All language subtitles for 01. The Framework

hello and welcome to the professional

trading master class video series with

me anton creel itpm managing partner so

guys

you've arrived

at the ptm video series

what a video series we have in store for

you

whether you're here because

you're a retail trader looking to get to

a more professional standard or you're

actually an individual who is looking to

go into the industry

and literally become a professional

trader

this is where it's at this is by far the

most comprehensive education

in trading you will ever get

so guys this is what we're going to do

we're going to get straight into it

we're going to introduce you to three

major concepts straight away we're going

to be looking at the framework

of

the professional trading master class

video series and the framework that

we're going to use throughout the video

series

and the three main areas we're going to

introduce you to straight away are the

competency hierarchy

time horizon and volatility

and the pro trader systematic framework

so guys we will learn those first and

then we're going to look at

the most important thing

and this is going to take up

the bulk of

the ptm video series it is the trade

idea generation process

okay with the trade idea generation

process we always start with

fundamentals we live in the majority in

our trade idea generation process

in

fundamentally driven trade ideas this

makes up the vast majority of what we do

and it makes up a huge amount of the

professional trading master class

we are rooted in our fundamentals in

both quantitative and qualitative

processes and this is what we call the

discovery and evidence phase it's a

combination of both top-down

macroeconomic processes

and

up company level or stock fundamentals

next we move on to trade timing

how we time our fundamentally driven

trade ideas this is in the minority of

our process we use technical analysis

and price action indicators to time of

fundamentally driven trade ideas okay

we don't use

technical analysis and price action

indicators to actually generate the

ideas this is a major difference between

professional traders and retail traders

our trade ideas are rooted in

fundamentals they are driven by

fundamentals and we use technical

analysis and price action indicators

only to time our trades

then later much later in the video

series we are going to be looking at

catalysts okay

so for our time horizon and volatility

optimization we operate in the 20 to 60

day time horizon

and we do this in equities okay in the

stock market

so this provides us

with a very large opportunity set it

gives us wholesale opportunities

and a systematic process within this

time horizon and within equities

this mandate gives us consistency

which is the holy grail for traders we

want to get consistent outsized returns

so

our trade ideas are fundamentally driven

trade ideas

that are timed well

we want to be operating within that 20

to 60 day time horizon we are not

investors we are traders and we require

catalysts

for a stock to actually move within that

time horizon so there'll be much more on

this

way later in the video series

in the meantime we have a lot of work to

do on the trade idea generation process

after that we have what we call in the

trade the whole process the whole

systematic uh professional trader

process

we have trade structuring

so what we're going to do in the ptm

video series is actually assume

that we're only going to have long and

short stock positions

the ptm video series is not an options

trading program

for trade structuring if you want to

learn

how to structure trades

using options you have to take the

professional options

trading masterclass okay the potm video

series

learning how to trade options and how to

structure your trade ideas

using options is an entire class in

itself

it can't be done in the ptm video series

okay

now next step of the whole uh

professional trader systematic framework

is risk management and this splits up

into two areas we have preemptive risk

management and we have reactive risk

management so preemptive risk management

will be taught

in the ptm video series

however

there's an issue here with risk

management unfortunately

reactive risk management simply cannot

be taught in a video series why because

reactive risk management involves

actually having a position

and when you've got a live position

knowing what to do at any one moment in

time in a specific situation that's

specific to a particular stock

unfortunately retail traders it's a bad

habit retail traders do always look for

rule books and checklists

for everything to do in every specific

situation this is not how it works okay

so unfortunately reactive risk

management

you have to actually go to the next

stage to learn reactive risk management

it can only be taught with live

positions and itpm this can only really

be taught on a trader mentoring program

so we will cover preemptive risk

management which is all the preemptive

steps that you can take

before you actually have positions when

building a portfolio so the best

practices of preemptive risk management

next up in the whole pro trader

systematic process is our trader metrics

how do you actually measure your

performance as a trader we're going to

show you how to calculate a track record

in a professional trade away it's not

just about making money for professional

traders

of course that's a large part of it it's

also about how you make your money

also in this video we're going to

introduce you to

the itpm principles the four itpm

principles which will get which we're

going to be utilizing

all the way through the video series

these are self sustainability

work ethic

free information and working smart and

not hard

so guys we're going to get

into this video now the framework

the whole ptm video series

there's many parts to it many major

parts to it but the first two major

parts

of the ptm video series we're going to

be covering the pro trader systematic

process

which involves top-down and bottom-up

funded fundamentally driven

trade idea generation

but first

let's cover the framework that we're

going to be using in more detail so you

understand how professional traders go

about things

this will form the basis of everything

we do going forward in the video series

so guys let's get stuck into it

[Music]

okay everybody welcome to the computer

free and welcome to the professional

trading master masterclass video series

let's get started we've got a hell of a

lot to get through it's a huge huge body

of work

and there's a lot of stuff to learn

so let's start video one the framework

let's start with a little background

let's get some uh context

about itpm uh the professional trading

masterclass

let's try and understand the bigger

picture here okay

so

the professional trading master class

the first version the ptm 1.0 was

launched in may 2013

and it was available

from may 2013 to may 2020

this video series

is the second version

the professional trading master class

2.0

which has replaced the ptm 1.0

uh in may 2020

and launched in october november 2021

okay

now in terms of content for the ptm 2.0

the ptm 2.0 it's not

simply an updated version of the ptm 1.0

with some say more recent examples

it's a total overhaul of the video

series and roughly it's about two and a

half times more educational content to

help retail traders globally get even

better than they were before

what we've included in this video series

the updated version

is everything that we've learned as

professional traders by interacting with

retail traders over the last seven years

and that essentially is a big attempt to

improve

the ptm video series even more

now going way back to may 2013 when we

launched the first version of the ptm

video series the trading education

industry globally was a total mess

and to a large extent it still is

when the first version of the ptm was

launched

and uh the itpm really came into global

existence

we essentially set a new standard by

raising the bar massively in the trading

education industry and since then guys

we've really helped

literally thousands of retail traders to

become profitable globally through the

original ptm video series and our

12-week trader mentally programmed

now also we have our youtube content our

youtube channel and that's been online

up and running since 2013 as well and

that hasn't just held thousands of

retail traders it's helped millions of

people globally change their approach to

financial markets and to trade better

okay

when the ptm 1.0 version launched the

original version

when it launched it set everything in

motion

what it did is massively raise the bar

and go global okay we took itpm global

and we literally changed an entire

industry okay we change the industry for

the better

what are we doing now well

we decided to raise the bar again

with the launch of the ptm 2.0

and we totally aim

to succeed in moving the industry again

into unsheltered territory

from now on guys

the ptm 2.0 will be known and referred

to as the ptm the professional trading

master class video series

now in terms of prerequisite knowledge

what do you need to know before

starting the ptm video series

well you can come in

with a blank slate that's totally fine

but most of you coming here right now

uh

before taking before taking the ptm

you will have taken the introduction to

professional level trading the iplt

video series

it's not an absolute necessity

to do before you start the ptm

but

if you haven't completed this program

prior to starting the ptm video series

it's definitely advisable that you do

why because you'll get a far better

understanding of the concepts resources

and teachings of the ptm video series if

you do that first

now if you're coming here and you have

completed it the iplt video series

congratulations you've definitely made

a giant leap forward in your trading

education there's definitely not many

retail traders on the planet that have

acquired the knowledge that you have

and the understanding of financial

markets that you've now got

you are already in the minority of

retail traders the significant minority

of retail traders

and uh as we go through the ptm video

series you're just gonna get better and

better and better okay

but for those who haven't

uh taken the iplt video series

um and also

for those who have let's

just have a quick recap

on the key

teachings and key knowledge of the iplc

video series before we plow ahead into

the ptm

okay

so what did we cover in the iplc video

series what did we conclude

well

we found that the approach to financial

markets taken by pro traders

is totally misunderstood by retail

traders for multiple reasons okay

secondly retail traders are kept what we

call unconsciously incompetent

by the market players that have inherent

conflict of interest okay

who are those people retail break retail

brokers and charlatan trading educators

quite frankly and this really just sums

up the whole industry

there is

a whole industry the entire industry is

built around keeping millions of retail

traders incompetent

third

what else did we learn in emulating the

professional trader approach

we learnt in the iplt video series that

we have to attempt

to emulate the function of hedge fund

managers

or the old investment bank proprietary

trading function

but

within the balance of the retail trading

industry infrastructure

and the parameters of volatility that

are set by the market okay

on volatility

what did we learn well volatility is

both risk and opportunity

which means it's everything to a trader

okay

volatility is the most important thing

for a trader

we have to understand the methods of how

to calculate volatility properly and we

did that in the iplt video series by

calculating distribution of returns

average true range percentage and

implied volatility

those are the methods

and we calculated it in the same way

that professional traders do it in order

to understand its implications why

because these are the methods that

professional traders use

okay once we know how to calculate and

understand the implications of

volatility we have to know how to

exploit it in the same way

that professional traders do

and from the lessons of volatility we

learn

how to exploit it

because we learn the areas that are the

most consistent and the most profitable

okay

so we end up with concluding that

building long short one to three months

equity and equity options portfolio for

absolute return is the best area of the

financial markets and this is where

professional traders exist

so for uh students who

uh took the iplc video series this is

genuinely a recap

but for those who haven't taken the iplc

video series and i've come straight to

the ptm video series

um

we definitely advised and encourage you

to do the iplc first if you haven't it

will put into context everything

uh in the ptm video series

and

what it really does is it shows you and

put into context why we actually teach

what we're teaching in the ptm video

series so if you're actually uh

going through the ptm video series and

you keep asking yourself the question

you know why am i learning this stuff

why is this important well the iplc

video series puts that into context

now we also learnt in the iplt video

series how to apply

the competency hierarchy and for those

of you that are new

uh the competency hierarchy uh can be

applied to any

uh learning endeavor

whether it's for example learning a new

language

or

perhaps learning a new skill like

driving

or even for example learning

a learning a new profession so for

example becoming a chef

becoming a plumber an electrician even

becoming an entrepreneur and even

becoming a trader okay

so we have four levels to the competency

hierarchy unconscious incompetence

conscious incompetence conscious

competence and unconscious confidence so

in the four areas we split up into two

big areas we have incompetence and we

have competence okay and if you look on

the right hand side you look right at

the bottom at unconscious incompetence

in a uh

in a in any setting

and learning any new skill or endeavor

and unconscious incompetence basically

means you've got no clue what you're

doing but you think you do and this is

an area that's full of delusion denial

and lies

in the context of the retail trading

industry that's where retail traders

exist okay

so

professional traders exist at the top

of the trading industry and retail

traders exist at the bottom okay

let's climb up the competency hierarchy

what's the next level well conscious

incompetence we're still

uh in the realms of incompetence but

the person now has the right information

they know that they're doing it wrong

they have the right information

and that information is going to enable

them to learn and potentially apply the

skill set okay

but they're still incompetent but

they're climbing the hierarchy because

they're now conscious okay

in the retail trading context okay this

means that you've learned that all the

things that you used to do

don't work okay

and the reasons for that

and you're starting to climb

the hierarchy you've started to become

conscious okay

that is now you getting your hands on

the right information okay

and this is basically the iplt video

series

and the ptm video series and subsequent

video series

at itpm

next in the hierarchy

is conscious competence

and this is where people sit

in endeavors and skill sets that they're

learning

when they actually know how to do it

right

and they're doing it in the real world

and practicing it doing it over and over

again they're implementing the knowledge

that they've learned okay

in the trading context

this is when you move from theory to

implementation

this is where you take what you've

learned in theory and you start to apply

it and implement with real money okay

and again

this can't be done with uh

with uh

demonstration money guys this can't be

done in demo accounts okay

uh trading and becoming competent at

trading

it has to be done with real money it

can't be done with fake money okay

it can't be done in a spreadsheet it has

to be done with real money

so this is you over a period of time

implementing the right knowledge

and doing it with real money okay

and then we come to the level of

unconscious competence

what does that mean well it means you've

been doing it for a good amount of time

you have a statistically significant

amount of traits that you've done

you have the metrics that prove

that you are competent and you're now

doing it on repeat and you're not

thinking about it too much so in the

training context this would mean that

you're essentially a professional trader

level

now

of course professional traders are

regulated by regulators they pass their

professional exams and they're trading

with either

investor money

or if they're trading at banks with

shareholder money

the skill set itself

doesn't mean you are regulated you can

still learn all of the same skills and

apply it in a retail trading

infrastructure

but if you are unconsciously competent

where you are essentially

taking the right information

you've traded over a period of time

where you've got a statistically

significant amount of traits

and you've got the trader metrics and

you're now doing it on repeat you're not

thinking about it too much and you're

just getting the numbers over and over

again

what does that mean well it just means

you're the level of a professional

trader it means you're good enough okay

now where do you institute traders sit

while institute traders sit

in between conscious competence and

unconscious monitors

institute traders are competent

and they've either been doing it for a

while

and they're doing it on repeat and they

are essentially professional traders but

operating within the retail trading

infrastructure

they are professional trading standard

but they're not registered or regulated

as professional traders

or

they're sitting within

the uh itpm infrastructure

they're trading they're new to it

they're going up the competency

hierarchy or maybe they've been there

for a while and they're stuck around

conscious competence and these guys they

may need mentoring programs because

something's going wrong they need to uh

they need to have a pro trader on their

shoulder to fix their problems to get

them into unconscious competence so

institute traders kind of sit between

the two they're either in one or the

other

but for most people coming here now uh

you're either going to be unfortunately

at the level of unconscious incompetence

or conscious incompetence

if you've taken the iplc video series

uh you've definitely started to climb

out of unconscious incompetence that

information should

absolutely

awaken you to the fact that everything

you've been doing before

is wrong

and now

you're getting the right information so

you should be sitting on the fringes of

the two

so

either

uh

just climbing out of unconscious

incompetence

and uh sitting on the fringe of

conscious incompetence or sitting

somewhere

in conscious incompetence the pcm video

series

is the right information the iplt video

series is the right information

uh if you complete the ptm video series

your next step is climbing out of

conscious incompetence into conscious

competence by actually implementing the

information

but let's go through a textbook guide

of what the competency hierarchy looks

like

in the trading context

what do retail traders have to do

in order

to become

long-term consistently profitable

traders

because in the iplc video series we

learned

that if we're going to emulate

professional traders

we absolutely have to do what they do

and what they do is they are

consistently profitable over a long

period of time

so what do retail traders have to do in

order to get consistent profitability

well

retail traders the vast vast vast

majority and we're talking

97 98 and 99

of

retail traders will forever be sitting

at

the level of unconscious incompetence

how do you get out of that level well

you've got to drop your old ideas you

cannot even begin to climb the

competency hierarchy unless you

recognize that the old ideas you had do

not work

of course

you may have experienced some fleeting

successes

everybody tends to have

wins occasionally okay

even when sitting in the unconscious

incompetent level okay

but overall you're going to lose over

many traits over a long period of time

that's because you're not taking an

approach that's sustainable that allows

you to get consistency

so the actual professional approach the

approach that professional traders take

if you climb out of unconscious

incompetence and you realize that

you're in conscious incompetence okay

you are actually learning the pro trader

systematic processes you now understand

the difference between the two

you now understand that

sustainability in trading means

consistent returns

which can only be achieved through a

robust and repeatable systematic process

you know you have to learn the theory of

how professional traders select their

trade ideas time their trades structure

their trades and build portfolios

and manage risk

both preemptively and reactively

you understand that you have to learn it

and you acquire this information

then and only then can you move on to

conscious competence

so you become

conscious and you start to become

competent

and how do you start to become genuinely

competent at trading

well you trade with real money you

implement the processes the theory that

you've learned

you have to properly commit to the

process that you've learned

and implement the processes in a live

trading account with real dollars demo

accounts do not count

you have to achieve

reasonable returns over a number of

trades over and over a period of time

and at this stage if you do have

difficulty

over a time period bridging that gap

between theory and implementation you

have to seek professional mentoring

otherwise you're just not going to be

able to jump to the level of

unconscious competence

when you're working on your weekly

schedule on your weekly schedule

this endeavor this skill set it has to

be

repeatable and sustainable the hours

that you put in

the hours that you commit

and the quality of work that you output

it has to be repeatable and sustainable

that is also how you become

consciously competent so you have to

commit to the process

implement with real money

and it has to fit into your life

seamlessly

when you've got those things and you've

done it over a period of time

that's when you start to move to

unconscious competence

this is when you are on autopilot mode

you're not just implementing uh

profitably and doing it consistently

you're now doing it without

thinking about it too much it's not

stressful

it comes naturally okay

what happens the management of your

trading account

and the growth of your account and the

weekly processes

that you adhere to

regularly become natural you're

generating high quality trade ideas on a

weekly basis

you completely know how to build and

manage your portfolio successfully and

you do it naturally and with ease

you also know what to do when things go

right you know what actions to take when

things go wrong and you're taking all

outcomes in your stride in a very low

stress environment

you're essentially

the same standard as a professional

trader but you're existing as retail

okay so now that we've got some context

we're going to move into the framework

now

what is the whole point of

itpm what is the whole point of our

programs what is the what are we trying

to do here

what is the point of the iplt video

series the ptm the prtm and the pftm

video series

what are we trying to achieve what's the

objective well

itpm we're here to provide a framework

that allows retail traders to emulate

consistently profitable professional

traders

so you can benefit from the same

approach

we're aiming to make retail traders

consistently profitable

through a framework

but the framework

has to allow retail traders to utilize

the same approach

that's taken by

consistently profitable professional

traders

within their own retail brokerage

accounts okay there's no point in

learning the theory if you can't

implement and do it with real money okay

so we're trying to make this real it has

to be

implementable

by retail traders in the retail trading

infrastructure

the framework itself has to allow retail

traders

to implement the process

from the framework

on a weekly basis and realistically

how they can fit this endeavor into

their normal everyday lives

so

your first step

once you've actually admitted to

yourself the wrongs that you've been

involved in

the first step

is to learn the theory

the good news obviously is that you're

here already which means you're on your

way you're climbing out of unconscious

incontinence and you're sitting nicely

in

conscious in concerts

itpm can take you all the way

however

the video series that we have for iplt

plus the ptm plus the potm and the prtm

our video programs can only get you to

the door of conscious content

you have to step over the line yourself

into unconscious competence okay

or if you can't do that

your option is to get a boost from a

trader mentoring program

with one of the professional traders at

itpm

but

if you think about the hierarchy and you

think about our online programs

for you to get out of

uh

conscious incompetence

into conscious competence

that requires

some practical things setting up a

trading account depositing money in the

account

generating trade ideas

putting trades on structuring the trades

and uh building a portfolio

and doing that over a period of time

over a number of trades that makes it

statistically significant okay

to get out of

conscious incompetence

to move into conscious competence

what's required

well

you're going to have to complete

the online programs the iplt the ptm and

the potm as an absolute minimum okay

and then you're going to become

competent that's when you move into

competency and you're doing it for real

with real money okay you've got the

right information and now you're doing

it with real money you're conscious

to get to the next level to unconscious

confidence

it takes a period of time quite a long

period of time and a number of trades to

become statistically significant

so these are our objectives okay this is

what we're setting out to achieve

to get as many retail traders as

possible

to emulate

consistently profitable professional

traders

to benefit from the same approach

and using the framework

and processes

on a weekly basis and realistically

fitting that into their normal everyday

lives and getting you up the competency

hierarchy right to the top of

unconscious competence

so these are the this is the objective

and these are the objectives

uh of itpr okay

so the framework itself how do we

actually go about achieving this well

we are traders

we are not investors what you are

looking at here

is a chart of time horizon and financial

markets volatility

if you look at the uh the chart and you

look at the number of days uh across the

top

where we start on the left-hand side

with one day

five days 20 days 60 days

and then we go all the way out to 120

days

250 days which is one financial year

for uh training

because there's 250 trading days in a

year

750

uh trading days three years and

1250 trading days five years okay

so we're looking at trading days in

terms of of time horizon

and

traders

exist

on the left hand side the longer we

extend our time horizon

the more we become investors okay

now

this is where the problem lies for

retail traders because retail traders

always mix up trading and investing

the time horizon

constitutes what you actually are it

defines what you are okay so

retail traders because they don't really

know

the difference between trading and

investing

what do they end up doing they end up

doing a mix of both whether that's in

the same account or in multiple accounts

as their overall strategy

what retail traders tend to do

is they either exist all the way on the

left okay

or

all the way on the right as retail

investors

so it's quite funny you know when we uh

when we have our applications for

mentally programmed

we actually ask people what

books on trading they've read

as one of the questions

and

most people

the vast vast majority

most retail traders when they apply

when they're filling out that question

they're telling us what they've read and

all the books that they have read are to

do with either day trading

or it's to do with

very long term

investing

either income or value investing okay

and there's nothing in between

so

retail traders genuinely don't

understand

out there in the big world that there's

an entire

world that's in the middle

there's an entire world that's between

the classic time horizon of trading

which is very short-term

and long-term investing and it's called

long-short portfolio management okay

the problem that retail traders have

is that

they're either one or the other very

short-term traders or very long-term

investors they've got they don't know

anything in between so what ends up

happening

when retail traders are trading they're

trading one to five days most of the

time

as day traders

what are they doing if they're trading

very short term especially as day

traders they're competing with algos

they're competing with software

that can do tens of thousands of trades

in a second

and they're trying to compete against

them for returns

it's not even possible anymore guys it

used to be 20 years ago maybe up to 15

years ago it isn't anymore okay so this

is a zero-sum game

we prove that in the iplt video series

or retail traders

we become retail investors

they go all the way to the other side

what are they doing

they're reading books on income and

value investing

uh which haven't worked for decades

and they're buying uh cheap stocks in

the hope that in the next three to five

years they're going to turn around

it's a hope strategy and guess what

they have to sit for three to five years

to find out if they're going to be right

or wrong

that isn't what a trader is guys

that isn't what a trader is traders are

not investors okay

where do professional traders actually

sit okay well professional traders the

vast majority are sitting between

the 20

and 60 day time horizon

so we are

20 to 60 day

long short portfolio managers okay

that's what modern traders are

when we go into positions

we are going into them

with

the aim of making money in the next 20

to 60 trading days okay

and we know that if we keep a position

on beyond 60 days

slowly but surely the position starts to

become an investment

and that is the cardinal sin in trading

when a trade becomes an investment

because you haven't taken off the

position

okay

we want things to happen in the 20 to 60

day time horizon where we have the

consistent volatility where we have the

volatility sweet spot

the longer we keep on a trade

beyond 60 days the more it becomes an

investment

now there's a gray area between 60 and

120 days

where

the grey area trades start to become

investments

beyond 120 days

a position

is absolutely at this stage an

investment okay so you've had

a position on for six months or more it

absolutely is an investment

in between 60 and 120 days

it's slowly becoming an investment so

morphing from a trade into an investment

so we do have this great area but

the vast majority of times professional

traders are trading in the 20 to 60 day

time horizon

if anything's on for more than 60 days

it's highly highly questionable

that person is probably falling into bad

habits

and it's becoming slowly

an investor okay we don't want that we

are not investors we are traders

now from the iplc video series when we

looked at volatility

and

what does it mean

for long short portfolio managers who

exist in this time horizon well it's the

area of the market that provides

wholesale opportunities and wholesale

opportunities that have the volatility

that enables us to harvest

continuous consistent expected return

okay

that's why we exist in this area

what happens when volatility moves well

it's adaptable the process and the

framework is adaptable okay

when volatility goes up

we become

we move from being portfolio managers

and we slide down the time horizon and

we become more short-term traders

when volatility declines

we slide up

the time horizon

and we become more

portfolio managers

and we trade and we build long short

portfolios okay

so it's adapted that it's adaptable the

framework is adaptable

to

our time horizon and volatility but the

vast majority of times around 80 percent

of time possibly up to 90 we are

existing in the 20 to 60 day time

horizon

now the beauty

of what we teach here at itbm and the

beauty of this approach

is that

we are existing in the volatility sweet

spot

and therefore

we're learning in the volatility sweet

spot what does that mean well if you're

in the 20 to 60 day time horizon

you are learning in the majority about

fundamentals our trade ideas are

fundamentally driven

and we use technicals and price action

for timing only okay

so what are we doing we are learning the

best disciplines of fundamentals

and the best disciplines of

technicals and price action okay so

we're learning the best disciplines of

investing

and the best disciplines of trading

now

what does that mean in the bigger

picture well

from a learning perspective

this is the best area to learn to climb

up the competency hierarchy

why

because

if you learn the best areas of

fundamentals

and you decide later in your career you

want to become more of an investor

well you will slide up the time horizon

and the other stuff that you've learned

here will help you become a better

investor because you'll have learned the

fundamentals

but you won't be bad at timing your

investing your investments okay

because you've learned all of the other

stuff you've learned the best

disciplines of trading as well again

and what happens if volatility increases

well if volatility increases and or

you want to become more of a trader

later in your career

of course

you can slide down the time horizon to

shorter term trading

and you will become a better sharper end

trader because you've not only learnt

the best of

trading content you've not only existed

as a trader you've also existed

uh building long short portfolios

and be on your trade ideas being driven

by fundamentals so it will sharpen your

trading you'll become a better trader

longshore portfolio management in the 20

to 60 day time horizon is not just the

volatility sweet spot it is also the

learning sweet spot for retail traders

and in fact all traders

so in terms of the framework that we're

going to be teaching you here

in the ptm video series

we are going to be teaching you how to

trade in the 20 to 60 day time horizon

how to build long short equity

portfolios

in the 20 to 60 day time horizon

and we have a process

for building the portfolio

we have a process that we go through

to build the portfolio

and to trade the portfolio okay

in the 20 to 60 day time horizon

and we can split this entire process up

into theory and implementation

let's start with theory this is the vast

majority of what you'll be learning okay

in

the ptm video series

we come up with trade ideas okay

we are generating trade ideas on repeat

okay it's the most important thing you

will do the most important thing you

will learn and we learned this in the

ptm video series

the trade idea generation process is

rooted in fundamentals

our trade ideas are fundamentally driven

okay

and the trade idea generation process is

split up into two main parts

the quantitative process and the

qualitative process we will cover this

in the ptm video series okay

next up is timing once you've come up

with a trade idea and you believe that

it's the that it's uh a trade idea that

you wanted to put into the portfolio

that's when we have to time our trades

okay

we have to use technicals and price

action

to essentially time our trade ideas

now what's the percentage split in terms

of information and effort that we put in

when we're uh when we end up with a

position

what drives it the most

fundamentals or timing

absolutely fundamentals this is 80 to 90

of everything we do in the trade idea

generation process okay if you've been

told in the past that technicals and

price action

uh

are the methods for generating trade

ideas unfortunately you've been taught

by a person who has never been a

professional trader

professional traders

absolutely in their overall systematic

process

have the majority

of their work done in

their trade ideas in the majority are

fundamentally driven

technicals and price action are tools

that are only used

to time

fundamentally driven trade ideas

we do not under any circumstances use

technicals and price action indicators

to generate a trade idea and then in the

future use fundamentals to justify why a

position went right or wrong that's for

amateurs that's what it is okay that's

for unconscious

retail traders

so professional traders we are 80 to 90

fundamentally driven

and we are 10 to 20

technical and price action driven but

the technicals and price section are not

generating the idea the idea is

fundamentally driven

and then we use technical and price

action indicators and tools

to help us to time the trade better okay

now this is all theory because it's a

lot of research it's work you're doing

research to generate the trade ideas

okay that's actual desk time and that's

work that you're doing research that

you're doing to generate trade ideas

that's the vast majority of what you'll

do okay

next up is trade structures why because

we're looking at catalysts before we

have a position

we need to look at catalysts and decide

what trade structure we're going to have

and that

isn't necessarily just going long or

short a stock

we can utilize options and more often

than not there will be option structures

that are more optimal than being long or

short for stock given the catalysts that

are coming up in the next 20 to 60 days

so when we're implementing which is the

big area over here where we're now

trading with real money

so implementing everything on the right

hand side

when we're implementing we're choosing

our trade structures around the

catalysts that we forecast

now of course once you end up with a

position there is risk management okay

and risk management splits up into two

areas preventative risk management and

reactive risk management

we will come onto this much later in the

video series but just understand and

appreciate the basic framework for now

the key message to take away here is

that in the trade idea generation

process which is the most important part

okay

the vast majority of the work we do is

fundamentally driven our trade ideas are

fundamentally driven

but there is a bigger overall definition

of what constitutes a trade idea

so

what are the differences between

for example a day trade

or a short term trade

an investment

and an actual long short portfolio

manager trade idea okay

well let's have a look at day trades

first

what are you doing

when you generate a trade idea

uh when you're trading in the time

horizon

of one day where

you're going to come in in the morning

you're going to be flat and when you

leave at the end of the day when the

market closes

you're going to be flat as well you only

have positions in the one day time frame

well

you're going to be basically scalping

what we call order flow

so orders that are in the markets that

are moving stocks up and down

in very short windows of time

and you're going to be trading on

candlestick charts

which are minutes a minute and you're

going to be using technical analysis and

price action indicators

100 of the time there's no fundamentals

uh

in the one day time horizon

so

it's just going to be trading on very

short-term indicators

and very short-term news flow

so basically a lot of noise and punches

okay

what about an investment well we've

mentioned this earlier

it's going to be uh three to five years

based on fundamentals of course it can

be growth as well as value

but there's a problem you have to sit

around and wait for three to five years

to find out if you're going to be right

or wrong

now what about something that's

prevalent

in the market from retail traders in

recent years

that you only live once retail trade

those can be both short term positions

so one day to one week

and they can also be investments

where you're basically

fully subverted to a narrative

that an investment is going to go up by

thousands and thousands and thousands of

percent

uh over a three to five year period or

longer

um and you just keep that trade on as a

yellow trade as an extremely

high percentage

of your account and or net worth

and you're all in you're essentially all

in on the position

so it can be one day to one week or it

can be an investment

now when we compare this to uh

longshore portfolio manager trade ideas

in the one to three month time horizon

what's the definition there and what's

the differences well the differences are

very easy to spot okay

if we look at what it actually is

uh

the longshore portfolio manager in the

one to three months time horizon is

utilizing fundamentals in the vast

majority

but also using technicals and price

action so we're 80

fundamental 10 technical roughly and 10

roughly priced action

but that's not where it ends a trade

idea the definition of a trade idea

includes other things okay it also

includes having catalysts within the 20

to 60 day time horizon for one to three

months by horizon

it also includes coming up with what you

believe to be is the optimal trade

structure in the one to three month time

frame

and it also involves risk management

both preventative risk management and

reactive risk management so some sort of

plan

in terms of risk management on the trade

idea

that you're going to implement

prior to having the position

and also

a plan to exit

whether it's going to be a winner or a

loser how you're going to react

uh when the stock moves okay

and also how you're going to to react to

certain catalysts if they come out

so this is what you're going to learn in

the ptm and the potm video series

the implementation phase can be either

done

by yourself okay it can either be done

by yourself

inside or outside itpm so of course you

can complete

the ptm video series

you can do additional video programs

that's itbm and you can choose not to

become an institute trader you can

choose not to implement

the institute infrastructure

and that's fine that's totally fine uh

everyone is an individual and everyone

has individual circumstances and choices

uh if you do come into the itpm

infrastructure uh you'll be implementing

the program uh content

uh in real time with real money okay

um but you can also

uh opt for a 12 week mentally programmed

program

followed by doing it by doing it

yourself

or

you can do a mentoring program up front

that's totally fine we're very flexible

but the implementation phase

you do it yourself either inside or

outside the itpm infrastructure but

essentially

regardless of the infrastructure that

you're uh that you're operating in

you will be in the larger context in the

retail trading infrastructure and you're

going to be implementing the trade idea

generation process which is 80

fundamental

20 technical and price action it's going

to include catalysts

include trade structuring and risk

management every trade idea has to have

all of those elements otherwise it just

simply isn't a trade idea

now what about the

largest part

of the overall process

the trade idea generation process

what about

that part where we're looking at

fundamentals let's have a look at that

because it's important to understand the

details of the framework

earlier we looked at

in fundamentals

fundamentals being rooted in a

quantitative process

and a qualitative process

it's by far the biggest and most

important part of the overall

professional level trade idea generation

process

it's the discovery phase of the idea

okay

the discovery phase of the trade idea

and that is a combination of

quantitative and qualitative processes

and assessment okay

we mentioned previously we are minimum

80

fundamental analysis

and maximum 20

technical analysis and price action when

generating trade ideas okay we do not

pull up a chart

draw some meaning meaningless lines on

the chart

and then look for some superficial

fundamentals to justify

why we happen to have the longer short

position or using those fundamentals to

explain afterwards why we had a winner

or loser in the portfolio

so

we begin

with a really thorough

top-down analysis of macroeconomics

and we combine this with a bottom-up

fundamental analysis in order to

generate

long and short biases

for the overall stock market

for

detectors

and

for individual stock x

now this

you know when we're talking in this

language and talking about these

definitions don't worry about it too

much

but you'll get and you're going to learn

all of this stuff later in the video

series

but

understanding the basics here of the

framework

we're looking at combining

top-down analysis top-down analysis and

bottom-up analysis so macro economics

and micro-economics

to obtain

long and short biases in assets okay and

those assets are the overall stock

market

equity sectors so industry sectors and

individual stocks within those sectors

okay we'll come on to this in great

detail across the video series

so we're using macro economic

fundamentals to obtain a macro view on

the stock market and we're using micro

economic fundamentals to obtain a micro

view on stocks and sectors within the

overall stock market

when we put these two things together

when we marry the two it gives us an

edge

in that

we allocate dollars with confidence

in our ideas and our positions

we take this approach

under the assumption that we are

operating of course

in the optimal areas of the stock market

to exploit volatility and that was

covered in the iplt video series so we

understand which area of the market

that we need to be in to get consistency

and to get

consistency in returns okay

to become consistently profitable we

understand the area that we need to be

in within the market and then we use a

process to generate the ideas and to

generate those consistent returns

the quantitative process though guys

obviously it comes with a

a bit of a uh expectation

of uh educational understanding okay

and the quantitative process

it's mechanical okay it requires a lot

of spreadsheets and data work

similar to the iplt video series you

you're going to have to get yourself up

the curve

okay

and it takes a while it takes a while to

learn this stuff and internalize it okay

to get yourself up the curve

you're going to have to first learn how

to obtain and process data

it's very important in the world of

financial markets very important in the

world of trading to become comfortable

with data

and statistics and processes

to manage the data and processes

but additionally you're going to have to

learn how to understand and interpret

the data okay so it's not just about

mechanically doing it it's about

understanding and interpreting data

in the ptm video series you're going to

be taught all of this spreadsheet work

and how to process everything yourself

so you're going to be taught all of the

processes so you can go away and do

everything for yourself

you'll also be taught how to understand

those processes

and how to interpret the data properly

okay that's very very important

very important skill sets

for

competent traders to learn okay this is

going to be done with both macroeconomic

and microeconomic data

so you'll be able to locate interesting

potential long and short stock ideas for

the rest of your life and most

importantly

doing it for yourself okay

now there is a caveat the quantitative

process is simply the first step to

generating an actual trade idea okay

you saw earlier that a trade idea is not

a trade idea

or can be defined as a trade idea unless

it has all the elements that we covered

so

when you go through a quantitative

process please note

we use the word potential again

at that stage you don't have a trade

idea the next stage you have to go to is

the qualitative assessment you also need

a timing assessment you also need to

look at

optimal trade structuring and you also

need to understand about how you're

going to manage your risk of that trade

it's an entire process and an entire

plan okay

everything's going to be fully explained

later in the video series

here i'm just giving you an overview of

the framework itself so you understand

every single set and every single

element of the framework and what

constitutes a trade idea

the next step

qualitative assessment

qualitative processes and assessment

okay

as part of the overall trade idea

generation process

so when we're looking at fundamentals to

generate trade ideas we do not just stop

at the quantitative

face okay

we don't just do quantitative

assessments and then stop and think we

have a trade idea we don't okay

we don't just use the mechanical

processes utilizing the data in the

spreadsheet

we also engage in a qualitative process

to assess the quality of a company stock

behind the numbers okay

what we do in the qualitative process is

we find out what's driving the

performance of the company and its

valuation whether it's good or bad

just knowing the numbers is not good

enough if we're going to have a position

in the stock long or short we have to

know why we have a position

the most important reason we do this is

to have a deep understanding of what is

going on behind the scenes in a stock

what is driving

the valuation

what is driving the fundamentals of the

stock okay

so imagine you have the position on

and uh

some qualitative information comes out

while you've got the position on what's

going to happen

you're going to be able to interpret

that information correctly okay

if the trade goes wrong you will know

what to do with it if a trade goes right

you will also know what to do with it

we're not trading blind we understand

what's going on beneath the hood

not just in the spreadsheets and in the

numbers

we know what's going on qualitatively

beneath the hood again

the qualitative process

is an essential add-on to the

quantitative process because it deepens

and furthers our understanding in a

stock and gives us higher conviction in

our positioning

what does that mean well our higher

conviction in a position

comes from a higher understanding of

what

the qualitative factors are that are

driving a stocks fundamentals and

valuation

this is what gives us a major edge in

the market okay

this is what gives us an edge over other

market participants

and it is edge

that we need in order to make superior

returns

within the parameters

of the market where we get optimal

volatility

why because the vast majority of market

participants

will never do the work

they will never dig as deep as we do and

have a deeper understanding of what's

really driving a company and driving

stocks valuation

next

is timing

so

we've generated an idea what we think is

a good idea

it's got potential

we've been through the fundamentals

we've been through the quantitative and

the qualitative processes

and we decide we really want to have

this position what's next well it's

timing

we've been through quant and we've been

through qualitative assessment

however

even at this stage

we've not yet obtained fully

what can be described as a trade idea

what we've got at this stage is a bias

okay

we've obtained a bias a long or short

bias on an asset on a stock

now we have to time the trade

once we have our timing and we

understand that it's uh

it's in play it's ready to go

and we have our additional stuff like

trade structuring on our risk management

plan

that is when we have a trade idea so at

this stage we use technical analysis ta

and price action pa

we use those indicators to help us time

trades better

and occasionally we use that

those tools for some risk management

practices if it makes sense to do so

now at this stage

if we conclude that it's the wrong time

to put on a trade we wait for a better

time it's not a trade idea yet okay

all we have at this time what we have at

this stage is a bias

if it's the right time to put on the

trade

we think it's the right time to put on

the trade

we move on to choosing our optimal trade

structure so you can see we're going

through the processes

and at the timing stage it might be

rejected as a trade idea because the

timing is not right

if the timing is right then we move on

to trade structuring because it passes

the next filter of the definition of a

genuine trade idea

now

we do not use

technical analysis and price action

indicators to generate ideas

that is for uneducated retail traders

brokers and charlatan trading educators

who are all operating at the level of

unconsciously incompetent okay ta and pa

is useful

but it has its place in an overall pro

trader systematic process

the place that it has

is only to help with timing

and some occasional risk management okay

don't put too much weight on technical

analysis and price action indicators

there's so much weight put

uh on ta and pa by the unconsciously

incompetent

what it essentially does is it keeps you

there at the level of unconscious

incompetence

because it's the blind leading the blind

people misuse it

and there's multiple reasons for that

that are covered in the iplc video

series

but

it is not ta npa is not

for generating trade ideas

it helps us time

fundamentally driven ideas

fundamentals give us our bias

on an asset so a stock

fundamental fundamentals give us our

bias

long or short and it gives us a

potential trade idea with edge

technical analysis and price action

indicators help us in timing the trade

that's all they do guys okay so don't

put too much weight on it

it does not generate a trade idea

now if we believe at this stage

that uh we have our fundamentally driven

uh bias

we've got our timing

things are starting to look good for our

trade idea uh we move on to trade

structuring

trade structuring is done around

catalysts okay

time horizon and volatility are the two

main constricting parameters in trading

we as longshore portfolio managers are

operating in the one to three month time

horizon and we're placing ourselves in

that volatility sweet spot that we

covered earlier

in the iplt video series viewers

watching now

you you will have understood that for us

to optimize these opportunities we

require wholesale opportunities to

enable consistency

every position that we take however must

also present further opportunity so

potential volatility above what is

already priced in by the market and for

that we absolutely require catalysts

that are going to occur

within the one to three month time

horizon while the position is live okay

now there's going to be much more on

this later in the ptm video series for

now just try to understand the framework

okay

around

uh catalysts we build trade structures

okay

we speak to optimize the trade structure

around the idea within the one to three

month timeframe and that is that can be

additional

to just simply going long or short of

stock okay there's multiple trade

structures utilizing mostly equity

options that we can consider and that is

mostly covered in the otm video series

one of the biggest mistakes of retail

traders in the stock market is to think

in the following terms

when you're looking in the stock market

retail traders think that a good company

automatically equals a good stock

and that automatically equals a good

trade idea

that is a very bad habit and a very bad

way of thinking okay

it's just completely wrong

what usually ends up happening in these

situations

um well the stock ends up not even

moving within

what can be defined as a trading time

horizon

and then it ends up becoming an

investment okay

we do not operate with this mindset

we want to make money in the 20 to 60

day time horizon

we require catalysts and we require

trade structures that optimize those

catalysts within the time horizon

this is what constitutes a genuine trade

idea

a good company does not necessarily

equal a good stock for a trader

and it does not necessarily equal a good

trade idea

it's just the wrong way to look at

things guys but retail traders fall into

this trap time and time again

so again guys just to hammer it home

because we need to iron out all of these

bad practices of retail traders okay in

the framework you have to understand

we are not investors we are traders we

do not take positions in stocks

and then sit around waiting for years

to find out if we're going to be right

or wrong okay

we we require we need catalysts

and from those catalysts we build trade

structures that optimize the payoff

within the one to three months time

horizon

the trade structure that we choose has

to reflect the fundamentals

the timing and the catalyst that we see

occurring in the next one to three

months

and as i've mentioned there are multiple

endless potential trade structures that

we can take advantage of

to just simply being long or short a

stock so in options for example

option structures are covered in the

p-o-t-m video series

and when we look at advanced structures

unfortunately advanced structures can

only be done on a mentoring program

in the ptm video series we're going to

be looking only at long and short stock

portfolios okay

so

we can't obviously in the ptm video

series where we're teaching you the

framework and every element in it

go

and become experts on options as well

options training

requires an entire video series okay but

what we will be covering is preemptive

and reactive risk management practices

on stock portfolios that's going to be

covered in the ptm video series

so again the framework guys and what

constitutes a trade idea

what constitutes a genuine trade idea is

all of the elements

you need to cover all of this

uh to be good at generating trade ideas

all of the elements need to be covered

now when you've been through uh the

entire trade idea generation process in

theory and in implementation

what's going to happen you're going to

put positions on and you're going to

take positions off it's really that

straightforward

positions will be winners losers or

coming out flat or around flat

you're going to have to measure your

performance and for that there's trader

metrics and trader performance again

as traders of course we place ourselves

in that volatility sweet spot

and we expose ourselves to an abundance

of high quality trade ideas

and we're aiming to get consistency

we're building the one to three month

long short portfolios

when we're going through this whole

exercise we're going to end up placing

many trades

over a period of time and initially what

you should be worrying about is your

first year okay

as traders we must have feedback on our

performance

now of course making money is a great

indicator most retail traders don't make

money okay

so just going in to the market with the

right information

implementing successfully

is making money okay but we need to get

feedback on more

we need to understand how we're making

money and what our strengths and

weaknesses are so that we can improve

incrementally over time

you know coming from unconscious

incompetence

into unconscious competence

and then becoming consciously

competent

that takes time

when you're implementing

around one year is when things start to

become statistically significant

but if you're just making money

coming from a long period of time where

you've implemented all the wrong stuff

you've got the wrong information you've

implemented all the wrong stuff

if you're just making money that's a

great start but

we have to understand

when we've

booked a number of trades

over a year or so

we have to understand how we're making

money

and within that data

we're going to really understand what

our strengths and weaknesses are okay

now on the flip side of course

if we're down and we're losing money as

traders we want to understand why as

well

trading performance and using trader

metrics gives you a comprehensive

analysis of this okay

and again you have to interpret the data

so we have a comprehensive analysis of

our trading performance

that's provided by our trader metrics

and that measures what we call our track

record

our trader track record is the evidence

of

our performance as traders

and not just that it tells us how we got

the performance it's essentially like

switching on an x-ray machine and

looking at the anatomy of a trailer

in the paint in the ptm video series

what we're going to be doing is we'll be

showing you all of the key professional

trader metrics to measure your

performance and track record and how to

actually understand and interpret the

statistics

so you can understand your strengths and

weaknesses

you will be using these resources

forever

you'll be tracking your performance

tracking your strengths and weaknesses

how you make money how you lose money

interpreting it understanding it and

incrementally getting better over time

so

getting a better understanding of this

overall framework is absolutely

essential

as we start the video series so when you

move on you've got the bigger picture

understanding and the context of why

we're doing certain things okay we're

gonna go through every single stage of

the process

but

when we do that

and when you're working

for the rest of your life as a retail

trader operating in the retail trading

infrastructure

you have to level up your game

okay

you have to become as good as

professional traders in all areas

now to do this

we're going to start you out on a path

of itpm principles

and these principles you have to speak

to all the time it's very very important

okay that you stick to these principles

throughout

we're going to be sticking to extremely

rigid principles and they are simply

non-negotiable

okay

why

because we know

what makes a good trader okay

we know what's required

in the approach and skills okay

that are needed to turn people into good

traders good traders

can't just be given the right

information

and then

not the principles of how to implement

properly and successfully forever okay

there's multiple principles and other

factors to consider that we're going to

go through now

the first one

is

self sustainability

and this is really to do with trade

ideas but it comes into other areas as

well okay

um

self-sustainability is very very

important

you cannot be

a consistently profitable trader

for a very long time without being

self-sustainable

why well good traders generate their own

trade ideas

good traders do not copy trade okay

that is for dumb retail traders that are

at the level of unconscious incompetence

you have to be a self-starter

it's non-negotiable you must be a

self-starter

in this video series and in other

programs itpm

are going to give you the tools

so that you never ever have to rely on

anybody else

not even us

so you can stand on your own two feet

what do we mean by copy trading

well

going on blogs going online going

looking at uh websites

uh

joining chat rooms uh

going turning the television on going on

social media

what you're essentially doing is you're

copying other people's

ideas

and other people's trade ideas

and you're just following other people

okay

you're not generating your own ideas so

if you go on social media for example

and you see a guy pushing something

they've come up with the idea you

haven't

you are copy trading that's how it

manifests itself in the modern world

okay

that is not self-sustainability

if you're gonna do let's say a thousand

trades over the next five years ten

years okay

if you take the approach where you're

going to get your trade ideas

for those thousand positions by going

online and just copying people

i've got news for you

that's not gonna work

that's for dumb retail traders okay

professional traders

in all areas of the market

in all areas of the time horizon

most of them are in the long short

portfolio management remit in the 20 to

68 time horizon but all professional

traders

are self-sustainable

they generate their own ideas okay

in the 20 to 60 day time horizon we're

going to give you the tools

to do that so you never have to rely on

anybody else

now

even a video series

with the right information on trading

and even

you taking that information and

implementing successfully

on a mentoring program with one of the

itp and professional traders

even doing that it can only take you so

far

why

because at some point

you are going to end up by yourself

you're going to end up alone

you'll be trading by yourself with no

help at all from the big bad world

so how do you think you're going to get

consistent profitability

for your entire career

well it's not going to be looking at the

next post online from some person that

you follow on social media okay

it's going to be because you're a

self-starter

it's absolutely essential and it is

absolutely non-negotiable

next up

work ethic

we get this a lot especially from uh

young people

young retail traders

approaching itpm

a lot of people want to become

professional traders a lot of people

want to go and work out hedge funds

investment banks etc that's all great

it's a noble

thing to want okay to have

to have a successful career

in the financial markets okay

but it's not good enough to just dream

and assume that you're a self-starter

because

you believe that you're motivated or

passionate

these are these words passionate

especially

and uh motivated

the currency of those words has been

devalued so much

over the last 25 years

people genuinely think because they have

passion and motivation that they have

uh work ethic and that this class

filters

it couldn't be further from the truth

okay

and

we assume obviously that you actually

want to learn here how to be a

successful trader and that you're

actually willing to put in the work and

it does take work okay

it requires

conscientiousness

and conscientiousness is way more

important than passion okay

at the institute

we're not going to be

spoon-feeding you trade ideas okay

and we're not going to be telling you

when to buy and sell stocks

that's for dumb retail traders at the

unconsciously incompetent level

as we outlined in the iplc video series

there's an entire industry out there a

whole industry waiting to take advantage

of laziness

and the retail trader wish fulfillment

for shortcuts and hacks

we don't do that at itpm we're going to

give you the tools but we need you to

respond okay you need to respond with

work ethic

and work ethic is conscientiousness

not passion not motivation okay

try to eliminate those words from your

vocabulary replace

passion

and motivation with conscientiousness

it's way more important

but guys don't be scared of the work

we're going to take you through all of

these processes

it's not as hard as you think it just

requires application and

conscientiousness

once you understand it it's

straightforward

and over time your processes will get

quicker the more you practice

the hard yards in this game are put in

now

but it does get easier over time so just

stick at it

next up

in itpm principles

free information

when you're starting out learning how to

trade

it's important to get your hands dirty

getting your hands dirty in the data

to really understand the nuts and bolts

of financial markets

and how to interpret the data properly

at this stage

you absolutely do not need to pay for

third-party software

and incur expenses

in an attempt to create shortcuts

your interpretation of publicly

available data

is way more important than having a

software software subscription okay

think about it what is the point of

paying for software and data

if you don't even know where it comes

from

you don't even know how to understand

and interpret it

and you haven't even turned a profit in

your trading account yet

a software is not going to turn you into

a profitable trader

only you can do that okay

you need to get in the beginning

your hands dirty in the data

to truly understand the nuts and bolts

of this business

to understand the underpinnings of the

financial markets

and you need to understand how to

interpret it properly no software can

replicate those two endeavors okay it's

very important at the beginning of your

career to do that

you know when we had graduates

coming from university onto the goldman

sachs trading desk

we knew

that they had all the resources at their

fingertips

we knew we'd be giving them

amazing software bloomberg software etc

and they would have access

to amazing data sets

okay

but we also knew that they didn't even

know where the data came from what it

means and how to interpret it

so we made them get their hands dirty

for at least the first three months okay

in building spreadsheets crunching data

and understanding all the processes and

understanding the nuts and bolts of

financial markets

it's absolutely crucial in the beginning

stages of your development that you

learn how to do that

we stick to the principle of free

information

we look at publicly available data sets

and we learn how to process that data

and get an understanding of the nuts and

bolts of financial markets

one of the biggest secrets of the

financial education industry

is that it's totally possible to make

money first with free information

from the data by getting your hands

dirty in the data

and understanding the financial markets

first

why because they all want you to sign up

for recurring

revenue products like software okay

a lot of this stuff

gets sold to you as a shortcut and a

hike

and gets called to you as the panacea or

a solution

okay

to your problem of not being able to

make money

the software will never give you the

answer guys okay the software will just

give you

data and you can get elsewhere but you

can learn how to get your hands dirty in

the data and learn how to interpret it

properly okay

you just have to be taught how to do it

by people who know how

so professional traders okay

then and only then are you allowed to

start subscribing to products that give

you

or that give you a quick answer or

subscribe to products that save you some

time okay

then and only then are you allowed are

you allowed to go and spend money

on

third-party software and pay for data

and even then only if it makes sense to

do so

so at the institute

in the beginning

we stick to this principle of making

money first

you open your trading account you put

money into your account

and you make money first implementing

what you have learned

in theory

and when you make money from it

maybe a small percentage can be spent

on softwares later not now

later okay

so you start out with no resources

prior to ever paying for anything

it's a very important principle

because it has a lot of ramifications it

means it forces you to get your hands

dirty

forces you to land financial markets

properly

and it forces you to understand how to

interpret the publicly available free

information okay

that gives you a fantastic fundamental

crutch for the rest of your career

so you may not even ever need to pay for

software that's the beauty of it so we

stick to this principle

because it's very important to start off

your career getting your hands dirty

from the free information

stick to the principle of making money

first from free information never paying

for anything and then if it makes sense

to do so in the future

then perhaps think about it if it adds

value to your trading

next up

working smart not hard

once you've actually done the hard yards

of learning the theory

and then you move on to implementation

of course this whole endeavor of trading

in the same way that a professional

trader does but in the retail trading

infrastructure as a retail trader it has

to fit into your regular weekly life

now earlier

we referred to work ethic okay

and when we did so we referred to

conscientiousness not passion or

motivation

and certainly here

not the amount of hours you're willing

to work per week

you can work for 50 hours a week on

trading and not make money

you need to work smart okay

you've got to eliminate the vast

majority the 97

of

and noise in the market that doesn't fit

your objective

that being consistent profitability

very obviously there is both a minimum

and a maximum amount of hours that you

need to put in per week a good trader is

a consistently profitable trader

and that requires you to show up every

week to put in the minimum hours

but we have to be realistic

retail trainers are likely to have full

or part-time jobs

they're likely to be running small

businesses for example

uh

retail traders can be at college or

university

so you've got other things that you're

doing in your life

you've got your family you've got

hobbies and interests okay

there's only so many hours in a week

okay given your other

endeavors

and other considerations so you need to

also apply a maximum okay

when you're starting out there's a

minimum and a maximum

the minimum is obvious why you have it

because if you're going to build a

portfolio and you're going to trade it

it takes a certain amount of hours

minimum to do so

but there's also a maximum that you have

to apply there is a diminishing marginal

utility

to working over a certain amount of

hours per week

on your trading even if you're doing it

to the standard of a professional

trailer

and you don't want it to affect other

areas of your life

why because when you're starting out

it's not a full-time job

it's a part-time endeavor

essentially

trading building portfolios when you

start out

is

a hobby or an interest okay slowly over

time as you make more money you can put

more time into it okay

but your time starts off with a minimum

and maximum

and oh you only put more in

above the maximum

if

it's becoming an extremely profitable

venture okay

we're going to show you

in the the ptm video series how to

optimize your hours and to work

really smart okay so getting the most

out of those hours per week no dead time

getting the most out of those hours and

being super efficient okay

principle number four

work smart not hard

it's extremely important to stick to

this principle going forward

so starting out in the video series try

to internalize these principles

and try to internalize all of the main

parts of the framework

and the trade idea generation process

and also what constitutes a trade idea

so let's add a few more elements to the

pro trader systematic framework the long

short portfolio management

in the 20 to 60 day time horizon

so

you'll see under theory and

implementation we've added a few boxes

okay

we've added

volatility and opportunity set this

comes from the iplt video series okay

strongly advise that you do it it will

give you a better grounding and

understanding of what's going on in the

ptm video series

and help you with the overall process

okay

under implementation you'll see that

we've added real money trading

that comes from

you trading by yourself

so self-trading or

on an institute trader mentoring program

self-training can be done outside the

institute or it can be done inside the

institute okay

but if you're inside the institute

and you believe

that you may need help with a

professional trader looking over your

shoulder

one of the guys at itpm can help you

over a 12-week period

in the implementation phase okay

or if you're struggling

in the implementation phase

you can choose to do a mentoring program

later

you'll see that we've also added to the

right hand side

after risk management

when positions come off

so we have the total

process

on the left hand side flowing to the

right hand side

obviously positions go on and then

positions come off okay

what have you got when positions come

off well you've got your trader metrics

and your track record

what is that

it's your

performance as a trader

and you get that from statistical

significance

probably over

one year to 18 months

with about 100 to 150 traits something

like this

that's when things become statistically

significant and you start really

learning

what type of training you are

what your strengths and weaknesses are

and whether you're any good at this okay

and uh

adding these boxes in uh is helpful

because it gives you the context and

understanding of the overall framework

that we're trying to teach at itpm so

moving forward into the ptm video series

we're going to look at every element

of course

inside the boxes

and the trader metrics

every element inside the boxes and the

trader metrics the volatility and

opportunity set is the iplc video series

and real money trading happens

with real money

either

as an institute trader or outside the

institute self-trading or as an

institute trader on a mentoring program

so

we're going to go through all of the

things from left to right fundamentals

quantitative and qualitative processes

timing

uh trade structuring happens more in

potm because that's with options but we

will do long and short positions uh in

the ptm video series

and we're going to cover risk management

as well in the ptm video series

so

adding these boxes gives you a better

understanding of the context

so guys let's summarize a systematic

process or framework in general terms

and i say in general terms because

it's not just guys in the 20 to 60 day

time horizon

uh on the professional side of training

that utilize systematic processes and

frameworks they're utilized by shorter

term traders they're utilized by

investors as well

what is it

in the broader context

a systematic asset selection process

is just a process

in which a trader or investor goes

through a series of processes

in order to find trades and investments

that provide a higher probability of

success when compared to simple

randomness okay

all professional traders and investors

use a framework to select their

positions

the vast majority of professional

traders out there globally used one

that's very similar to the framework

that you're going to learn in the ptm

video series

now

the framework presented

in the ptm video series

is adaptable to any market okay

you can tweak it

it's flexible okay it's not rigid

so you can take that framework

into any market where you can trade

publicly available assets

it's a very very useful tool okay

now at different stages of the framework

of course

you can choose to add your own processes

your own inputs

that are additional to what you're

learning in the ptm video series it's

totally acceptable and we encourage you

to do this

we absolutely obviously can't cover

every single thing that's uh going to

add value to a trader's life in one

video series okay

if you want to add stuff in to certain

areas of

the entire process the entire framework

that's completely fine it's totally

acceptable and we encourage you to do it

but

a small caveat

it has to be in the spirit of increasing

your odds of making money okay

as long as that's the case then

absolutely feel free to add your own

inputs and processes into the area of

the framework that you think they should

be applied to that's totally fine okay

so

that covers the framework guys i hope

you've got a better understanding

of what a professional trader systematic

process looks like

what the framework looks like

at itpm and what we're going to be

teaching you here in the ptm video

series

let's go back to the desk and move on to

video number two