Today’s trader question is in regards to trading resources:
I am just trying to be involved in FX trading. And I shall sincerely appreciate any help you can render, in terms of genuie and good free resources.
Over the years I’ve been exposed to a great many trading resources of all different types. That includes information and tools for use in the trade decision making process and items focused on educating traders and investors. I try to post regular reviews of books and other things here to provide my thoughts on the ones I come across.
The questioner in this case brings up a very interesting subject – that of free resources.
I have written on this subject before in the post When Free Isn’t and Paying Makes Much More Sense. There are certainly many free resources out there. To my mind discussion boards like Trade2Win and BabyPips are great sources for new traders. Not only do they provide information, but they also allow traders to ask specific questions. You can’t do that to a free ebook.
The question is one of value, though. The old saying “You get what you pay for” holds true in trading resources as it does in everything else. Keep very much in mind that there is a reason things are free. The most common one is that they provide only general information. Another is that the creator put the resource together relatively quickly without spending much time on making it a really good presentation.
Consider this. Are you likely to give away something you spent weeks or months of your precious spare time putting together? Probably not. If you only put in a couple of hours, though, you’d likely be more inclined to do so.
Also, what you get out of something must come into consideration when determining what you pay for it. Businessess understand this very well. If I can spend $100 on something that’s going to make me $200 in profits, or save me $200 in expenses, I’m most certainly going to do that.
I work on a analytic service which has a price tag of about $300/month per user. That might sound like an a lot of money, but think about it for a minute. If what my colleagues and I present to you makes you $1000/month in net profits, doesn’t that $300 sound extremely reasonable? The guy I consider my markets mentor runs a service with a monthly price tag of $1000+. The institutional customers who subscribe to his service happily pay that because they know they can use what he tells them to affect much bigger improvements in their returns.
There’s the difference between institutional/professional traders and individuals. The former understand they are investing their money with the expectation of a positive return. The latter think instead of cost and expense without considering the value of what they receive in return.
If you find yourself thinking about a book, or data feed, or trading tool, or whatever as an expense, then change your thinking. I’m not saying you should spend more than you can afford, but prudent investments can really the make a great deal of difference in your development and performance.
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About the Author
John Forman, author of this blog, has traded for more than 20 years, is a professional market analyst, and authored The Essentials of Trading. He is an active participant in trading forums, consults for trading related businesses, as published literally dozens of trading articles, and has been quoted in a number of books and in the media.
** See John’s full bio.
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