prepared for novice Traders, we will go through the assets for you here, you will be surprised at what you are actually trading:

First of all, did you know that as a Retail Trader you are usually trading Contracts For Difference? Not the actual assets, but derivatives, being contracts on that assets. Like in the case of currencies, famous Forex in its pure class is available only to Institutional Traders. Big banks can trade currencies between Countries, Retail Traders can not. We only profit from that using CFDs on currency pairs. To put it simply, if you have a large leverage, that means you are trading CFD. On pure assets no leverage is available. You should perceive Contracts For Difference as race cars – they are fast and dangerous. They also give you large leverages - thousands of brake horse power engines.

Forex and Crypto: these are the most traded classes right now. Most adaptive to all trading styles and best for learning. For Retails, they offer huge leverages.

Commodities: the second most traded class for Retails. Also big leverages available.

Shares: Available only during particular Markets sessions (i.e. American shares only during NYSE time). In their pure version, they don’t give any leverage opportunities.

ETFs (and other synthetics): Purely synthetic instruments. No assurance of price movement, as they are privately own assets, and especially during this Time (crisis), they show their true face - that is the difference from the assets they were supposed to cover. ETFs on Gold moved away from the Gold price for as much as 10% in last weeks… Gold gained - ETF lost, that speaks for itself.

Futures: or “Futures Contract”. Recently, there was a big fuss about the Oil price dropping to minus $40. But it was not the Oil, it was the Futures for Oil doing that. A Futures Market is unusual, it has its own rights and its own miracles possible. Not for beginners.

CFDs on all of the above: Every Broker providing MetaTrader platforms is not trading the assets, but CFDs on that assets. That gives you as a Trader special rights and abilities. See our Free Programme section for more details, as this is one of the most important and the least understood matters. 

EXAMPLE OF A TOOL
THAT IS USELESS FOR RETAIL TRADERS

LEARN FROM PROFESSIONALS - WHAT IS AVAILABLE

There is an opinion (!!!) that says, that every Trader must use all the tools existing. This is not true. Traders should know what exists, but use only what is helpful. We know from their own experience, that learning everything that exist on the markets only leads to confusion, and that Retail Traders should only master their own tools. Let us give you an example:

- Dark Pool sounds so professional... and so trendy... please don't fall for learning tools like that. Dark Pool is nothing more than a hidden orders book that applies only to Primary Markets. It does not exist on Forex at all. There are two types of Markets: the Primary Market and the OTC (Over The Counter) Market. In simple terms, the Primary Market covers NYSE, NASDAQ and other main exchanges in the world. They are centralised somewhere (have their headquarters, their employees and so on) and every order placed on that Market is visible to others via Order Book. OTC Markets, on the other hand, are just mutual agreements between many exchanges and brokers to trade a specific asset like Forex (in that way the Brokers are becoming the market's liquidity providers). Forex is OTC, is does not have any Order Book. When you trade, let’s say, US Shares - your order appears on NYSE Order’s Book. Everyone can see it, and that's why sometimes you might want to hide your order from other Traders - and only then you use the Dark Pools. When you use it, your order is hidden, and appears on the main Book just before the execution. And this is the whole reason behind using Dark Pools. Please, note that by trading US Shares CFDs, you are not appearing on the exchange Order’s Book at all. You are hidden from the very beginning.
So, by now, you should understand that this concept does not apply to Forex whatsoever. Forex has no Order’s Book, so there is no one to hide from and no reason for it. As a Quant, you should concentrate on mastering the most important tools at your disposal, without distracting yourself by dark pools and similar tools.

There are many tools of this sort, and as you might want to find out what they are - your main concern should be how useful they are for you. Continue your reading to find out more.

QUANTITATIVE TRADER

He/she takes all of the above and makes a conscious choice regarding their place in the system. For Quants, there is only one belief system - mathematics. We don’t hope for anything, we know our chances in advance and decide whether or not we accept the risk.  

SO, CAN YOU COUNT?

THEN COUNT ON YOURSELF

CAN YOU COUNT?  COUNT ON YOURSELF

As a Trader, you must know that your profit is somebody else's loss - or your loss is someone's profit. Professionals never exchange signals, as there is an unspoken “mutual lack of trust” between them, especially for the above reason, which is the conflict of interest. By relying on someone’s investment advice, you are doing the worst thing you can possibly do. Professionals need to assess the opportunity themselves and do what’s best for them. Example: recently, bankers were advertising ETFs as the most secure asset in the universe. Only in the first months of 2020, the truth was revealed – that ETFs are not so solid after all, as CDOs in 2008. But did you hear that from Bloomberg? No, and you never will. Because big banks must sell those assets, so it’s in their best interest to keep their mouth shut. As a Trader, you must think about your own best interest - not the bank’s. Right? We will teach you how to achieve that in the way, that you will never ask anyone for advice anymore. You will be taught everything you need to know to make your living from the Markets.