Trader Q&A - Why Don't Educators Just Trade?

Hi Lance

Firstly I would like to thank you for all the information that you share with everyone. The way you present what you know is really easy to follow.

I am a beginner in forex trading and am the type of person that will not start to trade until I am comfortable with the knowledge that I have. As you have stated so many time, there is unfortunately a large number of sites that offer training at a price and after paying the money a person finds out that the information is of no use.

You recently advertised courses by Toni Hansen. Could I ask you a question that has been bugging me regarding online course that are charged for. I battle to understand the concern that I have that if the courses that people sell are so good, then why are the people who are selling these courses not making so much money trading using the principles they are selling in their course. Why do they make money on the course then.

I am really trying hard to find decent material and it is not easy as a beginner. I really cannot afford to purchase the course by Toni to find it is just another one of those.

Could you perhaps help me out here?

Thanks Lance
Mark

Answer-

Hi Mark,

Thanks for the email. I'm glad you've found value in my website so far. I appreciate the feedback.

Your concerns are not unusual - this is a very common question, so I might share this response through the newsletter sometime in coming weeks.

There are numerous reasons why a genuine trader may want to also provide an education in 'how to trade'. Just off the top of my head I can think of:

Some people just love teaching. My past career involved a bit of teaching - I enjoyed it then. I enjoy it now.
Some people do it for ego. It gets them 'known' within a field in which not many people make it. This is a big ego boost.
Some do it to relieve the boredom of trading.
Some do it to get interaction with other traders. Trading can be a very lonely business, and I'd rather associate with other traders than anyone else, so it's a great business for me to be involved in.

And of course money is also a factor:

Why wouldn't you want to diversify your income streams. In my opinion it's the smart thing to do, and the main reason why I'll be charging for my course (when I get around to creating one).
In addition, trading education provides for stability of income. Trading does not provide a guaranteed daily income, even for a daytrader. And many longer term traders (daily charts or longer) will go through weeks or months of drawdown before reaching new equity highs. Trading education, unlike trading, provides a more regular and stable income.

Do not fall into the trap of thinking that just because someone teaches and charges money for it, they obviously don't know how to trade. That's not true at all.

To be honest, I don't know of any educator who teaches purely out of the goodness of their heart, with no expectation of reward (financial or other means as described above). We live in a 'value for value exchange' society. And to be honest, a genuine trading education is a valuable commodity. So considerable value should be provided in return (money or otherwise).

The question then becomes how to find the gems amongst all the rubbish that's on the internet (or elsewhere). As a novice this is not easy because you do not have the knowledge or skills to be able to differentiate the two. Without experience, you can't know the difference. Maybe some people fluke a great education from the start, but I think most end up following the same path that I did - stumbling from one bad experience to another, learning from mistake after mistake.

Of course, there are ways to perhaps fast-track the process, and avoid some of the 'poor education' pitfalls along the way:

Avoid any hype - if they're promising easy results for little work, then avoid them like the plague.
Be very selective with forums (or even better, avoid them altogether) - they're breeding grounds for mediocrity.
Get recommendations from people you trust.

Personally, I mostly recommend two educators - Mike Reed and Toni Hansen (both accessible through my Resources page as the first and second listings on the page). However you don't know me (and we probably haven't had sufficient time through the newsletter to develop trust), so conduct your own due diligence on anything you check out.

With Toni's material (since you asked about it), I believe you are getting a quality education in a valid trading methodology. If you're unsure as to whether or not her methods suit your circumstances and your preferred trading style, then subscribe to all of Toni's free newsletters (the emini intraday trading one, and the stocks position trading one), and view her free webinar at the ISE website (date presented 07/08/08). This will give you an insight into how she trades and how she teaches. It's quality material. (She has a followup webinar coming up tonight. I'll post a link to that on my website once the archive is online)

On a slightly different topic, two comments in your email raise alarm bells. Firstly, you said you're the kind of person who will not trade until you're comfortable with the knowledge that you have. Please be aware that knowledge from books or courses is not the sole prerequisite to trading success. The reality of the markets is uncertainty. Books and courses cannot provide you with what you need to survive within this environment. Books and courses could possibly make you a great market analyst. However there's a big gap between an analyst and a trader. To bridge that gap you'll have to trade - simulation first and then live. Only through experience in the markets can you learn the lessons of discipline and consistency, and overcoming your fear of loss. You can't learn that from books or any mentor. If you seek certainty before trading, you'll never trade. Certainty doesn't exist.

Secondly, you state that you can't afford to buy Toni's course and find out it provides no value. Just because I found value in the course, doesn't mean you'll see what I saw in it. Different people at different levels of development will perceive different 'messages' from the material. It's not so much that the course has to contain real material - it has to contain real material that is right for you right now. I can't promise that it will be the right thing for you, right now. That's for you to decide. (Often when I flick through one of my old books that I read in the early days, and found little value, and I'll be amazed now at how good some of the content actually is).

Final point - be careful you're not on a search for the holy grail. What is your expectation from this course? If you expect it to provide you with all the answers, you're expectations are not based on reality (see two para's above, about the need for experience). I recommend working through the traders checklist on my homepage, www.YourTradingCoach.com, in addition to whichever course of education you decide to pursue.

Sorry for the long reply. Hopefully that's helped.

Cheers,

Lance Beggs

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