The mediocre teacher tells.
The good teacher explains.
The superior teacher demonstrates.
The great teacher inspires.
William Arthur Ward
Our magazine already wrote about the Price Range Break Department within the Faculty of Flat Break; Automation; Auto-Trading. The Department recently turned one year old. What has it achieved? Alexei Morozov, Candidate of Technical Sciences, Head of the Department, speaks on this.
ML: Please tell us what kind of year this has been for the Department. What challenges did you face? What experiences did you have? How has your Department evolved?
AM: This was an eventful year. It took us only one year actually to achieve a lot. The results we have reaped are not accidental - they come from consistent, continuous, persistent effort of me and students of the Price Range Break Department. Now I would like to give details of how the Department developed and what we have achieved over the past year.
Individual training for students based on a proprietary methodology is one of our Department's definitive particularities. We opted for this style since the Department opened because it is the trader's psychology that 85% of successful trading rests on - what I call Adequate Trader Behavior. And only 15% rests on the performance of the trading system. Some will agree with me, some won't. Let's assume there are two traders. Both get absolutely identical information about a trading system. Using the system one trader consistently makes money and the other has inconsistent results or generates losses. Such situations are very frequent and perfectly illustrate that the Holy Grail is not in the trading system. The Grail lies in our behavior during trading. And, since our behavior is governed by our conscious mind, I always say that the Grail lies in our conscious mind. This is why we first need to work on ourselves, our adequate behavior when trading in order to learn to make money consistently and consciously in financial markets.
I often use a phrase 'adequate trader behavior'. What I mean is the behavior that leads him or her to consistent and conscious profits. This is the second definitive feature of training at our Department - we teach the student to develop such behavior. Day in, day out everyone (both the teacher and the students) rear the skills of such behavior in ourselves and reinforce it in our conscious mind. This approach to training started bringing fruit. When I was only setting up the Department, my experience and intuition prompted I had chosen the right instruction method. The past year has fully confirmed my assumptions. Positive trading results reached by a significant part of the students at the Price Range Break Department prove the instruction method adopted by the Department is highly effective.
You might be aware that most active traders required years of training and practice to achieve consistency in making money at financial markets. Examples of this are at hand. The instruction method our Department has developed helps the student achieve consistent profits quickly, within a short time span. First a positive trading result shows up at the end of a trading month. Then each week. Then each day is closed positively. However, achieving such trading results requires effort not only on the part of the teacher. It is only joint effort of the teacher and the student him or herself that can produce the necessary result.
Over 160 people have been trained in the Department over the year. This is despite the fact that instruction is individual. Many students now consistently make money. Moreover, some students are already taking up asset management. This all speaks for the efficiency of the instruction approach developed by our Department.
ML: You referred to 'a proprietary training method'. Could you describe some of its features?
AM: Before speaking about the proprietary training method, I would like to use my own experience and tell you about the stages of development every trader passes on their way to successful trading in financial markets. This is the information any student of the Department gets first. When we understand the path we are going to take we become confident in what we are doing. We clearly see the goal and the path to achieving it. Confidence is a necessary state of a successful trader's conscious mind.
There are a few stages in a trader's development. You become aware of the stages once you pass them, step by step. In most cases the person who takes up trading in financial markets starts with getting a lot of different information about trading. They read a lot of books, study in different training centers. This puts a huge volume of different information about trading, both helpful and useless, into the beginner trader's conscious mind. The trader that has no requisite experience cannot screen this information himself. This is why there is different, often conflicting information in his conscious mind. This is the first stage. This stage is difficult for a few reasons. Firstly, there's lack of trading experience. Secondly, there's an abundance of different information that one finds it hard to come to grips with. Thirdly, conflicting information results in doubts and, hence, trading failure. Not every beginner trader can reach the end of this stage.
You have to become aware that trading in financial markets is primarily business in order to pass this stage and move to the next one. Like in any other business, the beginner businessman takes the path of mistakes and failures. This is why reaching your goal requires patience. This is a natural process for achieving any goal we set for ourselves. Being 'short-sighted', many traders don't understand how important this process is and give up what they started in a belief that they have failed. Let's stop a little and think about the condition these people's conscious mind is in. Their mind is filled with negative things resulting from failure. They had a desire they failed to satisfy. This is on the one hand. On the other hand, there's an awareness they could not reach their goal. I.e. admission of their failure. What happens to this person next? They pick up a different thing. In most cases this process repeats over. Difficulties come their way and the person who does not build strength to fight difficulties gives up the new thing again and fails. I call this style of life 'a loser's style of life'. EVERYTHING DEPENDS ON OURSELVES. That’s right. It is us who conditions the reason for our future victories or defeats. Let's look at how the Winner behaves.
First of all, this person is clear about what they want, their desires and aspirations. Then they start acting, i.e. the winner first clearly defines their goals and only then will make an effort. They will go to the end, till they achieve the desired result. Put differently, the Winner is the person who achieves results despite anything. It is a person that takes the path of RESULTS. This is very important. When we set a goal and reach it, we REINFORCE THE CONFIDENCE that we can achieve anything we want. This confidence in ourselves and our potential gives us necessary energy and is a key in achieving future goals and having our desires come true. The winner is aware that any new business offers challenges on the path to achieving their goal but they are prepared to this and make necessary effort, armed with patience. They gain and analyze experience, make conclusions, adjust, if necessary, their actions and thus move to the goal in sight.
The first stage during which the trader faces difficulties is the losses stage. Most beginner traders take this path. It is only the traders that start to understand the reason for their failures that can reach the path of consistent and conscious profits. AWARENESS is what can be gained through personal experience. You can reach awareness alone, by trial and error. The path to your goal will be long - that's a disadvantage of this approach. A huge advantage is that your experience will become the key to your future victories. You will know what mistakes can come up in trading and what you have to do to solve a certain task. You need huge patience and analytical type of mind to walk this path and achieve results.
There is a different approach - just find the person who has already walked this path and is greatly skilled at trading. This person can show you the shortest way to achieving your goals. Under the instruction of an experienced mentor the number of trading losses goes down and this stage of development is over before too long. The reason being that your mentor knows what is important for trading and what is not, which actions result in profiting and which - in losses.
Some time later the trader hits the second stage. This is the stage of balance. Profitable trades start to compensate for losses. Here the trader actually produces a zero result in trading. There is a feeling they make no headway. This isn’t the case, however. The reason for consistent profits in the future gradually grows in the trader's mind without making itself apparent yet. At this stage the trader already has trading experience. This experience helps screen and 'pigeon-hole' information gathered during the first stage in the trader's mind. This piece of information is practical, this one - not. This method works, this one doesn't. This piece of information is true, this one - false. Theory meets practice at this stage. Now the trader spends even more time analyzing how they trade, enter and exit the market. They analyze their trading results and repeat this process over and over.
Analyzing how you trade is quite a challenge. Or something most traders find most difficult, to be precise, mainly because we create ourselves anew through this process. Following the habits or style of conduct rooted in our conscious mind is the line of least resistance. But those who become successful trading in financial markets have a mindset and behavior different from an average person's. The average person follows their desires and emotions (greed, fear, hope etc). A successful trader toughly controls their emotions and clearly follows their trading plan. Analysis of the way we trade helps us understand what is useful in making profits and what produces losses. We reinforce what helps get profits and root out things that result in losses. But we need time for changes to take place in our mind.
Now I'll tell you something from my own experience. Mine was the trader type that hates putting stops (a stop-loss is a technique used in trading to limit potential losses). My entire being objected to it. Despite my bitter experience, I repeated the same actions over and again. Even when there were many more positive than negative trades, as a result of losers without stop-losses I gave away most of the profit I got. Little by little I became aware how important it is to preserve capital and profits I had got. My trading style underwent changes with time, but I was still making mistakes. When one day... there was a transformation. It was a split second. It happened in no time. I changed. It became easy for me to limit losses. Limiting losses in advance became part of my trading. Now, before opening a trade, I think of the potential loss, of where I will be exiting if the price moves against my target. Even though the change occurred in a split second, I had been approaching it for a few months. This is how our habits change! At this stage the trader regularly analyzes their trading style, persistently works on themselves and, as a result, starts getting profits. First small ones, 1% a week, but this is a plus already! Your confidence grows. Then the trader starts reinforcing their achievements and works on accuracy of market entry and exit. This is when consistent and conscious profits come your way.
The first stage involves producing trading losses. The second, balance, stage means profitable trades compensate for losers. The third stage offers consistent and conscious profits. Now I will tell you how a trader develops from a different point of view. I think it will be of particular interest to people who already have some trading experience in financial markets.
Stage 1. The trader tries to predict, forecast market movements by using different trading tools.
Stage 2. The trader finally understands that market forecasting is useless as the trader initially is in a position when he does not possess all the information that drives the market. Indicators fail to answer the main question - why the market moves in a certain direction.
Stage 3. The trader understands that it is wiser to follow market movements instead of trying to predict them. It means following the market. They build their trading based on this understanding. This is when kind of 'withdrawal pains' take place because the trading style absolutely differs from what the trader is used to. This is an approach to trading absolutely different from what the trader developed for many months and years. This stage changes the view of the market and the trader's behavior in trading.
Stage 4. It involves improvement (reinforcement, furthering) after Stage 3 is over. Now the trader asks himself the question more often - what stands behind market movements - and starts looking for the answer. This way the trader concludes that large market movements result from efforts of major operators, entities with huge financial resources. When you find out how major operators work you understand that their trading tactics are directly opposite to what most traders do in the market. So, when you build your trading on actions of major market player, it becomes easy to get profits consistently.
You might want to ask: 'Can one move to Stage 4 right away?' I don't think so. You can't jump to the third floor without passing the first and second. In other words, there are stages of development. Of course, you can study materials of Stage Four. But there will be no desired results without the AWARENESS of how important this information is. It comes only after the trader passes the first three stages.
ML: It's all very interesting and, hopefully, will be useful for our readers. Let's now move, however, to the training process itself.
AM: Based on the knowledge of stages a trader passes on their way to successful trading, we built our training course at the Price Range Break Department. Instruction is split into two main sections. The first section deals with main effective short-term trading methods and fosters adequate behavior. A lot of focus is put in psychological aspects of trading. This is huge and very important work. The matter is that, when starting to trade in the market, all of us, whether we noticed that or not, filled our conscious mind with information about the trading style we were comfortable with. But in most cases it was wrong because it failed to take us to our goals - consistent and conscious profits. Now huge effort has to be made in order to change trading habits that we had been reinforcing in ourselves for a long time, to revert the conduct trend in place to a situation when profits are made consistently and consciously. To reach this objective the Department has developed and been applying different exercises that help maximize the speed and efficiency in this regard.
During instruction, through theoretical and practical lessons, the teacher and the student discover those traits of character and habits that help the student make profits and those that result in losses. The student reinforces what helps get profits and roots out things that result in losses. In this way the student quickly moves towards their goal - making consistent and conscious profits in the financial markets. Since bad trading skills and strengths are both rooted in how our conscious mind operates and each person is unique, training in the Department is only individual which I already said at the beginning.
Besides, in the first training section we teach the student to have a comprehensive view of the market. We believe the market is kind of a multi-faceted object which acts as a single financial organism, including foreign currency, stocks, futures, metals markets etc. By analyzing the market from various angles, we become able to see and perceive it adequately. Respectively, the findings we get at through such analysis are more accurate which positively affects our trading results.
As concerns the training process itself, it is built in a way that the date and time of classes in set by the student him or herself. It is very convenient, and all students at the Department have greatly appreciated this approach to instruction. Our Department's definitive feature is that we not only provide the information, we not only teach effective trading methods - we are aimed at the RESULT. The main driving force behind instruction is the goal to teach the student to get consistent and conscious profits.
The second section of training not only helps the student to reinforce the basics (practical application of knowledge received in the first section) but also deals with medium-term trading methods that allow profit-taking at a minimum risk with a Risk-Reward ratio of 1 to several dozen. The student also learns to 'read' the market. To this end, the Department has developed a unique trading method, the Market Following TS. This trading method is effective both in a range and a trend. It is characterized by an exceptional accuracy of market entry. Trades exactly follow price movement thus minimizing drawdowns. Numerous trades of the Department's students, including Market Following TS trades and trading statements, are available in relevant threads of the Price Range Break Department. Many students that were trained at the Price Range Break Department regularly get consistent and conscious profits.
We are aware that it is difficult to learn profitable trading in a month. Knowledge should be coupled with experience and practice. This is why the Department has developed a unique student support system. Each ex-student can stay with the Department and further receive quick help until they get consistent positive results.
The instruction approach taken by the Price Range Break Department has been appreciated by most students according to vast feedback posted in the relevant section of the Department's thread. I would like to quote a few of such responses as an example because they briefly describe what study at the Department is like and what results it produces.
'Good afternoon. Have a nice mood! It has been over 3 months since I started learning at Alexei's Department. I have formed a holistic opinion about the Department and study. This is what I would like to share with you.
Firstly, what you primarily buy for is eye-to-eye communication between the teacher and the student when you can quietly get and analyze learning materials without any fuss, study it, phrase questions you're interested in and then get answers. Don't be afraid you might miss something, be late for a class, have to catch up with missed material etc. Alexei is a very considerate and patient teacher who will never leave his student without answers to questions the latter is interested in.
Secondly, it is the quality of material that Alexei delivers. You see at once that this material was developed by Alexei in the course of consistent daily practice. It is up-to-date, relevant, logical, easy to perceive and understand. Most importantly, each of the methods we study helps take profits. But why?
Because, thirdly, instruction is significantly focused on trading psychology, discipline and money management. These are the simple and seemingly natural things that traders often overlook. Unfortunately, this is how our conscious mind operates. Many students have already developed their reflexes (oftentimes wrong ones - otherwise, they wouldn't have come to learn) in trading. They're already deeply rooted in the sub-conscious. And it often is very difficult to make yourself change them, especially once you're in the market and overwhelmed with emotion. This is when Alexei comes to help. By listening to his lectures, preferably, several times, the student gradually roots out their wrong habits in the subconscious and switches over to logic, knowledge and skills.
Next, I want to say that the most interesting stuff starts when the theoretical part of instruction is over. You are included in the Department's chat where experienced (and newly-come) students led by Alexei analyze market movements real-time, share their opinions, forecasts, drawings. I wish you could see how enthusiastic they get! Often chat conversations are on almost round the clock. People analyze movement of several currency pairs, explaining the logic of their movement in detail.
By looking at drawings, the entry logic and market entries themselves that Alexei offers you can, no doubt, see he is a very experienced and successful trader. Moreover, our teacher always answers questions, makes clear what you don't understand, gives the right direction for your thinking, the market entry and exit logic. In the chat, Alexei shares the recent developments of the Department, indicators, new lectures and training materials because the TS constantly improves and evolves together with the market.
Before this Department I studied at other places. I will say at once that I liked how they teach everywhere and left my feedback in relevant threads. But it was under Alexei's instruction that I got what I was aiming at - confidence in myself, the ability to read the market and be on the same page with it, the number of losing trades clearly fell, while winners increased, psychological comfort of trading itself improved multifold.
Yes, without any doubt I still have many things to reach and improve but I am absolutely positive that it was in this Department that I planted the seed of a successful trader in myself and it will only successfully grow and develop.
Best regards, Arseniy'
Success of the Department's students is an illustrative confirmation of how effective our instruction method is.
ML: Your Department does not stand still and constantly develops. This also is one of its characteristic features. Could you say a couple of words about the Department's new discoveries and plans for the future?
AM: The market changes like. So do we, and by becoming more experienced, we move forward on the path to professionalism in trading. Following this tendency, the Department also develops. It constantly works on improving the quality of instruction and the quality of trading, new lectures and discoveries are made. When I was only setting up the Price Range Break Department there were about ten lectures included in the curriculum, mainly in the text format. Now, during their tuition, the student gets over 35 different lectures in text, audio and video. Webinars are held for practical classes. The subject matter of lectures has been significantly extended to include the description of effective short-term and medium-term trading methods to lectures on psychology which are of applied nature. The basis, the foundation a student gets during the instruction will help them reach any goals they set in real life as well because principles of becoming successful in trading are the same as in any other area of activity.
The Department's discoveries include determination of the first wave, the market reversal algorithm, development of the Market Following TS and others.
This is what I would like to emphasize. A strong desire to have all students of the Department get consistent profits in financial markets resulted in new and different effective trading methods, including short-term and medium-term. I would like to stress that every person, regardless of their sex, age, financial situation, free time, everyone will find in the Department what will be useful for them and help them consistently make money in the market.
Among students there often are people who cannot devote a lot of time to trading because they are so busy in their jobs. Effective medium-term trading methods have been designed and implemented for such students as I have already said. But we took a step further. The Department created a separate unit for trading with the help of automated trading systems (ATS). It applies a scientific approach.
The Laboratory called 'Creation, Testing and Optimization of Automated Trading Systems' was set up within the Department in June 2011 to make consistent profits in financial markets based on automated trading systems. Leading traders of the Department are involved in its research. The aim is to create a unique method for ATS operation in order to make consistent profits with low risks. Results of this research are used to develop not only unique trading systems, but also the proprietary ATS trading instruction course.
In September 2011 we open the optional class of 'Profitable Trading with Automated Trading Systems' intended to teach the student to profitably trade with an ATS. The curriculum includes a unique proprietary method of trading based on advisors. Instruction is only individual and is held at a time convenient for the student. Instruction is open only to students that have attended basic training at the 'Break' Faculty. The curriculum includes theory (1 week) and practice (2 weeks). No matter how effective is the TS for which the advisor is written, any advisor needs managing to get consistent profits. We teach how to do this during classes. The curriculum involves trading with different advisors that work both in the range and the trend, at a different time of day or night. It deals with special features of many currency pairs and the dependency with different market sessions. Besides, the students will get a package of profitable advisors designed by the Department for the tuition period, as well as their parameters and management scheme for each advisor in particular and for all together. All developments and discoveries of the Laboratory of 'Creation, Testing and Optimization of Automated Trading Systems' will be open to the optional class students. After the study is over the student remains a member of the Department (if they want to) and regularly gets all new information about the Department's developments and research as well as quick help in trading. This is to help the student learn to consistently and consciously take profits in the market which is our goal and driving force behind instruction.
As some students of the Price Range Break Department take up asset management, the Department's plans for the future include creation of a special training course 'How To Become a Professional Asset Manager'. I believe this training course is right for those who want to start asset management for the reason that managing other people's money requires that the trader have special psychological preparation and a certain trading style where stability and reliability in trading are top priorities. We do our best to help our students consistently make money in financial markets!
ML: In conclusion, please tell us the key to your success.
AM: There's only one and very simple key. You have to love what you're doing and do it well and even better. You got to become professional at it. Patience, Unrelenting effort and Wisdom - these are the three components that will surely take any person to the goal they have set. Each of us wants to be financially independent in this life. Independence is a cherished dream for many. But to achieve it, we need to, first of all, become financially literate and then learn to manage our capital.
If you really want to succeed in investing, you need to treat it seriously and learn all the ins and outs of the trade because risk is anyplace professionalism is lacking. Of course, we can give our money to professionals but it is much better to learn to effectively manage our own money ourselves. Some might think trading in financial markets is very risky and it is more likely to lose than to win. In fact, there is no more risk here that in any other kind of business. The key lies in how we treat what we're doing. You can succeed in any business. Trading in financial markets is no exception. If we have patience and persistently make the effort it takes, the results won't be long to come. It all depends on our own effort. It is us, not somebody else, that is the reason for our success!
Hopefully, this conversation was useful to many readers of Market Leader. In the next issues I plan to give a detailed account of the optional class of 'Profitable Trading with Automated Trading Systems'.
