1. How can I “daytrade” and still keep my day job?
With the dramatic increase in electronic trading in the overnight markets (GLOBEX, A/C/E and EUREX), opportunities abound for trading outside regular market hours. Overnight ranges of 1000-2000 basis points in the S&P's are not uncommon ($2,500-$5,000 in the big S&P, $500-$1,000 in the Mini) not to mention the volatility seen in the German DAX (trades on EUREX) and early morning activity in T-bonds (they trade on A/C/E). More and more traders are participating. As a result one no longer needs to give up one's day job to "daytrade"
The best times for monitoring are from the time Europe starts trading in the early morning i.e. 3-4 a.m. until the open in Chicago. Occasionally when there is unrest in the Asian markets there will be sufficient volatility in the evening to consider trading from approx. 7 p.m. until midnight
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2. Can your trading methodology be applied to other markets and timeframes than the intraday S&P futures ?
Our method is applicable to any market, in any timeframe. We have heard from a number of students who are applying our methods to a variety of markets (equities, equity options, index options, currencies, bonds and other commodities) in timeframes varying from 2 minutes to weekly charts. Our course material, however, focuses on daytrading S&P futures on 5 minute charts.
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3. I don't want to "day trade". how does this work for more intermediate and long term trades ?
Our method is applicable on longer timeframes and other markets than the S&P 500. We have had numerous reports from students applying our approach to other timeframes and markets than those covered in the course materials. The only differences are that one may need to adjust the volatility filters and stop parameters. When trading the daily chart one can expect a holding period of an average of 2-4 days.
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4. I trade stocks, not futures. Is this only for futures trading?
No, it can be applied to stocks as well. We have a number of students who trade stocks in timeframes ranging from 2 min. to daily charts and they have been satisfied with our approach. Our materials, however, are geared to stock index futures.
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5. What kind of expenses are involved in getting started trading ?
Real-time quotes will run from $70-$300 pr. month depending on data vendor (eSignal, Quote.com, DTN etc.), method of delivery (i.e. internet, cable or satellite) and number of exchanges bought (CME, CBOT, COMEX etc.). This is your primary on-going expense.
Trading software ranges from free (Quote.com's QCharts) to $2,500 for TradeStation by Omega Research.
Finally, if you don't own a computer you will need to get one. The cost of a suitable 'off the shelf' system from a reputable vendor starts at approx. $800.
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6. Is your course set up for a beginner who has no understanding at all ?
We have worked with traders of every skill level. We do have certain admission standards for our workshop, however, to ensure that every one has achieved a basic understanding of the markets and technical analysis so we can focus on teaching our approach rather than the basics.
People pay good money to attend our course and we try not to waste their time on things they can pick up from a $50 book at Waldenbooks or Barnes&Noble. We will be happy to suggest a couple of books for you to read to get to that point. You may also wish to consider getting the materials in advance of attending, so that you can prepare better and get an overview of the material covered.
That being said we have oberved that new traders do have a distinct advantage when applying our approach, because they have not acquired any bad habits (such as not using stops, picking tops and bottoms, problems "pulling the trigger" etc.) that need to be overcome.
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7. As a novice, what amount of time would it take me to really master the program ?
It varies how long it takes students to gain the confidence necessary to start applying the approach in the markets. We have had students who have started trading within a week of attending the workshop, and we have heard from a couple who paper-traded for 6 months prior to starting. Realistically, expect to spend 30-50 hrs with the materials and 4-6 weeks paper-trading before you are ready to start trading.
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8. I followed your articles several years ago and the explanations of your approach. Are your home study products very much more detailed ?
The manual is much more detailed. It presents a coherent, comprehensive trading strategy that you can take and start implementing within days of receiving your materials. One of the things covered in great detail in the course materials is our money management and trade management scheme. Money and trade management are the cornerstone of any successful trading approach. That area received very little attention in the articles.
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9. Do you offer a money back guarantee ?
Most money back guarantees in the industry are written in such a manner as to make it extremely difficult (if not impossible) for the average person to collect on (i.e. must keep trading log for anywhere from 3-12 months, if can demonstrate after that period that X number of $ weren't made, may return materials for refund, provided materials are in resalable condition etc. etc). From that it is clear that the vendor has no intention of honoring the guarantee. We don't insult your intelligence with such tactics.
We cannot guarantee the future, hence do not offer a money back guarantee. No one knows what the future holds (this is the reason for the required CFTC statement: Past performance is no guarantee of future results), the markets may change. We do, however, offer unlimited follow-up support and guarantee to work with you until you have mastered the methodology regardless of how long it may take. In effect, signing a blank check on our time [the most valuable resource we have].
To succeed in trading a certain commitment and willingness to assume risk is required. If a person doesn't have the confidence in their own judgement to assume the risk of purchasing a course without a money back guarantee after doing their due diligence (i.e. asking questions of the vendor to learn about the product and assess his integrity and contacting references) and is not willing to take responsibility for that decision then they are not very likely to succeed in trading. We can only work with a limited number of people and prefer to work with individuals who are willing to make the necessary commitment and take responsibility for their actions and results.
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10. Do you offer a subscription to your signals ? In other words, can I get your signals without attending the workshop/purchasing the Home Study Course ?
This isn't the first request we've received along those lines. There are a couple of reasons we haven't done that:
1) We want you to become self-sufficient as a trader and learn how to trade. If you subscribe to such a service and rely on it and the person providing it gets hit by a truck tomorrow where does that leave you?
2) We are not interested in being "chained" to the monitor providing such a service. As it is we're inclined to take the afternoon off and play golf or do something else if we have a good morning. Obviously that would be out of the question if we had to broadcast signals throughout the whole day. In other words, now we have a "boss" and no longer enjoy the freedom that is the primary attraction of trading independently.
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Answers to Workshop and Methodology Questions
1. How much capital is required to trade your approach effectively?
The amount of capital required is a function of the market you plan on trading. Current margin requirements in the E-mini S&P's for example are approx. $3,500. A good rule of thumb is to use 2-3 times margin pr. contract.
NOTE: You may be able to get away with less, but it is difficult to trade when you are under-capitalized, it impairs your judgement, affects your trade selection and the way you manage your trades.
Capital requirements are significantly greater in trading stocks.
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2. What part of your methodology is discretionary ?
There are 2 areas where discretion comes into play:
a) Trade selection - you do not need to use discretion in this area (if you choose to take all the trades that come along, you can make this part objective). We like to give ourselves some credit for putting in all this time in front of the monitor, and allow ourselves discretion in this area. That doesn't mean we only pass on losing trades, we pass on plenty of winners, but we believe that performance can be enhanced by exercising discretion in trade selection.
b) Trade Management (from the point of getting your stop to break even). Our approach is mechanical with respect to managing your initial risk. Once you have moved your stop to breakeven you have a choice between a couple of different exit strategies we provide. Your choice of an exit strategy will take into account your own personality and risk preferences to produce a personalized trading experience.
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3. Can you give me some feeling for how difficult it is to implement your system ?
Our approach is quite simple and easy to implement. We enter on stops, away from the current price (we want the market to show us strength before we buy and weakness before we sell) and your protective stop level is known in advance. As a result you are able to phone/fax/e-mail your orders for the day to your broker before the open, if you are trading a daily timeframe. In other words, you can place contingency orders with your broker, for protective stop placement if your entry order is filled in the course of the day's trading.
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4. How big are your stops ?
Stop size is a function of volatility. Course materials explain how they were arrived at and what they are based on, so you will be equipped to make adjustments as required going forward. Stops are currently 3.00 pts in the S&P's ($750 in the big contract, $150 in the E-mini).
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5. Can I learn your system COMPLETELY through the home study course ?
Yes, we include all the information in the Home Study Course. Home Study Course purchasers who have later attended the workshop have indicated, however, that it was worth their while for the opportunity to observe us trading live in real-time.
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6. Besides actually watching you trade, is there any other difference between the class and the home study materials ?
You miss the give and take of a classroom environment where participants come from different backgrounds and have different experience levels. Often the classroom presentation will move outside the designated curriculum in response to student questions. This varies from workshop to workshop, no two workshops are the same. Otherwise, you receive all the same materials workshop attendees receive and apart from the actual trading days there is no difference.
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7. I currently work in the mornings, but have the afternoons free to trade, can your methodology be implemented on a part-time basis ?
Yes it certainly can. That is what some of our students have done, they trade on a part-time basis and build their confidence and trading skills slowly over time.
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8. When does the 'Continuing Education and Coaching' (CE) program start ?
The CE program starts when you request it. It must be requested within 3 months of receiving the course or leaving the workshop. This gives you time to absorb the course materials and get up to speed with the method prior to starting.
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Answers to Software and Hardware Questions
1. What equipment is needed to start daytrading ?
The only equipment required is a regular 'off the shelf' PC (Tip: If you are on a budget, buy the best/biggest monitor you can afford and spend less on the CPU, all new CPU's on the market today can handle the minimum processing requirements. There is no need to spend the money for a top of the line system), You will also need to subscribe to a datafeed and acquire charting software.
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2. What does the software included with the course do?
The indicator library is a 'visual aid', it identifies 2 of the 4 patterns and plots the support/resistance levels horizontally across your screen and updates them in real-time.
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3. Is it necessary to have TradeStation to implement your methodology ?
No, you do NOTneed to have TradeStation to implement our approach. You would however need it to take advantage of our proprietary software.
We explain the patterns, the logic and rationale behind the trades and disclose the formulas for the support/resistance levels at the workshop and in the home study course. We have a number of students who are using CQG, Ensign, Windows on Wall Street, MetaStock etc. and they have indicated that they are able to identify the patterns without benefit of the software.
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4. Is the software written specifically for the S&P's or can it be used for other markets as well ?
The indicator library is not written specifically for the S&P's. It can be applied to any market in any timeframe.
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5 What kind of PC do I need to run your software ?
Whatever the requirements are for TradeStation. These days pretty much any off-the-shelf system exceeds the minimum requirements. We suggest that the place to spend money is on the monitor, rather than the CPU. If you have to make tradeoffs go for a slower CPU and spend the money saved on a bigger/better monitor. We suggest a 17" at a minimum with 19"-21" preferred. The monitor should have the smallest dot pitch (.25 or less) and support resolutions of 1024x768 or greater at refresh rates of 85Hz. This will help reduce eye fatigue (remember you're going to be putting in a lot of time in front of that monitor!).
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P.O.Box 890648 Houston, TX 77289-0648