The title of my article is from a bumper sticker I saw on a handyman's vehicle. Basically, he was implying that people who try and fix things themselves without any knowledge of what they are doing usually end up paying more because they cause more damage than the original problem. The result is they resort to calling the experienced and knowledgeable handyman to come and make the repairs. Since the homeowner tried to fix it themselves, there is more damage to repair and the handyman is forced to charge more for the repair than if he had been called first.
For many inspiring traders, this is the same route they choose. With all the resources we have available today for research, some people feel they can be self-taught traders. While I do not disagree with the idea, I do believe that for the majority of people taking this route, it will not work. Just like any other dream that people pursue, a small percentage will make it while the majority will be severely disappointed or worse, financially ruined.
Successful Futures trading is a skill that must be honed correctly through proper education, experience, discipline, structure, time, goals and risk management skills. With the leverage involved with Futures trading, you can literally lose much more money than you actually have in your account. My question has always been, "Why would anybody want to risk this danger because they thought they could take some short-cuts?"
When it comes to trading education, you cannot afford to skimp. Trying to teach yourself because you want to save money will take you twice as long to learn, plus you will more than likely develop some very bad trading habits along the way. I can write about this because when I started out trading, I did just that; I tried to teach myself to trade. Granted, we did not have the formal training that is available today, but I still made the mistake. My tuition (losses in the market) was far larger than any class available today. Plus, all the bad habits I developed had to be corrected. These mistakes caused me to go for about 4 - 5 years before becoming a successful trader. Today, with the proper education process, you can do that in about 2 years. Just because a novice trader can research information on the internet does not mean they will know how to structure that information in a manner that they can properly learn from it.
Quality education will have a process that you must go through in order to be successful. How many college students have gone to register for classes and told their counselor that they are not interested in taking the first 3 years of college and would like to start out as a senior? None! Any college worth its name will make that student go through all four years and build a solid educational foundation before advancing to the next year. Can you imagine our work force if colleges allowed students to skip the first 3 years? Exactly, well trading is no different. If you try and take short-cuts, you will never succeed and will be destined for failure.
Successful trading involves knowing everything about the markets. This means you must know all the basics of trading first, then once you have mastered this, you advance to the next level of trading. Too many people are overanxious and/or too greedy to take the time to learn the basics first. They think all they need is a "system or strategy" to trade and they will become rich. The only good thing about people like this is they are usually on the other side of consistently profitable traders' trades and they provide the profits for those of us who have taken the time to learn how to trade.
There is a reason for taking classes like Professional Trader I & II because this is where you start to build your trading education foundation.
The most critical part of your trading career is right here in this class. I know, many of you are saying you are too experienced of a trader to take this class and elect to skip it. There are so many excuses for skipping this it is unbelievable. One of the worst excuses is that they don't have the money. Let me tell you something, if you do not have money for trading education, you do not have the risk capital that is needed to become a successful Futures trader. Sorry to be so blunt, but this is the truth. Be honest with yourself for a minute; if you do not get the right education, how long do you think your capital will last against professional traders?
Trading will take time to master and you should allow yourself this time to learn to properly trade. The markets have been here for a very long time and they will be there when you are prepared and sufficiently capitalized to trade. Once you complete the Professional Trader class, you will need time to go home and apply your new found knowledge. This does not mean to finish up a 7 day Professional Trader class on Friday and then the next day take a Futures class. It is impossible for you to learn anything about Futures or any other asset class for that matter by taking an advanced class so soon after the Professional Trader. The human mind can only absorb so much information at a time. After that, you are wasting your time trying to learn anything when your brain turns to mush.
By learning the market basics through the Professional Trader class, you will be trained to invest or trade in the stock market that is a lot more forgiving than the Futures, Options or Forex markets. Once you have honed your trading skills in the stock market through swing trades, you will be a much better trader when you go to a different asset class. There are better profit potentials with swing trades than day trades. As a swing trader, you can place your trades and leave your screen. This will allow your money to work for you and not the other way around.
Once you leave your screen, you are also removing the weakest link in your trading, your emotions. This alone should help most traders tremendously. When you day trade, you are forced to sit at the screen and can very easily get emotionally involved with your trades and stray from your trading plan. Don't get me wrong, day trading can be profitable, but I can assure you it will be the hardest easy money you will ever make.
By going through the process of learning about the markets and then taking time to practice them before advancing to the next asset class, you will be on your way to becoming a successful trader, unlike the people who take short-cuts and think they can save money by skipping very important lessons of trading. I am amazed at how many times people are trying to learn about Futures and they are still asking questions like, "What is a bid and ask?," "What is a limit or stop order?," "What time does this market open and close?," etc. As I mentioned earlier, the good thing about these people is that they will be paying the traders who know.
Another area that is important to becoming a successful trader is when you are taking classes, keep in mind that we are instructing you based on proven market concepts that have worked for us over the years. In the end, each trader is responsible for pooling together the knowledge they have learned from classes and mentors and create a plan or strategy that is tailor-made for them. It must fit your risk tolerance, time you can dedicate to trading, goals and personality. Unfortunately, nobody can create that for you. If you try and trade like somebody else, the odds are good that you will not follow the rules as they were intended because you don't have confidence because it does not fit your style.
In closing, I want to say that I am not trying to force people into extra classes or taking more time before they can start to trade Futures, but I am trying to show you that there are no short-cuts in this business that have proven successful. When you start trading as a business, keep in mind that most small businesses don't turn a profit for about two years; trading can be the same way, be patient.
Would you like to be the trained handyman who collects money from the uninformed homeowners who skimp and end up paying more, or do you want to be the homeowner who keeps writing checks for these repairs?
"Confidence comes not from always being right, but from not fearing to be wrong." Peter McIntyre
Source: http://www.fxstreet.com/education/related-markets/lessons-from-the-pros-futures/2011-08-16.html
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