Wondering what B.S. means? It means, Bull Shit.
I recently received a DVD of an organisation presenting a seminar about trading. Let’s refer to the seminar as the LT Seminar. Not going to name names here.
It was a two-hour presentation and I thought to myself, hmmm, might be able to learn something new here.
Indeed, there were bits and pieces of new things I discovered, but all in all, I thought it was pure crap. It was a classic sales pitch of nothing more than to get new clients on board.
They pitched the idea of trading financial securities (stocks, FOREX, commodities, and etc.) and presented the audience with their so-called “amazing” trading system. To join them, you need to only pay 10 grand. Yup, ten big ones! $10,000…
Looking at the system, I suspect that it’s nothing more than a hyped up moving averages. A knowledge that you can get by spending 30 bucks at your local bookstore.
They claim that trading is easy and simple, and it only takes minutes per day and you’ll make truckloads of money! Get real! If it was that easy, we would have had many people becoming millionaires by becoming traders. Many books that I’ve read refute this belief. A majority of people wanting to become traders have failed.
When it comes to trading, business, or any ventures for that matter, your success is determined by how hard you work. I’m sure most of you would agree with this. Some traders take 20 years, or even longer than that, before being able to become a good trader.
The thing about these kind of seminars is that a majority of the listeners are people who have got no experience at all about the financial markets. In other words, they’ve got naive audience in their grasp. Tell them anything, and they’ll believe you. Heck, even I myself nearly got sucked in a few times before.
My concerns on this particular seminar:
We have seen a lot of those haven’t we? Testimonials from their past clients complimenting how great they are. How they have made their clients so much money, and bla bla bla.
I mean, come on, are they even authentic in the first place?
ONLY GOOD CHARTS WERE SHOWN
Amazingly, they only showed good historical charts to their audience. They only picked the ones that trend well, and thus being able to make a lot money.
In reality, stocks, commodities, and FOREX, do not trend all the time. They can spend a huge amount of time trending sideways (i.e. neither go up or down). You can lose a big amount of capital trying to trade instruments trading sideways.
NO TALK ABOUT STOP LOSS
I’m a proponent of preserving your capital when it comes to trading. This means, on every one of my trades, I will determine where my stop loss should be. No stop loss, no trade. What’s a stop loss you ask? Refer to my article here.
In the seminar, there was no mention whatsoever about stop losses. Now, that’s just dangerous.
Not using stop losses is equivalent to making love without using condoms (pardon the crude comparison). Dangerous, unsafe, and the potential of a lifetime of misery.
Without a stop loss and without adequate supervision of the instruments you are trading, you run the risk of losing quite a lot of money. In fact, the risk of losing more than what you actually have is also high. Note that commodities and FOREX utilise leverage.
Something to add, there’s this one trader who told me that if you do not understand how to use stop losses, your time in the market will be short-lived.
Agreed, trading can be made simple, but one still needs to understand the ins and outs of the market. Not so much to the point of becoming a professional, but at least adequate for your survivability in the market.
NO TALK ABOUT RISK OF LOSING MONEY
Yes folks, there was hardly any mention of the fact that if you do decide to trade, there are indeed risks of losing money. They also forgot to mention, trading is a HIGH RISK venture.
BULL MARKET BIAS
Another thing, for the past 5 years or so, we have been experiencing a raging bull market (i.e. market generally trending upwards). So, any Johns, Jims, and Jacks out there can claim that they have found the holy grail of trading.
In fact, I read an article recently. Somebody did a research to compare the performance of two groups of people. The first group consists of brokers with their recommendations. The second group was just people placing stock names on a dartboard, and threw darts to pick which stocks to buy. Yes, I literally mean dartboards. Yup, this research was carried out during a bull market.
Surprisingly, the dart-throwers outperformed the brokers.
What does this mean? It means, nearly anybody can make money in a bull market.
So, do I think that trading courses are a waste of money? Well, not all of them. Some of them are indeed useful and beneficial. Some are just basic knowledge that you can get by purchasing cheap trading books at your nearest bookstores. Some are just teaching dangerous methods.
Anyway, I am actually contemplating of attending one course next month (not the course conducted by the folks above of course). They seem pretty good.
When embarking on your educational journey, do exercise your own judgment. Determine whether the course if suitable for you or not. Analyse whether what the presenters are offering to you are realistic or not. If it sounds too good to be true, then maybe it is.
P.S. Giving them the benefit of the doubt, the course stated above might be good after all but I just wish that they would explain the reality of the financial markets a bit better to their audiences. Explain the dangers of the financial markets as well, and not just the good things.
Disclaimer: This article is not a specific nor general advice on managing or investing your money. This article does not constitute a recommendation nor does it take into account your investment objectives, financial situation nor particular needs.
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