 Welcome everyone to this rescheduled webinar, the first of the year. It's me, Patrick Munley. I'm here today to discuss with you some of the core concepts that I believe are imperative to your success as a self-directed trader. First of all, I would just like to check that you can all hear me loud and clear if you could type a why in the chat box, that would be useful. And you should be able to see a welcome screen showing the tick meal welcome we want traders to succeed. So why in the chat box would be very helpful. Good stuff. Okay. So let's first of all move on to another very important aspect of trading and that's understanding the risks. And as always, we want to quickly review the risk disclaimer and be cognizant of the risks involved in foreign exchange or any other type of trading. Just give you a second to review that and we'll get going here. So once again, welcome to today's session. For those of you who are new to these sessions or haven't joined me before, I'm just going to today briefly give you an overview, I guess, of the context in which I'm presenting here to you today. So as many of you know, my name is Patrick Munnally. I'm a fund manager, mentor, market commentator, which all sounds pretty impressive. But in truth, it's an overnight success story 15 years in the making, as well as being the resident market expert for tick meal. I'm also the head of proper trading for a firm called Little Fish FX, and I'm the head of trading and trader education and leading trading education firm called FXcareerswap.com. I haven't always been involved in financial markets after graduating in 1998. I enter the world of consulting, specifically executive search. And in 2000, I left the comforts of a city firm to co-founder boutique executive search business. This company experienced rapid growth in 2004 we merged with another business. And at that stage I cashed in my stake finding myself with a lot of time on my hands and some chips to play with. I started to explore my long term passion for markets. Due to the nature of my previous work, I'd had a front row seat to the tech boom and bust and then watch people gain and lose fortunes in the markets. So with some capital to spare, I started to double day trading really in the S&P 500. Like many who first start trading, I caught some very lucky early breaks and started to make some solid and then really quite significant gains. However, as is often the case, my beginner's luck was about to run out and the gains I've managed to make, I gave back and then some. It was at this point that I decided to really stop gambling and playing at the markets and to get serious about trading and most importantly, applying myself as a student of risk. It was a period during which I became considerably more self aware, focusing not just on developing my technical skills, but more importantly my mental skills. By 2007 I had a solid, extensively back tested trading strategy, which was underpinned by a rigorous risk management approach. So finally I had a complete trading and business plan which I set about executing. Since 2008 I've been consistently profitable on an annual basis, which is really how I measure my performance. I'm not interested in the outcome of individual trades. My interest lies in my trading edge demonstrating its positive return over an extended series of outcomes. I can tell you that after developing a successful non-markets business and now successful trading career that the common thread in success is patience and discipline. If you're just playing at trading you can expect to liquidate your account. Trading like any other commercial endeavor requires a serious commitment and the persistence to take the hits and to keep going. The discipline to develop and execute a plan and the patience to incrementally increase your account over time. If you're looking to make a fast buck, forget it. You have way more fun at the Blackjack Tables in Vegas because whilst handing over your hard-earned cash you also get free booze. So that's a flavor of where I'm coming from today. Now I want to introduce you to some of the concepts we're going to be discussing today and specifically what it means really to be a trader. Firstly what I want to identify is really what the core challenge is. And the core challenge really to anyone who's new to the markets or is just getting started here is really how you can look to yield returns from what appears to be random data, which is obviously the markets that we're looking to trade. So really what you have to do to make a go of things in this business is you almost have to flip the challenge on its head. So if we think about the randomness or the seeming randomness of market data, how can we overcome that hurdle? Well really there's some core ideas and these are based around having a rules-based approach, understanding risk, which is absolutely imperative. And then being able to repeat that rules-based approach and that's what will ultimately deliver your returns. So really just again we want to focus on this, we want to have a rules-based approach, we want to pay laser focus to risk. And this risk and rules-based approach needs to be, you need to be able to repeat that process to deliver consistent returns. Now what we're going to do now is I'm going to unpack some of these ideas as we move through and I'm first of all going to explain to you how we established the rules, the risk and the repetition. But before we get into that what we want to do and an incredibly important aspect of becoming a successful trader as opposed to the act of trading, it's important that we understand the core difference. So trading in its rawest sense is you pitting your wits against the marketplace that consists of the best and brightest minds on the planet. We're also carving out an edge that delivers a profitable equity curve to a trading account. So from the outset, it's paramount that you have an unwavering commitment to trading excellence, because only that will allow you to compete on this stage. Anything other than that and you're playing a game that will ultimately just lead to loss and disappointment. To be a trader is a profession unlike most accepted in the general career context, because you are not paid for your time or the amount of clients you close. The market has zero regard for the hours of trading you think you may have put in. This is a business that requires a stellar will based on some key principles which will allow you to only enter the market when your trading plan criteria is satisfied. Not because the price looks so high that it has to reverse or so low that it must bounce. The market doesn't care what your view of bias is and those trading purely on that premise will rapidly eliminate their accounts. The only way we can succeed is by having a rules based approach to trading and this is essential for us to survive and then ultimately to be to thrive. To be a trader is to understand oneself at a deeper level than you did before you decided to become a trader. Because at the end of the day, every trade you take has a counterparty that is essentially another human being with a plan in mind. And unless you have a clearly defined plan, you're already at a disadvantage in what is essentially a zero sum game. Being a trader and the act of trading are two independent concepts is important to grasp from the outset that cash is a valid position for the professional trader. And that some of the best traders in the game are those who trade the most infrequently. Successful traders do not try to make things happen. If their system gives them a signal, they take it. If the system does not give them a signal, they don't do anything. The sooner you realize that you can only take what the market is willing to give you, the better off you'll be. The market is always moving somewhere, but movement doesn't equal a business opportunity. Analysis and execution are polar opposite experience. Many new traders focus all their efforts on developing technical skills, as this has a stimulating intellectual appeal, but they forget to nurture the mental skills required to survive and conquer the extremely visceral and emotive experience of executing and managing trades. So it's incredibly important from the outset that you know yourself, match your persona to your personal trading practice. Studies have proved that professional trading has a lot in common with professional sports activity and competition. In fact, sports coaching and training experience can be replicated and implemented to train financial traders. In any kind of sport, a series of fundamental exercises which have to be learned and practiced regularly are necessary to reach competition level and become successful, and that is absolutely the same in trading. So what we're going to do now is frame these ideas. So for me, the rules-based approach equals our market and our method. Our risk is our money management and risk management profile. And then the repetition part, so the ability to continually repeat your process, is all down to your mind and the mental task ahead of you. So what I'm going to do now, we're going to break down each one of these sets. So we're going to run through what these ideas mean, seeing a believing, probabilities over predictions, process over outcome. These are key ideas to developing that market method. Then we're going to look at risk, why cash is king, preservation over profit and risk over reward. And then finally we're going to wrap up looking at some of the mental ideas here regarding attitude over analysis, grind over grail, and the key concepts of patience and discipline. Okay, so let's jump in here now and get started with seeing over believing. I would like to say at this stage, if you do have any questions, please make a note of them and you can ask me. I'll open up the floor at the end of the session to cover any questions you might have. So make a note of them as we proceed through and I'll let you know when it's time to chime in with those. So let's start here now with seeing over believing. Creation of market prices occurs through the confrontation between buying and selling decisions. Essentially the market is a human organism. It's made of individual decisions, billions of them, which generate a continuous and collective decisional stream. This stream is what defines the price of a specific instrument at a specific time. As traders we have the possibility to continuously make multiple decisions based on our expectations about the market. The amount of invested capital or loss limit levels and the duration of a trade with the possibility to modify our decisions at any time. Markets are a constant stream of data and information. There are times when the data will be favorable to your position and there are times when it will be unfavorable to your position. To enhance our decision making process, it is incredibly important that we remove our ego and focus purely on our edge. Ego has no place in your trading career and you need to remove it from the process when you sit down at your trading desk. As it is the ego or your desire to be right, which will detract from your decision making process. It is essential that we come to the market with a neutral mindset. So we're open to opportunity that we trade the market as it is demonstrated on our screens, not as we think it should be. We trade what the market is telling us. One of the key skills we need to develop is moving past our biases and learning to read market data objectively. This is the best indicator of direction. So we drop the notion of being able to pick tops or bottom or trading off gut feel. We rely on our plan and our process. Let's think about probabilities over predictions because as we know the market is always moving and always changing. It has no defined structure and offers high profit and loss opportunities. In a fraction of a second the markets can go from apparent quietness and stability to extreme speed and turbulence. This specific market characteristic is often ignored by inexperienced traders. By having to cope with a completely unstructured fluid and ever changing environment is not something that we're used to. It's likely projected into a world without laws similar to the motion of atoms in quantum mechanics. As human beings one of our main purposes is to create mental structures for ourselves which will bring us security and stability. And this is the main problem that traders have when confronting the financial markets. We are not used to interacting with an environment which is mainly ruled by changing uncertainty. An environment where the mental and decisional processes of all market participants are constantly changing. A core rule of the market is to accept change and market uncertainties. There is no other way to survive the financial markets than to accept that a rules based approach will help us overcome ambiguity. And this rules based approach is focused on probabilities. So we will have back tested a trading plan that gives us a probabilistic outcome when we're analyzing certain market data. We are not interested in predicting the future directions of markets. We want to focus purely on probabilities. Rules are fundamental precisely because it's obvious. Easy to understand from a theoretical point of view but much more difficult for us to put this rules based approach into practice. Trading is about the management of probability rather than controlling certainty. On the contrary understanding that fluctuations in market prices depend upon mental processes and decisions that can vary depending upon an infinite number of unpredictable factors. This allows us to start eliminating all the mental mechanisms which generate pain from adverse market data. Process over outcome accepting change and uncertainty doesn't mean having a confused or insecure mindset or attitude. In the world of trading control over outcome has to be given up as does the need to always be right. This often comes as a real shock to control feats or perfectionists out there. In trading we can do everything right and still lose money. The process or the repetitive routine is essential. Your overall approach including when you trade where you trade all the way down to the procedure you established for executing a trade will form the basis for a structured process. Your routine is a safety net which is linked to the discipline which makes you commit to your process every time. If you trade outside of your trading plan then this will more likely be the wrong trade, more really a puns that you've taken without forethought. And yes you may get some big wins but consistently over time you will not be trading a plan and this is not going to be a process that is going to be repetitive or have the ability to be repetitive and as such will ultimately fail. Obvious rules like don't chase a trade or always trade with a stop loss to rules you develop over time based upon mistakes you've made. They are all created out of the principle to regulate the correct conduct for trading. All aspects are important but rules cannot be broken as breaking rules will lead to losses because you now know that these are in place to keep you safe from the markets and more importantly from yourself. The rules you adopt will be guides to make consistent results. You need to be committed to not breaking them or trading outside of your trading plan. At the core of a successful trading performance is the tolerance or the vulnerability of being wrong. And this is found mainly in the uncertainty of the markets. That tolerance is defined as the courage to face misguided beliefs about your power to control and the recognition that you are never in control once you place the trade. The only thing you could control is your risk. Trading and draw downs in your trading account only expose the illusion of control. Once we've busted that illusion of control and the vulnerability of being wrong is now front and center for us. It is here where you face the psychological demons and the fears lurking behind the need for control and the need to be right. This is also where successful traders are born. If you listen to your trading account rather than what you falsely persuaded yourself to believe about markets. Let's move on to think about risk. And we're going to start here with risk over reward and preservation of the profits and key concepts. To not be able to apply risk and money management principles is most certainly very much disadvantage disadvantage is to trade us to better understand this point. Let us first define what risk management and money management are by assessing market conditions risk reward ratios probabilities and the use of stop losses. We are able to define risk management. This aims to minimize losses for every trade and helps us focus on capital preservation. On the other hand, money management focuses on the steps necessary to maximize profit by the use of trailing stops and adjusting trade sizes, etc. It's imperative that you make your mind up regarding the maximum amount of capital you're willing to place at risk at any given time. Most professional traders choose to risk less than 1% on any one trade. This is while having a maximum of 3 to 5% at risk on total open trades. If risk in 1% of your account on a trade can't deliver your returns to match your objectives. Then you are under capitalized and capitalization is a death knell of many robust trading strategies. It's similar to the idea that Larry Hype gave us when he quoted, you can't win if you don't bet, but if you don't, but you can't bet if you don't have any chips. So capital preservation, the idea of focusing on our risk profile before we're focusing on the upside, the outcome, or the potential positive outcome of any trade is imperative to our long term success. The next concept is incredibly important and now we're moving into the idea of attitude over analysis. The need to be in control, the need to be right is often associated with effective strategies for success that people experience in careers before trading. Yet the reality of trading is an ability to maintain positive expectancy, even under a potentially extended period of negative feedback from the market, i.e losses. So what prohibits people from this are some fairly well characterized emotional responses. Such as inadequacy, there are traders who have tendencies towards perfectionism. They must be right or at least not wrong. They make a mistake, they take it as a personal reflection on their competency almost as a human being. Many traders report that in their beating up stories, they say things like you're so stupid or who told you you could ever be successful. This is like a negative talk and feedback loop. So they see losses as an attack on the adequacy of their person rather than focusing on realistic competency and standards that are applied to trading success. To the perfectionist, one mistake proves that they're not good enough. Notice that this is an assumption learned somewhere that is being applied to trading and competency in working with probabilities, not certainties. The problem is that the assumption has now been hardwired into the circuitry of their mind as a belief or a truth. Then we have the idea of mattering. Many traders believe that they have to be making money and a lot of it to prove themselves to others. So their mattering as a human being becomes tied to the need to be trading large amounts of money to show that they're in charge of the market. This unexamined need for confusing money and mattering is at the core of over trading and revenge trading. It is also what drives many alpha personalities. Then we have an idea of self-worth in the same way that personal worth becomes tied to money. So self-worth equals net worth. Many traders believe that they have to work hard for the money and if they don't work hard, they don't deserve to make easy money. Others don't believe they deserve to be making money beyond a certain level and every time they go beyond that glass ceiling, they self-sabotage themselves. Another important idea is powerlessness or helplessness. Have you ever seen a trader fall apart or have you experienced falling apart while managing a trade? So someone who experiences a sense of being overwhelmed powerlessness and ultimately becomes unglued in managing the trading situation. This trade is behind many and alphas blowing up in the heat of trading. Their illusion of power over the outcome is exposed and the underlying powerlessness is revealed. What they have not learned is the one thing that they do not have power over, even in the midst of uncertainty. Your power is your control over your mind that you bring to the moment. It's a new paradigm that people really need to learn this idea of being present in the moment as opposed to jumping forward to a future outcome or being caught in the past remembering prior losses or prior negative scenarios in the markets. In the successful trading mind, we're able to disconnect our sense of adequacy, worth and mattering from our performance. And as you're able to do this, the greater control you have over your emotions with respect to your performance. In short, your authenticity as a human being is not linked to your trading success. Instead, it comes from our capacity to risk vulnerability to follow our process. Performance no longer is the key outcome that we're focused on. What we are now focused on is process and where we get our reward from our mental reward is following that process. So once we're in a position whereby we have an absence of pain from changes in market data, then we have the possibility to be objective about the market. And this is a key perspective that we require to be successful. Objective perception is fundamental in training as traders have to recognize market patterns. Therefore, a rational and objective mindset will help us develop a rational decision making model, which is not based on emotions. Acknowledging the fact that markets are unpredictable and accepting trading risk is what makes the difference between a successful and unsuccessful trader. Losses are inevitable. They're a business cost and can only proceed gain. Accepting responsibility for every aspect of your trading performance is essential. Now a key concept and one that many struggle with is the idea of grind over grail. Because as retail traders, we're bombarded with information, knowledge and the promise of achieving overnight success that will deliver financial wealth beyond our dreams. Or at least in a very short space of time. The convention is that trading will set you free financially, socially and professionally. But are there any truth in these claims? There is an occasional tale of glory where a novice trader has hit it big and it's paid off. However, let me make something clear. If you're trading based on feeling, you may as well flip a coin because your luck is eventually going to run out. If you rely on that kind of trading, it is tantamount simply to gambling. Therefore, on the whole, it's widely accepted that trading will not instantly set us free. Trading is a fantastic route to providing the freedoms I've just mentioned. However, as with everything in life, we have to put in genuine effort. The inspiring aspect about trading is that it provides an equal opportunity vehicle to obtain these freedoms. And with a relatively low barrier to entry, it can afford success to anyone who chooses to become a trader and commits wholeheartedly to trading excellence. Having said that, due to the constant barrage of instant success ringing in the ears of retail traders, it's difficult for some to travel the long and winding path to trading success. You need to change your approach and think of trading as a career that takes time. The correct application of knowledge, practice, and most importantly, patience. Many traders become obsessed with trading strategies or indicators or at least the latest headline grabber in your inbox. Remember, trading is about you more than it's about the system. A trading strategy is not as important as the mindset you apply to it. There is always a chance you will correctly pick the direction of the market, but you may not make a huge amount of profit in doing so. So let's consider why this might be the case. It is the fact that we need a trading system. And we have, however, as a general rule, the trading system needs to be clear, concise, and does not need to have a whole host of indicators clogging up the screen. The simple system that suits your personality will form the bedrock for your trading, which in turn offers you a fallback when things aren't going so well. You have to be familiar and comfortable with it, and you have to be able to trust in your strategy. And this comes through rigorous backtesting. This is what once you've seen hundreds, if not thousands examples of your setup and the outcome, this helps to build conviction in your strategy. Plisting needs to be at the heart of your training plan so that it can be easily interpreted and replicated as you put the pieces of the jigsaw together. Developing your plan must be a labour of love to survive the endless pitfall. It's a snakes and ladders type experience demanding practice and research, which ultimately gives you a probabilistic edge in the market. Similarly, successful traders have found a method which is adapted to their personality and best capabilities. Good trading is a grind. It's repetitive. It's day in, day out, applying your process and your framework. Most importantly, most or really more so than any other industry is the emphasis you must put on you. For what makes or breaks your trading, you need to be focused. This means picking a time of day to trade where you can concentrate 100% on the markets, no distractions from family work or day to day life. Finally, let's look at patience and discipline because believe me, it's this that provides the paydays. But what is it? What is trading discipline? How do we define it? Many people when asked them, this question suggests that it's the ability to be able to consistently execute your trading strategy and to follow your trading rules. And this also may be inclusive of completing trading disciplines such as preparation and evaluation. Let us consider the two keys to successful trading. One, having a trading strategy with an edge and a positive expectancy. Two, being able to consistently execute that strategy. In trading, you'll ultimately have to overcome what is likely to be your biggest challenge yourself. So embrace this because it is part of the journey. Often when I speak to traders, at some point they'll tell me of their discipline issues. Some of these traders may see themselves as being ill disciplined and talk at length of their poor discipline. This will in all likelihood merely compound matters, reinforcing their problems with negative self-imaging. It is important to understand that discipline is a general term. It's an umbrella term for a variety of different behaviors. And that very few traders have challenges with every one of these behaviors. Indeed, in most cases, it's just one or two areas that are a major obstacle to moving their trading forward to the next level. It is useful for us to be aware of the components of discipline and to be able to specifically define our challenges so that we can seek the required methodology to address them. Because when a car breaks down, it's very rare that if ever that the whole car fails, it's usually one or two component parts. But some component parts are obviously more important have a greater impact on the overall operation of the car. And it's the same for us as traders. Isolating our specific challenges will help you target and defeat them, as well as keeping your discipline through difficult periods in trading. So when do traders lose discipline? Well, there are two main drivers. One is technical regarding strategy and the other is mental. So let's just briefly look at strategy. Not having clearly defined strategy with an edge is the first typical problem. Having this is a prerequisite to successful consistent discipline trading. Without one, it's actually impossible to see if you're being disciplined or not, as there is no accountability as to whether you followed your plan and you stuck to your strategy if you didn't have one in the first place. Without having a clearly defined trade trading opportunities, you are trading in a random haphazard fashion, which will quickly lead to loss. Trading a timeframe, a style or market that does not match your talent skills or risk tolerance and your personality is also another problem. If you are trading in a way that is not best suited to you and particularly if this is a long way off course, then cracks will appear and elements of ill discipline will occur. This isn't a problem with yourself as a trader but arises simply because you and your strategy are out of line. For example, someone who is trading a short term timeframe but who is a much more analytical, slower thinker and decision maker may find that they have challenges in taking trades with sufficient speed. To make matters worse, they then get frustrated that they missed out on a trade and end up getting in too late and ultimately chasing a trade. A loss of confidence in trading or a lack of understanding of probabilities and statistics is another issue. Sometimes you'll get a run of losing trades for no other reason than the fact that you are in a trading environment that contains randomness and that you will not know the distribution of outcomes for your strategy. Losing streets are not uncommon or unnatural. If you toss a coin 100 times, you'll get at least four strings or either of either four heads or tails in a row and potentially you can get five, six or many more in a row. When you understand this, coping with a string of losses is much easier and the temptation to try and recklessly recover them is lessons. Mental and patient, the mental idea or the mental aspect in terms of issues with discipline are often referred to are often caused by environmental or external distractions that are issue come about during quiet periods in the market. So this is basically just plain boredom. One of the biggest revelations that many new traders experience is that trading is not a 100% full on adrenaline fueled roller coaster. There are actually long periods of time when not much is happening and the markets are quiet. The danger here is that you get bored and trade just to do something and not because a trading opportunity as defined by your strategy has actually arisen. So you need to ask yourself, are you trading to relieve border or am I trading to make money? Find other tasks to do when the market's quiet, read, research, strategy development and so on. Then there are some fairly well defined emotional responses to the market such as anger and frustration. So when we are involved in a period of drawdown, this anger and frustration can be dangerous. The changes that occur to our physiology and psychology when we're angry and frustrated affect our ability to make objective and recent decisions. You're greatly at risk of trading emotionally and not objectively. So when we go through a losing period, it's important to take time out and wait till we're in a good mental state before re-entering the markets. Equally on the flip side over confidence resulting from the string of successes can also be a dangerous emotion. It will get you involved in the markets, potentially with bigger positions that might be appropriate. Create awareness of where overconfidence might occur for you and where it's necessary to actually stop trading or consciously manage your positions. Equally an unwillingness to accept losses. The loss of versions now that we talked about earlier most regularly related to the ego is a common problem. If you're not willing to take a loss, then you are always likely to run one and to move your stops out. Accepting losses and dealing with them effectively is key to discipline trading. Taking on too much risk. High risk creates higher stress and higher stress creates stronger anxiety and worry. All this weighs down badly on your decision making ability. Excessive positions also carry with them the potential for huge painful losses and no one wants to take them. So take appropriate risk is key necessity for discipline trading. Equally greed is another pitfall wanting too much too soon or trying to make every trade a big winner or home run. Again the key is to assess your strategy except that as traders we are in and out of the market over a desired time frame. Whilst the market moves both before and after we enter and exit our trade. Our aim is to capture profits within the time frame for our strategy. Equally fear this can come in many forms and may lead you either to not entering the market or getting out too late or too early. Fear of loss, fear of missing out, fear of leaving money on the table are just three possibilities. Managing trading position size, accepting losses as part of trading and having confidence in your trading strategy will help to reduce and eliminate these feelings of fear. Ultimately trading without emotion is a fallacy. I know exactly what you mean when you or I know exactly what people mean when they say this that you should be trading without emotion, but it's not that we it's impossible that we can't have any emotion at all. So what we're really trying to articulate is that we want to have no negative emotions. So those that we just talked about fear, anger, greed, frustration, those are the emotions we want to recognize because some states are conducive to peak performance and some are not. Some states hinder optimal trading performance from taking place. Trying to do something when you're not in the right state of mind is like putting your foot on the accelerator when the car is not in gear. Lots of revs but we're not going anywhere. Most people have heard of the phrase of being in the flow. A phrase that has been made popular by performance psychologists to describe people who are performing at their peak. When people achieve such states, they will have access to be in their ideal performance state or in trading terms, ideal trading state. Getting to your ideal trading state is important and is essential to your future success. When I talk to traders who I've worked with about when they've traded their very best. They typically describe their state using such words as feeling alert, feeling balanced, calm, energized, positive, focused, confident. Their trading is effortless and almost automatic. So in order to actually trade with patients and discipline, there are certain precautions we can take to predispose us to achieving our goal. We can check in with ourselves and sit down. We can run a personal inventory to see where we are from a mental and physical perspective. Initially, this sounds somewhat over-engineered, but as with all skills, labor is required to form habit. The principles I've covered today really cover some of the core beliefs that I've developed over the past 15 years with respect to markets. What it means to be a trader and what it means to strive for trading excellence. John Maxwell puts it in a great way. You'll never change your life until you change something you do daily. Secret of your success is found in your daily routine. Ultimately, consistency comes from discipline. Discipline comes from patience and patience comes from preparation and preparation comes from a willingness to learn. The reality of trading is this. We show up, we place trades fearlessly, we manage our risk and we do whatever we can to stay in the game long term. If you can do this consistently, even if you don't have a massive market edge, over many, many trades, you'll end up profitable. Be obsessed with the quality of your process and risk management, not the outcome. In trading, the hardest thing of all is to learn to love the process instead of being so overly focused on the trade-by-trade outcome. Yet, that changing approach is critical. Avoid making this game about being right or wrong. Whatever temporary satisfaction you get from being right will almost certainly be met by an equal or greater opposite reaction when you're wrong. Strive to remain neutral. That is essential to your future success. You've got to love your trading rules. If you don't have any, you should be putting your hard-earned money on the line. Let go of the get-rich-quick mentality, tone down your impatience, put in the work and then see what happens. So hopefully you found that useful today in terms of me reviewing some of the core concepts that, like I say, I've developed and adhered to over the past 15 years. I've been operating in the markets. What we've got now is about five minutes. If anyone would like to chime in with any questions regarding the content we've covered today, I'm happy to answer those now. I'm just going to have a quick sip of water and then feel free to ask any questions. So, again, Arina, thanks for the question. You either enter, you exit trades too early or too late. So again, this comes down to, you know, you should have, your trade plan should be fully documented. And so you should have rational and logical criteria that one identifies a trading opportunity. It gives you an entry, a risk-reward profile, so a stop, and a take-profit objective. Now, here's the issue. Unless this take-profit objective is based upon a extensive backtest. So you have X number hundreds or even thousands of trade outcomes whereby you have developed your take-profit strategy based on that backtest. You are always going to struggle with the idea of uncertainty because without having that backtest and having that data to base your take-profit objectives on, you're operating from a perspective of uncertainty, and that's what drives you to either exit too early or exit too late. Whereas if you are, if you've got a data set that you're analysing and you have an optimum take-profit level, sometimes you'll achieve that take-profit level and sometimes you won't. But that's fine because you know that from the data set, from your backtest, you know that more often than not you will achieve a certain take-profit level. Does that make sense, Arina? So again, it's a good question, but it really comes down to having that backtest behind your plan. You have a five-year back-tested strategy. So over that five years' worth of data, presumably you have identified an optimum take-profit level for your strategy, or you should have, or you certainly should be able to if you review the data. So then what it comes down to is your conviction in your strategy. And this, you know, lots of the concepts we've covered today, I suggest really listening to today's webinar, because what you're talking about there are the common issues related to a lack of conviction or a lack of adherence to your plan. Because if you've got five years of back-test, and I, you know, I'm presuming that depending upon your timeframe, you have a minimum, let's say, of a thousand instances of your setup and then execution of the trade trigger, you should then have a data set that allows you a high degree of conviction in your plan. Any other questions? What specifically is that dialogue? I think hopefully I'm pronouncing your name right there, dialogue. What specifically about race dialogue? With your many experience, can you, Ticknell, develop an indicator of who? I have indicators that I use. Since I have some proprietary developed indicators that I use as the core basis for my trading strategies to help identify high probability scenarios. So yeah, I already have those in place. I've been advised by other traders, 2% risk per trade is okay. Here's the thing. Obviously, this is why retail, or this is a key aspect as to why retail traders struggle is that once you've got a trading plan in place, the key to removing your emotion from the individual outcomes of trades is trading in a size that means if you experience 10 losses in a row, you could quickly, you could still quickly recover from those losses. Now, if you're trading at 2%, that's a 20% draw down. So just to get back to break even, so just to get back to where you started from, if we started from a neutral account balance, you have to, you know, that's a 25% gain you need to make. Which is, you know, some people, you know, if you think about professional money managers or if you track professional firms or money managers, 25% is a healthy return on a year. So I mean, if you take, you know, if you take a hit of 10 trades in a row and a loss of 2%, you need to make 25% just to get back to where you started, which is no mean feat. The reason why I risk less than 1%, I mean, most of my trades are actually a 0.7% risk is that a loss of 10 losses in a row to me is easily recoverable. But if you're risking 2% or 3% on a trade, and you can expect in your trading career to go through periods where you lose, you know, 10 trades in a row. And if you're risking 3%, then you're at 30%, then you're up towards, you know, nearly 40% just to get back to break even. So I mean, this idea of risk reward is incredibly important. And here's the thing, inexperienced traders are only focused upon the upside, all they want to know about is how much they can make, whereas professional traders are just laser focus on the downside. So when I'm in a position on my first, the first thing I want to address is my risk for the trade, and I'll pass on trades where I don't have where the setup can look fantastic, and the analysis is, is, you know, jumping off the chart. But if the risk reward profile isn't correct, then I pass. So I mean, for me, risk reward is everything is the final, you know, before I pull the trigger on the trade. I need to know that the risk reward stacks up. And that's my key focus. So, you know, what I, what I do is I reduce my risk. I trade in a conservative fashion on the basis that I know over a year, you know, and I'm always thinking in terms of years, you know, I'm looking at, you know, what my, what the outcome is going to be over the next 12 months. And I know that trading at, you know, keeping my risk low, focusing on my process and my plan is going to deliver me a healthy return at the end of the year. So I'm not, not thinking about, you know, the outcome of individual trades is really not important to me. Okay, so I am just focused purely on my process, like we talked about today, process over outcome. Yes, I mean, there you go. So if you've had 19 losing trades in a row, and you're trading at 2%, that's nearly 40% draw down on your account. I mean, you're having to make over 55% just to get back to break even, which is not an enjoyable experience. I don't know, I don't, I don't hedge Evans. I don't have a, you know, I'm a market speculator. I'm not, I'm not, I'm not hedging positions. I take a naked exposure in the market based on the directional bias that comes from my training strategy. So now I don't, I don't hedge. Don't get me wrong. If you're running a big equity portfolio of individual stocks, then certainly you can hedge positions in the options market. As you can do, if you're trading a big spot position, if you're, you know, if you've got a lot, if you've taken a three or six month view on a spot forex and you're running big profits, you can put on options hedges to protect profits. But this idea of getting into a trade in the spot market and then taking a counter position to it is, is not really worthwhile. Any other questions, guys? Okay, if we don't have any other questions, I'll, I'll wrap this up here today. We'll reconvene on Thursday at 11 o'clock UK time, where we're going to start moving into the charts now. And we're going to look at multi timeframe momentum on Thursday. So hopefully that you'll be able to join me and, and we'll take things from there. So thanks very much for your time today. And I hope this content was useful.