Throughout the Learning Center we progressed through all of the critical components a trader needs to understand and Master in order to be successful.
Our Chapters and Lesson plan were structured in a deliberate way, as the concepts in each Chapter needed to be read, understood, and internalized, prior to progressing to the next critical topic. Like any structure that is built to stand the test of time and weather all storms, we start by building a solid foundation, then fortifying defenses, then adding offensive weaponry, and finally battle tactics.
Before you ever place your first (or next) trade risking your hard earned money, you must ask yourself, have you built a fortress? Have you developed a Trading Program that is built to last? Have you made the necessary investment and time into your program to ensure it's viability & Long Term success?
If, the answer is yes, then you should know all of the following:
1 - You know all of the Rules of the Game for your chosen Instrument:
A - You know the quantity of Goods you trade per each contract, as well as the Notional Value of the Contract.
B - You know the Initial Margin requirement as well as the Maintenance margin required to hold the position overnight.
C - You know the minimum tick, and the dollar value of each tick move.
D - You know that you have to either roll or close your position 3 business days prior to First Notice Day or Last trading day depending on the contract rules. You are always aware of what that date is and when it is approaching.
E - You know which exchange your instrument trades on, as well as the Hours available to trade. For example, Softs and Grains trade at very different hours to Metals and Index Futures.
F - You Understand that you should primarily concentrate your trading in the most liquid Futures and Options contracts - If you don't, you risk not being able to close out your position.
G - You know that all of the "specs" information is available via the direct web-links to the exchanges located in the "Sectors" menu option in Alchymist.
H - You know that Margin Requirements are determined by your respective Broker, so you should be well versed on all of their rules and requirements.
I - You perform your own due diligence and fundamental research so you understand what events may impact your position. You THINK for yourself, and try to anticipate how other traders will react to this information.
If you are uncertain about any of these points, please revisit Chapter 1. Then go to the exchange website link to read up on your instrument. Then check in with your broker to ensure you understand margins and roll dates.
2 - You know all of the inherent Risks of Trading Futures and Options:
A - You understand that Futures, and Futures Options are derivatives with explosive Leverage. We call them WMDs for very good reason.
B - You understand you are up against the Biggest, Well Capitalized, Ruthless, and in many cases Criminal opponents. They will run all types of scams to separate you from your chips.
C - You understand that you must do your due diligence when selecting your broker. You are entrusting your precious capital with them, and relying on them to properly segregate and guard YOUR money.
D - You never fund a broker account without having reserves - You always must have available funds to come back with in the event you bust out or some other unforeseen catastrophe.
E - You know that any time you go Long or Short a Future, you only do so when you have covered your position with a protective option. This is your insurance, and you never, Ever, play without it. Doing so is like having sex without a rubber - It may feel good at the time, and it's fun to tell your friends and laugh about it afterwards - but it only takes one adverse outcome to ruin your life. Why take this chance?!? - DON"T!!
F - You know you never outright sell options as the risk/reward profile is horrible and contradictory to everything we teach. You earn a little, and in doing so, you expose yourself to unlimited risk.
G - You understand that you, yourself are the biggest risk of all to your success. Your greed, conceit, envy and fear can lead you to abandon sound/winning principals and risk management techniques. You must always guard against self sabotage.
If you are uncertain about any of these points, please revisit Chapter 2.
3 - You Know the odds of the position you are taking, and only play when those odds are in your favor.
A - You know the Baseline movement over a particular time-frame for your chosen future, and focus on trying to hedge against, as well as profit on, this statistically probable move. You focus on playing in the 70th + 80th percentile ranges for your chosen instrument. (See your Baseline Tables before structuring your trade)
B - You monitor Seasonal tendencies and understand the probabilities of success in a given month. (See your monthly Return Odds Tables)
C - You know the average yearly range and High/Low by year so you visualize the probabilities of how far a instrument is likely to go in both directions.
D - You monitor the positioning of the Commercial Traders and Hedge Funds, monitoring for Extremes in activity and positioning.
E - You monitor for other signal extremes, to ensure you are not on the wrong side of a high probability reversion to the mean.
F - You read our research and follow along with us on our blog where we will highlight some of the High Probability bets we see forming.
G - You know trading is just like any other game, with a random distribution of statistical outcomes. Therefore you always use proper Place Betting and Risk Management techniques so that you are not crippled by a few adverse outcomes.
If you are uncertain about any of these points, please revisit Chapter 3.
4 - You Have Developed a Grasp of Technical Concepts
A - You learn to read and monitor price charts.
B - You understand the structure of price movements.
C - You understand that Prices Ebb and Flow, Act and React, and you look to monitor and anticipate these retracement levels.
D - You let price action put you into trades, and take you out of them. This means you initiate longs and cover shorts as prices rise through Pivot Points. You initiate shorts and exit longs and prices fall through Pivot points.
E - You know that Pivot points can include the 3ptCapital Channels, Cyclical time Ranges, Round Numbers, Horizontal Support and Resistance areas, Fib Retrace levels, or many others that you may investigate and explore.
If you are uncertain about any of these points, please revisit Chapter 4.
5 - You understand proper Place Betting Techniques.
A - Your #1 priority is the preservation and vigilant protection of your Chip Stack.
B - You know your chip stack is your life blood - Without it you are finished.
C - You know your "Stake" is the total capital you have committed to trading. You absolutely, must ALWAYS have reserves in event of some unforeseen event.
D - You then divide your bankroll by a predetermined number of bets, so that you have game-planned in advance how many bets you can place in order to give yourself the best chance of seeing enough hands to take advantage of the statistical odds you will be placing in your favor.
E - You always buy insurance on your Futures bet. It guarantees the size of your maximum loss, and ensures you are betting in proper size relative to your bankroll. It eliminates the possibility of a ruinous loss.
F - You employ regression betting techniques. This means you hold a statistical advantage before betting, and as you are winning in your trade, you reduce the size. This guarantees you a profit, while continuing to play with house money to chase out-sized returns.
G - You Target a minimum of 2-1 Risk Reward ratio when placing your bet. Even if you are only right 40% of the time, if you can generate 2-1 bets, then you ensure you have a profitable system.
H - You are constantly monitoring your positions throughout the life cycle of the trade. Don't give back hard won gains.
I - You continuously remove funds from your Brokerage account after winning streaks or winning months. This is another form of regression and ensures you lock up gains, and don't trade too large, too quickly.
If you are uncertain about any of these points, please revisit Chapters 3 & 5.
Your success in the Trading Game requires Implementing all of the concepts you have learned throughout these chapters into your trading program. Don't risk your capital until you have done so.
You have the knowledge now, and the Alchymist platform provides you with all of the data & tools you need to Place the Odds In Your Favor, Calculate Your Risk, and then it is up to you to Execute your Strategy.
Make sure you spend as much time as necessary Trading a Virtual Account both properly and profitably, prior to pulling the trigger on the real thing. Take your practice seriously - by simulating Live Game conditions, you will be readying yourself for when the real bullets begin flying.
Never forget that your Persistence, Hard Work, Effort and Perseverance is what will make you a success. You must believe in yourself and outwork your opponents. We spent over 14years banging our heads against the wall, and giving back Millions in profits. Heed our warnings and learn from our mistakes. There is absolutely no reason for you to pay the tuition costs that we have paid to the Marketplace.
Most Importantly, Never Forget that out-sized returns, and significant profits can be attained by following this Golden Rule: Only bet when the Odds favor it, but bet in size like they do not!
With these principals embedded by your hard Work and Commitment, along with the tools and data that you now have access to, You Can Build your Trading Business into a Fortress.
You hold the high ground, so it is Impossible for invaders to over-run you. Your defenses can easily withstand numerous attacks. A diverse and accurate offensive arsenal is available at your command.
Build this...Become this...
We wont end this by wishing you luck, but rather by reminding you that you will have stretches of both Good AND Bad luck - So bet & play accordingly!
Good Trading to You.
Christian Badurina & the 3ptCapital Team.