Saturday, April 05, 2008

Planning Your Trading Education

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 you 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. In the meantime, good trading!

by Bill Kraft, Editor
Copyright 2008, Makin' Hay, Inc.
All Rights Reserved

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Able Baker said...

Do you make your DVD's available?

Anonymous said...

I, too, am interested in your DVD's. Are they available for sale?

Bill Kraft, said...

Hi, Anker. I do still have the SWAT (Stockmarket Weapons and Tactics) available. Originally, they sold for $399 for the set. I sell them to subscribers like you for $99. If interested, you can send a check or money order for $99 payable to "CutLoss, Inc." at 26677 Gray Buck Trail, Conifer, CO 80433, and I'll send you a set. Don't send the check for a week or so since I will be away until about April 18th.
Bill Kraft

Bill Kraft, said...

Hi, Guitarmom. Check out my answer to Anker in the blog regarding how to order a set of the DVDs. Thanks for asking.
Bill Kraft

Anonymous said...

Hey Bill,

My business planner is always stressing exactly what you say. So I am sending him a copy of Planning Trades.
To Introduce him I am providing You some links to do so:

Includes Photo

Under Consulting

Top Entry

Under Miscellaneous

Classes & Seminars

Map & Coordinates -
Master Photographer
- Weddings - Home Portraits

Photography - Heidemarie Burke
Photographic Images - 941-475-5148

Thanks Much,
"Dallas" Dave

Bill Kraft, said...

Thanks, Dallas Dave.
Bill Kraft