Trading education

Bernie Madoff had an 'audited track record' and we all know how that went.

AIG and Lehman retained very expensive top three accounting firms.

IMO there are some unique technical circumstances for a proper accounting treatment in the 'educational' space, and I would love to hear from another CPA or securities lawyer other than my own about this.

I think everyone could agree that a canned software package or a very specific trade setup could be easily audited with existing practices. But of course the devil is in the details. The more vague or generalistic instruction packages would require the accounting firm to develop an audit regime from scratch IMO, and time = billable hours. I don't argue the merit of the idea, I just don't know how it would take place from a pure technical perspective if the educator was not providing buy or sell recommendations. My other thought is that an educator can be vague and generalistic to the point of 'dodgy' or 'fast and loose' in terms of cherry-picking avantageous variables for his trading system as presented to an auditor in any number of ways.

The securities training education space is filled with hacks and 'snake oil salesmen' - purveyors of crap and schills to the naive and uninformed. It embarasses me and bothers me to no end that I get lumped into the category. I sleep at night because my clients are happy with their results and I have a reputation for integrity and outstanding performance.

Let's just call it as it is: the big secret is that there is no big secret. There is no holy grail.

I have signed five new clients this month. Each one of them independently spoke with existing clients. Serious prospects are provided with extensive personal and professional background information on me and I stress due diligence because I'm proud of my past and have nothing to hide.

I try to be very approachable to prospective clients and answer their outstanding questions as fair and to the best of my ability while retaining information proprietary to me and my clients. It is also important to remember that prospective clients almost always come to me with various degrees of 'baggage' and emotional or technical issues. To that end the due diligence process is a two-way street with me, and I do turn away a significant number of inquiring prospects.

Many clients also request that I emphasize certain market sectors or financial instruments. As a result, I almost always end up customizing a program and materials for each client based upon what I learn during our first few individualized training sessions.

I have gotten into this field of the business because I have been told by my first set of clients that I am the only person they could find that is doing what I do. So, it is a new 'trade' for me in the sense that I start out with a significant competitive advantage over other competition in the field.

Three weeks ago I was approached by another educator who appears on CNBC, Bloomberg, FXBN as a guest commentator. He also does seminars for exchanges and charting companies. Very polished guy with a very polished website. He charges more than I do. Alot more. He has a book out. A catchy name for his methodology with a violent testosterone-laden connotation. His pitch to me (and I paraphrase): 'I looked at your website, and I couldn't believe the level of detail you're putting out there. Anyone in the business knows that you are who you say you are. Do a series of instructional DVDs with me and I'll market them for us.'

I was very polite to him and turned him down. I'll keep doing what I'm doing with an emphasis on my personal and professional reputation.

 

If you mean a course, here is one trader with no education.

Everything is in a book somewhere. There are no secrets, and there are no secrets for sale, either.

 

Thanks for the thorough and objective summary. Actually, the only thing worthwhile at these events is the free food. The whole All-Star event is just an overdone sales pitch, albeit a very tempting one that I got caught in myself. I was cautious enough to ask how many of their students were sucessful and I got a generic statement about that they did not track that due to 'privacy concerns.' I should have listened to that inner voice, but after trying to pick up enough on my own via books, etc. with no luck, I took the bait in hopes that they would be able to help shorten my path to success.

Once you get past the high-pressure sales event and into the actual week-long training class, the instructor is much more honest about the difficulties you will face in trading, but nothing worth the $$$$ that they are asking for IMHO. They offer a basic TA course, provide some general guidelines while learning - to sim trade or use small lots, develop a trading plan, focus on one stock, etc. In short, nothing that is not already been mentioned at ET.

I don't know just how successful the 'super traders' are since they won't provide audited statements (note though that the profitable samples that we were shown did NOT match the strategy being taught.) However, I did want to correct a misconception about their on-going education - aka Extended Learning Track. During the sales event OTA will mention that you will be able to watch the instructor take live trades and be able to follow along and make back you money in short order. That is completely false. I attended the XLT for a year and the instructors NEVER took live trades in class - nor will they even discuss trades that they took in the past (except the BIG winner from last month!)

In actuality the XLT program is poorly thought out if OTA's true intention is to educate traders and not to just lighten their wallets. The virtual room has over 300 students with new ones coming in all the time, but the sessions only last two hours and occur twice a week. To make matters even worse OTA swaps the instructors around from day to day, so the continuity is just not there. After a short time, I realized that I would be better off on my own applying my own knowledge than stuck in such a non-productive environment.

As for psychological issues - I'd stick with the information provided by the established experts - Mark Douglas, Breet Steenbarger, etc. OTA won't be able to provide anything beyond that. So why do they offer a course on trading psychology? LOL. That shouldn't be hard to figure out.

At least you have figured out that you should be very cautious of trading gurus and 'educators'. It took me a long time for me to figure that one out.

Marqui

 

I am following up on my previous message.

I appreciate Marqui insights into the Online Trading Academy course and XLT service. It helps me build my knowledge base and form my opinion. For instance, during my failed attempt to negotiate shorter education path toward the XLT, the claim was that XLT strength is featuring multiple diverse experts that concentrate on advanced techniques rather than regurgitating the trivia (I do not qualify for free trial to XLT). Marqui shed light on that XLT claim. Or for instance the Pro Trader curriculum supports Marqui’s comment rather than promoting an advanced course that is superior to freely available media.

As for the personal message criticizing my wrong expectation I would like to say the following. It is personal weakness that I establish expectations based on my flawed perception. What would be your expectations of an ‘All Star’ event after hearing words such as ‘premier,’ ‘masters,’ ‘success,’ or ‘advanced techniques?’

I heard some good OTA review before attending the Online Trading Academy event. I also heard negative opinion about them from someone that attended previous events. He said that OTA empathically declared Terra Nova as vastly superior to Trade Station and they dismissed Think-or-Swim as marginal vendor with shaky reputation. Well during the event I attended I heard that they prefer Trade Station over any other platform, including ‘limited’ Think-or-Swim. However the value of the combined presentations given by all of OTA Masters over a full day did not come close to the one hour presentation I heard from Tom Sesnof from Think-or-Swim (and half of his presentation flew way over my head).

My perspective might differ from others. I am not averse to pursue education from people that are not successful traders. I am mindful that having successful trading record adds credibility and suggests education value in the area of execution techniques. My focus is on that ‘magic’ specific education contribution to MY success regardless of the instructor success. It might be similar to the traditional gap that academia and practice usually have. While being successful practitioner requires hands-on experience, universities could have key role in that success.

Responding to the criticism of providing skimpy supporting details, let me give a specific example that elaborates the last comment of my previous posting.

OTA used intra-day RIMM chart of December 10th for the Trading Game/Competition (event date was December 15). The fact that there was a classic extreme-volume bullish reversal “hammer” candle (or climatic reversal, pick your terminology choice from the TA book on your shelf) occurring exactly at the gap-closing level (half an hour into the day session) was ignored by all (several OTA ‘masters’ in the room). Nor was any discussion that RIMM was consolidating/constricting for most of the day on continuously reduced volume and price range, preparing for a potential significant move consequently. Was it oversight by OTA or a conscious decision that I was not ready for such analysis? Is my interpretation of either RIMM pattern or OTA presentation faulty?

Consider the fact that after failing to see the Pro Trader course description, instead of enjoying OTA complementary lunch, I went to the OTA web site to get the course description. I recalled that the Hammer Candle pattern is part of the sixth day curriculum. Was there any connection between the RIMM Hammer example on the presentation screen and the contents of their course?

It was interesting the way OTA transformed the dynamics of the day, culminating with the Game. I thought attendees’ objective was to examine OTA capabilities and competency. But OTA turned it around. That Trading Game was about OTA checking the audience competency and exposing future customers greed (big prize for the winner – discount on subscription fees). If that transformation was planned, I need to give OTA the accolades they earned by successfully executing that plan. Perhaps I should consider them more seriously.

This game was conducted toward the end of the day. At this point I already switched my focus from my initial intent to learn into a decision process about purchasing OTA services because of the way that day unfolded. The idea of such game was intriguing (though not original, see eSignal replay feature etc.). But I could not find value in that exercise beyond the idea of “dry trading” a chart and it did not contribute to my understanding about OTA coaching ability.

Or another specific example was Master Brandon Wendell (first presenter) over simplified example stating that with 10% chance of winning $100 when a trade cost $10 you walk away with nothing while with 80% chance of winning $25 you walk away with $100. When I asked him about probability distribution and calculating expectation per trade etc. (basic statistics) he brushed me off as missing the point, as adding inhibiting complexity, and as misunderstanding risk. I find overwhelmingly more solid material in sites like http://gummy-stuff.org/Excel/ (most of the spreadsheets) than very basic statements like Brandon’s (is this typical example of OTA class level?).


This becomes an overbearing message. As one can see I am caught up in pursuing that elusive education/service that would facilitate measurable improvement in executing trades. As time passes and I gain better perspective and context, my opinion of OTA deteriorates. Are all services (like Pristine or Trade The Markets) eventually disappointing their customers?

 

i think they all started well and good, then eventually the founders/co-founders no longer "trade for a living" and subsequent instructors just basically repeat the mantra of the course syllabus e.g. "you must have a Trading Plan" and lost the edge. the education service i took several years ago is now in their 3rd generation instructors and they can't trade, functioning more like advisory (to sign up with the course) while the founders/owners are busy working on other parts of "growing the business". i miss working with the original founders/traders who answered student questions truthfully, but the new 3rd generation instructors are bounded by corporate policies and cannot even discuss other broker/software besides the "preferred" affililated broker.

ask if your instructor actually pays his bills through trading. or he's just a branch owner or hired staff.

 

1-week (or even 2-weeks) basic training is not worth 5k! If you are newbie, it is unlikely your learn the profession in a week or two!

 

Proper due diligence has to performed by the potential student, because the trading education field definitely comes under the heading of 'buyer beware'.

I agree with a previous post that educators who don't actively trade are less than useful. It might be difficult for a potential student to accurately determine how truthful or effective an educator is at trading. If an educator does not have to comply with SEC or CFTC rules, then anything an educator provides should be suspect.

I would like to mention a word about trading textbooks. I was personally trained by Pete Steidlemeyer and Robin Mesch. I also bought their books and trading books with sections written by them. I found the classroom training to be much, much more useful than the published text materials. I have purchased and read many trading books, but I have to say that the relevant material I could actually apply in the market was lacking to say the least. Ditto for academic white papers.

The very best publicly distributed free materials I have found are those made available by the trading exchanges through their education departments. Most are excellent and extremely relevant. I would recommend them over most any textbook or academic white paper for a newbie.

For a newbie to purchase textbooks and hunt and peck for relevant information to apply to the markets is a very inefficient process and fraught with danger IMO.

 

The only service worth anything, PROVES THEMSELF TO YOU. Price means nothing. Website, credentials, and other stuff means nothing. Promises, guarantees, testimonials, means nothing.

Without independently-verified, audited track record, don't trust anyone with your money. And forget "you can check with my other customers" for your due diligence.

The main thing a trader needs, is a market-outperforming edge. Many claim to give it to you, but they will almost never prove it in a satisfying way. Such edges cost a lot more than a few hundred or even a few thousand.

 

I use a tremendous amount of intraday leverage, as do most of my clients who professionally trade futures spreads intraday.

That leverage is further compounded by the fact that clearing firms provide me with even more intraday margin credit on the spread positions. A big clearing firm like Man Financial is going to have a very competent risk management staff using SunGard - and even when he runs a four sigma scenario on my spread positions he is going to give me alot more leeway intraday than the exchange will credit me for holding margin on an overnight spread position.

So, with that scenario, myself and several of my clients can EASILY return 100% per month using $100K of intraday margin. All successful intraday futures traders can do that. Myself and several of my clients can easily make or lose $10K - $25K per day (and I'm being very conservative). Of course, I trade 3000 buys and 3000 sells per day in Nymex alone, and my rate is less than 40 cents per side. For CME products it's about half that. Should I imply to my clients that they should expect the same thing? Hell no. Trading is what you put into it and what you make of it. Bernie Madoff had audited returns for more than twenty years. The SEC blessed them off. Can you imagine the reaction I'd get by telling people to expect those kinds of returns? If I have X number of clients I can guarantee you that they have X number of unique circumstances. I basically end up building a custom-tailored program for each one of my clients. Each person on this earth has their own 'baggage', their own set of weaknesses, and most of all at least a few emotional barriers.

The only thing standing between you and a vast fortune in the trading profession is what is residing between your ears.

I have clients who net well into seven figures per year. And I have clients who try to net four or five hundred dollars per day.
This is not a 'one-size-fits-all' scenario. I can assure you that I spend alot more time with the five figure guys than the seven figure guys. But each client pays the same rate. A newbie needs a strategy and a business methodology to make money trading the markets. He needs direction. I insist that newbies do not risk any capital until they are absolutely confident that the risk/reward skew in their approach to the markets is firmly biased in their favor.

My performance and my reputation for integrity with my clients is all that matters to me - I could really care less about internet trolls. My clients make money. Some make a hell of a lot of money. A few make a hell of a lot more money than I do.

In the past five weeks, ten ET members have each decided to put me under contract and pay me $6500 up front to become clients. Each one of those ET members checked out my credentials and background materials including personal information and employer references. Every one of those ET members spoke with at least a few of my current clients.

Yesterday a prospect spoke for one hour on the phone with one of my clients, and he did not know that that guy on the other end of the line was a seven-figure trader. None of those clients has me to thank for their wealth. They were there before they hired me. But they did hire me for a reason.

I just started taking on clients in August and nearly all of my newbies is making great progress. One of them is moving to Chicago to take a proprietary trading position. Nearly all of them refer close friends in the business to me. I have clients trading futures who are now opening equity accounts to expand into that space.

One of my clients is incredibly challenging - he came to me with 'one foot in the grave' after two years of losing money scalping futures, and since August he is about a scratch or even a little debit with expenses. His contract is up at the end of January, but I told him I would extend him until the end of April gratis. I spend orders of magnitude in time with him over any of my other clients. I swear to God half of my emails and 30% of my webinar time is this guy. I think about him when I am driving the car. I have dreamt about the guy at night. He has alot on the line, and I will do everything I can to help him... but I can't seem to help him overcome psychological sabotage and financial self-mutilation.

For me, the best part about this whole new venture is that I have been able to take a day or two per week off from the markets and replace part of that income. After seventeen years of trading I feel like I'm on vacation. I can spend some time with my wife and kids. I can work out a little.

 

TraderZones, who used to post under RCanfiel here on ET and who's name is Ross Canfield, is a failed system trader, and tried (unsuccessfully) to sell systems here for 250K as well as Collective2 (he has pulled them since). According to the opinions on Collective2, he's also deceitful and has changed aliases (just like on ET) several times. http://preview.collective2.com/cgi-...nt=searchstatus

...ironic that he's giving you the above advice