One question often asked by beginners is should they buy a forex trading course? Or instead, go with the free stuff available?
I’m not much of a fan of (generic) trading courses, for the reason I’ll give below.
However, I don’t believe the answer should always be quite so binary.
As a newbie you’re at the start of an epic journey. One that will see you transform from neophyte to seasoned pro.
Along that journey, there’ll be things you want to learn for free, and things you don’t mind paying for.
The dilemma for beginners is in figuring out what is worth paying for and what isn’t.
My first and only ‘course’
I bought my one and only trading ‘course’ back in 2002.
It cost me £25, from the classifieds section of Investors Chronicle.
Meanwhile, a friend bought a course about Elliot Wave costing him north of £1000.
Needless to say, I’m still trading. He isn’t.
My course was nothing more than a cute little self-published booklet.
Well thought out, well written but short on substance.
What can you expect for 25 quid right?
Back then I was totally clueless, so was just grateful it taught me some basics.
Such things as what was spread betting, CFDs, and forex.
How to place orders.
The difference between technical and fundamentals. And why I should use the former.
It’s unique selling point was the simple price action strategy contained within – though I don’t ever recall the words price action, mentioned once.
If you’re a beginner and have read some of my blog, then you’ve likely gained a whole more than I did with that course.
However, I cherished that booklet. It was my intro to trading.
I have fond memories of it, in the same way, an adult has fond memories of his or her childhood years.
If you’re a beginner, then you have to take me at my word when I say you are totally green.
You’re the cannon fodder for the markets, brokers, scammers and yes, course vendors too.
Don’t be offended.
The sooner you accept your neophyte status, the sooner you can progress.
Whenever I read the question, (and I read it often), ‘should I buy a course or learn free stuff online?’ it just confirms greenness.
There is nothing wrong with being green.
I take the ultimate biscuit for the amount of greenness ever bestowed on an individual.
The problem with being so green though, is you lack the ability to distinguish good advice from bad.
Good trading technique from poor one.
Or superior forex trading course from one that truly sucks.
Too much learning – not good
I keep reading on forums just how essential it is to learn everything possible about the market, and by doing so you’ll become an expert trader.
I couldn’t disagree more.
I’m firmly in the specialisation camp. The more you focus on one thing, the better you get at it.
Our focus is akin to the rays of the sun shined on a magnifying glass.
The more those rays disperse the less strength that focus has.
IMO what you need are a couple of trading tools only.
The rest you learn as you go.
Society has conditioned us all to think, the more we learn the better we get, which translates into more money.
Yet there are many traders who can tell you everything about technical trading techniques, but couldn’t trade their way out of a paper bag!
Master one or two technical methods.
Then spend your time figuring out how the government bond markets work, how sentiment works and how your own psychology works.
Believe me, that’ll keep you occupied for long enough!
To pay or not to pay ? That is NOT the right question
I know what it’s like.
You see the flashy advert telling you how you can become a great day trader – if only you pay $500 for the course.
You look at your pitiful bank balance.
Then you think of all the money you’ll make as soon as you complete it.
You can quit your job working as an Uber driver, or at the Amazon warehouse.
Like I said before, totally green.
Let me help you.
Buying a trading course will not make you profitable.
And neither will learning all the free stuff.
Because the vast majority of courses will teach you methods or systems.
Hopefully some money management.
And if it’s really good, it will throw in a few trading psychology aphorisms too (which without ways to implement them mean diddly squat).
What they won’t teach you is how to stick to the method(s) they teach in the first place.
Every successful trader knows systems are not the problem.
Virtually any ‘system’ can be profitable. It’s sticking to it during the downtimes that’s hard.
Sounds easy right? Well it’s one of the toughest things you’ll ever try to do.
If Sir Issac Newton couldn’t keep himself out of the market after making his initial profit, then what possible chance have you got?
All-too often as beginners, trading becomes one almighty game of whack-a-mole, where there’s absolutely no thought or precision going into it.
A bit like the dude below.
Too much freedom
My own methods of trading are simple. Nothing glamourous. No bells and whistles.
No multiple timeframe analysis. No divergences. And definitely no fibs or support or resistance.
But my methods work. Sometimes very well, if I do say so myself.
So why the hell would I dish them out for free, when I went through so much pain myself?
First off I’m generous. I want people to succeed – corny as they may sound.
More importantly, I know, no matter how many readers try my methods, few, if any, will have the patience (or courage) to stick to them when the going gets tough.
They’ll be off chasing greener pastures; Fibonacci pullbacks, 5-second bar breakouts of the Istanbul opening bell, scalping using Elliot Wave etc.
In trading, you’re the boss. You have the ultimate freedom.
Too much perhaps.
Your job as a trader (mechanical) is to follow the system. End of.
But if you have a bad day ‘on the job’ it’s so easy to change that job.
Consistency is key.
If you flip systems there’s no consistency, and no consistency means no profit.
What’s this got to do with trading courses?
Quite simply, if you purchase a course you need to know just how the vendor is going to help you stick to the method taught.
Unless there’s a mentor walking you through it all in a live trading situation (preferably for months – even years) any course will have limited success.
Sure, it will give you useful knowledge.
But professional trader – it will not you make.
So you may as well go for the free stuff instead.
Shiny balls and holy grails
A little story from my own trading past.
The course I purchased all those years back was very good at planting a seed in my mind – in five years I could make a million.
If I was to win just 70% of trades and risk 2%.
The math was all set out for me to see.
5 years is conservative by all accounts.
I’ve heard the nowadays the social media trading gurus say it can be done in one.
Here’s the kicker though. And it kills me to this day.
If I’d just had the brains to follow the system I would have been profitable much sooner. Maybe not a millionaire – but well on the way.
The method I was following was a simple break out system. Not too dissimilar from what I use today, ironically.
But here’s where I made my first rookie mistake.
I decided, rather than placing my entry order at the breakout level, I’d buy at the current market price instead!
My thinking was that by the time price got to the breakout level, I’d have a nice shiny profit.
Oh, how green I used to be!
What happened after this was a slow, long, painful downward spiral.
Eight years of never-ending tweaks, holy grails, and shiny ball syndrome.
After eight years of tweaking, I finally figured out no amount of searching for shiny balls was ever going to help.
My epiphany came at 4.00am riding my motorbike back from work (I was working nights back then).
I should have been concentrating on the road.
But I had my latest trading strategy whirling around my brain.
Next thing, I was rolling arse over elbow with my bike somersaulting ahead of me. And, there, before my eyes, was another bike with two riders slightly attached to it, doing the same.
The road had been empty, and to this day I have no clue what had happened.
What did happen though, (after I picked up my bike and trudged it all the way back home – it wouldn’t start) was I just knew my days of the holy grail were over.
I would stick to one method. I would no longer be afraid of losses.
And because of no longer being afraid of losses, I no longer needed that one infallible trading method.
The point of the story?
Both your trading and your life can turn to crap, if you don’t have the discipline to stick to your method.
And so I say, one more time, if you’re going to buy a course – what fool proof method is in place for you to follow it?
Can the course vendor answer that question?
A free course worth its weight in gold
There’s a feeling out there, among beginners, the whole industry is full of scammers and cheats. From brokers to course vendors even to bloggers!!!
Well if you check out this course by Adam Grimes you can see how wrong you can be.
Adam has done a great job with this course. It’s better than alot of the paid stuff out there and yes, its absolutely free!
The holy canon of trading books
I’ve been a ferocious reader ever since I managed to complete my first ever book, ‘Danny Champion of the World’. I’ve read a lot of trading books in my time.
The great thing about books is that you can chart your own trading course.
I love classic books. I mean stuff that shaped the world we live in.
Like the holy canon of Christianity. And Buddhism. The Hellenic world. Classics.
Well, there’s a holy canon of trading too!
Maybe not quite as ancient, and maybe not quite as well known, but these books are true classics nonetheless.
If you’re new to trading I advise getting a feel for the whole domain of financial markets before going granular and choosing a niche.
I’m not suggesting trying your hand with real money at every conceivable type of trading. That would be silly.
But you should have a broad understanding of how markets work. You should aim to be more than just a chart monkey of the five-minute charting world.
One of the best ways to begin your education is with the Market Wizards series by Jack Schwagger. You simply cannot be a serious student of trading if you’re not prepared to read these books.
The series is a collection of interviews from the smartest traders to ever grace the planet.
Open any page, and there you’ll find one world-class trader, giving some valuable titbit.
There’s no one style of trader interviewed.
There are fundamental guys such as Jim Rogers (who’d never consider himself a trader).
There are traders like Linda Raschke, Stanley Druckenmiller, Ed Seykota, Richard Dennis, Paul Tudor Jones – just to name a few.
As a beginner, you probably won’t understand all the concepts discussed (I get lost when they talk options).
But the Market Wizards series lays a great foundation when it comes to understanding trading and how markets function.
Reminiscences of a Stock Operator
A true classic. And one of my favourite trading books.
I know that might sound cliché almost. But it really is such a damn fine book.
If you don’t know already, it chronicles the life of Jesse Livermore through a fictional character Larry Livingston.
Livermore was famous for making a million in the 1929 Wall Street crash.
Reminiscences of a Stock Operator is not the first book on trading I would read – that would be the Wizards series. The book can be hard going. And to the complete beginner possibly even nonsense.
I struggled with it on my first read.
It can only be appreciated after a few trading wobbles.
Livermore’s perceptions of speculation are amazing though.
Here is one to whet your appetite.
Speculation is far too exciting. Most people who speculate hound the brokerage offices… the ticker is always on their minds. They are so engrossed with the minor ups and downs, they miss the big movements.
The book was written in 1923 but it’s just as relevant today.
Even then (as today), there were those trying to profit on ‘small market fluctuations’.
Here’s another of Jesse’s wise sayings for the wannabe day traders out there.
The desire for constant action irrespective of underlying conditions is responsible for many losses on Wall Street even among the professionals, who feel that they must take home some money every day, as though they were working for regular wages.
How I Made $2,000,000 in the Stock Market
Don’t be put off by the title. This book’s a monster.
Written in 1959 it documents the story of a professional dancer, Nicolas Darvas. And his progression from a total neophyte, trading on tips and news, to a sophisticated technical trader using his ‘box method’.
We can only imagine how hard trading was back then for him. His dancing took him all over the world. It couldn’t have been easy catching up-to-date stock quotes or being able to place orders.
Oh my, how easy we have it now!
Education of a Speculator
Lower down the pecking order, but still a solid classic. It talks of the experiences of one, Victor Niederhoffer, once a protege of George Soros.
I like Vic’s writings. He’s down to earth. Sceptical of everything, technical analysis included.
Vic was a hotshot hedge fund manager as the book was being written.
But that same year he bought Thai bank stocks as the Asian Financial crisis was getting underway.
Needless to say, he blew up big time.
Nevertheless, the book is a great read and talks of many of the minute details of speculation.
What this book instilled in me is, testing our theories rigorously before putting them to work. In fact, the testing is the real job of a speculator. Not the trading itself.
Education of a Speculator covers topics about life and the similarities of trading
Vic was also a national squash champion and many of his insights come from the world of sports.
Extraordinary Popular Delusions and the Madness of Crowds
I’m a serious nut on financial history. And this book does not disappoint.
Okay, it was written in 1841.
So is definitely a classic in terms of age.
But what makes this book so special?
Popular Delusions is Charles Mackay’s study of crowd psychology
And it talks about the South Sea bubble, the Mississippi Scheme, and Dutch Tulip mania.
If you take in this book, you’ll never have a problem recognising when a trend has gone too far. Like the Bitcoin bubble, I discuss here.
The book is entertaining, a little hard to read (all classics are). But if you’re serious about a career as a trader – it’s a must.
Books on technical analysis
In all honesty, I don’t consider myself much of a market technician.
I know what I know, and know it well, but many of the mainstream approaches out there, I really can’t be bothered with at all.
Reading books on technicals is too much like reading an instruction manual for my liking.
I only have 2 TA books on my shelf. Beyond Candlesticks by Steve Nison
The other, by Jack Schwagger, Getting Started in Technical Analysis.
I’ve read the Al Brooks series on price action.
Hard work for me.
It’s like doing a masters degree in the subject.
I’m seriously not that smart. But there are those who will revel in his work.
The book that really turned around my trading was Long Term Secrets to Short Term Profits by Larry Williams.
I seriously can’t thank Larry enough.
In this one book, he tells you all you really need to know about trading.
Good sections on money management, and lots on psychology through excerpts from his past newsletters too. And again, everything is rigorously tested.
Larry Williams is the father of actress Michelle Williams of Brokeback Mountain fame.
But what few know is, at the age of 17 she won the national futures trading competition.
Just shows the value of a great mentor.
It was only when I dug myself into a real trading hole, I figured out I’d better figure out this trading psychology stuff.
The first book I got my hands on (as have many) was Trading in the Zone by Mark Douglas. Mark talks about trading with a casino-like edge.
That really sunk in for me.
I then went on to read The Disciplined Trader – which I believe was written before Trading in the Zone.
While Trading in the Zone introduced me to how a trader needs to think, it was Brett Steenbarger that really helped me establish the tools to do that.
I’ve been a follower of his blog Traderfeed for ages. All newbies should check it out.
But if you seriously want to get the trading psychology thing licked, I’d recommend the Daily Trading Coach.
It’s jam-packed with 101 how-to tips on mastering aspects of trading performance.
Brett is a god to me. He really wants you to turn pro. It comes through in all his writings.
The book Enhancing Trader Performance is another gem.
He takes the approach trading is an elite performance discipline, so we need to act like elite performers to be trading at our best.
I credit this book in seeing real changes in many areas of my life, not just trading.
The key takeaway from books
Okay, so you were expecting some thoughts on purchasing a Forex trading course.
And you got a whole lot of book ideas instead.
The main value in some of the books I’ve suggested is, you get other people’s experiences of trading.
You can make these ideas your own.
I don’t really care about techniques and systems. They are a dime a dozen. You can pick them up anywhere, even on this blog.
And systems are the easiest part of trading. The discipline to stick to them is what’s not.
Going back to what I said before – unless you’ve got a mentor standing over you, a course is nothing more than a high priced way to learn a few technicals.
I mean, how many ways to interpret trendlines and support resistance, or divergences can you actually learn?
But books like Wizards, Reminiscences, How I made 2 million, and Education of a Speculator all give you other traders experiences.
This is invaluable if there is no The Karate Kid type mentor looking out for you.
Remember I said you were green?
Well reading these books will do wonders to cure that.
The wizards give you an idea of the terrain. They’ll introduce you to macro concepts moving markets. They’ll tell you what it takes to be a success.
Reminiscences will bring you face to face with the greatest ever stock trader (who went broke and committed suicide).
Nicolas Darvas shows how you, even without the financial qualifications, or connections, can make a go of it in this business.
And Vic Niederhoffer can provide you with those pithy insights of a sceptical trader who has to test everything rigorously.
No, you don’t need a forex trading course
I am not totally down on trading courses. If you have the funds by all means splurge.
And let’s make a distinction here. I am referring to courses, not so much trader training or mentorship programmes. Where is the distinction?
To be honest I don’t really know.
My first assumption is price. Mentorship type training is probably in the $1000’s. Which is well beyond the price of the average retail beginner.
Courses are less expensive, but with that, any mentoring is probably lacking.
If you are lucky enough to find a course, where the instructor takes a real personal interest in your development, then think seriously about it.
But most courses are (I guess) not up to that.
So before purchasing a course, just be aware that completing it won’t turn you into a profitable trader. Only experience can do that.
And that’s assuming, the course is a good one.
There are also many charlatans making money as course and system vendors.
A course pumping ‘the trader lifestyle’ (fast cars, big houses, private jets, loose women) over the realities of trading should be approached with extreme caution.
Advertising 101 involves the triggering of emotions.
Ever notice why car adverts don’t list features, they list benefits? Usually, the biggest one being some hot female draped over the bonnet.
Trading course marketing is no different. It’s a potential minefield out there. So please watch your step!
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