BarroMetrics Views: Trading Educators
My rules called for an enforced three day break from the markets after the latest loss. So, I have been using this holiday to catch up with my friends.
This morning I had coffee with three of them. Their experience ranged from novice (2) to a successful trader. We meandered across a wide range of topics but one thread I found interesting: whether trading education served a purpose or whether it was all a scam.
So let’s introduce the cast:
- Mary the successful trader
- Peter, a novice, cynical by nature
- Paul, the other novice
Peter took the view that all seminars were a scam and that a newbie was better off with books and self-learning; Paul believed that somewhere out there, there exists a magic system that will make him tons of money; Mary believes that education is necessary, that some seminars, books etc are scams while others are genuine, and once you have found a set of ideas that work for you, you have to work to make them your own.
Needless to say that I fall into Mary’s camp.
I find it interesting that few argue that you can become a surgeon, attorney etc by self-tuition. Yet many believe that this is possible when it comes to trading - yet trading is a much harder profession than medicine and most other professions.
Having said that, I have sympathy for this line of thought given the tripe that is peddled. Today I received an ad offering a FX Robot that supposedly turned US$1000 to over US$300,000.00 in two months! Plea……se spare me this drivel. Despite the absurdity of the offer, I have no doubt that many will take it up.The newbie buys it and loses money. This happens time and again. Eventually he becomes frustrated and cynical. So he now believes he is better off with self-learning.
But, to try to learn on your own is a huge task. You need:
- To have enough confidence to be willing to accept many a blind alley.
- The wherewithal and patience to slowly develop an understanding of the nature of markets and of trading.
- Sift the wheat from the chaff in terms of learning experience.
But here’s the good news. Novices today need not do it alone. Today, unlike when I started trading in Sydney in the mid to late 1970’s, you have instructors that offer value for money. True you have to spend some time finding them but at least they are there for you to find.
One point. There is a belief, at least in this part of the world, that to be a good teacher, you need to be a successful trader. I don’t agree with the idea.
To be a good teacher you need to appreciate the challenges a trader faces and you need to be able to provide robust solutions to those challenges. Most importantly, you need to be able to communicate the lessons. Just because you have a positive expectancy in your trading does not mean you can necessarily impart the knowledge.
That said, Paul’s idea of a Holy Grail, of course, does not exist. This blog is a testament to what I believe newbies need to learn to succeed.
Finally, as I said, I subscribe to Mary’s position. My own journey has shaped this belief.
Seven years of meandering created my foundation to be open to Pete Steidlmayer’s ideas. I don’t know how many years I saved by the chance reading of that small ad in Futures magazine for a Market Profile seminar. Twelve months after my first attendance I had integrated the ideas and 12 months after that I had my first consistently successful year. It took me a few more years to learn to apply my rules in a somewhat consistent fashion.
To learn Peter’s ideas was monetarily expensive. My finances were short so the course fees felt huge; not only that, I had to travel to the US to learn - no webinars in those days. I was able to go because my wife provided the support, moral and financial. In hindsight, I am fortunate I made the effort.
This I know:
- To succeed you need to put in an effort in time and money. Trading success requires we work for the success.
- There is no Holy Grail and
- There is no guarantee that a course you take will be to your benefit. You can do some work to place the odds in your favour: you can do due diligence on the net. It’s amazing what you can discover.
One thing I do know: if an educator promises you easy riches with little effort, you may as well give him a miss. I have a new name for that class of educator: the Bernie Madoff School of Trading.
Refer this blog post to a friend or colleague…
