In answer to Courses and Questions before doing courses

[tech/a]

Searching for quality education should be your first goal.

I agree in the sense that the TAFE education will be broad brush,and if anyone needs broad brush education there is nothing wrong with a properly structured course presenting that.

Defining quality education is the hard part for most.

Prospector says.

What exactly, do you think you could get out of it?

A question all should ask but more so perhaps.

"What exactly do I need to learn.?"

I'll make the following suggestion if it was me doing it all again.

(1) How can I trade in both directions Short and Long.
(2) How can I trade shorter term and NOT be glued to a screen? Go to work and not have to worry about my trades.
(3) How do I know any trading plan I come up with will/could be profitable?
(4) How can I be sure I'm not wasting my time/money learning Ways/Ideas to trade which are not simple and proven profitable?

I have posted a brief and simple "Trading Blueprint" before with bullet points which hopefully help people like you find the SIMPLICITY in what is often presented as complexity.

[1] Psychology
Trade within your limits,trading outside your comfort zone will throw your psychology out the window.
Know that staying in business is just as important as profit.

[2] Trading is a Business.
Structure your trading that way.
If you don't know how to structure a business--find out.

[3] Entries (I think from Nick Radge or Brett Steenbarger)
There are only 3 ways to enter a trade.Short or long.

(1) Entering into a trend.
(2) Breakouts.
(3) Counter Trend trading.

[4] Exiting a trade.(Howard Bandy)
There are generally only 5 ways to exit a trade.

(1) A pre defined signal.
(2) A Profit Target
(3) A Timed Holding Period
(4) A Trailing stop
(5) A Maximum stop loss

From Howard

Generally, one of the first three methods works best for trades that are held a short time -- a few days or at most a few weeks.

A trailing stop can be a good exit for use with a trend following system. The parabolic stop and the chandelier stop both work well.

A maximum loss stop is not a reason to sell. It is insurance against a disaster.

All exits must be tested and all must individually pass tests of validation. That means that all exits must occur often enough for meaningful statistics to be gathered.

In general, stops hurt systems. My advice is to design your trading systems so that the exit is caused by a signal from your system rather than by an adverse price movement hitting a stop.

[5] Positive expectancy(Nick Radge)
There are only 3 ways to gain a positive expectancy.

(1) Have more winning trades than losing trades.
(2) Have much bigger winning trades than losing trades.
(3) A combination of (1) & (2)

These are some of the KEYS I have learnt over the years.
Simple in their message.
Regardless of the way we trade and the tools we use to trade these snippets hold very true.

There are more one Radge and others quote from time to time---something like.

(1) Find a system that works.
(2) Test it.
(3) Trade it.


Lastly Paper trading is time consuming and terribly inefficient in testing Ideas.You'll have to wait months even years to get a result.

Its a long and challenging journey most of all ENJOY IT.

See Psychology

 

[Timmy]

Excellent post thanks Tech.

One thing you didn't touch on was what sort of price should one pay for a course along these lines. The value for money question.

In theory, a course that gives you the skills to trade profitably should have a price that approaches infinity (bear with me here). Take successful trading skills and apply them with good account size to any highly liquid instrument(s) and earnings can be significant. (There are web sites that track the earnings of hedge fund operators and we are talking yearly pay of over a billion USD on occasion, and plenty in the hundreds of millions range). Now, there are plenty of holes in this argument, I know, but hopefully you can see the gist of what I am saying.

Now the real world is a little messier, but I think the concept of "the higher the price of the course the better it must be" is relevant to people's thinking (I know economists have a word for this type of phenomenon, perhaps one of them could enlighten me here what it is). So, when a course is advertised at say $8,000 there is a perception created that it "must" be good value for money.

Unfortunately there are very few in that business who will provide verifiable performance figures (broker statements, whatever) so there is no objective way of knowing whether the course is potentially good value for money (I say potentially because even if the course promoter can verify excellent performance there is no guarantee that another person will be able to follow his/her methods). If verifiable performance figures will not/cannot be provided, then the next best thing is to see actual live trading or at the very least live market 'calls'.

Anyway, this is my long-winded way of asking the question that along with the very useful guidelines in your post defining quality education, what price represents good value for money?

 

[tech/a]

Timmy.

A good and very valid question one which should have a clear cut reply.

I think I can do that!

Firstly many people look at trading as a hobby as such they put in "Hobby" type effort and in return get "Hobby"like returns.

Serious traders should and do treat Trading as a business.

This business has the potential of returning an experienced CEO---YOU---an extremely good income.
I'll take the example of someone with say $500K in Super
OR someone with a $5K starting capital.

Both begin in Business with different capital bases but BOTH will over a long period of time invest similar amounts in their business if they are to succeed.
This goes beyond Courses and Education to software,Tools of trade ,Computers,Data feeds,Systems testing and designing tools,Portfolio management,Books not to mention their own time! (That has and should have a value!) After all you could be spending your time doing something else which returns a profit.

So that investment will be slower and more difficult to progress with those with low capital bases.The higher Capital bases will generally have more disposable income to INVEST in their BUSINESS.

I added my total up a year ago and then it was $36,000 over the 14 yr period without placing a value on my estimated 6 hrs a week over 14 yrs.

So for the $500k investor how much is to much for him to create and manage a business that could double his investment in a few years.
For the $5000 investor how much is to much for him to create and manage a business which could supply him an increasing income for the rest of his life.

I think the answer is as much as one can afford and deems necessary.

The more pressing issue for newbies and some of us hardened types is what represents TRUE value.

Hence my brief above.
Searching for techniques that are a "Secret" to the few as is presented by many Charlatans is futile and expensive.
There are truths and some of those I know are presented above.
Searching for more than there actually is -- is exhaustive and can be depressing.

 

[Timmy]

Searching for techniques that are a "Secret" to the few as is presented by many Charlatans is futile and expensive.

Hear, hear

Thanks Tech - good stuff.

 

[julius]

Now the real world is a little messier, but I think the concept of "the higher the price of the course the better it must be" is relevant to people's thinking (I know economists have a word for this type of phenomenon, perhaps one of them could enlighten me here what it is). So, when a course is advertised at say $8,000 there is a perception created that it "must" be good value for money.

Positional value ; irrational / non-cooperative demand

The assumption that cost reflects supply/quantity underpins positional value; hence expensive goods are less common & more valuable. ie. Rolex, DeBeers

I would say that the best information is the hardest to 'find'

Financial markets are characterised by information asymmetry, the investor/trader/participant gets $payed for knowing what others don't. The harder you search, the more you are rewarded, the more sustainable your edge.

 

[tech/a]

Searching for techniques that are a "Secret" to the few as is presented by many Charlatans is futile and expensive.

Let me illustrate this perhaps a little more clearly.

Money Majix comes to town.They promise to show you how to trade with their proprietary software and make astounding profits year in and year out for $8000. Once you enlist and do the course with less than satisfying results you'll get---Well you need to do the "Boot Camp" here you'll gain access to our Money Management techniques which will crystallise the proprietary software capabilities into a money making machine.
Just another $8000.

I dont care what they have hidden in Proprietary software it will only do.

[3] Entries (I think from Nick Radge or Brett Steenbarger)
There are only 3 ways to enter a trade.Short or long.

(1) Entering into a trend.
(2) Breakouts.
(3) Counter Trend trading.

[4] Exiting a trade.(Howard Bandy)
There are generally only 5 ways to exit a trade.

(1) A pre defined signal.
(2) A Profit Target
(3) A Timed Holding Period
(4) A Trailing stop
(5) A Maximum stop loss

And unless this can be demonstrated I dont care whether you do 20 boot camps no amount of Money management is going to save a method which doesnt have.

[5] Positive expectancy(Nick Radge)
There are only 3 ways to gain a positive expectancy.

(1) Have more winning trades than losing trades.
(2) Have much bigger winning trades than losing trades.
(3) A combination of (1) & (2)

 

[RichKid]

Tech, for the record, this thread is a great idea and your opening post has an excellent layout. I am sure that the clarity & precision will prove to be very helpful to many members and lurkers when combined with your trading experience. It is refreshing to get a glimpse of a trader's particular perspective of an educational structure for trading the markets. What is especially useful is that you cite the source of some of these ideas as it allows readers to examine the material at its source.

Those looking for more info on the people or ideas discussed in this thread could first try using the search tool located in the toolbar near the top of each page, there are a number of excellent discussions there. Some preliminary reading will probably help focus your questions in this thread more effectively as well if the terms are unfamiliar to you.

We are lucky to have someone combine and organize various teachings into a practical and credible order that works for them, as tech has done here- thanks again tech. Even if you disagree with tech's schematic, this thread may inspire you to re-asses the structure within which you organize your trading knowledge.

RichKid
moderator

 

[Timmy]

That's good commentary RichKid - this thread could be used really effectively as a good reference to send those posters with questions/spam about the latest, greatest software/education/holy grail system.

 

[nizar]

Firstly many people look at trading as a hobby as such they put in "Hobby" type effort and in return get "Hobby"like returns.

You've hit the nail on the head with this comment, tech.

 

[nizar]

[5] Positive expectancy(Nick Radge)
There are only 3 ways to gain a positive expectancy.

(1) Have more winning trades than losing trades.
(2) Have much bigger winning trades than losing trades.
(3) A combination of (1) & (2)

And also to add;

The Annual return of an account depends on two things:
1/Expectancy (which must be positive obviously).
and
2/Trade frequency.

Trade frequency is something which is often overlooked, but it can turn a mediocre expectancy into a great system, which is what I'm trying to do now with Forex.

Great thread by the way.

 

[theasxgorilla]

I disagree with tech/a on one point (won't the be last time either )

Your 1st rule of trading should be:

"Don't focus on making money; focus on protecting what you have" - Paul Tudor Jones.

This begins before you spend a cent on education, computer hardware, computer software etc.

It's like learning many things. At the beginning you have an idea about something you might like to be/do...a golfer, a guitarist etc. Even an experienced amateur or semi-pro could show you which basic buggy, bag and club set is adequate for a learner. An experienced amateur or a semi-pro can also teach you how to hold and swing the different clubs, how to address the ball, along with golf course etiquette.

There is something that everyone should know about educators in the field of trading.

They can teach you how to trade without ever picking up a club and showing you how they hit the ball. Let alone showing you proof of their handicap. You can buy a handful, of lesson with a pro at your local golf club, to see if that person is an appropriate coach for you. The golf club is responsible for verifying that the person teaching you is in fact the real McCoy ie. a pro.

Avoiding the situation where you are trying to get back thousands of dollars from a fraudulent educator, falls under the banner of, "protecting what you have".

ASX.G

 

[Trembling Hand]

Trade frequency is something which is often overlooked, but it can turn a mediocre expectancy into a great system, which is what I'm trying to do now with Forex.

Its funny that when you see systems or training spruked you always see a high win/loss ratio, "86% winning trades last month", that kind of crap.

That is their first mistake, why would you want to teach someone a unattainable goal as being right most of the time in the market. To take the golfing example you wouldn't sigh up to a coach if he said the first thing he is going to teach you is how to hit a hole in one 4 out of 5 hits.

Sure we would all like 80% winners but its just not possible nor is it necessary to win that often.

 

[Matrix]

Hi Guys,

Some pretty good discussion going on here in this thread.

Lots of good opinions and cross referencing from others which is great.


After reading all of the above,

Question:

Which is the best path to take with regards to the Eduction Road??

I mean, there are courses now one that one can do, but surely they ALL cant be that bad, can they?

Example:

************ apparently does a Australian Certified course in sharetrading.
(not that you need a certificate to trade a stock or make money).
(I think it is $4,800 around for the diploma)

Another one which I came across and seen was AussieRob's course ($8,000+), which I dont think is nationally accredited (uncertain here) and seems to give all them promises that you made above.


Then there are the other courses to which are part of Finsia (Finsia.edu.au)
that do some in between stuff and cover similar ground.

At the end of the day, we all like to turn a dollar, cover our expenses and keep moving forward the best way we can.

But then which one if any are the way to go???

Would self study be a the way to go potentially and or is just using free resources on the net the way to go, as there seems to be MANY (too many>) experts out there already so which is the way to go here.

(also taking into some consideration that each person has their own circumstances and speed they learn or want to learn at).

 

[Trembling Hand]

Stay away from Aussie Robber. See this thread as to why.
https://www.aussiestockforums.com/forums/showthread.php?p=252666

 

[Trembling Hand]

For a guide line for what you should be looking at with trading training don't think you could go past this article From Dr Brett,

http://traderfeed.blogspot.com/2008/02/from-trader-education-to-trader.html

He is probably as knowagable as they come in what is required to educate traders. He is a Psychologist who has seen the development of traders from Newbies into market leading many million $$ per year traders. trades himself and has set out a guide as to what a training system would be required to cover to be successful. Note most Courses hardly cover the first step let alone all four.

 

[Matrix]

Thanks for the links TH. Will check them out, Cheers

 

[Timmy]

..apparently does a Australian Certified course in sharetrading.

I find this confusing; what does 'certified' mean in this context?
Once you have completed the course what are you 'certified' for?

For a guide line for what you should be looking at with trading training don't think you could go past this article From Dr Brett,

http://traderfeed.blogspot.com/2008/02/from-trader-education-to-trader.html

Great link thank-you.

Great thread tech.

 

[RichKid]

That's good commentary RichKid - this thread could be used really effectively as a good reference to send those posters with questions/spam about the latest, greatest software/education/holy grail system.

That's right Timmy, it is one of many threads containing various views which would be a better starting point than a lot of the bogus educator material that gets mentioned from time to time (eg black boxes or share trading courses which are overpriced).

fwiw, protecting my capital is the highest priority, the other goals are of lower priority, so I agree with that view per the previous post by ASX-G. Betting small (eg 1% of total ac size risked per trade) is another thing that helps me sleep at night and is one way to try and minimize the risk of catastrophic loss. I'm no expert in this area so I don't want to say any more.

 

[tech/a]

I disagree with tech/a on one point (won't the be last time either )

Dont see ANY disagreement ASX.

[1] Psychology
Trade within your limits,trading outside your comfort zone will throw your psychology out the window.
Know that staying in business is just as important as profit.

 

[theasxgorilla]

But then which one if any are the way to go???

Would self study be a the way to go potentially and or is just using free resources on the net the way to go, as there seems to be MANY (too many>) experts out there already so which is the way to go here.

(also taking into some consideration that each person has their own circumstances and speed they learn or want to learn at).

Starting with the end in mind...what do you want to achieve? Money? Why the sharemarket then and not something else? There are many ways to make money.

There are many ways to be involved in the sharemarket. Knowing what you want to achieve can help us steer you toward appropriate education. If you really are at the stage where you don't know what you want to achieve, and likewise you don't even know what is realistically possible, ask around. This forum is full of people who have done it/are doing it.

Can you comment on some of these things?

* time: how much are you prepared to dedicate?
* starting capital
* exposure: how much of your capital to invest, for how long?
* what skills do you already have?
* what experience do you already have?

Actually, the book called Trade Your Way to Financial Freedom has an excellent interview with Tom Basso. I actually recommend that all people who are new to trading, or about to get serious should do a self interview/assessment based on those questions. The process of thinking about the answers starts the gap analysis between what you know and what you begin to realise that you need to know to acheive your objectives. I'll post them up if I get time into another thread and people can have a go at answering them.

ASX.G