C. TARGET MARKET Novice to Experienced traders who aspire to become consistently profitable professionals

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1 Markets Never Lie A Professional trading course designed by traders for aspiring fulltime traders Stefan Juriansz - July Module course for Traders A. SUMMARY The game of speculation is the most uniformly fascinating and challenging game in the world. However, Trading like any other profession is a business in which who engage should determine to learn and understand it to the best of their ability. Understanding the fundamentals and technical aspects of trading only covers a portion of what is required to be a consistent, profitable and professional trader. Unfortunately most traders fail or give up learning as the required dedication and determination and constant failure demotivate most human beings. But this is what every trader goes through in his/her learning cycle. The path towards profitability can take years of hard work that it is not surprising to hear that only 6% of the people who attempt to become professional traders actually succeed. With this in mind we have specifically designed this course to facilitate this continuous learning process by assisting a trader to develop their own trading methodology and pave a path towards profitability. It will provide a traders with real life, practical trading strategies and personal mentoring sessions from a professional fund manager. B. COURSE OBJECTIVES / HIGHLIGHTS Teach individual traders how to manage his/her own private portfolio Help traders develop a trading system which suits their personality Teach students the fundamental and technical analysis required for trading Provide traders with individual mentoring sessions Help traders develop a lifelong learning process Teach students how to use a trading software C. TARGET MARKET Novice to Experienced traders who aspire to become consistently profitable professionals D. TECHNICAL REQUIREMENTS FOR STUDENTS Individual laptop and internet connection Knowledge of English E. COURSE STRUCTURE 6 modules consisting of 3 hrs. per module over 6 weekends (Sundays Mornings) 1 hour of personal mentoring sessions per student at the end of the course (as scheduled and discussed with tutor) Markets Never Lie - Stefan Juriansz - July Module course for Traders 1

2 F. TRADING FRAMEWORK Portfolio Management Fundemental Analysis Trading system TRADING Record keeping Trader psychology Technical Analysis Mentoring F.1. Syllabus:- i. Trading with Technical Analysis - A chart speaks a 1000 words This subject will look to cover the theoretical and practical aspects of technical analysis. Technical analysis is the window into the soul of the market and is only PART of what a trader needs to understand in order to be consistently profitable. The course will cover the basic theory and how to apply it in the real world of stock trading. The trader will be taught; basic chart formation, how to use technical analysis for entering and exiting a trades and time frame analysis. Students will also be taught how to read and understand market cycles based on historic cycles in the Colombo stock exchange. Key topics Technical analysis theory Chart patterns Market indicators Trading with technical analysis Understanding market cycles Markets Never Lie - Stefan Juriansz - July Module course for Traders 2

3 ii. Trading with Fundamental Analysis Fundamental analysis is an important tool that traders can use to increase their probability of success. It provides real value when making trading decisions. Understanding the financial position of a company can provide additional confirmation for any trade you are considering, or it may make you rethink the wisdom of that trade. As a trader you don t need to familiarize yourself with financial models or read a company s entire annual report. As a trader you need to understand the basic fundamentals of a company and the best way to learn such facts about a company is through financial ratio analysis. Financial ratios can help you to make sense of the overwhelming amount of information that can be found in a company's financial statements. Knowing how to pick out small bits of important information, combine them with other small bits of information and interpret the resulting number is more of an art than a science. But it's undoubtedly one of the most important arts that an investor should practice. Price ratios Profitability ratios Efficiency ratios Debt rations Liquidity ratios iii. Portfolio Management Portfolio management is a crucial area that is overlooked by most retail investors in Sri Lanka today. Understanding the market environment and how to position a portfolio can have significant effects on the profit and loss over time. Investors will be taught basic portfolio management theory and practical approaches to managing a portfolio through a variety of market cycles. Passive vs. Active management Strategic Vs. Tactic asset allocation Monitoring and refining portfolio Portfolio performance measurement matrix Types of diversification Understanding Value at Risk (VAR) Position sizing strategies Understanding asset correlation Developing a risk management plan iv. Trading systems Every trader needs a strategy and system to form a framework for their trading. Without a reliable way to identify and execute trades, you can never be a consistent performer. Fundamentally, your system is a roadmap that guides your trading and keeps you from making bad decisions. Trading can be stressful and lots of hard work. Many people make the mistake of believing that a trading system is something you can just buy in a box and it is something that other people with specific technical skills or secret knowledge of the markets can create for you. This isn t the case. There are hundreds, if not thousands, of trading systems that work, but after purchasing one, the typical trader will not follow it or trade it exactly as it was intended. Why not? Because the system didn t fit them and their style of trading. Markets Never Lie - Stefan Juriansz - July Module course for Traders 3

4 One of the biggest secrets of successful trading is finding a trading system that fits your personality. Developing your own system allows compatibility with your own beliefs, objectives, personality and advantages. Set-up conditions An entry signal A worst-case stop loss Re-entry when appropriate Profit-taking exits A position sizing algorithm Multiple systems for different market conditions Developing a trading plan Trading strategies Trading rules and commandments Stock screening v. Trading psychology There is no one way to make money in the market. There are a variety of strategies and profitable approaches to investing in the stock market. For example, an investment personality like Warren buffet would not be profitable at day trading stocks as like a highly successful short term trader such as Paul Tudor jones, would go bankrupt trying to value invest. The secret to successful investing is figuring out your investment personality and individual psychological factors that affect your decision making. The course will seek to provide the participant with the framework in understanding themselves. This would involve establishing a blue print and skeleton framework for continuous self-development from a trader perspective. Developing a trader s mindset Creating a vision, mission, goals and beliefs Developing a trading routine Dealing with drawdowns Learning how to learn vi. Putting it all together with record keeping A trading journal is a record of all your trading activity. It is important to keep an accurate record of your trading results, because they allow you to assess the overall performance of your trading decisions and how effective your strategy is. This information can prove critical, especially when you start to experience negative trading results. During these times, the confidence of a trader can be shaken, especially if there is no clear reason as to why their trading results are poor. Questions that can arise during these times are: Has the system stopped working? When should I stop trading with this system? Should I just keep trading despite losses? Not having the answer to these questions can lead to a fear of losing trades. This can further lead to traders making common mistakes, such as revenge trading (taking too many trades to get the lost money back, without a concern for the strategy) or deviating from your trading system in an attempt to avoid further losses. Markets Never Lie - Stefan Juriansz - July Module course for Traders 4

5 To avoid this the course will teach traders how develop and use your trading journal Developing a feedback loop to improve trading results vii. Mentoring - Putting it all together An entire session will be devoted to help each student deal with their individual problems and questions relating to their portfolios or the various topics of the course. SWOT analysis Individual trader system analysis Market discussion Markets Never Lie - Stefan Juriansz - July Module course for Traders 5