Avoid Traditional Trading Education at All Cost

What I am going to say here will piss off 90% of the gurus out there offering their takes on how to become a successful trader. I can truly sympathize with that, because I understand what they went through to get to their level of trading proficiency (assuming they are not lying). I went through the same obstacle course before I became proficient in trading. Going through it myself is one thing, but it’s not right to put others through the same thing, if for no other reason than because it entails so much unnecessary damage. My belief is that there is a better way to approach trading education.

Simple Analogy Illustrating the Flaw in Current Trading Education

Do we burn the hands of our children on the stove to prevent them from burning themselves in the future? Do we need to jump off a roof to learn that we shouldn’t do that in the first place?

That’s exactly what the traditional approach to trading education has been. All of the super-duper trading “methodologies” of the self-proclaimed gurus fall under this same kind of approach. You suffer from unnecessary losses, you learn something from the experiences, and hopefully next time you will do better —and along the way, hopefully you will rewire your brain to better recognize the patterns that make or break success.

But with a zillion rules and patterns to watch out for, how the hell are you supposed to learn from watching the price swinging up and down for hours a day until your eyes turn red?

No framework or methodology will save you from the conditioning of your brain, nor will it prevent you from making the same mistakes that any normal person would make. You can only hope that eventually you somehow “click” and break through your mental blocks to become a better trader. The word “hope” is the problem.

But aren’t all those trading methods supposed to teach you something concrete, so that you don’t need to hope?

Eventual Mind Corruption

Some concepts in trading are pretty easy to understand. Given the right set of example cases from historical chart data, many people can recognize the pattern and use that to trade with some level of success. After all, many people praise the fact that the human mind is still the best pattern-recognition machine compared to AI computers.

However, what these people fail to recognize is that human minds are also much easier to corrupt than their AI counter-parts. All it takes is a few times of losing money by trading the pattern you have been taught to recognize, and you will try to “adapt to the environment” without knowing whether you should adapt in the first place.

Your mind is always at risk of being corrupted. It doesn’t matter whether you have traded 10 years or 50 years. It just takes the right circumstances to trigger you, and you will start to question whether the pattern you recognize is still valid. Then you have a 50/50 chance of making the right decision.

Seriously, the only way that a discretionary trader will not be corrupted is if the trader is all-knowing and all-seeing, meaning that the trader actually knows every single possible outcome with the pattern. But we all know it is not possible because none of us have access to the future.

Normal people make decisions based more heavily on new feedback than the original concepts they were taught or told. Rules are always bent and reinterpreted over time. With a lack of a higher level of abstract rules to govern themselves, a trader always ends up failing because of their corrupted minds.

For those 4% of the population who are “blessed” with the ability to learn from the traditional trading education environment, they are not destined to become great traders either. Contrary to what many people hope for, these 4% “geniuses” are the ones who are most likely crash and burn in trading. The reason is obvious – they depend so heavily on their “talent”, and with so much conviction, that when the patterns in their heads get messed up they blindly follow what they believe and violate every single rule they know about money management. 

Mastery Does Not Work This Way

Not everyone learns from being burnt badly. At least half of the people who went through the experience will be traumatized. The same goes for sending someone on a suicide mission to bet on the market direction with no real depth of knowledge when it comes to the market. The results of losing money and being blamed for failing to learn the lessons properly do not help, either.

Real mastery of a skill depends on many things. One of them is the imitation process through which the trainee learns by copying whatever the master does. In trading, this means learning by watching the master trading in real-time. Do what the master does, not what he says with the instructions. It is the subtle details of all the intricate thoughts that went through the mind of the master trader that is worth learning from.

The fun thing is that many master traders do not really practice what they preach. They may have distilled their knowledge into certain rules and methods, but in reality they violate them all the time. There is really no easy way for an apprentice to figure out the actual mechanism that a master trader uses when deciding what to do with a particular situation.

And how can you be so sure you are learning from a master trader, anyway? I have heard stories about these so-called trading gurus who demonstrate live trading yet are not even be able to stay calm and composed while trading…

I think you get the point.

Time to Stop

Perhaps you tried trading the traditional way and lost a lot of money. It is not an effective way to learn trading, but it is not your fault that you aren’t getting anywhere.

Even so, you may still want to keep trying down this path. There are many reasons why you might want to do that.

Some of you out there may want revenge. That’s anger. Some of you want to make back enough money and call it even. That’s gambler remorse.

And there are also those of you who think you are so close to another “breakthrough” that will finally allow you to beat the market, so you feel compelled to continue down this path. Well, that’s the fallacy of the sunk cost.

I can keep going with every excuse you can imagine, and none of them makes logical sense.

It is time to stop trying. Stop learning to trade the old way. Collect your thoughts and give yourself a fresh start.

Part of the A Smarter Way to Learn Day Trading E-Mini S&P 500 series

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