Best way to learn

Trading Discussion
1

Hello all,

During my whole journey in FX, I have come up with several conclusions on the learning process. Either you:

a) Learn on your own, borrowing from books and online sources.

b) Pay somebody to teach you.

c) Get a job or get exposure to a place where you have seasoned professionals that teach you, i.e. bank or prop firm.

The way I see it, here are the advantages and disadvantages of each approach:

a) Advantages: Lowest cost approach, you get to form something unique.
a) Disadvantages: Takes a very long time because of lots of trial and error, and because you need to have another job to support yourself with. No counseling when the going gets tough. Need excellent self discipline.

b) Advantages: Somebody shows you ideas that you don’t have to dig around to find. They walk you through it.
b) Disadvantages: Expensive, and you have no idea how good or bad the trader who is teaching you is. The question inevitably arises - how do I know I am getting my money’s worth, and why is this person teaching instead of trading? Counseling is extra $$$.

c) Advantages: Somebody teaches you who’s P and L you clearly see, this person has a job because they are profitable and there is no reason to doubt. They can council you when you’re down. You work at it full time, it is your job. Learn fastest. Motivated to work hard.
c) Disadvantages: Going through the hiring process, you have to be a good fit, they have to believe you will justify the investment made in you. For some people (i.e. older people, people without certain education) this option is not available unless you already demonstrate a record of profitability.

Finally, there is option d, which is close to c but a bit different: you trade with other traders online, just as with a remote prop firm.

Ideas?

2

there is no substitute for experience, and that can’t be bought or taught, the only cost is time

4

I don’t agree with this.

5

And what is your time worth?

7

b) Pay somebody to teach you.

yah right, you can pay someone to teach you if you don’t like to learn by yourself but see to it you get a good teacher or tutor or else, nothing will still happen.

8

Some more thoughts from me after a little reflection…

In my experience, trading education is WAY too overpriced. The amount of hours of class you get versus the amount of education you receive within that timeframe is not really a good deal.

As an example, take your average retail trading education course. 5 day seminars usually price out to around $5000. If we’re assuming 5 days are 8 hours a day, multiply that to get 40 hours for $5000. That’s $125 per hour of education.

Compare that to the closest equivalent that you’d get going to a top tier business school teaching finance. As an example, NYU’s Stern school of business charges $1500 per credit (part time or full time). 3 credits is typical for one course, meaning 3 hours per week (not including homework time, which is a multiple of class time). 3 credits X $1500 = $4500. The average academic year will yield 13-15 classes. Lets make that 14 as an average. 14 X 3 = 42 hours of education for $4500. Works out to $109 per hour of education.

Now lets take a look at the advantages you’d get going to a top tier b-school over some Masters of the Market LLC:

  1. The teachers you have will have verifiable experience in their field of endeavor.
  2. The teachers will have years of experience teaching, in many cases, meaning they can clearly relate the subject matter to you and give you quality assignments.
  3. Most of the students you are going to be around are not some poker hacks off the street with nothing better to do, they are people with brains and ambition who want to succeed as badly as you.
  4. Teachers have office hours.

Most important:

  1. If you carry through with the program, you get a reputable diploma in your hands which you can use to get a job in the business if you ever need one.

With off the shelf trading education, nobody at any prop firm or bank will give two damns about how many classes you took. Why? Because there is no way they can tell how well you did (no transcript), and there is no such thing as accredited trading education, unlike business schools.

Granted, not everyone will get admitted to the top schools, and the cost of a diploma is not small (around $100,000 at a top school). But we can get an education at a less competitive school, and who’s to say the quality there will be worse than at an average trading education firm (especially if we consider the price these lesser schools charge as opposed to a trading education firm)? There are some local state schools that will charge you $400 a credit for a Masters in Finance (X 40 credits, works out to $16,000). That’s a steal compared to trading education by the hour, and some of these schools are of a pretty good reputation.

Fine, you say, I don’t care about working for a bank or a prop firm, I want to trade retail and that’s it. Great, but then we bump into the next problem. How do I know that Masters of the Market LLC is giving me quality education? By their price? By reviews? By audited account statements that attest to years of consistent performance in varying market conditions? Nobody seems to have the latter available. What ends up happening is that most people end up falling for marketing glitz.

In my opinion, the basics of how to read the market and all the bread and butter strategies of trading (trend following, range plays, etc) are all available on the internet for free. I think if you need somebody to teach you technical analysis, you are wasting money.

Likewise, there is no substitute for screen time. Observing the market, noting the patterns and behaviors, no instructor can give that to you.

The place where I think professional coaching comes in is the psychological end of trading, getting somebody to help you optimize your strategy and execution, help you in the fine points of trading which make the biggest difference in your PnL.

9

That would be a fair comment if all the trading education out there were in the form of expensive seminars like this. To my mind, the most cost efficient way of learning, especially for foundational topics, is books.

Now lets take a look at the advantages you’d get going to a top tier b-school over some Masters of the Market LLC:

Have been through b-school I can’t help but comment on these. :smiley:

  1. The teachers you have will have verifiable experience in their field of endeavor.

Ummm… probably not.

  1. The teachers will have years of experience teaching, in many cases, meaning they can clearly relate the subject matter to you and give you quality assignments.

Some yes. Some no. There are definitely some good teachers, but there are also plenty of “brilliant but couldn’t teach their way out of a paper bag” types and a lot in between.

  1. Most of the students you are going to be around are not some poker hacks off the street with nothing better to do, they are people with brains and ambition who want to succeed as badly as you.

Yeah, not too many pokers hacks in MBA programs - not that all your fellow students are Mensa candidates, though.

  1. Teachers have office hours.

See #2.

  1. If you carry through with the program, you get a reputable diploma in your hands which you can use to get a job in the business if you ever need one.

True enough, but it’s not a vocational training, which is what trading education is. A bit of apples and oranges. Also, a degree in no way guarantees you get on a trading floor somewhere.

In my opinion, the basics of how to read the market and all the bread and butter strategies of trading (trend following, range plays, etc) are all available on the internet for free. I think if you need somebody to teach you technical analysis, you are wasting money.

Again, I ask, what is your time worth? No monetary cost does not mean no cost at all. If reading a book or taking a course can save you many hours of online research (and give you info you from a source you can rely on) it can more than make up for the price tag. It’s a value proposition.

Likewise, there is no substitute for screen time. Observing the market, noting the patterns and behaviors, no instructor can give that to you.

True, though a good one can guide you and help you make the most of your screen time.

The place where I think professional coaching comes in is the psychological end of trading, getting somebody to help you optimize your strategy and execution, help you in the fine points of trading which make the biggest difference in your PnL.

Fair enough, but let’s make sure we differentiate between coaching (working with the individual) and instruction (providing information).

11

Agreed, I was referring primarily to the seminars that are taught. Might I comment though, that there are plenty of books that are also way too overpriced. My most valuable trading books each cost under $40.

Have been through b-school I can’t help but comment on these. :smiley:

That makes us colleagues then…

Ummm… probably not.

Concerning verifiable experience? I’d say with the top schools and even the middle tier schools, definitely yes. In my experience. But by far not ALL professors of course. You have to be selective.

Some yes. Some no. There are definitely some good teachers, but there are also plenty of “brilliant but couldn’t teach their way out of a paper bag” types and a lot in between.

You have to be selective, and its much easier to do this with a b-school environment than with retail trading. With b-school you have students you can talk to. In retail trading you usually have internet forums where you get shills from either the pro or con camp. Very difficult to make sense out of it.

True enough, but it’s not a vocational training, which is what trading education is. A bit of apples and oranges. Also, a degree in no way guarantees you get on a trading floor somewhere.

Agreed, that a trading course cuts to the meat while a degree is more wide scoped. My main purpose was to compare value per hour of education.

As for a degree not guaranteeing a job, absolutely agree with that too. But there’s a difference between someone who has a degree on their resume, versus someone who has Joe Trend Traderz LLC on their resume. The former gets a look, the latter goes straight into the trash unless it is combined with verifiable account statements showing consistent profit over a respectable period of time.

Again, I ask, what is your time worth? No monetary cost does not mean no cost at all. If reading a book or taking a course can save you many hours of online research (and give you info you from a source you can rely on) it can more than make up for the price tag. It’s a value proposition.

Not many people can say their time is worth $125 an hour. Books are definitely a good way to go I think, only after reading them should someone go online for supplementary info. As for “rely on”, that is the big puzzle here. Its very difficult to find someone who you can truly put your trust in.

True, though a good one can guide you and help you make the most of your screen time.

Agreed. Assuming you know they know what they are doing, and trust them.

Fair enough, but let’s make sure we differentiate between coaching (working with the individual) and instruction (providing information).

Personally I think coaching has greater value than instruction. Seriously, how much faster is an instructor going to teach you tech analysis than you can get from a book or three?

To me, a big part of education is not just about learning the basics. Its about trusting what you’ve learned. That process is critical. Anybody can tell me what a double top is about. But getting me to trust a double top in a setup is a totally different issue imho.

12

interesting thread. I am self taught and it has taken years to where i am comfortable with my trading. I read a ton of books which was great. I downloaded some material from the internet. also good. I can’t say about school allthough it seems to be a viable sollution if your schedule permits.

In the end I think you need time and experience to become profitable.

13

Not right, trade yourself, then why do Demo accounts exist, when you trade & fail yourself, you know what mistakes you did to avoid it at the next trade, and know how market is going up, the person who is going to learn you (and tell you you are ready to trade) that would be a fae and you will start losing, practice on demo and learn YOURSELF.

14

I TOTALLY agree with you !!

15

I agree that without taking care of the basics on your own, you are going to be wasting more money than you aught to. I think every person who wants to trade should open a demo account, learn how to place orders, and simply get a feeling for how things work, then buy several books on technical analysis and trading in general, and dig in.

That said, I think when it comes to going outside the basic 101 knowledge of trading, there is value that another person can add. For one, there is the ability to offer a perspective. It takes us much longer to see our own flaws, usually, than it takes other people to notice them. Second, there is also the issue of accountability. When we go to someone else, we feel more accountable for what mistakes we have made and are less likely to repeat them than when we are our only audience.

16

woah, that’s a way too costy even though it is an example. or I think it happens really in real life>?

17

There are trading educators out there charging $1500 an hour, and I know people who’ve paid it !

19

is it way too costy? $1500 is a big big money, I cant imagine it will only be paid for an hour. it makes me :eek:

20

ur kidding right?

21

if he’s not kidding, then we should accept that someone paid that kind of money per hour, but I still couldn’t believe it :confused:

22

he has to be kidding.

23

Not at all. I think I’m correct in saying that Van Tharp currently charges over $50,000 for his super trader program (and I believe it used to be double that price a couple of years ago) He’s selling that product to the retail end of the market

I’ve regularly charged corporate clients a great deal more, time is valuable.

24

Personalized instruction is always going to be the most expensive form of instruction there is. The best place to get personalized advice for free is on a forum like this one. I remember once I was in a chat room and I saw a trader take live trades, who was good. That had a positive impact on me and it taught me a lot. This guy was pretty good, and he was categorically against becoming an instructor. He just loved to trade and happened to pop online to hang out with other traders. If you can find opportunities like that, you’ll save a bundle.

Also, if you read Van Tharp’s books, you learn basically whatever he’s going to tell you when you show up to his workshop. I mean, he’s obviously going to get into more detail once you show up and plunk down $50k, and you’ll get all these nice lobster dinners in an expensive house and get to talk with other traders, tralalala. However, once you catch on to the main train of thought, you can pretty much take it in your own direction thereon. These people constantly write articles and blog, so that’s also a good way to pick up on things as well.