I am absolutely convinced that one of the most important factors
in achieving success in trading is to have a trading business plan. I
am so convinced that I devoted a complete chapter in my book, "Trade Your Way to Wealth" , to the creation and content of a personalized
trading plan for traders and investors. In my estimation, every
trader should include a plan to educate himself or herself. A
well-known trading coach I recently heard speak noted that: "Traders
get their own education." I suspect one of the major reasons for that
phenomenon is that schools rarely have offered courses on how to make
money.
In any event, though my primary source of income and my primary
focus is on trading, I have been involved in many areas of trader
education. I have done that for a variety of reasons in addition to
the obvious pursuit of additional income. When I first achieved some
trading success, I was very excited about what I was doing and I told
everyone who would listen and then invited them to my home to show
them what I was doing. That quickly got out of hand and I had little
trading time left for myself so I started a seminar company figuring
that if I charged them, they wouldn't come. I was wrong. They did
come and the seminar business was a success. I even did a two-day DVD
of the basic training class. Though the seminars made a lot of money,
they were time consuming for me and I preferred to trade so I stopped
doing the seminars.
After that, I have tried to use my subscription services as a
training tool and, the majority of the time, send alerts on trades I
am actually making myself with a short explanation of factors that
influenced my decisions to enter or exit trades. Ultimately, that led
to an offer to write "Trade Your Way to Wealth" which has been very
well-received and which I hope provides a strong vehicle to educate
traders from new to modestly advanced.
Over the years, I have also regularly conducted mentoring or
coaching sessions with individual students or husband and wives
together.
I have personally read almost everything I could get my hands
on, attended innumerable seminars, and watched countless videos and
DVDs. In my opinion, I could not have succeeded without this effort.
Was it expensive? I suppose it depends on your definition of
expensive. I think trial and error trading is much more expensive
than the cost of my own trading education. However, I have seen many
traders complain that a $60 or $125 book is too expensive. In my
opinion, however, if I learn one thing from a $125 or $150 book that
saves me $1,000 or more on a single trade or teaches me how to set up
a risk free trade, the cost was cheap. Expensive is taking that
$1,000 or $5,000 or greater loss.
Just as I believe a business plan is a necessity for the
successful trader, I also believe that the trader should plan his or
her trading education. Reading trading books is a great start as is
attending seminars. Individual coaching also definitely should be
considered once real money trading has begun. You probably can't beat
intense one on one sessions to sharpen your trading knowledge and
discover new or better approaches. However, the individual coaching
is probably not the best thing for the brand new trader.
I know from the coaching I do that the learning is intense and
the new trader will be exposed to just too much to absorb in a short
time. Things like knowledge of trading vocabulary and preference for
strategies or market direction should be in place before the
individual coach is selected and hired unless the trader already has a
great deal of money. Individual coaching is costly, but that doesn't
mean it isn't worth it. One well-known trading coach charges $7,500
for a two day private session. Is that too much? I don't think so if
she can help you focus your trading, improve your ability to let
profits run, teach you how to remove emotion from your trading, or
provide you with new insights into your own trading personality. I
think it is more important to focus on what improvements you can make
with some help rather than on what you pay. Knowledge you gain may
change your life as it did mine. Even today, after a decade of
trading, I try to devote some time each day to study. This field is
one in which we never stop learning, but like so many other fields of
endeavor, it seems that a trip back to basics is almost always
worthwhile.
The coaching I do is on a very limited basis. I try to take no
more than 7 two-day students a year since I really do devote the bulk
of my time to trading. Teaching, however, does help keep me sharp and
I can and do trade during coaching sessions. While I don't charge
quite as much as the lady I mentioned in the previous paragraph, I do
not come cheap. If you have any interest, you can check out the brief
link here in the Newsletter, but it is not important that you hire me.
What is important is that you do expend effort to educate yourself.
I suggest you give some real thought to planning your education.
Consider how you learn best. Do your prefer to read, or are you one
who prefers to listen to someone teach? Are you a visual learner?
Direct your efforts where you believe you will get the most benefit.
It may be reading, watching DVDs, attending seminars, and/or spending
time with a trading coach. Effective learning can only be achieved
through the methods that work for you. Just as my personal business
plan may not be for you, the way I went about my studies may be
different from the way you go about yours. I think the key to
successful learning is to learn the way that you find easiest and most
enjoyable for you. If it is drudgery, it probably won't work so think
about how you can best gain knowledge. Seek to study within your own
framework giving consideration to the time you are able and willing to
devote, the methodology that works best for you, and the goals you
seek to achieve. After all, it is about improving your own trading.
Next week, I plan to write a little about seminars (that I no
longer give) to discuss the value I see and some of the drawbacks
attendees may encounter.
Good Trading!
Bill Kraft
Success Trading Group -- by the Success Trading Group Team
Our Success Trading service delivers quality trading ideas for the elite investor that has the financial wherewithal and market nimbleness to profit on small moves in a stock's price. Become a member and you will be provided with email and/or PDA alerts intended to provide you with the opportunity to make many, many profitable trades.
Here is a play from the Success Trading Group:
Procter & Gamble Co. (PG)
Our Success Trading Group members closed two more winning trades this week.
We closed our recently opened positions in Kinder Morgan (Ticker: KMP) and
Consolidated Edison (Ticker: ED). We like Proctor & Gamble (Ticker: PG) on a
dip below $70.
Have a great weekend and we'll trade next week.
Success Trading Group Team
