Lessons from the Pros


But I Read How to Trade in a Book!

Many people are introduced to trading or investing by reading a book or online article or by watching videos on the subject. Most of what is published is the same sort of retail information in different forms. Some of this information can be extremely dangerous and expensive for traders to follow because it is misleading and/or incorrect. However, even if it is good data on how to trade, knowledge is only part of what is required to be successful in the markets.

Think about it this way, if you were to search the internet, you are likely to find directions and videos on how to remove an appendix. No matter how many times you watch the videos, most people would not be comfortable allowing you to perform the surgery. So, what is the problem? You have the knowledge, right? Well, what is missing is the experience and skill that is needed to ensure that the surgery goes well.

Just imagine trying to become an airline pilot. There are plenty of books and information on the internet on how to fly. There are even flight simulators available online. How comfortable would you feel flying with someone who had only read about flying and never had any real-life experience?

Learning to trade takes knowledge and skill, just like learning how to fly.

There are two things required to become successful at pretty much anything; and learning how to trade is no different. The first is knowledge, and the second is skill. Having one without the other isn’t enough. Knowledge is the foundation, the information needed about the subject (in this case, how to trade) and how to be successful at it. Skill is something you develop over time and through proper practice under the watchful eye of a mentor.

Applying this to trading and investing, knowledge would be broken up into several parts. There is knowledge required to understand how the financial markets truly work and how to discern order flow from the institutions versus the novices. This information is critical when learning how to trade. Further knowledge is required to create a step by step plan for trading and investing with high probabilities and low risk. Simply put, you need a proven, rule-based plan. Trading and investing correctly means taking calculated risks, not blindly jumping in and hoping for the best.

Free Trading WorkshopThen comes the skill. A great plan is worthless without the skills to implement it with discipline. To develop a skill, you must practice the fundamentals to build that skill. In trading and investing, the fundamentals are the ability to read price action and identify quality supply and demand levels. Part of knowing how to trade successfully is recognizing the trend and location of the curve.

The problem with practice is that the wrong practice will produce the wrong results. To ensure you are practicing properly, you need to work with a mentor who is successful in the endeavor you are working to master.

Online Trading Academy has a clear advantage in that they have a patented, rule-based core strategy. They also have successful traders and investors teaching that strategy and working constantly with students, in-person and online, to help them master their skills.

It is funny that people believe that they can learn how to trade and become truly wealthy in the financial markets from simply reading a book or watching some videos found for free online. If that were true, there would be many more Warren Buffetts in the world!

DISCLAIMER This newsletter is written for educational purposes only. By no means do any of its contents recommend, advocate or urge the buying, selling or holding of any financial instrument whatsoever. Trading and Investing involves high levels of risk. The author expresses personal opinions and will not assume any responsibility whatsoever for the actions of the reader. The author may or may not have positions in Financial Instruments discussed in this newsletter. Future results can be dramatically different from the opinions expressed herein. Past performance does not guarantee future results. Reprints allowed for private reading only, for all else, please obtain permission.

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