I think it's universally apparent that the current systems of trading education are rife with fraud. I've spent some time trying to think at what an 'ideal' teaching system or mentorship would look like. The fundamental problem with current setups is that the educators are almost guaranteed to not actually be making money trading. If they were, the opportunity cost alone of 'educating' would be prohibitively high. Example: Pretend the mentor makes $1M/year trading. So a week of his time is worth at least $20K. Add 50% premium for the pain and hassle so now it's $30K. That's not even taking into account the potential detrimental impact on his trading as the trade gets more crowded. I have thought through a potential solution to this problem. I don't really propose to implement this solution. It's like the hyperloop. There's an off chance I'd do it but I'd prefer to see someone else do it. Following is a list of ideals that should be handled. I'm interested if people have more to add to the list that I have not thought through. Or propose a solution that fits all the criteria, or critique mine after I post it. 1) Mentor needs to be making at least $1M/ year for several years. FROM TRADING. Not investing, not managing money, not educating. 2) Student should have complete access to all account statements, tax returns and accountant. He should be allowed to call anyone he chooses to verify numbers. Audited statements prefered but not necessary. 3) Education should be completely free to the student. (other than travel costs) 4) Mentor should have the potential to make money out of the deal (not from the student paying him). 5) Student should have the potential to make money (educator pays student) 6) Student learns stuff to apply to his own trading. 7) Takes 2 weeks or less.
Sign me up! You are basically saying have the student work for the mentor for a couple weeks as they are being trained, and if they do well for the mentor have them pay the student some, right?
Where I started to laugh was the "2 weeks or less", when I first started teaching others, I did have a similar set up, they traded my accounts, got three years of brokerage statements, signed contracts, but your duration is way off and the more you know, the longer it takes so they had to do 4-6 months of sitting next to me. What good is it to anyone to take all my experience and let you take the juicy parts out for crumbs? I stopped doing above approach when one student ran my account to 50k and in one nite intentional blew it out cause he said I could afford it as to how I lived. I no longer mentor, enjoy my freedom and really don't want to be bothered by anyone. I did hire, taught them and works much better for me. Look at it this way, would you do the same when you making one mil plus? People bother you when you concentrating on trades they ask you questions right before you place a trade and you lose out on it, or winning trade becomes loser cause of questions, you always losing some money by teaching others. Almost all profitable traders get idea to teach at some point, they try a couple times and find it much easier to just trade, way too much bullshit to teach day trading. Get a few books on Price Action, hole up in a cave for solid year and experiment of what works for you.
I agree, can't teach manual trading a difficult product in 2 weeks. But my bet is that I could extract enough value out of people in 2 weeks to make it worth the time.
I think the trading education industry is structured the way it is because of the economics of trading. I would think that the money flow would resemble a pyramid, where lots of guys on the bottom are net losers and a small number of traders at the very top are making a killing. I'd guess that most retail traders are at the very bottom and those are the guys that education vendors are catering to. I don't think you can change the economics, so by definition there's always going to be a huge customer base at the bottom, many of whom have no business trading, and they basically want to be sold a dream. I think the kind of training you're describing seems more like hiring. Regardless of whether you're paying the guy a salary or not, I assume there's profit split or you're making commissions off their trading, so the difference seems semantic. I think the main distinction I'm trying to make is that you're not offering a mass-market training solution.
You are correct. I have not proposed and am not offering a solution. Mass market or otherwise. But I will add points that seem important. 1) do not make commission off students trading 2) do not take profit from students trading. 3) do not hire student.
There's an old saying: Those who can, do; those who can't, teach. There is some truth in that. It's hard to trade and teach trading at the same time. If a person is trading well, why teach? For the money? But there are a couple reason why a skilled trader might offer instruction. Mostly, some people just like teaching. People should stick with what they like doing. Or they may have become risk-averse and battle-weary. It's also possible to know something of value about trading but not be a good trader, usually due to risk-aversion or self-sabotage. It's also possible to be a good trader and not know how to present the knowledge in an accessible form. Just some random thoughts...
I think it might depend on the type of trading strategy as well. If I were a mentor, I don't think I would teach anything that the student could just walk off with. Trust would be a big part of the equation since the mentor is paying an up-front cost and hoping the student ends up being a good investment. However, once the student is profitable, I think there's always going to be a difference between the student's perceived value of what he's taught, and the mentor's perceived value of what he taught. For that reason, if I were mentoring, I don't think I would teach anything which the student could execute independently.
This will be the hardest part for a successful trader. Time is money. That being said I have a few mentors in place that give me pointers and help me down certain paths that have given me much success. But there's no way i'd ask for access to their accountant and all your bullet points. There are good people out there just throwing tidbits, be thankful for some of the crumbs.