About the Traders Governor v2

Welcome to version 2.0 of the Traders Governor. The Governor and its companion product, the Traders
Organizer, are designed to help you plan trades and manage risk. Both the Organizer and the Governor are
Excel workbooks with multiple spreadsheets, charts, and macro programming.

The Principles of the Governor and the Organizer

The Governor and the Organizer, offered as a package, are designed to give private traders an
unprecedented degree of control over risk and money management.
This is the logic of the package:
* You input all your numbers into Traders Organizer (TO). Thats where you enter all your trades,
commissions and slippage, cash withdrawals and additions.
* You do all your trade planning in Traders Governor (Gov) thats where you set risk parameters and
discover which of several stocks that you found are better candidates for buying or shorting. Here you also
find how many shares you are allowed to trade and decide to which account to allocate each trade.
A single Gov will work with up to nine (9) trading accounts, allowing you to measure and manage risk
across multiple accounts. You need to make a copy of the TO for each account and link them to a single
Gov, as described below.
The Gov collects and summarizes the data from each account and provides an equity and risk profile for the
entire group of up to 9 accounts. It helps you plan your trades by calculating the available risk and
allocating it to potential trades.
The concept of available risk is central to understanding the Governor:
There are two key rules of money management. The 2% Rule states that you may never risk more than 2%
of your equity on any given trade. The 6% Rule states that you may never risk more than 6% of your
equity on all your trades within one month. These rules are explained in detail in Dr. Alexander Elders
book Come into My Trading Room You may modify both rules by lowering the percentages at risk but
never increasing them. Available risk refers to how much money you may risk on all your long or short
trades, after applying either the regular or tightened 2% and 6% Rules.
For example, if your trading capital is $100,000, you may risk no more than $2,000 on any single trade and
$6,000 on all your positions combined within a month. If you want to buy a $20 stock and place a stop-loss
order at $18, youll risk $2 per share. In that case the 2% Rule will allow you to buy a maximum of 1,000
shares, and your available risk for that month will be reduced from $6,000 to $4,000. This is a simple
example, but the level of complexity can skyrocket if you decide to risk not 2% but, say, 0.75%, then adjust
your stops, then take some profits or losses. Trading multiple accounts complicates the matter further.
You may acquire several large trades in one account which seem to violate the 2% Rule, while in fact other
accounts have plenty of available risk and your capital as a whole is well within permitted risk level.
Good money management is the key to trading discipline, essential for your success. The Governor
provides you with a tool that until now has never been in the hands of private traders. This is our
contribution to individual traders in their battle against chaos and losing.
Heres a quick overview of features from the Traders Governor:

New Features in Traders Governor version 2.0

The following are the three major new features in release 2.0 of the Governor:
The Diary Builder
The Governor Version 2.0 provides you with a complete record-keeping package. It builds upon the
success of version 1, which provided the tools for managing your trade risk by applying the 2% and 6%
Rules. In addition, it tracked account values and cash balances along with trading expenses for an up-todate profile of your equity and profitability.
The latest version of the Governor includes a Diary Builder which allows you to add text and charts
to create an electronic Traders Diary. Since the Organizer already has all of the associated trade
information, building the Diary is done at the click of a button. Invoking the Diary Builder macro brings up
the following form:

The form collects the trade data you just entered and places it in the diary file a standard Microsoft
WORD document which you may edit further if you liek. The file name includes the ticker symbol, type of
trade (Long/Short) and entry date to help you archive and arrange your files.
Since the Diary File is built using Microsoft WORD, you must have WORD installed on your computer to
use this feature. The Diary Builder allows you to choose between two different formats for each Diary file:
(1) a 6-page landscape format with three Entry pages for weekly, daily, and intraday time frames, two Exit
pages for daily and intraday time frames, and a review page for a follow-up review of the trade, OR
(2) a 2-page format with weekly-daily for the entry, daily for the exit, and a review section.
The Diary Builder automatically inserts the titles and comments about your trade into each page and
section of the diary. It reserves blank sections on each page where you can copy-paste from your favorite

charting program to complete the Diary. You can use the Print Screen feature on your keyboard to
capture the charts, so that no additional software is required, although many traders like to use SnagIt from
www.techsmith.com for copying and pasting charts. An example of the two portrait-format pages is below:

This is an example of the two portrait-format pages. The page on the left shows the weekly and daily
charts for the trade entry. All the text on the page headings, comments, trade data, etc. is collected and
formatted automatically from the trade data records in the Organizer. You copy and paste the charts into the
Diary via the Print Screen function in Windows or by using SnagIt
The right hand page shows a daily trade exit chart and a diary review chart. The text is formatted by the
Organizer in the same manner as the first page. The review page is is there for you to add a chart and/or
comments after the trade, showing how prices performed for some period of time after the trade exit.

The Governor Installer

The installation of the new Governor Version 2 had been automated using a professional installer program.
Your distribution CD should start automatically when you insert it, displaying a menu of choices which
include the installation of the Governor and the review of its manuals.
The illustration below shows the initial startup screen of the Governor Installer:

The Installer allows you to choose the name and location of the folder which will contain the Governor
program and data files. The default folder and path are C:\MyPortfolio, as shown below:

Inside this folder, the Governor Installer sets up the Governor file, the Organizer Master files, the Diary
template files, and the folders for storing the Action Logs and Diaries. The illustration below shows the
operation in progress:

NOTE: Since the Governor and Organizer are Excel Workbook files, there is no actual program installation
on your hard drivei.e. there are no changes to any system folders or the system Registry.
If you need to maintain multiple groups of accounts on the same computer, you can repeat the Governor
installation to set up a separate portfolio folder for each group of accounts.

Improved & Automated Account Transactions

Previous versions of the Traders Organizer (v3 and earlier) allowed you to track trading-related expenses,
but all transactions, such as deposits, cash withdrawals, and service charges, had to be summed up
manually outside the program. For example, if you had multiple deposits in one month, you had to
manually sum them up and enter the total into the Organizer.
The new v4 of the Organizer allows you to enter six types of transactions, total them up with the click of a
button, and automatically apply them to each monthly account balance on the Trades sheet. The new
Expenses and Transactions sheet is shown below:

The transaction table on the right is where you enter deposits, withdrawals, service changes, etc. A click on
the Compute Totals button will total each type of transaction for each month and store the result in the
Trades sheet. This keeps your trading account equity values up-to-date with your account transactions and
your trading activity.

Standard Features of the Traders Governor v2

THE PLANNER SHEET

The Planner Sheet is at the center of the Governor this is where you perform the majority of your actions.
It consists of a split window whose top section has several small tables and navigation buttons, while the
bottom section contains four major data tables.
The PERCENTAGE & STOPLIGHT Table
This table allows you to call up two stoplights that are based on the 6% Rule and change their settings to
reflect your degree of bullishness and bearishness. For instance, in the example shown below, a trader
decided to allocate 4% of his available risk to long trades and 2% to short trades. His total risk is 6%. He
could have decided to allocate different percentages or even nothing at all to either longs or shorts. He
could allocate a total of less than 6%, but never more than 6%. The Governor uses the settings you select
to calculate the maximum risk and available risk across your entire portfolio of accounts. You access the
stoplights by clicking on the CHANGE button near the upper left corner of the table.

The BUTTERFLY Controls

Immediately to the right of the Percentage & Stoplight Table are the butterfly controls that allow you to
set the levels of risk per trade. They are based on the 2% Rule and provide separate controls for longs and
shorts. The Butterfly controls, named for their appearance, apply only to the activated trades in the
Bullish and Bearish Review Tables, explained below.
On the left side of the Butterfly are the controls for the Long Trades, labeled green. Below the green box is
the maximum risk per long trade. It shows 1.25% simply as an example you can choose any number, as
long as it is not greater than 2%. The program uses your bullish butterfly factor to calculate the total
planned risk (in dollars) for bullish trades in the Bullish Review Table. The total amount at risk in all long
trades is automatically entered into the Stoplight Table under the Bull column as Planned risk.
The controls for Short Trades, labeled red, are on the right side. The work the same way for the short trades
using the Bearish Review Table.

The buttons on both sides of the butterfly can be used to bump your Risk per Trade up and down by 0.05%
per click. The minimum value is 0.05% and the default maximum value is 2.00%. Whenever you change
the risk factor, the program recalculates all associated values in the Bullish or Bearish Review Tables and
the Stoplight Table.

The Portfolio Summary

On the right side of the Planner Header Section is the Portfolio Summary. It shows the year-to-date and
month-to-date values of your cash balance (equity available for new trades). It also shows the account
value (upon which risk is calculated), the gross profit/loss and net profit/loss after expenses, as well as both
the maximum and current risk figures, both as percentages and in dollars. This table always remains up-todate, as various controls and adjustments are applied throughout the Governor.

The Accounts Review Table

The Accounts Review Table provides up-to-date equity and risk information for each account and for the
entire portfolio. It shows each account number and name, the beginning Account Value for the current
month, the risk calculations and the cost and risks of new trades, summarizing long and short trades. If you
have any cost or risk overruns, those are flagged by the purple background.

The Bullish Review Table

The Bullish Review Table is your tool for planning new long trades. Once you decide to put on a trade,
you click to activate it in this Table and assign it toa specific accounts. The size of the table allows you to
enter and compare up to 20 potential bullish trades at any given time. The cells with the yellow
background identify the columns in which you may enter the trade data. The cells with the blue
background indicate calculated results and should never be touched. Purple background or purple text is
used to flag your errors

The Cost/Risk Distribution Table

The Cost/Risk Distribution Table is immediately to the right of the Bullish Review Table. It sums up your
costs and risks for all activated trades in each account. This data is replicated in the Accounts Review
Table. Activated trades which have not been assigned to an account are totaled in the last or unspecified
row, labeled Unspec.

The Bearish Review Table

The Bearish Review Table functions exactly like the Bullish Review Table with the obvious difference that
it works with Short or Bearish trades.

The Positions Review Table

The last table on the Planner sheet is the Positions Review Table. It displays information for all open
positions in all accounts in the portfolio. The Positions Review Table is shown below:

The Position Review Chart

The Position Review Chart offers a quick review of each trade by plotting its gain or loss as a percentage of
that stocks channel. The bars are normalized relative to the trade with the largest gain or loss. This offers
you a quick glance at whether each trade is gaining or losing and by how much.

The Summary Sheet

The Governor Summary Sheet has two long tables of equity information. The first table is the blue Monthto-Date table which contains the current months equity numbers for each account. The second table is the
green Year-to-Date table which contains the same information on a year-to-date basis. The format of both
tables is the same as the Equity Sheet in every TO v4 Account file. The principal difference is that the Gov
Summary Sheet lists the data by account and the TO Equity Sheet lists it by month. Along the top left side
of the sheet are macro buttons that provide selective views of both tables by hiding/unhiding columns.

The Expenses Sheet

The Governor and the Organizer work together to help you track expenses in each trading account as well
as for the entire portfolio, providing a more accurate picture of your performance than profit sand losses
alone. It is essential to know how much income you generate from trading after expenses.
As highlighted in the new features section, the Traders Organizer v4 now allows easy tracking of trading
expenses as well as other transaction types:

The Accounts Sheet

The Accounts Sheet can include up to nine (9) TO v4 account files, linked to a single Governor. Each
sheet shows the Portfolio name and the folder path for each account. It shows where its files are located,
their filenames, the account names, and the last validation date.

The macro buttons allow you to easily add accounts to the portfolio or remove accounts. You can also relink the existing accounts after upgrading the Governor program.

Standard Features of the Traders Organizer

The Traders Organizer v4 (TO v4) keeps records of open and closed trades, tracks your trading
performance as well as your account equity, and helps enforce money management rules.
The first function of the Organizer is to keep accurate records of your trading. This includes recording
newly opened trades, while ensuring that your risks do not exceed pre-set limits for any single trade or for
the month. The TO monitors your risk levels while a trade is open, tracking any adjustments of stops. It
updates your account balances with net profits and losses from closed trades, allowing you to monitor
changes in your account equity on a daily basis.
The Organizer calculates several measures of the quality of each closed trade, helping you evaluate your
performance. It maintains year-to-date averages for your performance indicators, providing summaries that
enable you to monitor your consistency and improvement.
The Traders Organizer v4 tracks changes in your account equity, both from net profits and losses as well
as cash deposits and withdrawals. It shows the account cash balance and the account value (cash balance
plus the value of open positions) on any given day. It helps you evaluate your profitability, cash flow and
consistency of performance.
Here are some of the key features of the Traders Organizer that, in conjunction with The Traders
Governor, take your record keeping and performance monitoring to a higher level of flexibility and control.
Updated Trade Record Format with Open Positions in the Current Month Data Block. The trade
record consists of two lines, with trade entry data in the top row and exit data in the bottom row. TO v4
automatically collects and displays all OPEN trades in the CURRENT month block. The ticker symbol and
the status of open trades are shown in bold text, making them more visible.

Cash Balance Calculation The TO v4 accurately represents the true cash value of your account before
and after opening a new position. You can always know the amount of cash available for new trades. This
Cash Balance is propagated to the Trader's Governor, allowing you to direct trades to the accounts with
available cash.

Trade Summary for Every Month displayed at the top of each monthly data block, showing the total,
average, maximum and minimum dollar amounts for winning/losing trades and for long/short trades. It is
automatically updated after the closing of every trade.

At-A-Glance Equity and Risk Summaries The Trades sheet maintains up-to-date equity and risk
summary information. The Equity information includes the beginning and the year-to-date totals of the
cash balance and account value. The maximum allowable and current risks are shown both as dollars and
percentages. A pie chart shows how much of the maximum risk has been used.

Smart Trade Entry and Exit Forms TO v4 uses several controls to enhance data entry. The entry form
calculates slippage, trade targets, and risk percentages/amounts. Comment boxes allow you to record
comments on your entries and exits.
Equity Table Views the Equity Sheet allows you to see four different views of the data with a click of a
button. Views include Net Profits, Cash Balance Detail, Account Value Detail, and Cash Flow. Two
examples are shown below.

The above views show two of the four ways in which you can view the financial data.in the account The
top view shows the data from the perspective of Net Trading Profits focusing on profits, losses, and
expenses. The bottom chart shows the Cash Flow Summary which highlights the credits and debits outside
of trading activity that affect the cash balance of the account.

Contact Information for the Traders Governor

For all business questions, such as information about price, availability, and upgrades for the Traders
Governor, please contact elder.com
Email:
Phone:
Fax:

info@elder.com
800-458-0939
or
718-639-8889

718-507-1033

For technical questions, please contact Mike McMahon at governor.support@att.net