Notes to aspiring traders
Successful trading is
one profession that does not have any real path of formal education to traverse.
There are no graduate schools or advanced degrees that equip anyone for reality
in the trenches when those opening bells ring.
How then does an aspiring trader go from complete
lack of knowledge to competent, confident and profitable professional? Great
question… I’m so glad you asked!
Consumer’s Side Of The Screen
I have pondered chatting with you on this topic for a some time now,
but it’s one of those ideas that rested on the proverbial back burner. With
years of experience in this industry as a consumer and provider of trading
information, let me share with you some things I’ve learned along the way.
As a consumer, i.e. aspiring trader in process of
learning this craft, I myself purchased just about every type of information
package imaginable. Let’s save space here and not detail all of the books,
videos, websites and live seminars I’ve attended. Suffice it to say the
collective cost of said info is easily $20,000+ and counting over my
still-evolving career.
Some of that information was pure rubbish. Some
of it pure gold. Price paid didn’t seem to make a big difference, although the
less I paid the less I usually derived.
Two information packages I purchased back in
early 2003 and would recommend to anyone are (in no order of preference)
Kevin Haggerty’s 1,2,3 method and Chris Curran’s 3-Line Break method. With
no preference or connection to either, I will say that each of them are well
worth many times the price. If you took all my trading tools away this weekend
and left me with either of those methods, I could build a new customized
approach that would offer positive performance potential in no time at all.
A package I don’t yet own but eventually will is
Don Miller’s course. I’m quite confident it would be worth many times my own
investment if I were searching for something that works for intraday trading the
minis. I already have a method with no holes in it that suits me perfectly, but
one never knows where a little tidbit from here or there can add something
valuable to it. How can we put a price on education extrapolated thru the life
of an active trader?
I’m content with never learning another thing
about trading and would be fine should such a brain freeze occur. However, I’m a
big proponent of knowledge for its own sake. There are plenty more things for me
to learn before my retirement day arrives.
Provider’s Side Of The Screen
I have run live market rooms in one form or another since mid-2000…
just over five full years of daily interaction with traders. It provides many
positive things for me in my life, but more on that a bit later.
If I had a dollar (here we go with that old
cliche` again) for every time I’ve been asked, “Why don’t you just trade your
own account? Why do you need to peddle information packages to others?” I’d have
1,000s of dollars. Or at least accumulated them over the course of time. I’d
have spent most of that money on wild women and smooth gin… the remaining cash
just going to waste.
But I digress.
Along with that question has infrequently come
accusations of falsehood. More than a few flaming emails have castigated me (and
many others in this role, I assume) for preying on fledgling traders. The most
venomous ones always seem to opine that all method providers are frauds, cannot
trade profitably for themselves and exist in this industry as parasites to be
avoided.
Hmmm… maybe I should speak for myself: perhaps
I’m the only information vendor who has ever received a colorful email before.
Let’s assume that is the case. Let us also assume I cannot trade my way out of a
torn paper bag, and have no hope of ever making a dime in real profits. Would
that scenario change the value (or lack thereof) for information I possess?
Scott Blevins is a
special teams coach for NFL football kickers. He is one of the best in his
business, highly coveted by many NFL teams and professional players.
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Oh… and one more thing. Scott is also in a wheelchair. Has never kicked a
football in his life, from what I understand. Regardless, the professional
players that he works with get positive results. They improve their craft. They
kick more efficiently. They keep their spot on the roster. Their teams win
clutch games… including SuperBowls. The kickers sign bigger contracts, and so
do their teammates. The players and their family all benefit. Their agents and
agents’ families benefit. Etc, etc.
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When someone shares information with another, the expected end result is
improved, positive performance for the student from there. What difference does
the vehicle delivering said info make in the equation?
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Greatest, or The Worst?Â
Please pretend along with me for a moment if you will. Say you had
the absolute greatest trading method in the world, bar none. It was sure-fire to
profit thru any market conditions, period. The only requirement is that you see
and likewise act upon the buy and sell signals it issues accordingly. How simple
is that to accomplish? Just about anyone who fogs a mirror in the morning can
handle that role, right?
Now, what if you commonly drank a six pack of
beer by 9:30am EST each morning and then traded your method? What if you were
bipolar? Suffering from chronic depression? Anxiety attacks? Prescribed copious
quantities of medication for what ails you? Addicted to a ritualistic twelve
cups of coffee before the opening bell? Slept until noon?
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Remember now… your personal trading method is the absolute greatest in world.
Any other competent trader can make money hand over fist with absolute ease,
but you self-sabotage yourself to pieces. Is your trade method information
priceless or worthless on its face? Would your own actual results in the market
reflect what your information is capable of in the hands of just about everyone
else? Would that core information of yours on its own, outside of your human
application be valuable to others, or not?
This wild analogy is my best attempt to explain
why we can often learn tactics = methods from part-time traders who have
discovered patterns and tendencies in the market thru various forms of research
and observation. Likewise, some of the very best traders may be poor
communicators or outright clandestine with their knowledge. Pure information and
the person who possesses it are not always synonymous.
Free Fetches A High
Price
In this age of information, trading info is available cheap or even
free everywhere you turn. Where in the world does a new trader possibly begin?
How does one sort the junk from invaluable? How long does the discovery process
take to sift thru myriads of free stuff? At what cost of time = lost opportunity
can we assign to such a process.
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I learned thru exactly that progression myself, long before the information age
began. It cost me tons and tons of lost money, time and emotional angst. How
expensive is free information? How much of a price is paid thru blind stumbling,
trial and error approach? In my opinion most system or method vendors ask
relatively little $$ to teach one helluva lot of stuff… stuff learned in real
time from the often cruel hard right edge of those charts.
Most aspiring traders lose more than the price of
any good information package inside the first week or even first day while
fumbling with some half-covered theory gleaned for free. What is their true cost
of education in the end?
Why Am I Here?
If I had to pick a new profession for myself right now, at this time in life, it
would either be guiding big-game hunters in the Rocky Mountains out west or
teaching high school = coaching sports. I’m 20+ years past the dream of playing
NFL cornerback. I gave up on being a trust fund baby soon after I could speak
and count.
I truly enjoy sharing knowledge and information
of any kind with others. If I guided hunters in the western slopes, it would be
very self-satisfying to help them succeed. By the same token, teaching young
people about life in general would also be lots of fun… and a few headaches
along the way.
Trading for a living is lonely. Have you ever
experienced that? Those of us married to our screens are divorced from most real
world interaction with others. We have no co-workers to fellowship with. Just
try to explain what you do for a living at the next social gathering, and see
how that goes. Tell the poor souls who mistakenly ask what you do for a living
all about how this week’s volatility was rocking, you caught some moves here and
missed some there, etc. Go into a bit of detail and see how that flies.
Listeners will look at you as if there’s a third eye jutting from your forehead.
They might mumble something about their 401K being up or down, and the subject
will quickly change.
Been there, done that… still doing that today.
Many of you are, too.
Writing some words in these forums offers me a
chance to socialize with like kind. Preening with birds of a feather, so to
speak. Exchanging my time (the stuff life is made of) and hard-earned knowledge
has much more benefit than pure monetary. The “teacher” part of me really gets
satisfaction out of sharing info with others. There is a big personal benefit in
watching that process take place. I am absolutely thrilled when traders are able
to learn some things we share, and it pains me when for whatever reason(s) they
don’t.
That is why I am here, and I’m guessing the same
is true for most if not all the esteemed writers & bloggers around me. Humans
only do what works for them. If some benefit is derived from banging one’s head
on a wall, guess what? You’ll watch said person bloody their forehead over and
over again until that act ceases to fill their void.
I expect and hope that our exchange of
information, free or otherwise will lead to benefit for both of us. if such were
not the case, I would not be here. The personal satisfaction of helping others
succeed and having them think more of me afterwards than before is my primary
personal payoff. Make sense? That’s what works for me on a human level, and that
is what keeps me in the educational arena on both sides of this here screen.
Summation
Traders today may have too many choices of information to select from. That can
be a problem. I will say from experience that it is an even bigger problem
having no information available at all. That’s how it was before the advent of
internet, computers and the online world. Remember those dark days in our
distant past? Perish the thought.
Please feel free to join us (as always) inside
www.coiledmarkets.com on Saturday
night for the open-access Weekend Outlook section. There is a lot to cover in
the charts there this time around… that is for sure! See you then, and please
have an excellent weekend.
Trade To Win
Austin P
(free pivot point calculator, much more inside)
Austin Passamonte is a
full-time professional trader who specializes in E-mini stock index futures,
equity options and commodity markets. Mr. Passamonte’s trading approach uses
proprietary chart patterns found on an intraday basis. Austin trades privately
in the Finger Lakes region of New York.