A few days ago, I answered some questions for John Forman (author of the excellent The Essentials of Trading
) :
How much money can I make trading?
That’s the worst question you can ask…focus on learning what strategy works best for you, how to control losses, risk management…ya know all the boring important stuff…and worry about being right last. The beautiful thing about trading is that gains are practically unlimited, but the key is finding patterns, setups and picks that work over and over and over again. While I once turned a few thousand into a few million all within a few years, the reality is that 90% of traders lose money. So if you happen to find yourself earning any money whatsoever, understand that you’re in the minority and protect your gains at all costs.
What books should a new trader read?
Reminiscences of a Stock Operator
Confessions of a Street Addict
How I Made $2 Million in the Stock Market
Secrets Of Professional Turf Betting
Extraordinary Popular Delusions & The Madness of Crowds
Is it worth spending money on educational resources when there’s so much free stuff available?
YES! This is an industry in which you get what you pay for. Just as you don’t get great executions, tools and research at the cheapest online brokerages, you must invest your time and money into educational resources if you want to increase your odds at building your knowledge base and your account. That’s not to say all the stuff out there is good and the most expensive materials are not necessarily the best, but if you do enough research and use common sense (don’t trust anyone who says they will teach you to make millions within a few months!), you can discover resources that will help you become a better trader.
If you know so much, why don’t you just trade?
Trading can be very lucrative, but trading profits are by no means guaranteed nor do they increase steadily with more time and effort. In fact, my greatest trading gains have some suddenly, when I was experienced, knowledgeable and quick enough to take advantage of ideal opportunities. Teaching others is not only more fulfilling, but the income derived from it does increase quite steadily and is based on how much effort you put in and how successful you are a trading teacher. I encourage all successful traders to share their knowledge and experience through books, blogs, instructional DVDs and seminars because good information is difficult to come by in such a sham industry filled with frauds and marketers. The beautiful thing about my business model as a trading coach is that I just have to pass on the lessons that took me a decade to learn, thus saving my students time and money.
Tags: Trading Basics, Trading Books
