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The Twisted Ramblings Of An Old Man
So, it's not really a blog. It's more of a rant. And truth be told, I'm not really that old. Going to be 42 this year. But trading is a young man's business - in trader's years, 42 is old, more like 75 or so. I feel that entitles me to grump about the hypocrisy and problems in the trading education business. So here is my two cents worth on all that is wrong in my industry.
Indicator Salesmen
Don't know what charting platform you use. Mine has literally hundreds of indicators built in. They are free. The formulas used to calculate them are in the public domain, and in most cases have been for decades. They also don't work, by and large, if you use them as they were intended to be used. However, Joe Failed Trader comes along, reprograms the indicator to paint a little colored dot every once and again, and voilà, this indicator is now worth hundreds or even thousands of dollars.
Give me a break! If I ever came up with an indicator that did work, I, along with any other smart person would do one of two things:
Trading Rooms
I have mixed feelings about trading rooms. Mostly feelings of disgust and anger, mixed in fairly equal parts. I have worked with a number of students who were in xxxxx's Trading Room for the last 3 years paying $4-500 EACH month. Yet after 3 years of sitting in this room, I could show them something simple - two buttons. One is green and says BUY in big letters, the other is red and says SELL. They don't have a clue about which one to push or when to push it. What did they get for their $6000 a year? They didn't even make money while they were in there! I don't know who frustrates me more, the guy running the room or the guy paying $6k a year for nothing.
And then we have a whole nother (yes, nother is a word, I checked) category of room moderators. The guy who brags about selling 90's when you know bloody well 90's never went bid and you know he wasn't the first guy in the queue when that one lot went off at 90 three minutes ago. Posts the trades, brags about how much money he made, keeps crowing all week about the 20 handles he bagged when you know he wasn't even in it, let alone the fact that no twitchy day trader alive could have set through that action for 20 handles.
I have known many trading room moderators who never have owned a live account. Something a little unsettling about that. I guess you have to decide for yourself. I have seen some of them make good calls but they didn't have the mental grit to trade. Or they had no discipline and couldn't manage their trades or their gambling habits. Or the room shuts down eventually and you are all on your own with no idea of what to do.
I know a moderator who was excellent calling DAX and FTSE. He always claimed to be trading 10 cars at a time, which I doubted. So I watched the tape carefully (as a tape reader, I do that anyway) and he would never appear on the bid or the ask, never see more than a two lot print anywhere near his price. If you've ever traded either of them, you know what I mean - these markets are thin at every level unless you're right around the London open. He was not trading, and eventually acknowledged it.
I'm shocked. I mean, I'm not shocked that he wasn't trading, knew that was the case. I am shocked that he owned up to it though, so I pressed him a bit. After all, he was a pretty prominent moderator in the trading world. Come to find out that he had not owned a live account in years - but he was making a killing in the room. Had over a hundred traders in there paying $300 per month to follow him. Don't talk much with him anymore, and sure wouldn't send any referrals his way.
Long story short - I don't see much value in rooms unless they are part of a mentoring process where they are actually instructing you.
Although, I guess if it doesn't bother you that the guy who just said to go long doesn't have an account, more power to you. Just don't say that you weren't warned.
The Harvard MBA
Don't even know whether to get started on this one. I will try my best to keep it brief.
I have been around trading circles long enough to know that there is no university that prepares you to be a trader. I don't care how many MBAs you have or what school they're from. Having an MBA has absolutely nothing to do with success as a trader. Zero. Zilch.
Discipline, patience, self-control, mental toughness, that's what trading requires. Not some hypothetical book learnin' from a fancy school. That is, if they really even have the MBA from Harvard. After all, it's pretty easy to type the following words on your website: "I have an MBA from Harvard". See there, just typed it...wasn't too bad at all. In fact, I did it with one finger.
I would sooner trust an instructor who said 'I have no college degree, but once I pulled myself 30 miles across the desert with my teeth, after I fell off my dirt bike and broke both arms and legs and got bit by a snake...That's tough, that's what I want to see, not some little piece of paper that says 'Failed Trader learned this hypothetical nonsense on a chalkboard 11 years ago'.
Ex-Floor Traders
My personal favorite - the ex-floor trader. Cannot count how many times I have seen educators bragging about being a floor trader as if this was the golden key to the inner sanctum where the Holy Grail is kept. Give me a break! I have never seen a floor trader
successfully transition to the screen. On the other hand, I have seen many dozens who crashed and burned, some of them going through millions in a couple years after they went to the screen. Guess it doesn't mean successful ex-floor traders don't exist, but I'll take my chances with someone who never stepped foot on the floor.
It's not that I don't respect floor traders. They have some unique insights and perspectives from their years in the business. But let me tell you a little simplified version of what it means to be a floor trader. You'll see why being an ex-floor trader is a huge handicap and why they usually fall flat on their face when they go to the screen.
Here's the short, short version of being a floor trader. You cram a couple hundred guys and a few gals in a room called 'a pit'. They're known as locals. Standing around them are institutional traders representing Goldman, Smith Barney, and so on. They're called paper.
Paper is almost always real. When a large institutional client tells Goldman to buy 5000 big S&P contracts, it's real. The order is phoned in, the trader sits with a phone on his ear and hand signals the buy order into a couple hundred guys in front of him.
As a local up near paper, you can see this; maybe the locals behind you can't. If you're standing close to paper, and especially if you're really tall, and you can scream really loud, you will find someone to sell you some contracts, which you of course immediately flip to Goldman for a tick profit. When Goldman hangs up the phone, you are done.
Now bear in mind that this is really simplified, and yes, some locals do trade their own money against other locals and paper. I wouldn't want to tangle with someone like Borsellino. But think of what allows most locals to make money - it's by front running real money orders. What an advantage - you can actually truly lean on paper because they still have their ear to the phone. It's only when they hang up that you are in trouble.
Think also of the unique perspective they have on momentum and emotion. They have a hundred guys standing in their face, spit flying, elbows flying, fists flying, screaming, yelling, crying, chewing on cards, etc all around you. Who could miss the emotion with all that in your face?
Some of the locals get huge, they are awesome. These guys aren't the floor traders who wash out and become educators, trying to teach you how to trade the screen. See, for every big local there are a dozen who are mean enough, loud enough, and aggressive enough to front run paper. At some point they leave, then they go to the screen - now all they have is what you have - a little screen in a quiet corner somewhere. They have no idea whether they can lean on the bid, no idea whether anything in the book is real or an illusion, no screaming, spitting, and fighting to help them get a clue as to the market's emotional level. They can't see the phone on paper's ear anymore. They're basically doomed to becoming an educator relying on their credentials of being a pit trader.
I will say nothing more about them, you get the point.
Am I any different from these previously mentioned individuals?
I sure hope so! I don't sell any indicators, don't really use them much in my personal trading. I will admit that one of my setups uses a CCI indicator, but I don't use it remotely like it was designed to be used. Over the years I have used RSI, again, not in the way it was intended. I am willing to show you how I use it. Both indicators are free on any charting platform, so even though I tweak them a bit, I won't ever consider programming it to make a colored signal dot and then selling it.
I am pretty sure I don't have a Harvard MBA. Although I was offered a scholarship to University of Wyoming, I turned it down and started my first business at the age of 17. I have had some lessons from the prestigious School of Hard Knocks, but never got the paper certificate to hang on the wall.
I have absolutely never been a floor trader. Never traded over the phone either for that matter - I'm old, but not that old. I have been a screen trader since the beginning, so I don't need you standing in my face screaming to get a feel for the emotional level of the market participants.
I don't run a trade calling room. I have thought about it in the past, and if I ever do, it will be an instructional room, not a shadow trading room. It will be based on buying education at a reasonable price, not gouging you for as much as I can get from you.
I do freely acknowledge that I am an educator/trader. Sometimes I am a trader/educator. Seriously though, I am a full-time trader, but I preface that by saying the isolation of being a trader drives me crazy at times. I came from a background of helping people solve their problems, and one of the best feelings in the world comes from the compliment of an individual who appreciates what you have done for them.
So being locked away from mankind in a closet to trade is not my idea of fun, although I have done it for years. I don't really like being in a trading room either. While a little contact with living breathing people is welcome, I don't like to be bothered by chit chat about football and hot women while I'm placing live trades.
I truly enjoy helping people understand the structure of the market and its participants, I like the interaction with students, and I really like to teach. At the same time, I hate the crooks out there who aren't teaching you to be a self-sufficient trader. So I trade, and I educate - or I educate, and I trade, depending on how many students I am working with at the time.
Well, I'll stop now. It's 2 a.m. and my fingers are tired from typing. Plus, if you actually read all this, you're ready to quit too. So if you have any questions, please feel free to contact me. Oh, one more thing if you are wondering about my qualifications - I have never crawled across 30 miles of desert. I'm tough, but not that tough.
Joel
PS - It's 2017 and I'm 48 years old now. Who would have figured I would still be going strong and enjoying what I do? Going on 21 years now...
Indicator Salesmen
Don't know what charting platform you use. Mine has literally hundreds of indicators built in. They are free. The formulas used to calculate them are in the public domain, and in most cases have been for decades. They also don't work, by and large, if you use them as they were intended to be used. However, Joe Failed Trader comes along, reprograms the indicator to paint a little colored dot every once and again, and voilà, this indicator is now worth hundreds or even thousands of dollars.
Give me a break! If I ever came up with an indicator that did work, I, along with any other smart person would do one of two things:
- Shut my mouth, hold it close to my chest, hunker down and make my millions as fast as I could.
- Give it away free to every Tom, Dick, and Sally that comes along. After all, a hundred thousand traders piling on at the same time is even better than going it alone, unless I am so slow that I come in last.
Trading Rooms
I have mixed feelings about trading rooms. Mostly feelings of disgust and anger, mixed in fairly equal parts. I have worked with a number of students who were in xxxxx's Trading Room for the last 3 years paying $4-500 EACH month. Yet after 3 years of sitting in this room, I could show them something simple - two buttons. One is green and says BUY in big letters, the other is red and says SELL. They don't have a clue about which one to push or when to push it. What did they get for their $6000 a year? They didn't even make money while they were in there! I don't know who frustrates me more, the guy running the room or the guy paying $6k a year for nothing.
And then we have a whole nother (yes, nother is a word, I checked) category of room moderators. The guy who brags about selling 90's when you know bloody well 90's never went bid and you know he wasn't the first guy in the queue when that one lot went off at 90 three minutes ago. Posts the trades, brags about how much money he made, keeps crowing all week about the 20 handles he bagged when you know he wasn't even in it, let alone the fact that no twitchy day trader alive could have set through that action for 20 handles.
I have known many trading room moderators who never have owned a live account. Something a little unsettling about that. I guess you have to decide for yourself. I have seen some of them make good calls but they didn't have the mental grit to trade. Or they had no discipline and couldn't manage their trades or their gambling habits. Or the room shuts down eventually and you are all on your own with no idea of what to do.
I know a moderator who was excellent calling DAX and FTSE. He always claimed to be trading 10 cars at a time, which I doubted. So I watched the tape carefully (as a tape reader, I do that anyway) and he would never appear on the bid or the ask, never see more than a two lot print anywhere near his price. If you've ever traded either of them, you know what I mean - these markets are thin at every level unless you're right around the London open. He was not trading, and eventually acknowledged it.
I'm shocked. I mean, I'm not shocked that he wasn't trading, knew that was the case. I am shocked that he owned up to it though, so I pressed him a bit. After all, he was a pretty prominent moderator in the trading world. Come to find out that he had not owned a live account in years - but he was making a killing in the room. Had over a hundred traders in there paying $300 per month to follow him. Don't talk much with him anymore, and sure wouldn't send any referrals his way.
Long story short - I don't see much value in rooms unless they are part of a mentoring process where they are actually instructing you.
Although, I guess if it doesn't bother you that the guy who just said to go long doesn't have an account, more power to you. Just don't say that you weren't warned.The Harvard MBA
Don't even know whether to get started on this one. I will try my best to keep it brief.
I have been around trading circles long enough to know that there is no university that prepares you to be a trader. I don't care how many MBAs you have or what school they're from. Having an MBA has absolutely nothing to do with success as a trader. Zero. Zilch.
Discipline, patience, self-control, mental toughness, that's what trading requires. Not some hypothetical book learnin' from a fancy school. That is, if they really even have the MBA from Harvard. After all, it's pretty easy to type the following words on your website: "I have an MBA from Harvard". See there, just typed it...wasn't too bad at all. In fact, I did it with one finger.
I would sooner trust an instructor who said 'I have no college degree, but once I pulled myself 30 miles across the desert with my teeth, after I fell off my dirt bike and broke both arms and legs and got bit by a snake...That's tough, that's what I want to see, not some little piece of paper that says 'Failed Trader learned this hypothetical nonsense on a chalkboard 11 years ago'.
Ex-Floor Traders
My personal favorite - the ex-floor trader. Cannot count how many times I have seen educators bragging about being a floor trader as if this was the golden key to the inner sanctum where the Holy Grail is kept. Give me a break! I have never seen a floor trader
successfully transition to the screen. On the other hand, I have seen many dozens who crashed and burned, some of them going through millions in a couple years after they went to the screen. Guess it doesn't mean successful ex-floor traders don't exist, but I'll take my chances with someone who never stepped foot on the floor.It's not that I don't respect floor traders. They have some unique insights and perspectives from their years in the business. But let me tell you a little simplified version of what it means to be a floor trader. You'll see why being an ex-floor trader is a huge handicap and why they usually fall flat on their face when they go to the screen.
Here's the short, short version of being a floor trader. You cram a couple hundred guys and a few gals in a room called 'a pit'. They're known as locals. Standing around them are institutional traders representing Goldman, Smith Barney, and so on. They're called paper.
Paper is almost always real. When a large institutional client tells Goldman to buy 5000 big S&P contracts, it's real. The order is phoned in, the trader sits with a phone on his ear and hand signals the buy order into a couple hundred guys in front of him.
As a local up near paper, you can see this; maybe the locals behind you can't. If you're standing close to paper, and especially if you're really tall, and you can scream really loud, you will find someone to sell you some contracts, which you of course immediately flip to Goldman for a tick profit. When Goldman hangs up the phone, you are done.
Now bear in mind that this is really simplified, and yes, some locals do trade their own money against other locals and paper. I wouldn't want to tangle with someone like Borsellino. But think of what allows most locals to make money - it's by front running real money orders. What an advantage - you can actually truly lean on paper because they still have their ear to the phone. It's only when they hang up that you are in trouble.
Think also of the unique perspective they have on momentum and emotion. They have a hundred guys standing in their face, spit flying, elbows flying, fists flying, screaming, yelling, crying, chewing on cards, etc all around you. Who could miss the emotion with all that in your face?
Some of the locals get huge, they are awesome. These guys aren't the floor traders who wash out and become educators, trying to teach you how to trade the screen. See, for every big local there are a dozen who are mean enough, loud enough, and aggressive enough to front run paper. At some point they leave, then they go to the screen - now all they have is what you have - a little screen in a quiet corner somewhere. They have no idea whether they can lean on the bid, no idea whether anything in the book is real or an illusion, no screaming, spitting, and fighting to help them get a clue as to the market's emotional level. They can't see the phone on paper's ear anymore. They're basically doomed to becoming an educator relying on their credentials of being a pit trader.
I will say nothing more about them, you get the point.
Am I any different from these previously mentioned individuals?
I sure hope so! I don't sell any indicators, don't really use them much in my personal trading. I will admit that one of my setups uses a CCI indicator, but I don't use it remotely like it was designed to be used. Over the years I have used RSI, again, not in the way it was intended. I am willing to show you how I use it. Both indicators are free on any charting platform, so even though I tweak them a bit, I won't ever consider programming it to make a colored signal dot and then selling it.
I am pretty sure I don't have a Harvard MBA. Although I was offered a scholarship to University of Wyoming, I turned it down and started my first business at the age of 17. I have had some lessons from the prestigious School of Hard Knocks, but never got the paper certificate to hang on the wall.
I have absolutely never been a floor trader. Never traded over the phone either for that matter - I'm old, but not that old. I have been a screen trader since the beginning, so I don't need you standing in my face screaming to get a feel for the emotional level of the market participants.
I don't run a trade calling room. I have thought about it in the past, and if I ever do, it will be an instructional room, not a shadow trading room. It will be based on buying education at a reasonable price, not gouging you for as much as I can get from you.
I do freely acknowledge that I am an educator/trader. Sometimes I am a trader/educator. Seriously though, I am a full-time trader, but I preface that by saying the isolation of being a trader drives me crazy at times. I came from a background of helping people solve their problems, and one of the best feelings in the world comes from the compliment of an individual who appreciates what you have done for them.
So being locked away from mankind in a closet to trade is not my idea of fun, although I have done it for years. I don't really like being in a trading room either. While a little contact with living breathing people is welcome, I don't like to be bothered by chit chat about football and hot women while I'm placing live trades.
I truly enjoy helping people understand the structure of the market and its participants, I like the interaction with students, and I really like to teach. At the same time, I hate the crooks out there who aren't teaching you to be a self-sufficient trader. So I trade, and I educate - or I educate, and I trade, depending on how many students I am working with at the time.
Well, I'll stop now. It's 2 a.m. and my fingers are tired from typing. Plus, if you actually read all this, you're ready to quit too. So if you have any questions, please feel free to contact me. Oh, one more thing if you are wondering about my qualifications - I have never crawled across 30 miles of desert. I'm tough, but not that tough.
Joel
PS - It's 2017 and I'm 48 years old now. Who would have figured I would still be going strong and enjoying what I do? Going on 21 years now...
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