HOW TO TRADE

LIKE A
TRADERPRENEUR

NICHOLAS A. PURI
This eBook is provided by The Duomo Initiative to members of the
Inner Circle mailing list.

Copyright © 2015 PuriCassar AG.

The Duomo Initiative is a division of PuriCassar AG.

All rights reserved. No part of this publication may be reproduced, distributed, or

transmitted in any form or by any means, including photocopying, recording, or
other electronic or mechanical methods, without the prior written permission of
PuriCassar AG, except in the case of brief quotations embodied in critical reviews
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requests, write to PuriCassar AG:

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Mythenquai 26

Zurich, CH 8002

Find us online

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Contents

Introduction 5

Creating Your Work Terminal 9

Setting Up Your Trading Assistant 15

How to Optimise Trader Performance 27

How to Optimise Your Trading Strategy 34

Summary 43

Appendix 45

3
INTRODUCTION
The Key to Successful Trading
As a novice trader, I used to read everything trading-related that I could get my
hands on.

It was beyond being a passion or vocation for me, it was as if my life depended on
it. Every free moment; whether commuting to work, lying in bed or even watching
TV, I was absorbing new insights through books, articles, videos and podcasts. I
was a man on a mission.

Now after years of trading professionally, I am happy to share with you my findings
from all the time I spent learning. Even better than that; I will sum it up in one
sentence:

99% of what you read about trading is useless.

So what about that 1% that actually proved to be useful? I’ll keep this one even
shorter. The key to effective trading can be summed up in one word:

Preparation.

From the countless hours I spent learning, the most important lessons were about
how effective preparation is the key to trading successfully.

If you want to rise above being just another profitable trader and actually hit elite
level, achieving jaw-dropping returns, you will understand that the opening and
closing of trades is only the by-product of your work.

To quote Muhammad Ali:

“The fight is won or lost far away from witnesses - behind the lines, in the
gym, and out there on the road, long before I dance under those lights.”

If you’ve had some exposure to trading before and are not a complete newcomer, I
am willing to bet you have read about at least a couple of ‘great’ trading systems.
You may have even tested them out and spent hours learning the inner workings of
them.
5
I’ll even go double or quits on that bet and suggest that you ended up being sorely
disappointed with the long-term results of the system.

Of course, there are always systems out there which actually do work and can be
adopted and adapted to create a profitable outcome for yourself. But these are few
and far between; usually such profitable systems remain hidden – why would great
traders want to share their secret?

Since you’re reading this, I would count you amongst the minority of traders who
are lucky enough to stumble upon a method that really works. As part of our free
Inner Circle mailing list, you’re being taught a proven approach to trading that has
shown long-term success; and you’ve seen the evidence of this.

However, over the coming pages of this eBook, I’m not going to be explaining
trading setups to you. I won’t be explaining principles of money management or
how to correctly balance your risk. I’ll be sharing with you the most important
information you need for achieving continuous improvement and reaching an elite
level of trading. I’ll be showing you how to prepare like a professional.

The issue for many of us, is that we have spent most of our careers working for
somebody else. Over a number of years, we’ve built up the mentality of an
employee and understand how to follow orders.

Unfortunately, this doesn’t translate well into trading. As a private trader, you are no
longer an employee – effectively, you are an entrepreneur.

Making this shift in your understanding of trading comes with some shifts in
responsibility. If you’re going to start thinking like an entrepreneur, you need to
begin running your trading operations as a business.

Over the course of this book, I will show you how to move away from being a
hobbyist trader and become a fully-fledged trader-preneur. You’ll find some key
articles I’ve pulled together from our Duomo archive, as well as brand new
information exclusively available in this book.

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In this book, you will learn how to:

 Improve the way you work

 Enhance your edge
 Reduce your workload and stress
 Increase your productivity
 Create a professional work setup
 Create your own trading assistant

And what’s more, all of this will be achieved at absolutely no cost.

I’m ready to reveal the blueprint for performance optimisation through professional
preparation; it’s time to operate as a successful entrepreneur.

Your story starts here…

7
CREATING YOUR
WORK TERMINAL
It’s Monday morning and your alarm clock goes off.

You hop out of bed with a smile on your face and begin your morning routine.
You’ve got a spring in your step today because it’s the start of a new week.

“Another day, another Dollar!”

You’ve had your breakfast and spent some time priming yourself for the day ahead.
It’s time to get cracking with your work.

You sit down at your desk and switch on your computer, revealing your very own
professional trading workstation.

Here’s how it works:

Creating Your Trading Data Terminal

[Adapted from a guest post by Tom Beadle for DuomoInitiative.com]

We’re lucky enough to be trading during a time when information is available at

rapid speed. It’s not essential anymore, for a trader to pay a huge subscription fee
to receive up to the minute data through a Bloomberg or Reuters terminal.

To take the first step in building our entrepreneurial setup, I want to show you a
simple way of having all the data you need during the day right at your fingertips.

There are so many complexities in trading, that it’s better that we keep things as
simple as possible and not start investing in complicated technology that generates
nothing for us, except distractions.

Essentially there are three key areas you need to cover, which can be achieved at
no cost. These are the bare minimum tools you require as a trader, before we move
onto more advanced setups you can create which are more similar to an
institutional setup.

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Your Economic Announcements Calendar

Let’s start with the easy first step. This is an area that most traders already have
covered, but it doesn’t hurt to revisit it.

Economic announcements are essential but frustrating. Although they keep us in

the loop as to how the economy is functioning, they create a lot of (often unneces-
sary) volatility and can turn your beautiful trade into the ugly duckling you’d rather
forget.

The number of releases each week can be overwhelming, but by preparing yourself
appropriately you’ll avoid finding yourself in a mess of numbers that mean nothing
to you.

The first important thing I want to point out, is that you should never rely on a single
source for economic data.

A lot of us rely on websites that provide the day’s schedule, as well as sending out
alerts before, during and after each release. This sounds like a great service, but it
will be the death of your trading career – you have been warned.

Unfortunately, these services have their flaws; not only do they have inconsistent
data, but they also miss a lot of scheduled announcements and can have technical
issues with their alerting service. I’ll tell you from experience: it’s not nice receiving
an alert at 3am after you just unknowingly traded through the actual announcement
twelve hours previously!

What should we do instead? Simple – build your own calendar. It isn’t hard work, it
just takes some discipline… the type of discipline you should have as an entrepre-
neur, but perhaps not as an employee (are you starting to get the idea?)

Free calendar software is available everywhere. A popular option is to use the

Google calendar, but I prefer to rely on my mobile phone – that way I’m alerted
wherever I am. The only essential feature is that you can input the schedule quickly
and set multiple alerts.

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Next you need to compile your calendar. You can do this weekly or monthly if you
wish, but I would suggest doing it daily before the markets open. This means you
stay on top of any changes in the schedule and familiarise yourself with the action
of the day. If it’s a particularly eventful day with lots of news expected, you may
even choose to knock trading on the head and do something more productive.

As I said before, using one source is a big no-no. Instead, you should compile from
multiple sources. Of course, most of it will be identical (which means it doesn’t take
a long time, as you’ll already have the schedule noted), but you will often see
discrepancies and you’ll be thanking your lucky stars that you double-checked.

I would advise you to check out the best sources relevant to the markets you are
trading, as some sites cover certain releases that others don’t. These can include
sites such as:

 FT.com

 FXStreet.com

 Econoday.com

 NTMarkets.com

Creating Your Market News Feed

Having automated alerts for incoming releases is only the first step. It’s important to
know when the announcements are coming, but it’s equally important to know what
has been said.

Have you ever seen a Bloomberg terminal with the news feed streaming throughout
the day? Now it’s time for us to create our own version.

The solution is so simple, it seems too good to be true, but you can create a similar
(and often even better) version of a news terminal simply by using Twitter.

Firstly, we want to make sure we can receive new tweets without having to
constantly refresh an internet browser. For this, I would recommend downloading

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software that allows you to create a ‘reel’ of updates. My personal recommendation
is to use TweetDeck – it’s easy to use and dependable.

Next, you’ll want to ‘follow’ relevant financial news outlets, market commentators
and companies that will help you keep your finger on the market pulse.

When choosing which accounts to follow, to build your news feed, you should follow
these rules:

 Don’t follow too many accounts or the important tweets will be drowned in noise.

 Include accounts that report the economic data as it comes out.

 Only follow individuals who are employed by bigger institutions or are a well-
known name.

 Be wary of private traders – everyone has their own opinion.

To help you get started, I’ve included a bonus article in the appendix with 10 great
Twitter accounts for traders. Even by just following these 10 accounts, you will have
great market coverage.

Supporting Resources

Just to conclude this section, I’ll add a few extra resources. Sometimes your ‘news
feed’ and economic calendar aren’t enough, particularly during special events such
as central bank announcements, politicians’ speeches and unfortunate global
disasters.

In these cases, you will want to get live coverage and not rely on news being
released via Twitter. You have two suitable options:

 Market news TV networks (Bloomberg, CNBC etc.)

 Squawk Radio (RANsquawk, FXPro, IG etc.)

(Note: I’m whispering these suggestions to you, as they are often full of clueless
morons and entertainment rather than information).

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Just make sure you don’t get brainwashed by Jim Cramer shouting BUY, BUY,
SELL, SELL!! He isn’t a market oracle, he’s just insane.

13
 SETTING UP YOUR
TRADING ASSISTANT
The funny thing about being a trader with your own funds, is that you’re operating
on a daily basis in an arena transacting trillions of dollars, featuring ‘big players’ like
investment bank traders and hedge fund managers who deal in the millions. (The
majority of whom still struggle to beat the market or even turn a consistent profit).

Yet you’re expected to compete in this arena and make a living from it, with such
limited resources in comparison to the behemoth institutions you’re up against.

Sounds impossible, right? Fortunately for you, it’s not.

As a trader, you’ll always hear the “Us vs. Them” complainers, who constantly moan
about institutions having an unfair advantage over private traders.

Yes, it’s true that they have an advantage but most of this is due to having more
advanced resources.

Rather than complaining about these resources, why not try to get one step closer
to achieving this for yourself?

So far on the subject of building a professional set up, I’ve shown you how to set up
a trading terminal at no cost and even shown you how to have instant access to
some of the finest minds in the industry.

Now I want to reveal to you a real game-changing tool, which will put you on a new
level of performance.

Creating Your Own Trading Team

In any competitive environment, the world-class performers manage to remove
distractions and unnecessary activities to make sure they are able to focus and
deliver in the area of their skill and expertise.

In a professional trading environment, this means building a team that can

compartmentalise tasks.

However, as a private trader the responsibility is usually on you to do all the tasks
by yourself. You’re expected to do the analysis, place the trades, be the risk
manager, manage the accounts, do all the admin and even be the tea-boy!
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It’s obvious to anyone that this isn’t a sustainable approach to working, especially in
a career that’s so top-heavy on the psychological aspects. It’s a slippery slope
towards poor performance, burn-out or being sectioned!

I know the feeling of being burnt out and it’s a painful experience, which is why I
want to share with you the most important tool for becoming a high-performance
trader-preneur.

I have searched extensively online to see if anyone else is using this and it seems it
has hardly been spoken about… which means this is a clear edge for you, if used
appropriately.

“But what is this magical tool?”

Evernote!

That’s right – that app/software for tracking your notes; but it can be a lot more than
that for us.

Perhaps surprisingly, it is THE most important and overlooked tool as a private

trader. We’re going to adapt this phenomenal tool beyond note-taking, to become
our very own trading assistant.

Overview

To put it simply: Evernote is a way to store and track information quickly and easily.
You can compile huge databases of notes for future reference and build ‘your life’s
work’.

That sounds boring though.

Let me show you how we can create something incredibly exciting from it.

In this section I’ll be explaining how we utilise Evernote to:

 Create time-released preparation packs for economic data

 Provide quick reference guides and ‘cheat sheets’ for trading concepts

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 Recall previous trade setup observations for quick access

 Build a tracking system for executed trades and paper trades

 Track results and on-going performance

 Generate a water-tight trading plan

 Minimise mistakes

 Journal our daily performance for establishing a performance baseline

 Enhance our trading ability

 Optimise our trading strategy

It sounds like a lot to cover, but don’t be alarmed – I’m going to show you
everything in an easy to follow, paint-by-numbers approach that you can get started
with immediately.

I’ve also included a quick guide in the appendix on how to use the Evernote
functionality, if you’re unsure about where to start.

Time-Released Preparation Packs for Economic Data

Traders at financial institutions receive information prior to important economic data

releases from their team of analysts. This will usually include previous data, trends
and expected outcomes. Some may even provide qualitative information about the
context of the data.

You and I don’t share this same privilege, but that doesn’t mean we should neglect
this important information.

Of course, we covered a lot of this in our first section and built ourselves a live
newsfeed and economic calendar. But, as I mentioned earlier, those were just the
basics – I want to show you how to take your preparation to a level that’s usually
unheard of for private traders.

If your strategy involves trading data releases, this aspect will have even more
importance for you.
17
Although the strategies taught within The Duomo Method stay clear of economic
data releases as much as possible, you will often find you have a position open
prior to an economic announcement.

Therefore, we really need to know what to expect from the market, to help in our
decision about whether to keep the trade open (after measuring our risk and
realising the volatility could help us) or to close the trade (if the risk of failure is too
high).

Key (volatile) data releases include:

 Central bank announcements (ECB, US Federal Reserve, Bank of England)

 Employment data (especially US Non-Farm Payroll)

 PMI data (US, Germany, Eurozone, UK etc.)

For each economic release that is relevant to your trading strategy, you should have
a series of notes contained within a notebook.

The information you need from your notes will depend on your strategy and is
something you will need to consider individually. I’ll explain to you what I arrange in
my notes and what I think the standard benchmark should be for economic data
notes.

1. What the expectations are from the release.

Using the sources provided earlier when we discussed building your trading
terminal, you can find out the market consensus for what the data release is
expected to be. You will also see information about previous releases and
past trends.

This is of high importance, as the market will react based on whether the
release is better, worse or in-line with expectations (as the expected value will
already be ‘priced-in’).

If you rely a lot on fundamentals for your trading, you may want to put
together your own analysis of this rather than depending on consensus views.
18
After all, if you have a good understanding of what to expect, you can
front-run the release and make a killing from it.

2. Annotated chart screenshots of previous releases.

Understanding the release is one thing, but knowing how it will affect the
charts is where the money lives.

Experienced traders may keep this knowledge in their minds, having

absorbed many hours of ‘chart time’. However, even experienced traders can
be caught off-guard and not pick up on trends in market reactions.

By getting into a habit of taking a screenshot after data releases (include at

least an hour after the release, to capture all the volatility) and annotating it to
explain what the activity was like before, during and after, you will be sure to
pick up all trends and common occurrences.

Since trading is about probabilities, you can begin to understand how the
market is likely to react and if you start to spot a particularly tasty setup prior
to the release, you can use previous screenshots to guide you to profit.

As the Mark Twain saying goes: “history doesn’t repeat itself, but it does
rhyme.” Make sure you’re ready to pick up on any similar scenarios from
previous announcements.

3. Fundamental analysis of the data release to add context.

Not all trading strategies rely on understanding fundamentals. The Duomo

Method certainly doesn’t, but that doesn’t mean you can abandon the
qualitative aspects of the markets altogether.

By understanding, at the very least, how a good or bad data release will affect
the bigger picture for the economy, you can understand whether the markets
are truly pricing-in the expectations well enough.

Of course, that doesn’t mean you will be ready to trade it; but it doesn’t hurt to
be well prepared.

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 If you aren’t familiar with fundamental analysis or how the economy works,
you can use trusted sources to bring the qualitative information to you. The
sources mentioned earlier will work well for this, but if you can get access to
the client services from investment banks, this would be preferable.

By tagging any notes specifically related to a particular data release with that
specific tag, for example “NFP”, you can easily bring the information together when
needed.

It’s good practice to do this as you go along, rather than trying to find all the
information last minute.

After a data release, I will take a screenshot and tag it. I will also save any related
articles and comments from news outlets and tag those too.

During the weekend before the data release, I will search in Evernote for the
specific data release, which will bring up a list of all related notes that have been
tagged. I can then put them all in one notebook and set a reminder for the morning
of the data release, and then again for 15 minutes before the announcement is to
be made.

Who needs a Trading Assistant? You can have all the information you need,
delivered to you automatically on a regular basis. This means you’ll avoid ever
having those situations where you’re caught out in a position unexpectedly.

Quick Reference Guides and 'Cheat Sheets' for Trading Concepts

I don’t know whether it’s laziness or because of the abundance of information online
about the markets, but I very rarely hear of people taking a lot of notes when
learning to trade.

We can always make excuses for not taking notes:

“I prefer to learn by doing”

“I’ll just Google the information again, if I need it”

“I’m good at remembering things”

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“I just don’t have the time”

But in the end, we’re only harming our own development.

There’s only so much we can remember and if you don’t take notes about what
you’ve learned, you’ll easily forget things that may have been invaluable.

However, there is more to it than that.

With the use of Evernote (your very own Trading Assistant) your notes can provide
you with a quick reference system and even a ‘cheat sheet’ in many situations.

If you come across important subjects for trading, you can screenshot or copy
articles, scan pages from books (using the Evernote scanner function on a smart
phone) and type in your own notes about your findings.

If you tag these notes with something specific and appropriate (for example “volume
spread analysis reversals”) you can quickly search for that phrase if you encounter
a situation you’re unsure of in the market.

With many systems, it’s the intricate details that really make the difference between
profiting or not.

If you can quickly refer back to a detailed guide on a concept, before you commit to
opening or closing a trade, you will become a lot more meticulous which ultimately
means more prolific with your trading.

Once you have done this for a number of days, it becomes habitual to take notes of
things you learn as you go along. You’ll realise that the time, effort and money you
save in the long-run makes it very worthwhile.

Recall Previous Trade Setup Observations for Quick Access

Sometimes we can spend so much time in front of our charts that we begin to
experience ‘chart blindness’, which can lead us to not seeing something right before
our eyes or even worse, seeing something that isn’t really there.

A lot of people preach about the benefits of keeping a journal of your trading

21
experiences to avoid this. However, the main issue is that journals are usually text
based, whilst most of the work we do in the markets is based on visual keys.

By taking screenshots of your charts (and annotating them!) we can build a

database of setups that can be called upon very quickly when you need a quick
reminder.

For example, you may take a screenshot of a perfect trend-line situation or pin-bar
setup.

If you are then following the markets and see a setup forming which looks like it
may be a good trend-line or pin-bar setup, you can search Evernote for “trend-line
reversal” and see what previous setups you encountered and whether they were
successful or not.

This will keep you honest with your setups, avoiding overtrading and ensure you
don’t start developing bad habits, looking for the wrong cues in the market.

Another clever little point about this, which I’ll explain in more detail later, is the fact
that you can then use the screenshots for optimising your strategy and refining the
way you trade. Let me give you an example:

Let’s say you trade pin-bars a lot. They happen very frequently in the market.
However, what makes a good pin-bar setup or a bad one? It’s easy to give
theoretical points about it, but what if you could really provide solid evidence for it
and discover specific clues in the market for a brilliant pin-bar reversal?

By keeping screenshots of each setup, you can easily spend some time
investigating your annotated notes and finding the consistencies that led to fantastic
trades. This will give you more confidence with future trades and help you build an
arsenal of prolific tools.

Build a Tracking System for Executed Trades and Paper Trades

We all like to show off the statistics on our trades when we’ve had a great month or
year, but a bunch of numbers doesn’t specifically help us to understand what we did

22
well or badly.

By taking screenshots of trades we executed and opportunities we missed, we can

begin to understand what we can do differently in the future to be even better.

We’ve all experienced that feeling when you exit a trade and then see a lot more
profit on the table that you could have taken if you stayed in a bit longer. When we
take screenshots of this, we can analyse the situation for future reference.

This also goes for paper trades. Sometimes we don’t have the risk allowance to
take any more trades, but we still want to track whether we would have been right
with our analysis.

We may see a perfect 161.8 setup in the market and want to see how it pans out
over the future. We can then track the trade, without the pressure of having money
on the line and see whether our thinking was correct.

Minimise Mistakes and Have a Water-Tight Trading Plan

If I hear one more trader complaining about ‘lack of discipline’ being the reason for
lost trades, I think I will skin someone alive.

There is never an excuse for not being disciplined enough to stick to a well
thought-out plan. However, we all seem to commit this sin at some point.

Having read many books on entrepreneurs, I have heard on multiple occasions that
even the most well-respected business leaders rely on checklists to ensure they do
everything to the best of their ability.

It’s common for human beings to make mistakes, even when we think we’re an ex-
pert at something – in fact, that is often what leads to complacency. Therefore,
checklists keep us… in check.

You really should have a trading plan with clear criteria for opening or closing a
trade. If you don’t have one, please go and create one. Once you do have a plan,
turn it into a simple checklist and keep it ready for quick access in Evernote.

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Before you open a trade, have a quick look at your checklist and make sure you’re
following your guidelines. This can then be added to your justification on the
annotated screenshot of your trade after it’s been opened.

(For additional reading, check out The Checklist Manifesto by Atul Gawande, as
endorsed by multiple bestselling author Malcolm Gladwell).

Journal Daily Performance for Establishing a Performance Baseline

Dear diary…

Look, it doesn’t need to be a cheesy, teenage girl’s type of diary, but you really must
keep a journal.

The benefits are beyond simply being a memoir of your trading adventures.

If you are able to write even a few sentences in Evernote each day (keeping an
individual note for each day) you will begin to pick up trends in your own
performance during different points of the day.

If you are really committed, you can even keep notes of every aspect of your day
within your journal entries. This will help you to optimise your performance beyond
belief, as I will explain in great detail within the next section.

By journaling your daily performance, you can begin to establish a baseline, which
means you can then improve yourself.

A lot of traders are looking to improve themselves and the way they work, but they
don’t even have an idea of what areas need work.

How can you possibly know what you need to work on, if you haven’t established a
credible and proven baseline?

I would suggest taking notes of your daily activities: what you ate, what exercise
you did, what hours you worked, how many trades you took, how you felt, how you
performed and any other details of significance.

It doesn’t need to be an essay every day, but half a page of writing will not take you

24
very long and will provide a great deal of benefit.

For the next two sections I’ll begin to put some meat on the bones for how you can
use these journal entries within Evernote, as well as the other tracking you will be
doing, in order to optimise trader performance and your trading strategy.

25
HOW TO OPTIMISE
TRADER
PERFORMANCE
Let’s face it, sometimes we just can’t be bothered trading.

At times it’s great and at other times it just feels like a chore. That feeling is
ALWAYS reflected in our results too (isn’t it funny how we always make money on
days when we feel fantastic?)

A few years ago, Tom (my former trading assistant) told me he could tell if I was
going to make a lot of money each day, just by the mood I was in.

Rather than just ignoring this comment as a coincidence, I decided to investigate

further. I wanted to find out if it was possible to ONLY have good trading days.

Do You Know Your Edge?

Everyone speaks about getting an ‘edge’ in the market, but what exactly is an
edge?

Essentially, it’s an aspect of your capabilities or strategy that is better than the
majority of other traders. Therefore if you want to outperform the market, you’ll need
an edge.

This often leads traders to participate in the never-ending search for the ‘Holy Grail’
system; looking online, reading books and watching videos.

I’ll share a little secret with you… they’re looking in the wrong place.

If an edge is something you do better than the majority of traders, we shouldn’t be

looking externally… we should be looking internally.

The truth is, when Tom could tell I was going to have a good day, he wasn’t being
Mystic Meg – he was just experiencing the by-product of me utilising my edge.

But how could I know that?

Are You Self-Diagnosing Effectively?

A man walks in to see his doctor, complaining of stomach issues:

Doctor: What’s wrong with you?

27
 Man: I’m getting terrible stomach problems.

Doctor: So… what’s wrong with you?

Man: Well, I was hoping you would tell me.

Doctor: How am I meant to know? It’s your body.

Man: Yes, but you’re a doctor – not me.

Doctor: Yes, but it’s your body not mine.

Doesn’t that situation seem ridiculous? Just because it’s the man’s own body, it
doesn’t mean he can diagnose himself with IBS or a food intolerance just by the
way he feels. It would need further investigation.

Instead, the doctor would probably ask him to reschedule for a new appointment
and to track his diet in the meantime.

With that in mind, why do traders not take the same approach?

Rather than tracking psychological and physiological changes that happen during
their day, most traders think: “Well, it’s my body/mind… therefore I don’t need to
track it, I can just feel what’s happening.”

Even worse than that, some traders don’t think it even matters – it’s only the chart
strategy that counts.

Oh naïve traders… thank you for bringing the ‘dumb money’ to the market.

Monitoring Like an Athlete

Much like athletes, as traders we have to understand how to use our body and mind
in the optimal way to get great performance – or at least that’s what the world class
performers do.

At the top level, athletes track everything. It’s not enough to be ‘good’ at something,
you have to learn how to do it optimally; this is what provides athletes with their
edge. As Ross from Blackstar Fitness told readers of The Duomo Initiative Inner
Circle:
28
“On an even playing-field where all the players have the same tools; efficient
utilisation becomes the key to progress.”

Building the Six-Million Dollar Man

When we first teach a client how to trade, we start with a series of questions that
analyses their skillset and what lifestyle they want to live i.e. how many hours are
they willing to commit to trading.

This approach helps us take a trader from 0 to 60 in the quickest way possible, by
matching them with a suitable strategy and approach to trading.

Now let me show you how to take this up to 100.

By capturing snapshots of our daily output, in terms of trading and our overall
routine, we can start to identify trends that contribute to good or bad performance.

Once we identify these trends, we can make changes to bring them to their optimal
level. One-by-one we bring every aspect of our trading day to its peak performance.
Imagine yourself like the Six-Million Dollar Man; substituting average or poor
performing parts for high-performing ones.

The Devil is in the Detail

In my own case, I found that my best trading performance happened when I could
monitor four timeframes in one market, without feeling overwhelmed or
uncoordinated.

The question was then: what changes allowed me to work at that level?

I needed to use retrograde analysis on the good and bad days, to find the ‘lead
domino’ in the process that was leading to my best performing days. By finding this,
I would also be able to explain why Tom could tell which days I was going to
perform well on.

Sounds simple?

It was.

29
By taking daily snapshots which included how I slept, what I ate, what exercise I
did, how I felt etc. I was able to identify a trend, just like I do with the markets.

The best performing days went like this:

I would get a minimum of 6 hours sleep and a maximum of 8 hours.

This would be due to sleeping earlier, rather than waking up later. Therefore, I
would wake up with enough time to have a good breakfast.

Both of these contributed to me starting my day fully focused and making better
decisions in the market. This meant I performed better in the morning and could
afford to take a lunch break.

Having a lunch break meant:

 I ate properly throughout the day, keeping up my energy and (importantly for
trading) my blood-glucose levels.

 I traded well in the afternoon, meaning I could stop trading early in the day and
still feel fresh.

 I could exercise in the evening, due to not feeling burnt out from trading late.

So as you can see, the lead domino for me was getting a good amount of sleep.

However, this is just the beginning. Those improvements made my trading better,
but it didn’t bring me to my optimal level.

Taking Things a Step Further

Monitoring how you feel during certain times of the day can also be very revealing
about how to improve your performance.

For example, if you find yourself having a slump in the morning after a good first
few hours, you may want to look at what you’re having for breakfast – perhaps
ditching coffee first thing in the morning will give you sustained high performance
until lunchtime and eating more protein and slow-release carbs will keep you
energised (think cooked oats and scrambled egg, for example).

30
Alternatively, if you just can’t get active first thing in the morning and it takes you a
few hours to ‘ease into’ the day, it may be that you aren’t drinking enough water and
are therefore waking up feeling groggy due to dehydration.

You may also be suffering from low blood-sugar levels after sleeping, which can be
avoided by having a spoonful of peanut butter before bed.

Sometimes it can be the activity of trading itself, which causes your performance to
reduce. Decision fatigue in trading has been found to set in, on average, after 2
trades.

However we’re looking for an edge, aren’t we?

Finding Your Edge

So why should you base your trading on the average person? We should all be
experimenting (and tracking everything!) to find what level our decision fatigue sets
in and performance declines.

For me, I found that I could make three trades perfectly, but depending on the
amount of time I was waiting for the fourth trade, it was either slightly worse or
much worse. Either way, it was clear that my decision fatigue sets in after three
trades.

We also need to monitor ‘ego depletion’. This occurs as a result of our will-power
and self-control having a limited resource pool to draw from each day.

As we control ourselves more, or make more controlled decisions, our ability to

make similar decisions later in the day will reduce. This means we may be more
impulsive, which can lead to poor positions and overtrading.

Overcoming this can involve sleeping, but can also have a simple solution such as
eating sweets.

Surprisingly, glucose has been found to reverse some of the ego depletion effects
and restore some of your resources. However, the rate at which you decline and
improve will depend on other factors such as age, amount of sleep and diet.

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It’s only from tracking your days and testing new approaches that you can find what
will work optimally for you. Perhaps you work best in short periods of time, but
would be happy to work around the clock; in that case, polyphasic sleep may work
wonders for your trading performance.

Applying It All to the Markets

When it comes to trading itself, you need to understand what style of trading works
best for you and what market types you thrive in.

You can also relate your physical signals to your performance and find what days
you trade at your best; therefore understanding what days you can push yourself
further, or step back from the market.

Next we’ll take a look at how you take a similar approach to your trading strategy
itself, to optimise every possible area and make sure you’re operating like a
world-class business.

32
HOW TO OPTIMISE
YOUR TRADING
STRATEGY
Imagine you entered an international soapbox race.

You have a series of heats before the grand final where you’ll be pitted against the
top soapbox cars in the world.

At your disposal for the first heat, you have a car made from an old beer crate,
some wheels from a wheelbarrow and some string pulleys to steer with.

Somehow in your first race, you scrape through in the top 3 and make it through to
the next round, but you realise that you have some work to do if you want to avoid
losing the next heats.

You find a steep hill near your house and start testing. You knew in your first heat
that your steering pulleys were slightly primitive compared to the other guys with
their steering wheels, so you’re ready to upgrade.

In your next race with your new steering wheel, you perform slightly better. This was
a good decision. But you now realise that your wobbly wheels can’t match the solid
tyres of your opponents. It’s time to test that and upgrade.

This goes on for a few months; every time you have a new race, you test and
upgrade a new section of your car. The races begin getting easier and easier.

This happens up until the semi-final, when suddenly you’re far out-competing your
opposition. Apart from a few niggles during the race, your car is now entirely
dependable.

Time to iron out those niggles and optimise, ready for the final event – there’s a
cash prize involved here, so you want to arrive at your very best.

On the big day, you arrive and realise that everyone is staring at you. You look to
your left and see an opponent sitting in a wooden chassis with ‘fresh eggs’ written
on the side. The opponent on your right is holding a steering wheel that could only
be described as a picnic plate. Both of them are green with envy.

You take a good, long look at your ‘soapbox’ car and realise that after all your
testing, after all your weeks of optimising, after all the time spent focusing on the

34
individual areas, you had finally optimised your car as far as it could go.

You look down at the front of your mean-machine and admire the yellow badge you
painted on with a black horse – nice touch.

As the flag is about to drop for the start of the race, it suddenly dawns on you…

You’re sitting in a Ferrari!

Facing Reality

Ok I admit that was a very over-elaborate and unrealistic analogy, but I wanted to
get the message across. Trading is an international competition; do you want to be
competing with the Ferrari of trading strategies, or the wooden egg crate?

Just like our soapbox car in the analogy, we need to single-out each weak area and
optimise it. We don’t want to scrap an entire strategy if it isn’t performing; let’s look
at which areas work and which ones don’t. After all, a badly performing strategy
may be one small tweak away from being an excellent one.

As you would have seen if you followed my accurate (and very profitable)
predictions from The Market Blueprint, I have now got my own strategy narrowed
down to just a few variables that I track. These are the elements that work best with
the way I like to work and they consistently perform exceptionally well for me.

Now I want to show you how to get the same outcome for yourself.

Hermit Crab Traders

Some traders behave like hermit crabs. Rather than finding which aspects aren’t
working, they move into a whole new strategy that looks better than their existing
one.

However, as we know, you could have a fantastic strategy but some slight mistakes
in interpretation (sometimes just a couple of pips either side) could lead you to
taking a long trade, when it’s actually a short opportunity.

Therefore, we want to use our trade tracking to find trends in the performance of

35
our strategy and discover which aspects work consistently or need upgrading

Rather than finding a new strategy, we can develop one that perfectly suits
ourselves and is entirely comfortable for us to trade.

Creating Robotic Perfection

When I was developing my automated trading system in 2013, my team and I would
go through various stages of iterations in the overall concept before we built a
working prototype.

Even once we had a live model, we would still back-test and live-test until we found
the variable that needed tweaking.

This inevitably meant we went through versions 1, 2, 357, 1093 etc. of optimisation
(it was a long process!) during our search for perfection.

Aiming for perfection is not necessarily the goal in this process. The real target is to
tweak areas of your system to reach the desired performance levels that match
your trading ambitions.

This means achieving the success rate, risk/reward ratio and trade volume that
work together to reach your targets.

In this section, I’ll break down how we optimised our automated system, whilst
explaining how you can do the same with your manual trading strategy.

The Game of Probabilities

With manual trading it’s easy for us to forget what trading is all about. Essentially,
it’s a game of probabilities; we open trades because we perceive there to be a
high-probability of success and avoid situations with low probabilities.

However, a lot of traders don’t even have an estimated probability for their system –
in many cases traders are using a losing probability, without realising they’re
fighting a losing battle.

By tracking your trades you will begin to establish the probability of your system;

36
this is essential for the next points we will discuss, as we start to raise your
probabilities and build your Ferrari.

Stage 1: The Logic Test

I’ve mentioned in my Inner Circle emails that your trading strategy needs to make
sense logically. This means every component must have a specific function; if not,
you may want to consider cutting rather than adding to your strategy.

Are there any mutually exclusive or mutually necessary aspects to your system?

In other words, are there parts that will only work well when combined with
something else?

You may also find that certain parts are under-performing as a result of being
combined with other functions that don’t work well in synergy.

Sometimes you need to give your components enough space to ‘breathe’ and not
be overshadowed or competing with other parts of the system.

An easy way to discover this is to ask yourself “what information about the market is
this part meant to be showing me? Is this being duplicated unnecessarily?”

When building the automated system, our first version was looking for a very
specific setup in the market, which looked like a big blue triangle on the screen. The
setup was derived from the surrounding price areas and a calculation was made
based on these to find an entry point.

However, we soon found that the surrounding price areas weren’t entirely
necessary, which meant the blue triangle was just restricting the system.

Instead, we were able to build the system based on a stand-alone calculation that
provided a model for the markets. This led to an increase in opportunities, more
versatility and a much higher success rate.

Stage 2: Performance Issues vs. Strategy Issues

We often distort our own system results by executing the plan incorrectly.

37
Without tracking our trades, it would be impossible to know whether we’re doing
something consistently. Remember: consistency is the key to good trading.

We would check this with the automated system by printing screenshots of entire
days of ‘paper trading’ with arrows representing the entries and exits.

These print-outs would then be compared to the same trades taken using manual
trading. This allowed us to check for consistency – was the automated system
following the correct plan?

My team ran these manual checks 24 hours a day, 5 days a week to ensure we had
a good sample pool to work with. (This isn’t essential for your own trading, but I
wanted to point out how the more you track trades, the more dependable and
consistent your data will be).

It doesn’t matter if you are performing well or not. All that matters is that you are
following a consistent plan because this is the only way to find the areas that need
strengthening.

Even if you make money by deviating from your plan, this isn’t a good thing. In a
similar way to patting your dog and playing with him, after he’s just left a huge load
on your new carpet, the positive reinforcement will create mixed signals and lead
you to sin again!

Iron out your performance inconsistencies, even if it means you make less money.
You can always optimise towards better performance, but not if you have
inconclusive statistics that contain a heavy dose of “+/- luck”.

Stage 3: Chunking the System

Think of your overall strategy as a human body; each organ works individually but
the overall effectiveness is generated by how they operate as one entire organism.

If your system passed the logic test, you should be operating in a similar structure.

Each section has a unique purpose and role within the system, but the parts create
synergy when working together. Therefore, any useless parts can be removed if

38
they cause issues – like the human appendix.

As an example, your system may be defined in the following ‘chunks’:

 Section A determines if the market is overbought or oversold.

 Section B determines the direction the market will move.

 Section C determines the expected size of the move.

 Section D determines the ‘entry area’.

 Section E is the micro-strategy determining the precise entry within the ‘entry
area’.

Once you have ‘chunked’ your system, you can uncover the variables from each
section that you’ll be testing in the next stage.

With the automated system, we had an underlying code which generated potential
reversal levels, based on a complex calculation. This was useless on its own, but
combined with the rest of the system, it was very powerful.

The rest of the system was made up of a strategy built on top of the code, which
determined whether a trade could take place and in which direction.

The final part mapped-out the ideal stop loss and take profit levels, as well as more
complex calculations about the size of the trade and risk level.

Stage 4: Testing the Variables

The fourth stage is the fun part – this is where you make minor (or occasionally
major) adjustments to find the optimal value.

You should have a plan for working your way through your entire system, one
‘chunk’ at a time. Only changing one variable within that chunk as you go along,
until you find the sweet spot for each one, bearing in mind any dependencies you
noted in Stage 1.

At this point, tracking is essential – don’t be tempted to work on gut feel or your in-
terpretation of what works best. Let’s stick to raw statistics.
39
For example, if you are basing entries on a trend line and have always gone for a
Type 1 close on the first test of the level. What happens if:

 You try Type 2 entries?

 You trade the second test of the level?

 You define the required candle and wick sizes on these tests?

I know it seems like a lot of work – but we are talking about building a Ferrari here!

The more effort you put in, the better results you will get out of this. Is this a hobby
for you or a chance to live the life of your dreams?

With our automated system, one interesting discovery was made when testing the
reversal levels which were calculated as the base of the entire system. We wanted
to prove that they were as strong and precise as we thought.

Based on extensive testing, we found that the price movements around the levels
were similar to air density when getting closer to the ground.

Our levels were producing a gravitational pull which meant more activity happened
the closer the price got to them – this allowed us to rule out the need for any
leniency around the line, since we understood the power of them. We didn’t require
a buffer for any margin of error. Either the price reaches our level or there’s no
trade.

Stage 5: Live Trading and Continuous Improvements

Once you have run through Stages 1 to 4, you should be in a situation where your
system is ready to be set free, live on the markets.

It’s your big race day and you’re sitting in the driver’s seat of your brand new
Ferrari.

However, the process shouldn’t end there.

Markets change their dynamics frequently, so we have to stay ahead of the curve
and make sure we’re always developing to remain profitable.

40
You don’t want to be sitting at your desk one day and suddenly realise your system
isn’t working anymore.

My business partner Dr. Alexander Cassar used a technique to encourage

continuous development during our automated system development.

During the day he would take screenshots of the opportunities he had traded,
whether they were in-line with the system or not. He would also take screenshots of
the opportunities he should have taken but missed.

This would soon become a stack of papers and he would check these at night
before going to sleep.

But what was he checking for?

Firstly, he was double-checking that he had been meticulously following the strategy
to a tee, in case he started to deviate from it and form bad habits.

Secondly, he was seeing where there were trends of good or bad performance that
could lead to a further system development.

I really admired this smart, forward-thinking and dedicated approach.

In any successful company, regular performance reviews feature as part of the

process for achieving continuous improvement. You should be taking this attitude
with your exposure to the markets.

If we rest on our laurels, we’re always one small step away from losing money. In
the financial markets, money will always move towards the pockets of the smart
and best prepared traders.

41
SUMMARY
That didn’t take long to go through did it?

On paper, the changes seem short and sweet. These are the ‘hacks’ you can use to
work like an entrepreneur and bring your trading up to the standard of being a
business.

In reality, these changes are going to take some work from your part. It may have
only taken an hour to read, but implementation is going to be an on-going task.

These aren’t just one-off things you can do for 10 minutes now and forget about in
the future. These are disciplines you must develop and continue to practice in order
to trade like a pro.

Having said that, the great thing about trading like a trader-preneur is that it is
EASY. And not only that, but it also makes your overall trading easier too. So why
wouldn’t you want to implement what we’ve discussed?

The lessons I’ll be sharing with you through our free mailing list will help you
develop your trading strategies, psychology and ability, but you need to keep your
end of the deal by putting in the effort to make this a joint success.

By implementing everything we’ve discussed throughout this book, you will start to
see exponential growth as a trader and greatly improved performance; ultimately,
this is going to fill you with passion and satisfaction as you realise you’re on the
path to greatness.

I have full faith in your journey to success and I wish you the best of luck with it.

Remember: Your story starts here. Stay dedicated, this is just the beginning.

43
APPENDIX
10 Reliable Twitter Accounts for Trader-Preneurs
[Adapted from a guest post by Tom Beadle for DuomoInitiative.com]

@FXStreetNews

FX Street is a Forex news reporting site. Data releases are released in real-time on
their website and Twitter account (Twitter with a very slight delay).

Their breadth of coverage means they cover a lot of releases that other providers
miss.

An interesting addition to the main site is a collated Twitter feed which can be used
to improve your own list with other relevant financial Tweeters.

@ZeroHedge

ZeroHedge offer exclusive and in-depth insight and analysis throughout the US
trading session.

Some people regard them as doom mongers, but their tongue-in-cheek, yet
detailed reporting and commentary regularly provides off-centre analysis to broaden
your understanding.

If all else fails, their sarcastic tone always provides a laugh or two throughout the
day.

@DailyFX

DailyFX are another Forex news reporting site which is usually the first to report
headline figures direct from source.

Only snippets of analysis are provided through the Twitter account itself, but the
volume of releases they cover ensures that DailyFX can counteract any missed
news or economic items from your daily calendar.

@TradeDesk_Steve

Steve Collins is Global Head of Dealing at London & Capital Asset Management.

45
An He uses his considerable experience to not only provide lightning-quick breaking
news, but often provides extra insights (particularly regarding UK assets) that add
real value to the standard data releases.

@FGoria

Fabrizio Goria is a financial journalist who is the reference point for Eurozone
breaking news, especially with regards to Italy.

In addition to unique bite-size analysis and perspectives, Fabrizio is a great source

for the best finance articles from around the web.

@AP

The Associated Press is the most reputable source for breaking news, as this is
usually the first destination for non-economic news releases.

Associated Press and other breaking news accounts are particularly relevant in
times of significant conflict, where sudden events can cause great market
movements in a short period of time.

@ForexCrunch

Forex Crunch is a Forex news and opinion website which provides a range of timely
and interesting Tweets.

The two standout features are the pre-warnings for important announcements and
the crowd-sourced articles, which offer a great deal of diversity due to the wide
selection of contributors.

@ALaidi

Ashraf Laidi is the chief investment strategist at City Index and Founder of
Intermarket Strategy.
Ashraf offers great market insights and provides commentary that helps you
understand the context of sudden market moves, which can otherwise be confusing
at times.

46
@PawelMorski

Pawel Morski uses his extensive network and background in fund management to
provide a fascinating and humorous insight on developing stories.

His attention to detail leads to a wide variety of Tweets that are satirically accurate,
as well as thought-provoking.

@ForexLive

Forex Live is a Forex news reporting website that is often at the forefront of provid-
ing data releases as they happen.

One of the best sources for announcing breaking news and discovering the story
behind the action; each Tweet features short-but-sweet reasoning in the accompa-
nying link.

@BrendaKelly_IG

The commentators from IG are some of the best in the industry, with Brenda Kelly
being the pick of the bunch.

Brenda is their Chief Market Strategist. She provides a down-to-Earth opinion,

laced with sharp humour and relevant retweets. Particular value for those focused
on UK or Irish assets.

47
How to Use Evernote
The main functions we will be taking advantage of are:

 Creating notes

 Creating notebooks

 Tagging notes

 Setting reminders

These are all incredibly easy to use. I’ll briefly explain each of them initially, to help
you get started. Once you get the hang of using Evernote, you’ll be doing each of
these things without a second thought.

Creating a Note

To create a new note, click the New Note icon, located at the top of the application
window. By default, the note will be created in your default notebook.

You can also click the drop-down menu to create the note in another notebook. This
will be important, as this will allow you to select the ‘New Screenshot’ tool that will
be used later for taking a snapshot of your charts.

Once created, your note will automatically be saved to Evernote and synced across
all your devices. That’s right – you can have all your trading resources handily
tucked away inside your smartphone too.

Creating a Notebook

In the Sidebar, click Notebooks. The Notebook List will be displayed.

Click the + New Notebook button. A new notebook will appear in the Notebook list.

Enter a name for your new notebook and press the return key. You can add notes

48
to your new notebook immediately.

Tagging Your Notes

Once you have created a note, you can add ‘tags’ to it, by clicking the area titled:
‘Click to add tag…’

Tags are references for your notes. This will allow you to search for specific words
and automatically bring up a list of related notes.

An example of suitable tags would be: EUR/USD, NFP, Type 1 setup, US Fed
Announcement.

Setting a Reminder

Reminders will allow you to be alerted about a note at a specific time and date.

These can be assigned by opening a note and clicking the ‘Reminder’ button.

These are the only functions you will need to use in Evernote to create your own
Trading Assistant. I’m sure you’ll agree that it looks incredibly easy… and it really is.
49
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