“Why Teach When You Can Trade?” Part 3 of 3

“What to teach?”

I have attended many workshops where there was a guru on stage teaching us how to trade in a certain style that was suited to just one security/instrument. Almost all of the time, the style in which we were taught was a “cloned” system in which we had a set of rules to follow and a stringent set of guidelines to qualify our trades. Often these systems depended on either software, on-line subscriptions or “triggers” as indicated on pre-configured charts. These were robotic styles of trading that didn’t suit me. If trading was a personal thing, this was certainly not the way I envisioned it would be. Furthermore, a simple question convinced me that his was not the way; “Do Wall Street professionals trade like this?” … certainly not. So why was I paying to learn something that the pros were not doing?

Wall Street does not rely on software, screeners and subscriptions to make their trades. Wall Street also does not trade simply by charting alone and they certainly don’t ignore economic situations. Almost all the courses I attended barely or never touched on macroeconomics and the relationship between securities and the correlation between the many instruments and economies around the world. We were just taught to trade, for example, Options. And in one Options Trading workshop, little was mentioned of the correlation between the Option Price and the Underlying – we were even told that the underlying move matters little to the Option Pricing! We were even scolded for asking him to teach us Greeks!

This was definitely not what I wanted to do as a teacher. I wanted my students to know EVERYTHING because every true professional in any business must know everything about their business and not be ignorant to external factors. It was important to know what moved your currencies which moved commodities which moved equities which influenced bonds that was monitored by the fed who will adjust interest rates to control inflation which affected currencies … everything comes full circle (rationally or irrationally) and that is why it was important to me to teach everything.

“How to teach?”

When I started teaching at home, it was easy because there were questions. I taught what they wanted to know. They would ask and I would answer. Every question and answer was documented and soon enough, I had enough Q&As to fill a tutorial of about 12 Chapters with each chapter addressing a specific topic like TA, FA, Research, Planning, etc.

This, I figured, is the best way to teach because the student is getting what is expected. As long as I catered to queries, I would have a tutorial that anyone could relate to as these were common questions that almost every student would and should ask. These were the questions that I was asking when there was no one to answer them for me.

Misconceptions were also another approach I took in improving my tutorial. In this business, we read, hear and assume a lot of things and we take what we learn as gospel. When a situation presents itself, we react as we would because we had “learned” and we “knew” what to do. This is the single most effective killer of novices and newbies. One of the most popular examples would be trading on news. More have lost from trading news wrongly than have been overnight millionaires. Another simple and common misconception is being “stock-centric”. And let’s not forget the biggest misconception about the correlation between interest rates and the market.

Another difficulty in teaching is speaking in terms that your students will understand. Many times, teachers who are extremely familiar with their subject matter tend to rattle on while assuming that everyone will understand what is being taught. The jargon, acronyms and terminologies are something experienced traders take for granted and ignorantly assume that most will understand what they’re talking about. Terms like ‘tank’, ‘spike’, ‘dip’, ‘rally’, ‘stops’, ‘trend’, ‘consolidation’, ‘cut’, ‘divergence’, etc, will have quite a different meaning to a layman while it carries a lot more meaning to a seasoned trader. Such terms need teaching and are a lesson in itself. Teachers often assume that their students will understand these terms and almost always fail to detail these things. One of the biggest sins amongst teachers in this business is their complete failure to teach the detailed difference between a Buyer and a Seller. In almost every class, I have students that attended other courses and they, along with the newbies, always fail a simple test of knowing the difference between the Buyer and the Seller.

The biggest misconception has to be that you can make tons of money and become a millionaire by trading. This is a result of the constant bombardment from teachers who sell the dream in order to fill seats. My biggest problem as a teacher is to tell such people that such dreams are only that … a dream. And in that moment of honesty, I have lost a student who believes that there must be a way to rape the market for a quick profit. Testimonials from winning students show that it is possible to make such a massive profit. The ads prove it and testimonials don’t lie. But what is not so obvious is that the ad never changes and the testimonials don’t improve. If that winning trader was consistently making that massive profit every week, I am sure that the ad would change every week because any teacher would be proud to have such a track record amongst his traders. But the testimonial is a one-off, a flash in the pan that is not likely to change, improve or get updated. And we buy the dream. We will pay the big money to learn how to make the big money. But the big money never comes and these are the students that come to me to learn what went wrong.

“Whom to teach?”

In football, learning to trade is like learning how to take a free-kick to score a goal. But the game of football is more than just free-kicks. There are tactics, fitness, skill, discipline, rules, equipment, proper conduct and behavior, strategies and understanding your opponents who are equally, if not better prepared than you. Plus they may take better free-kicks than you too.

Thus I only wanted to teach students who were interested in learning everything rather than buying a dream of taking goal-getting free-kicks. I wanted students who appreciated that there were no free lunches in the world of finance and no easy way to achieve success just as in life, nothing comes easy.

I wanted to teach only those who were serious about this business. I wanted to give the student a financial education which incorporated trading. I needed my students to appreciated that the bigger picture was always more important than being stock-centric. I wanted my students to know that money matters were more important than just learning how to trade and that trading was one small part of a much larger picture.

The irony of whom I teach is that the real value of the lessons are lost on those who are absolute newbies who have never attended other courses before while the ones who have attended and lost from other courses simply treasure and appreciate what I have to offer. I can’t sell the experience to someone who hasn’t experienced.

“Why Teach When You Can Trade?”

If I have to teach, it has to be profitable. This is common sense. I teach because people want to learn and they are willing to pay to learn what I know. I don’t force anyone to do this. I don’t con them, I don’t sell them dreams and I certainly don’t make an obscene amount of money from it. But if I do teach, it has to be profitable otherwise, why bother to teach when I can trade?

But to the person who would ask such a question, allow me to ask you frankly … If you could do what I do, wouldn’t you? If enough people came up to you, willing to pay you for what you know, if you had a chance to make a positive difference in someone’s life, wouldn’t you? And if you could make some money from it along the way, without compromising your integrity, wouldn’t you?

Let’s be totally honest about it … if you had a chance to make it big, rich and famous without giving up your values, integrity, ethics and morals, wouldn’t you take that opportunity if it came knocking? If you had a chance to make something of your future for your family, wouldn’t you?

So why teach when I can trade? My final answer: I teach because I can and I can because I trade well and I trade well because I teach. And I do all these much better than most. So why shouldn’t I?

At the end of the day, it is a thankless job and a personally rewarding one at the same time: if the student becomes a successful trader, it is because the trader is a smart and talented trader … but if a student looses money, it is because his teacher is lousy. If he models his teachings, he is a copy-cat … but if he innovates, he is a risk taker. If he makes money, it’s because he has a big account and high leverage advantage … when he loses, he is not worthy of being a teacher.

One can never win … yet I teach because I love the job regardless of its thanklessness.

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Comments

Hey Conrad,

Rest assured that there are many thankful souls out there who have benefited greatly from your teachings. I know….. becasue I’m one of them.

THANKS!!

Very honest and straightforward message. Most coaches are indeed just out to make some money with some knowledge. Some put in the passion to teach and make a difference in others life. But I know we’re not saint, and we need money to survive. Without money, we can’t live in this society. Thanks for your passion and effort!

Allan Heng
http://SuceedWithInterviews.blogspot.com

Bravo! Bro! It all boils down to personal accountability.
If I were to put my hard-earned cash to trade, I damn well be personally responsible for EVERYTHING, not shift the blame to someone else, the weather, global warming and whatnots!

In my case, I’d rather spend $4K to ‘learn’ and then decide not to trade vs losing $20K in bad trades! [which I did in 2000]

I believe all are mature adults [then again, maybe not].
Spend your time and money wisely.
Only experience and time will tell.

Conrad, keep true to your calling, many thanks!

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