Trading online has dramatically increased in popularity over the past 10 years, now it is possible to have all the data and tools you need on your PC at home, that were only available to professionals at the start of the millennium. However, all the tools and data in the world does not make a good trader. Short term trading in the stock market is extremely difficult, fluctuations in price become more random the smaller the time frame.
Along with the rise in trading popularity, has come a plethora of “trading gurus” who will tell you they can teach you to make money profitably from your laptop at home, with minimal effort. The vast majority of these courses come from failed traders looking to earn money through other means. Whilst they may teach you a few basics of technical analysis and market mechanics, most of this type of content can be obtained free of charge on the internet.
Trading courses and teachers are not regulated. There is no regulatory body that monitors the quality of a day trading guru, showing you how to buy and sell stocks and futures. This is because these courses are very careful to state they are not “advice”, and as such don’t fall under any regulatory requirements. Instead these courses are classes as “education” as as such it is a little harder to separate the good from the bad.
There are some very good and professional organisations out there that can take a novice trader and develop them into professionals. However they are the minority, so it is important to be careful when looking for a new trading course. Some key important factors to look for are:
- Live training. The instructor broadcasts live as they educate, allowing for interaction and questions and answers. This is sign that the trainer knows their material and is willing to talk about market events as they happen live.
- Full time traders. The company should have full-time traders that are making their living from the markets every day. If the education is good, then there will be traders working for their firm applying that knowledge. For example a proprietary trading company may have many traders on the floor, and an education department that provides training courses.
- Track history. There needs to be some kind of track history with the firm, in terms of performance and educational material. Large database of videos on YouTube, and testimonials from clients is a good sign. Some kind of reference to their performance in the past is needed.
- Offer of funding. Sometimes a trading courses come with the offer of funding and/or mentoring for candidates they feel could make a career out of the markets. This is a sign they are confident in their education, and are willing to put some commitment back into their students.
- Avoid companies that tell you what you’ll earn. Many trading courses will lure you in with slogans like “make $1000 in one hour”. This is one of the biggest red flags that the course is bad. In trading it is impossible to know what you will make from one hour to the next, as it is dependent on the market and trading methodology. Managing your losses is as important, if not more important, than focusing on profit. If a course tells you how much you will earn trading, avoid it!
Finding good quality trading education is difficult, as the space is open for anyone to come in and start a course. There is no barrier to entry, no qualifications, needed, and no evidence of past performance. There is no “trading advice” as such, only education. This makes it extremely important to research your trading educator, look at their company background and history of producing good traders.