What stocks should I buy?

We do not offer advice on which stocks to trade, we can offer you workshops to build your skills as a trader but not specific information about each individual stock on the market.

What trading platform should I use?

We do not make any recommendation on trading platforms. In our technical workshops, the instructors will openly say what platform they use but we do not teach any systems that “require” one platform over another. All of the trading systems we teach are tradeable across platforms. Many brokerages offer a paper account – a simulated account – for free usually. That would be a good way to practice using a platform and executing orders.

How much money do I need to start trading?

There is no one answer – except maybe “it depends”.  There are several other much more important questions to answer first – Who are you?  What are your objectives?  What are your abilities?  What are your limitations?  And so on.  Someone who wants to make a living off of their trading returns will need more knowledge, and/or more skill, time, and capital than someone looking to “beat the market” in their account.  Out of an understanding of yourself, your objectives, the markets, position sizing strategies, trading systems, and other topics comes the answer of how much money you will need.

I'm ready to buy one of your systems and a few workshops sound very interesting to me. In some places it says that returns are over 40% per year. Can you please tell the risk/draw down of the systems that you offer?

We have not advertised returns for trading systems taught in VTI’s workshops as such a percentage is a result of the system results combined with a position sizing strategy. An attractive returns figure can mask a crappy trading system and a risky position sizing strategy. That is not Chuck’s intent with the REEDS system but it is the reason why we talk about the SQN score for VTI systems taught – not percentage returns. All of the systems we teach at VTI technical workshops I believe all have SQN scores in excess of 2.5 and some get into the 3-4 range. These are all good or very good systems by Van’s system rating guidelines. All have positive expectancy, low variance in results, and manageable R multiple drawdowns. In the Systems workshop we just taught, we emphasize trading a good system but creating a great position sizing strategy (PSS) because the PSS is the part of your business which helps you achieve your financial objectives.

Which systems course might be best for you has a lot more to do with the kind of systems that fit you rather than the performance numbers. To fit you, a system has to match your time availability, beliefs, capital, and personal resources. You will have much better personal performance if you trade lower scoring SQN systems that fit you than trying to trade high SQN system rules which you have trouble following exactly. Across our workshops and Elearning courses, we teach trading systems ranging in holding periods from minutes to weeks and in instruments from stocks, index based ETFs, Forex, Futures, and a coming two course series on options trading. If you have additional questions, feel free to email me back.

Am I too old or young to start a trading career?

A large part on Van’s instruction is focusing on the power of beliefs – in the markets and in your life. Yes, you are too old if you believe you are too old to start anew. Yes, you are young enough if you believe you are young enough to start anew. For reference, most of the people who attend our workshops or enroll in the Super Trader program are between the ages of 45 and 65 with a few in their 70s. Some of them are looking to start a new career. Nearly all of them are planning to manage their net worth and retirement money smartly with good preparation through education. Would a new career in stock market trading fit you and your objectives? It depends all on your beliefs.

I read your free book "Trading Beyond The Matrix" what's next?

First, I might suggest one more book before you get into any home study courses – “Super Trader”.  It’s a fairly comprehensive overview of Tharp Think whereas Trade Your Way focuses more on systems and Matrix focuses more on transformation.

 

Second, Van has all of his Super Traders stop trading (if they are not already consistently profitable in their trading) and work through the Peak Performance Home Study Course before he allows them to start their business planning and system development work.

 

The psychological issues that we all have will show up in your planning and trading (usually in the form of losses or “negative” emotions) until you are aware of them and you manage them.  Though this may seem like it might take longer, it is actually a shorter path to trading well in the end.

 

Finally, the Systems Development Home Study course helps you understand the process of system development and all of the parts of a trading system.  It will help you frame your thinking about which strategies to use and it also covers bigger picture elements – psychology and position sizing strategies.

 

You will have to do some looking inside as well as research in the markets to determine how to select and apply a channel breakout strategy.

 

If you want some hands on experience now, here’s a possible approach – pick one channel breakout strategy that seems to make sense to you or works for somebody else, trade it at a size of one share for 100 trades, make sure to write journal entries on your thoughts and emotions for each part of those 100 trades, document the results, then analyze the results, and make adjustments to the system based on your analysis.

 

There is no teacher better than experience with lots of documentation and some analysis – and you don’t necessarily need the home study course to do that – though it might help.  The Trade Your Way book has plenty of good system information in it.

 

At some point, however, you may discover what Van has witnessed in many traders – without some work on your psychology, trading success may be elusive.

My plan is to improve my trading to a level whereby I feel more confident managing other people’s money, and or be able to generate significant returns annually in order to trade for myself full time. I have a system in place, that has an SQN above 1, but I feel there more room to refine it and I want to learn more about other people’s systems to help me create various systems that suit me for different market conditions. Hence, I am very interested in taking the busted break out course, the swing trading course, and core trading system. I predominantly trade FX, some precious metals, some stock indicies and brent, yet am happy to trade other instruments such as ETFs. How would you suggest I go about it? which course shall I start with first?

You might consider Dr. Tharp’s model for trading education which he applies to candidates in the Super Trader program. The first half of that program is built around the psychological principles of trading in his Peak Performance Home Study Course. After the Super Traders complete that section, Dr. Tharp then has them go on to write their trading business plans (100+ pages), develop at least three trading systems, and finally trade those systems at very high performance benchmarks. Therefore –

  • We would recommend completing the Peak Performance Home Study Course as a foundation for excellence in trading – regardless of the systems or instruments anyone trades.
  • Dr. Tharp teaches that understanding position sizing strategies is actually more important than having great systems. He wrote about all of his ideas in his 400+ page book – The Definitive Guide to Position Sizing Strategies.
  • From learning about trading systems, the Systems Development home study course provides Dr. Tharp’s ideas about a trading system’s parts, what a trading system does, and how to think about or develop trading systems.
  • From learning specific trading systems, there are several elearning courses. The Core Course teaches several long term (month or longer holding periods) trading systems using index based ETFs while Swing teaches five systems that hold stock and ETF positions for 2-10 days. Gabriel’s Busted Breakout teaches only one day-trading Forex system that works best on the major pairs.

I have questions about attending workshops, where can I find more information?

Visit this page for more information about attending workshops:

A Guide To Attending Workshops

How do I calculate SQN?

Because Van trademarked SQN and considers it proprietary, we don’t write about the calculation in our newsletters or publish it on the website. As you mentioned, Van explains the SQN formula and its use in his book The Definitive Guide to Position Sizing, and we teach it at two of our workshops—Blueprint and Systems Development. He also talks about SQN in his book Super Trader but doesn’t discuss its calculation.

Van didn’t write about the “Market” SQN in Definitive Guide because he developed that particular application after the book was published.

First, he finds the daily percentage changes from close to close for 100 days in the S&P.  Then, he calculates both the average daily percentage change over the period and the variation for the period.  A high average and a low variation will have the best Market SQN score (strong bull or bull), and a negative average with high variation will have the worst Market SQN score (strong bear or bear).

If you have the daily data, it is fairly easy to have Excel calculate the Market SQN for you. You could use a spreadsheet to monitor the Market SQN for major asset classes on a weekly basis, which can help you keep up with your big picture.

Does SQN take into account the negative trades, but not the worst drawdowns during trades?

You are correct that the SQN score does not consider the “maximum adverse excursion” (MAE) of price in the trade as it’s commonly known.  If you are following Van’s Tharp Think principles, however, your MAE should never be much more than -1R except in the cases of opening gaps or limit moves where the MAE will equal the exit point as well.  While MAE and the SQN score both tell traders something about the performance of their systems, they have different purposes.

Leave a Reply

Your email address will not be published. Required fields are marked *