Best and Worst Ways to Learn to Trade
New traders take all sorts of different approaches to learn to trade. Here’s a look at some of the common methods, with thoughts on each to help you make the most of them.
Trading Books: I personally love trading books (see 4 Great Trading Books You Should Read). I think they are a great way to get some basic concepts about how to trade. The thing about a book is that reading is not enough to become a good trader. Knowledge is not the same as application. If you get a book, and it has great information in it, keep that book beside you, open a demo account and practice, practice, practice. You may find what the book says isn’t as easy to apply in the real-world as they made it seem in the book.
Online Articles: Online articles can also be a great way to get some basic or advanced trading techniques. There are a couple problems with online articles though. Can the source be trusted? Anyone can post an article online, and if they know how to write something well it may even be at the top of your Google search, but that doesn’t mean it is credible information. Check multiple sources, or rely on a few credible sources for your information.
Also, articles are focused on one specific topic, and not trading as a whole. You aren’t going to learn everything you need from a single, or even a bunch of articles. It is up to you to seek all the information you need…which could take a long time getting information in fragmented article form.
Once again, knowledge is not application. Reading won’t make you a better trader. You need to practice relentlessly what you learn.
Trading Seminars: One of the more expensive ways to learn to trade, seminars give you a more interactive experience. This is only worth it is you can ask questions and get help on your specific issues. If there is no engagement from the audience, then you may as well save your money and watch a course online.
Online Courses: Webinars, online courses and YouTube videos are all ways to get trading information online, often for free. Remember though, someone putting on a free webinar is likely going to compensated in some other way. While they may provide great information, something will often be missing as they steer you toward buying a product. Of course this isn’t always the case. I have seen many stellar webinars and YouTube trading videos with no strings attached.
Watching individual videos will be like reading articles, it won’t give you everything you need by watching a few. It is up to you to piece together all the information to a make a personal trading system that works for you. One again, find some credible sources, and stick to those. If it is “salesy” stay away.
Once again, knowledge is not application. Watching won’t make you a better trader. You need to practice relentlessly what you learn.
Personal Mentoring: This could be cheapest or most expensive way to learn to trade. It involves a professional trader directly teaching and guiding you to learn trade. It is efficient because you get only the information you need, your learning time will be greatly reduced, your errors can be immediately corrected and you have someone over your shoulder to help you deal with psychological issues which inevitably arise during trading.
Personal mentoring can cost a lot, or it can be free. If it is free, the mentor may take a cut of your profits once you become successful. I like this model, because it means that unless the mentor makes you successful, he or she won’t be paid. Paying money upfront means you are putting a lot of trust in the mentor. If you know them, that may be ok. But make sure they are legitimate before forking over cash.
Successful traders are also usually open to helping new traders, without charging a fee. This may not equate to mentoring because mentoring is a very time intensive endeavor, but you can probably ask some questions or get some resources from them that will help you in your journey.
Best of all, mentoring is about application. Knowledge is useless without it; you need to able to apply what you know. Mentors help you do that.
There is loads of free information, but much of it is rubbish. Look at multiple sources to verify information. Articles, books, seminars and online material are all ways to learn, but the information is typically fragmented, so it is up to you to compile it into something that is a tradable system. Also, you need to practice what you learn. This is where most people falter…just like reading fitness magazines but not actually hitting the gym. You must apply what you learn, and practice it, in order for it to be of any value. Get into your chart pattern or and actually see if what you are reading is true. Test stuff out!
Personal mentoring is the ideal way to go, as it is efficient and gives you all the information you need. Beware of salesy behaviour though. Ideally, ask not to pay anything upfront and then return them part of the profits for a set period of time once you start making money. If the mentor believes you have what it takes, they may take you up on it.
Got questions, hit me up on Twitter: https://twitter.com/corymitc