Monday, June 20, 2011

The trading learning curve

I sometimes get the question from people interested in KING, an emini trading course that I have been offering on this site for a few years now, about the course learning curve.

Here is the answer that I gave one or two of these fellows when I really thought that it was the best and most honest answer taking into account not only the very question but other things they mentioned in their emails: "if you need to ask this question, you don't have what it takes to make it as a daytrader."

Yes, I know that there are vendors out there who would want you to believe that you can become a trading champ overnight or something to this effect, except that they are plainly dishonest because how exactly would they really know it? No one can know how long it will take you to master day trading. One can only talk about some approximate range, and it's a pretty wide range. From my experience with KING students, it is from days (in exceptional cases of people who are well prepared and smart) to weeks and months, even years in some cases. This depends on many factors, and hence how long it takes in individual cases is, on the whole, unpredictable.

If you cannot accept it, then what this tells me is that you cannot accept uncertainty, and hence you are a poor candidate for trading because trading is essentially about handling uncertainty or the risk that comes with it.

And then there is another issue that should be rather easy to understand for every thinking person: your learning curve never really ends. You learn all your life as you should if you want to stay competitive in your field, and the more competitive this field is, the more you need to learn. Day trading, especially day trading highly leveraged markets such as emini futures, is one of the most competitive fields you will ever enter.

But that does mean that you need to keep on trying new things all the time. I don't think this is really necessary. You may stay within the same framework, such as offered by KING. What this rather means is that if you are not willing to better yourself as a trader, not willing to perfect your trading, not willing to learn new tricks and study things on your own and practice as much as you can, you may find that your trading becomes rustier and rustier.

I have been trading emini futures for about 9 years now and even if more than half of this period I have spent trading the same methodology, the same I offer in the KING e-mini trading course, I continued learning all this time. In fact, I believe that in the last four years I have progressed more as a trader than in the first four. I realize that this may sound strange to those who think that there is some definite learning curve, but as this example illustrates, there just isn't.

There is yet another issue that my experience points to. Namely, that those who after two or so years of trading think they are as good as traders as they ever will become are most likely wrong. What's worse, believing so may interfere with their growth as traders.

So don't ask a vendor about the learning curve of the trading course he markets unless you want to find out if he is an honest man. Because if his answer is that it's short or anything definite and optimistic of this kind, then it's a sure sign you are dealing with a guy who wants to sell you something desperately and so may be tempted to employ "advertising shortcuts," to put it euphemistically.

The proper and honest answer is that it varies, but if you want to become a person who trades for a living, the answer is that it ends with your trading career.

Friday, June 17, 2011

A Buddhist tale

A monk was being chased by a tiger when he came to the edge of a tall cliff. Peering over the cliff, he saw that at the bottom was another hungry tiger pacing and waiting for him to fall. The monk climbed carefully over the edge, and grabbed onto a tree root while the tigers roared above and below him.

As he was hanging there, he noticed in the side of the cliff one strawberry was growing. The strawberry was plump and red and as he plucked and ate the strawberry­, the monk smiled and thought to himself that strawberry is delicious and perfect.

That is what Buddhism teaches about the beauty of impermanen­ce and change. We are all caught precarious­ly between hungry tigers, but the secret to life is being able to appreciate the beauty and perfectnes­s of life in the moment; to be able to drink every last ounce out of every fleeting moment and waste no time on regrets.

Credit: Matt Russell