As with any subject, you need to learn it in order to ‘do it’ better. However, there are a lot of people out there promising to be able to teach you to trade and offering their own brand of special secret sauce, sometimes at ridiculous prices. How do you decide what’s worth paying attention to?
For me, I actually learn an awful lot from books – in fact it’s probably my preferred way to learn. Certainly anything like psychology or project management if you read properly you can pick up an impressive amount of what the author is trying to get across. The challenge is that in this densely packed information age we’ve all pretty much developed amazing speed reading skills. This means we might read something but not really take the information in.
If you want to read a book in order to learn, then I recommend that you take notes or even write in the book margins as you read it. Note taking is vital because it helps your brain (via moving your physical body i.e. your hand) to absorb information. Also, if you go to any sort of talk or seminar about trading then take notes. You’ll internalise and be able to review the information which was relevant to you, rather than looking at a bunch of powerpoint slides and thinking ‘what was that all about??’
Now, the next point I’m massively guilty of. I tend to ‘peck’ at information. In other words I’ll have three or more books on the go and I switch between reading these, pretty much at random… This is not coherent. So now what I’ve done is made a pile.
Apologies for the crappy pic but my smartphone died (waiting for a new one – Samsung Galaxy S 2) and the paper at the bottom are receipts… don’t ask… Obviously, the book at the top of the pile has to be read first. I’ve also charted the pile diagrammatically to help me keep to the thread I’m following… It looks a bit grand this bit really it’s just a pretty list.
Might re-name this as “Tree of not being a dumbass” 😉 but again, these are all ‘tricks’ to help me focus on the goal at hand.
Ok, changing the subject slightly – with respect to courses and people offering to teach you to trade etc.
Rule number 1
Are they offering value? In other words if the course is £2000 but your trading account is only £800 then forget the course and add the £2000 to your account and trade it. You will gain much more experience/information by losing this money trading (yes, we don’t intend to of course) then giving it to someone else. (more on this in part 5)
Rule number 2
Has this worked for others, have you talked to them? Don’t just buy the hype on the web-page.
Rule number 3
If you are going to follow someone else’s system, do you think you can?
This is a key point for me. I am a crappy follower – possibly due to me lack of regard for the opinion of others 😉 but mainly due to not being able to follow through on something on ‘faith’. To a certain extent this might be a handicap in the short term as I’m essentially re-inventing the wheel. However, it’s my wheel and once the car is built I’ll understand it completely. Hopefully this at least makes sense to some people.
I’ll expand the ‘Book Review‘ section of this blog at some point with some of the other stuff I’ve read etc. but if you’re stuck for ideas then it’s a good place to start. Also some of the people I rate are listed here.