00:00I think not. Just don't try and compete with the big money machines, the funds, the hedge funds,
00:14the professional traders, the institutional traders. So what do I mean by that? For example,
00:19these people have got microsecond, low latency connectivity. They definitely know the news
00:26before you do, even though the news is released at some instant at half past one,
00:31they actually know it before you do. They've already priced it in, they've already made their money
00:36and go, you can't compete with that. So just avoid trying to compete within the areas in which you've
00:42got no chance of doing better than them. There are areas where they offer, they actually have no
00:48advantage over you and why not go for that, you know, where you're on a really on a level playing field with them.
00:56I think that the areas where, you know, you have no disadvantage is if you're trading exchange-traded
01:06products, so the price is transparent in the security. If you trade with a daily chart, you're
01:12seeing exactly the same high and low and close and volume as any institution. So it's nothing secret
01:18about it. And so you can see what he can see. And so if you operate in that longer timeframe,
01:24for example, all his advantages have gone. Actually, you've got many advantages now that
01:29he hasn't got. You can learn to trade as probably, possibly better than an institutional guy who's
01:36hasn't got any time to learn. You can study, you can do that. You can also not trade. It's not an
01:42option for many of these people. They must trade and you can see that it's not the right time and
01:47I shouldn't be doing it. And also being smaller than them has a lot of advantages too, because
01:53for them, being very large means that by the time they start buying things, they're starting to move
01:58the thing itself. Most likely, if you do buy things, you won't be moving the market at all. And so you
02:05can buy strengths and breakouts and things like that. But an institution has to predict the breakout,
02:11which is a very risky thing to do in order to start buying before the event itself.
02:20I think not. First of all, what people think is manipulation of the markets, things like short
02:28squeezes and dart pools and things like that. They're not. They're just factors of the market.
02:35It is things that happen that markets go into backwardations and things like that. It's not
02:39manipulation. It's a short-term nearby shortage has caused that. And really, does this affect and
02:48impact detrimentally to the retail investor? No, it doesn't. Usually, it's the institutional investor
02:54that's on the wrong side of these things that makes them appear so bad. The manipulation of the price in
03:01the shorter term is, again, I think is not possible really these days. There's too many eyes on it.
03:10It's the reputational risk for the institutions is too great. The fines are enormous. They will get
03:16caught. And so it just generally doesn't happen. You may get rogue traders, but internally, firms really
03:24are very conscious of that. And, you know, a bad apple can ruin a whole bank.
03:35This is really something that private traders can do. Now, they can't be high-frequency traders and
03:43low-latency traders. The cost barriers are too great for them, but they can become systematic.
03:50Systematic just means rule-based. And there are plenty of very good programs out there which start
03:56at free and even very good ones like MT4 is a very popular one in the retail market. And it's a very
04:02good program. And there are better ones which you pay more for. And it's a lot to do with the flexibility
04:07and the data and processing power of it. But all of these programs are very good. Now, what they allow you to do
04:14is to develop a method which you have tested and finessed and said, does this work? Or would
04:23work better if I did this? And if I changed the way I operated the stop like this, then eventually
04:29come to a conclusion that if I continue to operate in this way, I will in the long run make money if
04:36I do that. And this will give me the discipline to do it, take away all the emotion. That's just the
04:40correct thing to do. If you don't make money, it wasn't your fault. It was the fault of the program
04:46that it wasn't correct. But it wasn't to do with you. And mostly people stop doing things or get
04:52worried and say, oh, it's always me. Or I can't do it right. Or I've lost money five times. I'm not
04:57going to take this next trade and skip the next one and things like that. It will stop you doing all
05:02that kind of thing. So you've got the discipline, the confidence that comes with that. And I'm
05:09certain that is the right way to do it and something that's achievable for a retail person.
05:21I think using technical analysis and systematic training is something you can do,
05:26one can do, and you can do this as well or better than any institution. So you're at no disadvantage
05:33unless you try and compete in the very short timeframes and very difficult and strategic
05:40type of trading, which they specialize in. You can't do it better than them. And you haven't got
05:45the money that they power that they've got to. But they're at no advantage over you if you trade
05:51systematically in the markets. And you've got many, you can do it better than them. You've got time,
05:58you can study, you don't have to do it. You don't have the problems with size that they have. And that
06:05creates considerable problems for them. And so you can trade trades, you can take trades, which they
06:12are passing over because they're not, it just can't be done for them. But it is a profitable trade for you.
06:18And the other thing, the second thing that I would suggest is if you can, I would try and get somebody
06:26to help you. This is not an easy thing to do, particularly for a retail person, to find somebody
06:32who's willing to spend time, who's got experience and can coach you. Like any sportsman, you know,
06:38they need a coach, who's going to push them on and correct them and study them and be brutal,
06:47and knows how to do it. But he's not the sportsman that you are, but he's there to help you and to
06:53watch and to criticize. And try and find somebody like that. Beware of all the charlatans there are,
07:00the sort of gurus, plenty of people pretend they're that thing. But really, it comes with time and
07:07experience and background of people and try and go for those kind of people. I do do this kind of
07:12work myself in the institutional area because they have problems too. They have off-form traders that
07:19they want to see what's wrong with those traders and people that they're bringing through the system.
07:24And I've worked with those people too. But yeah, they are available at a retail level, not easy to find,
07:32not cheap. You know, the good ones inevitably that you're acquiring a lot of their time,
07:36valuable time, and they are experts. So you don't expect them to do that for free.
07:50It's quite interesting that I think that in many occasions, the wholesale market,
07:57the institutional market, is often trading against the retail market. The very same moment
08:02where one is buying, the other one is selling. For example, if you think about a support line,
08:10for example, you might think that, well, this support line may hold. Also, the institution may
08:15think the support line may hold. The support may be the days low, the months low, the pivot low,
08:20something like that. They're seeing the same thing as you. Now, how might you react to this? Well,
08:25you want some confidence. So you might see that the approach to the support line is weakening. So
08:30the candles are getting smaller and the bodies are getting smaller and the volume is lightning.
08:34And then you have a nice white candle, which gives you the feeling that we've reversed up and the
08:39close is now well off the opening. And so it's turning. And you might, as a retail trader say,
08:45if it follows through on the next candle, I'm going to buy and enter the market. I've got a very obvious
08:49place for a stop, which is below the low of the recent candles. And that's where I'll enter there.
08:55Now, what you don't realize is that the institutions, because of their size, they could never do that.
09:01They couldn't wait for that late stage. If they start buying at that point, they'll push the market
09:06away from them and they won't have got enough size on board, enough position on board, and the market
09:10will have already run away. So they've already had to have participated. So as the market comes and
09:15starts to look as though it's going to hold and not fail, they will be the buyer. Actually,
09:20they caused the white candle that you're now seeing as the trigger. And they've already started
09:25to buy. It's risky because they're buying early. They haven't got the confidence that you've got,
09:30but they have to participate earlier than you. And so they are buying and they will possibly be
09:38selling having already bought at the very moment that you are buying. And so they are the wholesale
09:45participants and you are the retailers.
09:53Use your advantages and certainly don't be drawn into and seduced into areas where you are a clear
10:00disadvantage. And these areas are, you haven't got size, you cannot trade faster than institutions.
10:11And so go where you've got an advantage algorithm, which is more in the intermediate term,
10:15doing technical analysis, become systematic, you can do all these things as well as they can do it.
10:21They may have sophisticated algorithms for short term trading and high frequency trading and machine
10:28learning algorithms, but they're all gravitating towards this shorter timeframe. Just leave that alone,
10:34let them have that. But go to an area where, you know, if there's a trend in the market, which is
10:40driven by the demand of security, the fundamentals of security, that's what's moving the price.
10:46They can't change that. It will be the same for you as it is for them. And you'll be able to see
10:51it as well as they can see it. Maybe you could even see it better because you're working under less
10:56pressure than they are and you've got more time and you're doing it more slowly than they are. So
11:04go where you've got your own strengths and avoid the areas where you're at a clear disadvantage.
11:08It is for me. I'm not saying swing trading is the sweet spot for me. I'm not saying it is for
11:18everybody. It's just when I ended managing a big fund and went into a smaller fund, I then didn't
11:27have anybody telling me what to do. So I had the opportunity to go to do what I thought was best and
11:34what would be most profitable rather than suited the investors the best. And so I feel that I have
11:44no skill or ability to forecast a six months or a year ahead. You know, it's a guess like it is for
11:51anybody, but they most people don't admit it. But the reality is who knows where it's going to be
11:56that far ahead. The short term is very difficult to trade for different reasons. It's difficult,
12:01but also you've got the disadvantages of all this power that these institutions have got.
12:07But I would head for this area, which I would think is with a horizon of about a month for your
12:13holding period, something like that. That's typically swing trading, you know, the trading,
12:18the ups and downs in a long term trend. And there you can do that just as well as any institutional
12:24trader. You're not at any disadvantage. The size is not a problem. And you've got the same tools
12:30as they have got, the same data as they have got. So go where you've got the same level playing field,
12:38as you're playing in the same level playing field as they are. And I think in some cases,
12:43you will have, you'll be able to do it better than they can.
