Mastery

The current Mastery course is proving to be a gold mine of information.

Participation was only by invitation  – perhaps that accounts for the fact that the commitment to succeed is so high among the attendees. That’s not to say that the commitment is uniform – in any group, there will be those with a higher drive to succeed than the others. But, it is to say, that as a group, the commitment is higher than most.

Perhaps I should take a step back and outline the purpose of the course. Mastery assumes you have integrated the basic knowledge for trading success: you have a method with a positive expectancy, you keep your journals, you apply ACT so as to remain calm enough to allow your neocortex to manage the fight, flight or fear response, you execute your risk management and method rules with a high degree of consistency, etc., etc.

Mastery assumes you have integrated the basic knowledge for trading success:

  • you have a method with a positive expectancy,
  • you keep your journals,
  • you apply ACT so as to remain calm enough to allow your neocortex to manage the fight, flight or fear response,
  • you execute your risk management and method rules with a high degree of consistency, etc., etc.

Its objective is to move to the next level of discretionary rule-based trading: rather than see the chart as a series of individual patterns & processes; traders start to see the whole picture, they start to see what is important, in this instance, and what is not.

Think of the as a course designed to produce chess grandmasters. They scour the board and see the patterns that are developing rather than merely seeing individual tactics.

What I’ve found with my group is while they are competent in seeing trading as a single pattern e.g. they see a Spring Change in Trend Pattern, they aren’t quite there when it comes to seeing the whole picture e.g. why in this case, the pattern is likely to fail.

BUT, the fab thing is I am seeing such rapid improvement that it has made the endeavour well worthwhile. In the process, I’ve been taught what works and what doesn’t. The course has certainly put paid to the idea that you can become a master by attending a tw0-day or three-day seminar.

The course has certainly put paid to the idea that you can become a master by attending a tw0-day or three-day seminar. The attendance is but a start. After the seminar, you need to put in the work – first attain competence, and then to seek Mastery.

So where are you at? Beginner, Competent, Master? And what are you going to do to get to the next level?

LOOM – WARNING

A warning from my good friend, Joshua Fong:

“How’s it going?

Just a note of caution that it appears the app can read everything you type, including passwords etc, even when you are not recording. Just saying…”
I missed the warning when I looked at the software. My aplogies.
?

Presentations

BarroMetric Views: Presentations

My blog publication schedule may be disrupted March 22 to April 2.

I’ll be in Singapore for two presentations.

  1. On March 23, a presentation only for Oanda clients, the Elite Trader’s Club.
  2. On April 1, a public event – at UOB Kay Hian Auditorium, 8 Anthony Road:

“How to Leave the 90% Who Lose Money and Join the Winning 10%”!

At UOB, we’ll be looking to provide:

  • the knowledge needed to become successful and
  • the models needed to integrate that knowledge into a set of skills.

Also, there will also be some great giveaways:

  • Four high-quality books – among the best to help traders become better, and
  • A lucky draw for a mystery gift, one that has led to phenomenal improvement.

Needless to say, I expect the event to be highly successful. It’s certainly the case if our registrations are anything to go by. The auditorium holds 100, and we are more than half-full – we started the marketing just today!

If you’d like to attend, register at

http://www.barrometrics.com/ray-barros-trading-success-foundation

 

 

Learning from History?

BarroMetrics Views: Learning from History?

Is the mainstream press willing to learn from history? Judging from the Dutch and forecasts for the French elections, I don’t think so.

In the Dutch elections, the press was all agog about Wildes winning. Yet, in the polls, he was a long way behind; and if you surmised anything about Dutch electors, the probability of Wildes winning, on this occasion, was remote. After the result, the press proclaimed that sanity had been preserved and forecasted a similar result for the French.

Wait a minute guys and gals, didn’t Wildes’ party become the second largest party, netting 26 seats? I wouldn’t be writing off Le Pen on that outcome.

Turning to the French – first round April 23 and the second May 7.

The mainstream pundits are predicting a Le Pen-Macron win on April 23 and have all but written Le Pen off for the May 7 run-off (Google ‘who will win the French elections’ and you’ll see what I mean).

For the May 7 round, the Betfair Exchange has Macron odds-on to win at 20-21, with Le Pen at 13-5 (2.6-1).

The French polls remind me of Brexit and US elections all over again. The focus is off tangent. They seem to ignore the strong undercurrent of French sentiment against current French immigration policies. Le Pen is all for exiting the Schengen border-free zone while Macron is for keeping it. This is the most critical difference in their policies.

If Le Pen wins on April 23 and is at 2-1 or more for the May 7 elections, I’ll be tempted to have a friendly bet. At those prices, she is under the odds.

 

 

Overcoming Bias 2

BarroMetrics Views: Overcoming Bias 2

Yesterday we saw how I have acquired a bias for the short side in the GBPUSD. By the way, this is inevitable once we form a view of the side that is likely to produce a low-risk, high probability profitable trade.

At this point, I analyse the pair with of my Trader’s Timeframe lenses.

The first step is to list my observations, then categorise them as ‘bull, bear, or neutral’. Following that, I look to integrate the information and assess the probability that the downtrend is likely to continue or change.

Before I move on to the next item in the analysis stage, ‘zone’ (where will I take the trade), I consciously look for information against the bias. This step seeks to ensure I am not suppressing information or falling prey to the heuristics that have proven to be my Achilles’ heel: representativeness, anchoring, framing and confirmation.

Let’s look at the ideas in action. (My trader’s timeframe is the 18-day swing).

In the GBPUSD, I have assessed a downtrend that is likely to continue to in the higher timeframes. Figure 1 shows the 18-day (red line), and 13-week (black line) and 12-month (green line) daily equivalents. They swing lines show the trends: monthly, quarterly and yearly respectively.

At first glance, the 18-day downtrend seems intact. If that were the case, my strategy would be to go long in the sell zone around the current swing highs, or upon a break of the most recent swing low.

But, when I actively looked for ‘long’ info,  I saw:

  • Since 2/28/2017, as the pair moved South, its ATR dropped from around 130 to 90. In Market Profile terms, the pair ‘is not facilitating trade’. In short, we do not see the price action that would suggest downside continuation. Most likely, if the longer-term downtrend is to prove itself, we’d first need to see higher prices.
  • The structure since 09/06/2016 has formed what I call a ‘rejection high, rejection low, value area 313’ – a label for a ‘bell-curve forming’ process.
  •  In this pattern, the next high probability move is:
  1. acceptance above the Value Area high at 1.2774 (red TPL) for
  2. a move to the Primary Sell Zone (1.3434 to 1.3210) of
  3. the structure bounded by 1.3448 and 1.1644.
  • However, if instead of an upside breakout, we see acceptance below the rejection low at 1.1985, we’ll probably see a re-test of 1.1644 and even more likely, its breach.

So, by looking for ‘non-confirmatory’ clues, I  have changed my initial views of where to take trades and the likelihood of an 18-d trend change. (A rally to the PSZ at 1.3434 to 1.3210 would break previous 18-d swing highs and thus negate the 18-d downtrend).

The process may seem complicated. But, as with most habits, it’s only difficult at the beginning. Once internalised it becomes second-nature – though I still use a check-list to ensure I consciously cover all bases.

We’ll never totally eliminate the biases occasioned by our mind’s unconscious reasoning – nor would we want to because they serve an invaluable function. But, by being self-aware, we can reduce their adverse influences when their use would lead us astray.

So, over to you: what are you common biases?

(By the way: ECB rate decision announced tonight at 16:30 HK time – may stimulate an increase in the ranges [at least of the majors and European crosses])

FIGURE 1 GPUSD 18-day and higher swings

FIGURE 2 GBPUSD 18-day swing

 

 

Broker Selection

BarroMetrics Views: Broker Selection

One of the most important functions we have as traders is finding a broker that we can rely on and feel confident in: that we won’t lose our hard-earned if they close.

For retail traders, there are only two jurisdictions I like: Singapore and Switzerland.

  • Singapore because MAS has a sterling track record. In the collapse of MF Global (2011) and Refco (2005), not a single Singapore client lost money.
  • Switzerland because the Government guarantees deposits up to 100,000.00 CHF. The drawback in Switzerland is the only licensed broker I know of is Dukascopy. I’m told, by my students and friends, that small accounts experience unacceptable slippage on stop orders.

I am not commenting on London’s FCA registrations because I have no experience with them. In the US and Australia, clients of failing brokers have lost some or all of their deposits. It’s true that in these situations, the brokers had failed to place funds in segregated accounts, in breach of regulations (e.g. MF Global), but the net result is the clients lost money.

Here is a link to an excellent article by Forex Peace Army on the subject:

http://www.forexpeacearmy.com/community/threads/how-to-select-a-forex-broker.2333/

Broker Going Under?

BarroMetrics Views: Broker Going Under?

On Monday, Feb 6, the news came out that the CFTC had fined FXCM USD7M and barred the broker from continuing business in the US. The CFTC alleged that FXCM had defrauded its retail FX clients by advertising itself as a ‘No Dealing Desk’.  The has paid the fine and settled charges with the CFTC.

Yesterday Gain Capital announced it had bought FXCM’s US client base.

So what now for FXCM non-US clients?

Finance Magnates provided an excellent analysis of FXCM’s situation in “Analysis: Is Leucadia Willing to save FXCM Again? What’s clear from the article is if I were an FXCM client, I’d be moving my funds to another broker.

Sure Leucadia could come to the rescue or FXCM may find a buyer for its ex-US operations. The average daily volume generated by US clients of FXCM was reported to be around USD 2.4 billion – not exactly chicken feed. Its other operations should at least match that sum.

On the other, if I had money with FXCM why run the risk? Better to be safe than sorry. Cut and run would be my motto.

Rule of Law

BarroMetrics Views: Rule of Law

This post has little to do with markets; instead, it’s a comment on my view of Trump’s executive order banning entries to the US from Iran, Libya, Syria, Somalia, Sudan, and Yemen.

So, if you have no interest in this world event, tomorrow’s entry is the blog for you.

I understand why the executive order was made. If we examine where known terrorists have hailed from, we’ll find they were predominantly from the seven countries. And, if we view the European experiences, the ban seems to make sense.

But, there is a world of difference between the US and Europe.

In the US, those being held for deportation are holding legally valid visas – legally obtained; while in Europe, there is a policy of free passage within the EU. With a stroke of his pen, Trump turned valid visas into invalid ones.

It’s no wonder that four judges have suspended the enforcement of the order. But, here’s the worrying thing: according to a news item on Fox, Homeland Security has issued a statement that the executive order is in force despite the rulings.

This is a worrying development. If the US abandons the rule of law for ‘reasons of national security’ we are seeing, possibly, the first steps to a move to a much less free USA. A slide to authoritarianism has always been the danger that Trump would bring to the White House.

Hopefully, the news event was incorrect; or if correct, an erroneous statement.

A Heads Up

Hi

I’m in Sydney for a cataract operation and to organise a date for my hip replacement.

I had forgotten how much time it takes to get to an appointment and to return. And since I arrived, all I seem to be doing is going from one doctor to another.

My last appointment is on Friday, November 18. So next week, I’ll again be posting regularly.

Apologies for the break in posting.