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Those Who Can’t Trade Teach

Spend enough time in the trading arena and you are sure to run across someone saying that those who sell systems or books or other information are only doing so because they can’t make money trading themselves. You might even be guilty of thinking or expressing a view something like that yourself.

Yes, I said “guilty”. I use that term intentionally because it represents an incorrect mindset.

“if you are a good trader why do you need me to fund your effort  that does not make sense but it tells me you make more money selling than you do trading”

I received the above via email yesterday. It was in response to an invitation I sent to my mailing list to pre-order a new course I’m putting together. It’s on the subject of using simple chart analysis methods to recognize market strength and weakness. This is stuff I use every day and I have been thinking for some time about recording a video (or set of) to share them. I’m finally getting around to doing just that, and will be using the proceeds to support the volleyball organization I used to run – as I have done with most of the revenues I have taken in over the last year plus.

In case you were not aware, several years ago I started a youth volleyball club program in Rhode Island. I ran it for five years (I was also a college coach during that span). A couple years ago, however, I stepped away from volleyball to get back into the market full-time (I’d been out for about 7 years). The new employment meant a move away from the area, so I couldn’t stay involved with the program in any direct fashion anymore. The club continues on, though, and I try to support its efforts as much as I can (and other RI volleyball teams where possible). That means financially. The cost of gym space, uniforms, equipment, and all the other stuff that goes into running a program continues to rise, so finances are really tight. Since I have all this knowledge and experience in trading and the financial markets, it makes sense to use that to create a mutually beneficial situation where I can provide information to traders and investors and use the proceeds on the volleyball side. I don’t keep any of the funds for myself.

Now I included the above information in the email I sent about the new course, so I’m not sure where this particular emailer is suggesting that I’m making more money selling than trading. I’m not personally making any money selling, so there’s no comparison to be made.

Basically, this person is telling me that I must be a poor trader since I’m in the education business. Of course they know next to nothing about me, so they really have no basis for drawing any conclusion one way or the other. This sort of thinking is indicative of a failure to consider all the reasons why someone might get into education in the first place.

Yes, there are certainly those out hocking systems and whatnot who are insincere and unscrupulous. That’s the reality of things. Of course trading is hardly alone in that. There are always going to be con artists in every venue where they see the potential for profit.

But that’s really not the main point of this  “those who can’t trade teach” thing. Let’s step back and take a look at the wider “those who can’t do teach” thing. It’s a complete crock, of course.

Think about it. If no one who ever could do taught, then the bulk of our educational system would be gone. Think of all the college professors who are experts in their fields who both do and teach. If no one who ever could do shared what they do, no one would ever learn the doing!

For my part, I’ve been active in educational efforts of one sort or another for many years. I started coaching volleyball while still in high school. I was talking with my alma mater’s Finance Department chair about program adjustments as soon as I got into the professional market arena. I was certainly not getting paid for either. It would be more than a decade after I did my first volleyball coaching before I finally started getting paid for it (sub-minimum wage if you count the hours I was putting in). I didn’t earn a penny on trading education until Wiley published my book, The Essentials of Trading, which was after I had already spent a couple of years contributing in the university classroom (not being paid) by presenting much the same material to college students as ended up in the book.  And if you think I’ve made a lot of money off my book you are sorely mistaken.

I love helping people learn, develop, and reach their potential. That’s why I spent so many years getting paid very little to coach volleyball full-time. It’s why I spend much of my spare time thinking about ways I can help people with their trading and investing. It’s very rewarding. I fully expect to be an educator on some level or another for as long as I live, regardless of my level of wealth.

There are definitely other people out there like myself. I’m certainly not alone, so let’s try not to be so cynical about things.

And other motivations aside, do we begrudge people for making a secondary income? If you have a job and you trade on top of that, it’s the same thing. You’re doing something additional to improve your financial situation. It’s a bit hypocritical to cast aspersions on folks who pursue an income from selling trading educational material. If they are putting out complete crap or it’s dangerous, then criticism is certainly fine and justified. If, however, they are providing at least as much value to those who are purchasing their products as they are receiving from them, then what’s the problem?

By John

Author of The Essentials of Trading

16 replies on “Those Who Can’t Trade Teach”

hi, i downloaded the short version of The Essentials of Trading and found it of great help to me (Note: She is referring to the evaluation version, which you can request via the form in the right sidebar). i am a complete novice and after trying out internet marketing and getting burned, i decided that i was not going to waste alot of money buying tons of products that would help me. i instead downloaded a lot of free e-books and you cant believe how much info is out there, totally free. that said, i am very tempted to buy The Essentials of Trading and the video course on how to read the charts. i keep saying to myself that the ebook was so easy to understand that the rest of the book will be worth it. the reason i am writing to you is that i am the same type of person that you are and will with the greatest of pleasure share and teach anybody any knowledge that i have that may help somebody else. it is difficult to let other people understand how much pleasure i get out of helping others. if you can make a buck or two for your effort and you are not ripping people off, who are they to condemn you. great ebook. thanks

Great post. Some of my best trading teachers were (and still are) awesome traders. There are great teachers who are great traders and there are great traders that design and sell good trading systems. How could there not be?

I totally understand the person who wrote to Mr. Forman! He is skeptical, and ha should be. However, not everyone is a con artist, but most trading info sold, is not worth buying. That’s my opinion!

To Mr. Forman, keep up the good work and thanks for sharing!

Johan from Sweden

If you could trade, you’d be successful enough to not need to write a book or teach. It ‘s funny that those WHO actually can trade don’t teach. I wonder why that is? 99% of all socalled teachers/coaches in the trading arena are complete bs.

John Smith – if that’s your real name – I’ve been waiting for someone to voice exactly this opinion. What took you so long? 🙂

First things first. No one “needs” to write a book, especially one published by a major house like Wiley (my publisher). There isn’t much money in it unless you have one of those special books that sell tens of thousands of copies – and very, very, very few books do that. And the process is a challenging one which takes a considerable amount of time and effort.

I certainly didn’t need to write The Essentials of Trading. I did it because I wanted to have something to help the college students I was working with at the time (not getting paid to teach, by the way). I hadn’t even intended on getting the book published. I only made that decisoin after the book was finished, with the encouragement of Brett Steenbarger and others.

As for those who can trade not teaching, that’s completely false. As Brett Steenbarger has written about numerous times, prop shops have training programs which are obviously run by traders. Investment banks and hedge funds have the same thing.

But you will counter that those are professional traders, not retail folks like us. Fair enough. It’s definitely more of a challenge for Joe Trader to find someone to teach/mentor them in the same manner because we are all scattered around and often don’t readily interact with each other on a direct basis. I’ll refer you to the comment from Keith Shepard about how he was taught by some good traders. They are definitely out there.

And don’t toss out something about good traders being too busy trading to teach. A statement like that assumes everyone is a day trader who has to spend all her/his hours watching the market. Most traders aren’t that short-term focused, though, leaving them plenty of time to do other things – like help new traders.

Lastly, saying 99% of teachers/coaches are frauds (to paraphrase) is going way over the edge of reasonableness. You’re tossing out a number with absolutely no supporting evidence. It makes you come off as someone who is either incredibly cynical or has been burned (or both).

As I’ve noted, there are definitely those offering their services who are less than ethical and/or less than helpful. That said, it’s been my experience that a great many who complain about the value or quality of the education/coaching/mentoring they receive went in with the wrong expectations and/or didn’t take the time and effort to really think about what they needed.

Why does Donald Trump sell books, seminars and do TV shows? Is it because he sucks at real estate? Why is Michael Phelps going to write a book, he doesn’t suck at swimming. Why would George Soros write a book, or Warren Buffet, etc….? It is capitalism!! Trading is a very tough business and if there is something a trader can do to diversify and increase his income based on accumulated knowledge, he would be a fool not to take advantage! Of course there are the “charlatons” in every business who have no real experience, caveat emptor!

I actually looked at this particular book and returned it to Amazon. Don’t waste your money. It is very basic.You can find this kind of information free on the Internet. I would rather recommend one of Elder’s books instead, like “Trading for Living”.

Michael Phelps is going to “write” a book with b.s. like eating 12k calories/etc will make you the olympian, etc.

Is he going to write in detail about pharmacological support that every elite athlete recieves or anything else that must remain secret (and really makes the difference between gold medals/nobody) ? No.

Pools of water don’t spontaneously pay you money. It’s not trading.

DTrump “writes”/makes TV shows/etc because he’s already famous and it will sell. And yes, he sucks. Hasn’t he been bankrupt a few times, or nearly so?

Soros always wanted to be more than a trader, and his books have little to do with trading, he does not teach how to trade. Unfortunately, he really sucks as a philospher, when compared to his trading/schmoozing prowess.

The only successful money manager that wrote books that really had to do something with actual strategies, is Toby Crabel, and maybe Ed Thorp (a little questionable).

Why isnt Jim Simons writing trading books? He has plenty to teach about real trading.

Please correct me if I’m wrong, but I have not seen paragons of trading wasting time on writing books about how they are raping other traders, they seem to prefer to keep their cards close to their chest, is it not clear why?

Before somebody mentions Niederhoffer, please make sure you explain how he did not really blow up a few times.

Ella S – I assume you’re referring to The Essentials of Trading. Of course it’s very basic. It was written for folks with little to no trading experience.

Raphael – First of all, just because someone doesn’t write a book, it doesn’t mean they don’t share their knowledge in other ways.

Second, is your statement the pools of water don’t spontaneously pay you money supposed to imply that trading somehow does?

Thirdly, just because someone doesn’t share the exact techniques they use to trade doesn’t mean they aren’t providing valuable information. The Market Wizard books are a great example. You got some of the best traders in the world offering advice about how to tackle the markets. They aren’t providing details of how they come up with their buy/sell decisions, but you could make a very strong argument that what they do provide is more valuable. Some of them trade in ways the vast majority of folks could never do. That doesn’t make what they say about money management or market analysis or whatever any less useful.

Hi John

Interesting that your post struck a cord. I wonder why it is that the same criticism is not leveled at say surgeons and medicos etc. The fact is all successful traders I know have stood on the shoulders of someone else. If not, we’d constantly be re-inventing the wheel.

That’s not to say that there aren’t ‘trading teachers’ out there that don’t deserve label ‘teachers’. But this is true of any educational endeavour. It was certainly true of some of the lecturers at Sydney Uni’s Law Faculty when I was studying there – and at the time that was the best Law School in Australia.

Not all successful traders teach – so? That doesn’t mean that the successful traders that do teach can’t trade. My trading career turned around because of Pete Steidlmayer and he is certainly a successful trader.

LIke any profession, you have good and poor educators. Our job as students is to distinguish between those that have something to teach and those that don’t.

My view

ray

While there is no need for any rancor on the topic, it does seem like a bit of skepticism is not out of place.

The difference between most other teaching endeavors is that trading is a zero sum game. In order for you to be on the upside of a trade, you have to find a counterparty who by will end up on the downside. The methods and models used by an individual trader are those that he believes give him and advantage of ending up on the “right” side of the trade. If those methods become common knowledge, then their utility in providing the trader an advantage in the market cease to exist (or at least are materially diminished.)

That leads to a couple possibilities:

1. The information is so general that it provides no insight into the details of the traders system. While this might be of great use to the novice, the belief that it will provide any real advantage in the markets is misplaced. I believe at least one poster referred to this possibility up above.

2. The information contains details of a successful system, however leaves out a few key elements that effectively obfuscate the traders true strategy. I call this the “MacGyver” method since the 80’s show of that name typically left out a few key elements of the inventive solution to MacGyver’s problem.

3. The information contains the full details of a successful system, however does not indicate that while the system was very effective at one time, market conditions and correlations have shifted rendering it no longer useful.

Not knowing much about the author or his credentials, my guess would be that this is a case of #1. Even if it is #2 or #3 there can be utility in the information in providing an example of a marketview that was, at least at some point, successful.

Just trying to reframe the conversation into something a bit more constructive (of course, this is the internet, and no place for constructive discourse…)

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