Are financial trading courses a scam?

Are you are interested in trading the financial markets? Have you done any trading course? Are you thinking about doing one?

Well, the truth is that I am no enthusiastic with this issue of financial trading training courses.

Quite the contrary. If you were to ask me, the first thing I would say is not to do any of these courses. Most of them, I’m sure, are really mediocre (being generous).

I’m not saying they do not give valuable information. What I’m saying is that  to spend a whole day in a room of a hotel to charge you $ 300 or € for a course of 5 or 6 hours in which you are going to be taught some technical analysis, and little else, I find abusive. It is indeed a perfect business for many people.

Holy Grail trading system

Do you think they are going to teach you the Holy Grail of trading in one of these courses? Do you think that someone is going to teach you happily a model that will make you a day trading professional? If those who give the course can win consistently every year by trading, what need do they have to teach these courses?

There are thousands of trading courses on the network. These people obviously do not make a living trading the financial markets directly. The fact they say it a thousand times in the most diverse ways, active and passive, written and unwritten, proves nothing.

Best of all is that these courses have pretty salty prices. We also find that these people usually recommend their books about the magic of trading. And the fact is that most of what they teach is a resume of their books. So gentlemen, you can save making the course by buying the book. It is actually what I recommend: read trading books.

I see these courses as follows: The trainer has read several books on trading and on what he has learned in those books. You know, Technical Analysis, Money management, leverage and many indicators (the more, the better, to impress people). The truth is that there are hundreds of people who fall into this trap, thinking that they will discover the holy grail after having attended these courses.

Profesional trader course?

I would be curious to know what exactly these people teach in these courses but I will not pay 400$ to find out. You see, a guy can get 4 or 5 thousand $ “teaching” how to be a professional trader.

Gentlemen, the only way to learn to be a trader is operating on your own on the market. Nobody will teach you that, except a mentor you met in a trading firm or somewhere; but a mentor who would teach you for “free”.

Why would these people be giving training courses if they were professional traders making a living in the market? Would not they be better off trading the markets instead of wasting their time teaching their supposedly own great methods?

A successful trader will never, and I repeat profusely, never teach their method of operation to anyone.

He would never reveal his secret, technical indicator, or whatever makes him succeed regularly in the markets year after year (a good year or months may, anyone can have).

If a truly professional trader reveals his secret to other operator, it will be against its own interest: so no trader would do this.

Trading secrets

The reason is this: if I have a method for operating the Nasdaq, say following an indicator, I will trade when the indicator tells me to do so. Well, the market size is not unlimited.

There is a volume of buying and selling. If many traders use the same indicator, there will be a problem.

Normally, a single trader will not be able to move the markets too much.

But here is a problem. If you are a professional trader, you are supposed to have reached a significant operational size; i.e., you will have capitalized your account to try to achieve as much as you can at that time.

If the Nasdaq´s future, for instance, admits trading 100 contracts without causing a big problem in price, then that professional trader will tend to raise his trading size (if successful) to the maximum possible.

So a trader would never hand out what his trading system is to anybody, let alone dozens and dozens of people.

Because if he does, a lot of people will be able to trade the same way, and it will make it more difficult for everybody to get the same price or the same conditions.

Trading alquemy

¿Do you know any alchemist who would cheerfully give you his secret in exchange for a couple of dollars?

Or, do you know a perfumer who gives his formula for 400€?

Well, I do not.

If a professional trader makes 200.000 or 500.000$ per year trading why would he want to teach some courses?

I say that if a trader makes money consistently in the markets, the first thing he will do is to capitalize on its own gains.

Having said this, I’m not saying there are not courses that are not worth. But most are too expensive for what they teach and also none of these courses will make you become Jesse Livermore.

My best advice for those who want to invest in the stock market or financial markets is to invest long term. But not an investment based on technical analysis and thousands of indicators but based on other and “simpler” things. Something like André Kostolany style: buying when everyone sells and selling when everyone buys. What he called medium term (3-5 years) speculation.

For example, buy Nasdaq stocks in 2002 or 2008, not early 2014.

Thanks for reading and sharing