- [Karina Hollekim video added 2nd Nov 2014]
- [Updated 9th May 2012]
- [Updated 5th Sept 2011]
- [Video added 8th Oct 2011]
- [JFK Video added 8th Nov 2011]
- [Amy Purdy Video added 12th Dec 2011]
Please keep in mind that these comments are highly UK specific and based on my own views, opinions and experiences so far. You will have to take responsibility for your own actions so read, comment and most importantly – think for yourself…
This is in many ways a very broad summary of my outlook and written for people who are interested in learning to spread bet based on more than 9 months of me being less than successful so far… Here’s the kickoff 😉
I don’t think most people get into trading because they like trading.
My belief is that the majority of people open a trading account because they are focussed on the end goal (which is sold as a Midas-like ability to pluck unlimited cash from thin air) rather than any stage in between.
For whatever reason they have an issue (usually around lack of money = ironic) that they think trading can fix. Trading is sold as a short-cut to an amazing lifestyle of ‘working’ 30 minutes per day, sitting on a beach and not having to answer to a boss. Here are bullet points from some spam related to trading which is pretty standard: –
Set your hours to suit you. To succeed as a trader requires as little as an hour a day.
It’s easy to start. All you need is a computer, trading account, charting software – and the right training, of course!
You can trade from anywhere. As long as you can plug into the Internet, you can trade.
No tax on earnings. Spreadbetting in the UK is not taxed, so you keep everything you make.
Yep, you’ll notice it promises you’ll be able to trade. Great. No promises about being able to make money though – haha 😉
Only the last of these four points is completely factually correct but if your main income is from spread-betting you will be taxed on it. So in fact none of these points are true! (Thx to JDTrader for the correction/comment below)
Statistical probability shows that if you have enough people doing the same thing then x% of them will be completely awesome at it. They may be naturally talented. However, at this initial stage it will actually be a small number of people winning if you’re getting them all to perform a complex task. Let’s call these ‘retail’ clients and their ‘lose’ rate is probably about 90% i.e. lots of people open an account and lose money. So they quit.
I’m completely serious in writing that there are companies out there actively promoting this dream as a way of parting you from your cash rather than actually teaching you to trade. If it’s too good to be true then it’s too good to be true. Ok? Good! You have been warned.
If you still can’t relate to the paragraph above and haven’t traded before then the following should make it abundantly clear. For people who I’ve talked to before or who have read this some of my blog already I’ll also clearly state I’m loving trading – This vid is only for the ‘newbies’ and illustrates what most people are thinking, especially when they’ve been ‘sold’ to 😉
So please be very careful if you’re looking at certain UK based companies that promise to teach you to trade over a weekend. They’ll have really nice offices, you might learn the basics (stuff you can pick up from a book) but it’s essentially a waste of your money and only leads to an ‘upsell’ for the Supertrader course…
Throughout the education process I’ve gone through so far most of the things I’ve seen or read do not actually help you make money in the market.
How can this be…?
The vast majority of the ‘information’ sold with relation to trading is wrong. In the main it’s not intentionally wrong (misleading on purpose) but it is probably going to send you down a blind alley and while you figure out whether it’s right or wrong you’ll probably be losing money. Bugger eh? Here are some of the myths.
Newbie trading myth number 1… Fundamentals don’t matter, all you need to do is look at a bunch of charts and interpret them in the right way.
Frankly, this is total bollocks. No-one who’s made significant money in the markets (FX or stocks) has done so purely from a technical standpoint. I’d suggest if they did so they were in the right place, at the right time with a system that was ideal for the market at that point.
However, this myth is great for marketing and other companies trying to sell you their ‘course’ as it makes it sound like they have some sort of secret and it’s a shortcut to riches… If you haven’t realised by now that there are no shortcuts in life then please go back to watching Eastenders.
It’s human nature to want things to be easy, I understand that but please stop believing there’s a magic bullet. Technical analysis is not the be all and end all of trading. It might be a tool, it might help but thinking this is all you need to know will mean you lose money until you learn otherwise. [Any technical traders reading this – I am NOT ‘dissing’ TA only the marketing spin on what’s needed/involved which is very common in the UK]
Of the 40+ people I met who all started their trading journey in about Oct 2010 I know of 2 who are still trading… Everyone else has stopped or isn’t replying to email… probably also indicating that they stopped or blew up their account 😉
Newbie trading myth number 2… You can be successful at this and change your life in 30 minutes per day.
Holy s**t! Really? I’ve spent 5 years working out in the gym and I’m still not where I want to be on that topic yet… I looked back and reckon that’s maybe 500 hours over this whole time. Probably for the first 200 hours I had little or no clue what actually worked. Somewhere in the next 200 I could see I was making good progress. The last 100 or so hours have made me realise how far I am from where I want to be fitness wise and the sacrifices that will be involved if I really want to get there.
Now, if you’re an expert who has spent 10,000 hours trading then this may be true for you. Maybe. Working forwards by the time I’ve spent this long in the gym I’ll be a fantastic looking 134 year old corpse 😉
Newbie trading myth number 3… You can go from zero to hero financially in months
Please, just do the maths. NO ONE is making a 100% return in weeks. If they are then they’re taking completely mad risks and they’ll soon have no money to trade with.
Now, if you enter this arena when focussed on the end goal but don’t immediately (or quickly) begin moving towards this goal then you will get frustrated, upset and angry. Then you will quit. That was the end of your trading journey. How much you lost in the process depends on your emotional make-up… This is what most people do I guess.
Here’s the choice, the question you have to answer in your life.
Who do you want to be? What do you want? How are you going to get it? What sacrifices are you able/prepared to make in the pursuit of your goal? How long are you prepared to continue in the pursuit of what you want, or will you only go so far then quit?
Regardless of what you’re doing and where you’d like to be in the future it’s up to you.
Trading may not actually be the best way for you to get there so think about that before you give anyone your money to teach you or if you try to learn to trade by reading a lot of books. Read the section I’ve written on books for why I don’t think reading a library can help you learn to trade.
Just because you want the shiny things promised by the marketing people doesn’t mean they’re giving you the right information or that anything they say is actually true.
It’s the quality of the questions you ask yourself that determine the course of your life.
And if I’ve not managed to put you off then you’ll be needing some inspiration
It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.
If you just want to do it for the shiny things you’re doing it wrong…