IDTA – Simulation to Live Trading Transition Guide

Introduction
Hello! Welcome to the IDTA – Simulation to Live Trading Transition Guide. This Guide has been developed to provide a series of clearly defined Mile Stones that are intended to empower a trader to transition from Simulation to Live Trading based on proven competence and confidence. “From the outset it must be stated that this ‘transition’ is not a simple process as it requires discipline, patience and the proving of trading competence in the only way I know how; proven trading statement profitability.” Lachlan Elsworth 3 December 2014 Let’s explore this. The only true way your trading competence can be measured and proven is trading statement profitability at the end of each trading day, trading week and trading month. If you cannot prove yourself profitable in Simulation, following a highly defined trading plan, and applying this plan with discipline and patience, it is highly unlikely you will be profitable in Live Trading. The above comment may ‘ruffle some feathers’, but it is the ‘inconvenient truth of professional day trading’. In saying this, we are in a great place… Why? The stunning advantage that we do have is that we can in fact practice in Simulation and prove our profitability with not a cent at risk in our trading! We can use Ninja Trader both in the Live Market and also using Live Market Replay, in the exact market conditions, the exact time slot, using the exact strategy we intend to use when we do transition to Live Trading. This means there are NO EXCUSES!!!. You are either profitable or you are not and you must take responsibility for this prior to starting live trading. This places us in a great position. From here we can follow a highly defined set of Mile Stones that provide us with highly defined Performance Yard Sticks to measure ourselves against.

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Lachlan Elsworth is an Authorised Representative (AR Number 444 020) of Intelligent Financial Markets Australian Financial Service Licence Number 426 359 for the purpose of Futures Trading Education. The information in this guide is general information only. Any advice is general advice only. Neither your personal objectives, financial situation or needs have not been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice. Guide Correct 5 December 2013

Let’s get into the Mile Stones with the intent of setting a foundation for success. In saying this, in our experience, successful traders are disciplined, patient and follow a highly defined set of rules and trading plan. Further, they have proven their chosen strategy to be profitable, and they just follow it every trading day without exception. These principles will now be established as the 4 Keys to Trading Success for this Guide. The 4 x Keys to IDTA Trading Success 1. 2. 3. 4. Discipline; Patience; Follow a highly defined trading plan and strategy; and Independently prove your own profitability using the plan and strategy prior to trading live money.

Our Required Reality Check
In order to give new traders and seasoned traders alike, the greatest chance of success, the following Mile Stones must be followed and proven verbatim. To start, we must recognise a very important fact regarding apprenticeships/ University Qualifications and how long they take before graduates can get paid properly. In our experience, in Australia, a Carpenter follows a four year Apprenticeship Cycle, as does a Motor Mechanic, an Electrician and most ‘trades’. Likewise, the minimum full degree University Course we have found in our research is 3 Years. Most of these ‘students’ enter the education cycle with the ‘expectation’ that they will not get paid properly for at least three or four years, until they are independently competent and confident! The same competence and confidence rules apply to day trading. Do not rush the education process; instead, embrace it. In our experience it does not take 3 – 4 years to become a good Day Trader provided you are disciplined, patient and follow a highly defined trading strategy that you have independently proven to be profitable.

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Lachlan Elsworth is an Authorised Representative (AR Number 444 020) of Intelligent Financial Markets Australian Financial Service Licence Number 426 359 for the purpose of Futures Trading Education. The information in this guide is general information only. Any advice is general advice only. Neither your personal objectives, financial situation or needs have not been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice. Guide Correct 5 December 2013

YOU MUST GO SLOW TO GO FAST and realise there is huge potential in Day Trading if you are prepared to do the hard yards and follow the Mile Stones as set out for you below. If you are not prepared to follow the system and achieve the Mile Stones, it is highly advised that you stay in Simulation until you do. If you never fund a live trading account, you cannot actually go and lose it!

The Mile Stones
Mile Stone One. Study the 101 Course in detail deciding on the 5 Minute Strategies that you prefer to trade and understand the best. Note that for the 101 course to be completed properly you must competently complete every Quiz without failure or exception. Once you know the strategy that you are going to be trading, you are ready to move on to the next Mile Stone. Mile Stone Two. Attend the IDTA On-Line Coaching to confirm that your signal recognition agrees with that of the Coach conducting Coaching. Focus on the Screen Shot Critique and Best Signal Patterns being studied on the day and make sure it agrees with your understanding of the patterns and strategy. It is imperative that you study multiple patterns to confirm that you can identify the pattern and that you know how to enter and exit the trade based on the trading strategy to be used. Mile Stone Three. Download Ninja Trader, Load Your Indicators, and prove your signal recognition and trade execution in the Live Market. This process can be enhanced significantly by practicing your trading using Live Market Replay. Please note that practicing your trading and the execution of your strategy requires a number of skill sets to be tested and executed simultaneously. These include:    Your preferred market; Your preferred time slot; Your preferred signal patterns;
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Lachlan Elsworth is an Authorised Representative (AR Number 444 020) of Intelligent Financial Markets Australian Financial Service Licence Number 426 359 for the purpose of Futures Trading Education. The information in this guide is general information only. Any advice is general advice only. Neither your personal objectives, financial situation or needs have not been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice. Guide Correct 5 December 2013

Your preferred ATM Strategy including your Target, Your Psychologically Defined Stop and Your Stop Strategy.

Once you have proven your signal recognition and your ability to trade your selected pattern/patterns you are ready to step to Mile Stone 4. Mile Stone Four. IDTA Simulation Trading Proof Phase. Can you trade profitably and hence prove your competence and your confidence through your live trading statements? This is the only way your trading competence will now be considered ‘proven’ by IDTA for your transition to Live Trading! When you view your Ninja Trader Control Panel, select the Accounts Tab, which enables you to view your Simulation “Cash Value” Account balance.

In this example, the Sim 101 Account “Cash Value” figure is $99660.00 which now acts as the starting balance for your Trading Competence Proof Phase. It is this amount that you will seek to add $3000.00, or $4000.00 or $5000.00 or $10,000.00 to, prior to earning the right to switch to Live Trading. The amount you choose depends on the balance you wish to open your live trading account with when you start live trading. See below for a worked example.

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Lachlan Elsworth is an Authorised Representative (AR Number 444 020) of Intelligent Financial Markets Australian Financial Service Licence Number 426 359 for the purpose of Futures Trading Education. The information in this guide is general information only. Any advice is general advice only. Neither your personal objectives, financial situation or needs have not been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice. Guide Correct 5 December 2013

Simulation Trading Proof Phase We have included a worked example below. This example is for explanation only and is not indicative of all trader’s ‘Live Account Starting Balance’. We intend for you to use this example to set and then prove your own personal bench mark as part of the Simulation Trading Proof Phase. 1. Step One: Take note of the amount stated in your “Sim 101 Account Cash Value” as per the Ninja Trader Control Centre picture above. Write this down in your trading journal. This balance in the picture above is: $99660.00. 2. Step Two: Decide on the Account Balance that you seek to “start trading with” when you open your Live Trading Account. You may choose any sum, from $3000.00 to $5000.00 to $10,000.00, this choice is completely yours. Write this down in your trading journal. We will choose $5000.00 for the purpose of this example. 3. Step Three: Prove you have the ability to earn the amount of money you defined in step Two (above). How do you do this? Simple! a. b. c. d. Trade in Simulation; Use the exact signal pattern you have chosen and proven; Use the exact strategy you have chosen and proven; Trade in the time slot and market you intend trading when you trade live; and e. Trade the exact number of contracts you will trade under the exact ‘Risk Profile’ requirements defined in your trading plan. Ideally, you are testing exactly what you will do when ‘Live Trading’, just now in Simulation. This is a huge opportunity to prove that your chosen strategy actually works and you have the competence and the confidence to work the strategy!

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Lachlan Elsworth is an Authorised Representative (AR Number 444 020) of Intelligent Financial Markets Australian Financial Service Licence Number 426 359 for the purpose of Futures Trading Education. The information in this guide is general information only. Any advice is general advice only. Neither your personal objectives, financial situation or needs have not been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice. Guide Correct 5 December 2013

Worked Example:  The Sim Account featured currently says it has a Cash Value of $99660.00 as per the picture above.  I agree (with myself) that I intend to start with a $5000.00 account balance when I start my live trading.  My Simulation Trading Proof Phase involves me now using the exact strategy I am going to use in live trading, in simulation.  My goal is to add $5000 to my current ‘Sim 101 Cash Value’, so I have effectively proven I have the ability to earn $5000.00., the balance of my proposed live account. Why?  If I intend starting my live account with $5000.00, I have now proven I have the ability to earn $5000.00, effectively showing I have the ability to double the account in size. Switching to Live Trading:  In this example, if you are capable of adding $5000.00 to your ‘Sim 101 Cash Balance’, you have earned the right to switch to Live Trading.  This can be measured easily! All I needed to do is turn the $99660.00 in my ‘Sim 101 Cash Balance’ into $104,660.00 and I have earned the right to trade live money. I have passed my IDTA Simulation Trading Proof Phase. If you do not achieve a profitable ‘IDTA Simulation Trading Proof Phase’, you HAVE NOT earned the right to trade Live Money in the opinion of the IDTA Coaches. Likewise, if you cannot trade profitably in Simulation, it is HIGHLY UNLIKELY you will trade profitably using a Live Account regardless of the size of the account. This is when you must be honest with IDTA and yourself. Have you passed your IDTA Simulation Trading Proof Phase? Yes or no? If you cannot make money in Simulation, do not fund a live account under any circumstances!

“It is in your moments of decision that your destiny is shaped”. Tony Robbins …. Need we say any more?
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Lachlan Elsworth is an Authorised Representative (AR Number 444 020) of Intelligent Financial Markets Australian Financial Service Licence Number 426 359 for the purpose of Futures Trading Education. The information in this guide is general information only. Any advice is general advice only. Neither your personal objectives, financial situation or needs have not been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice. Guide Correct 5 December 2013

Mile Stone Five. Double the size of your Live Trading Account. One of the best ways to measure your ability to trade is in fact your live trading statement. There is no truer test of a professional trader’s competence and confidence. A highly profitable trading statement will be the result of all Four Mile Stones above in addition to the 4 x Keys to IDTA Trading Success described on page 2 of this Guide. Once you have doubled your live trading account you have many choices including Capital Draw Down and/or Compounding the profit, the choice is yours. You must note that to achieve this is setting the foundation for excellence in Day Trading. This does not mean that you ever leave the defined strategy that is working and paying you well. The True Test “The true test of any professional trader is their ability to stay disciplined and patient long enough to make money, and do this repeatedly and without reservation, even on the days when your chosen trading pattern and strategy fails to show”. Lachlan Elsworth Early Success Trap Do not fall into the ‘Early Success Trap’. Do not be the trader who sniffs success then decides they are beyond the teachings and beyond the need to be disciplined, patient and follow a highly defined and proven trading strategy. When you perfect the use of the IDTA Strategy and your signal pattern, stick to it. While it is paying great money, get paid. Humans appear to be romanced by complexity. As such, they appear always to be looking for the ‘next best system’. The best system I have ever seen is the one I have written and it is waiting for you to master it and master yourself in the process! Conclusion The IDTA – Simulation to Live Trading Transition Guide has been written with one goal, your success in trading the IDTA Day Trading System. Please follow the Mile Stones Verbatim and most of all pass the IDTA Simulation Trading Proof Phase prior to funding your live trading account. Your trading statement is your only true test of your trading competence and confidence. Good luck and stay disciplined!!! Lachlan Elsworth – Professional Trader

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Lachlan Elsworth is an Authorised Representative (AR Number 444 020) of Intelligent Financial Markets Australian Financial Service Licence Number 426 359 for the purpose of Futures Trading Education. The information in this guide is general information only. Any advice is general advice only. Neither your personal objectives, financial situation or needs have not been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice. Guide Correct 5 December 2013