What to look for in trading education

In the wise words of Benjamin Franklin, “an investment in knowledge pays the best interest”.

A few years ago I attended an investment conference in Atlanta. Robert Kiyosaki, Anthony Robbins and presidential nominee Donald Trump were on the list of speakers, as were other successful investors of various trades (real estate, stock market, commodities, Forex, etc). At the end of each lecture, the speakers sold the audience on the idea that without their outstanding training material, sold conveniently at the tables at the back of the room, everything they said could not be put to good use. So at the end of every lecture, swarms of attendees would congregate around the back of the room to buy said training materials.  

It makes sense. When new traders get their mind set to start trading, they think there is a magic bullet and when presented with something that slightly resembles one, they are eager to jump right in, foregoing the very important stage of research. That is how thousands of dollars are spent on materials that shortly after end up accumulating dust in some forsaken drawer.

Learning to trade can be an expensive endeavor, but acquiring the right education is most certainly a good driver of returns. A lot of investment firms and platform providers offer free trading guides which are a good way to get started. But if you want more, where should you go and what should you keep in mind before you invest in educational materials?

1. Beware of magic. Most new traders are in search of a tool that will set them up for good. A set of mechanical tips that instruct them when to buy and when to sell. If you find a tool like that, beware. There is no magic tool in trading, there is no one-size fits all either. Look instead for educational tools that will help you develop your own trading strategy and that will grow with you as you progress. The ideal educational tool provides a framework so you can work within those guidelines to form what works best for you.
2. Make sure the information is up to date. Some of the practices that may have worked before a crisis are often revisited after. When selecting educational tools and materials, check that those have evolved with the times. While some techniques may have been in play for years, some new ones are thought of after major events impact the market. Make sure the information you obtain is updated and relevant to today’s market conditions.
3. Tailored to your needs. Not all traders are created equal and so not all educational materials fit every trader out there. The educational material you choose should be in line with your learning style as well as your trading style. Let’s first talk about your learning style; do you absorb knowledge better when it is conveyed in a classroom setting? If so, perhaps enrolling in live courses, whether online or in person is what you need. Are you more of a visual learner? Do you absorb knowledge through written materials? There is plenty of variety out there so you can choose the medium that best fits your learning style. As far as trading styles go, keep in mind that some trading methods are contradictory to certain personalities and when that is the case, you will find it more difficult to implement your strategy. If you are risk averse, but the learning material you acquired is teaching you techniques that are more in line with a risk lover for example, you may have a hard time implementing the material in your trading career

The success of your trading career depends on your talent as an individual and the way in which you apply the concepts you learn in the educational materials you acquire and adapt them to endure changing circumstances.