People from all over the world can access international financial markets by just by having a stable internet connection. Anyone can open a trading account with a broker and start trading. For the regular retail trader, this is both a blessing and a curse. It is a blessing because only several years ago it seemed impossible to access that many financial markets so quickly and easily.
The industry has changed completely; brokers of all types now offer impressive conditions. Trading financial markets has become cheaper, easy to do, and potentially profitable.
However, brokers tend to advertise online trading as just an easy way to generate some extra income. Anyone involved in the markets knows otherwise. As such, the question arises: why do retail traders fail on their first attempt to trade financial markets? The only logical explanation comes from lack of trading education.
There are two ways to do it. One is to take your chances as a trader and have an approach of learning by doing. This is an expensive way to find out about the markets’ potential. However, some view it as necessary tuition on the road to becoming a professional retail trader.
Other traders view this as time-consuming. Why not learn from an online trading academy, forex trading school or online trading school? There are plenty of online resources to learn pretty much everything trading related: futures trading courses, options trading courses, online stock market courses, and so on. In this article, we’ll cover the ins and outs of doing that, the pros and cons, as well as what is the best way to capitalize on such an experience.
Financial Trading Academy
Every market sector has its own particularities. Trading Forex is one thing, stocks is another, commodities and options are entirely different proposition, and so on. As such, there is no financial trading university to cover them all. Even if there were, it isn’t recommended as there may be too much to cover for a beginner. It is just too much to handle. Plus, the markets change all the time. Analyzing a market for a trade needs a technical and fundamental approach.
Technical analysis deals with everything surrounding charts and price action. Traders use a plethora of indicators, oscillators and trading theories to form an idea about the possible market course. Fundamental analysis refers to any outside factors that influence the market. Economic news, elections, macroeconomics, natural phenomena, all fall into this category.
Some markets work better with technicals and some work better with fundamentals. Stocks, for instance, move on information related to dividend payments, management plans, buyout programs, and so on. The foreign exchange market mainly looks at central banks interest rate decisions. While, the price of oil fluctuates based primarily on supply and demand imbalances.
Following everything and being up-to-date with the industry isn’t recommended if you are part time. It’s a huge task, and no one can trade all markets. Hence, the right thing to do is to focus on some markets and invest in online trading courses to learn how to trade those successfully. Start small, and grow big. How does that sound?
Educate Yourself Following a Forex Trading Academy Courses
An online trading university or a financial trading school has a bit of everything. However, it won’t offer a guarantee of a profitable trading experience after completion. In the end, it depends on the trader’s attitude and willingness to put in the screen hours, dedication and hard work.
Unfortunately, few traders are willing to ask for mentoring and support as solid foundations for successful speculation. The main obstacle is human nature. More precisely, the ego. Despite every broker being forced to show a risk-disclaimer by the financial regulators, people still like to take their chances without knowing pretty much anything about the online trading industry.
In the currency market, for instance, statistics show a terrible number. Around ninety percent of first-time traders lose their initial deposit. Only after that, people look for help. Again, because of the ego. Some of them think of making the money they lost back. Some of the others really like trading and intend to dedicate a significant portion of their time to it. They view the initial loss as a lesson, to remember, to motivate. A mistake.
A quick look on the internet gives plenty of opportunities to start learning. An online trading academy typically refers to one market. If it is the currency market, traders have the chance to learn about the basics of forex trading or forex trading theories, among others. On the stock market, for instance, one can learn how to trade stocks for beginners, what is a buy-and-hold investment approach and the best risk management and market strategies to use.
Above all, regardless if it is a currency trading training or a stock market trading for beginners course, the most important step was made. The trader wants to learn and understands that he/she invests in the future.
Pros and Cons of Using an Online Trading Academy
An excellent financial trading academy costs money – lots of it. Any course offered is written or recorded by professionals, people that trade for a living or have done that in the last couple of years. They have experience and a lot to share.
The best day trading schools and courses offer a unique combination of theory and practice. Typically, wannabe traders participate in scheduled webinars where they can ask questions, see in practice how theoretical concepts apply, and so on.
A significant problem when following an online trading academy’s courses is lack of patience. People usually buy or enroll in a bunch of courses, which are meant to follow one after another. But rarely do they have the patience to go through the entire course. Instead, traders check the market and see an opportunity that looks suitable for a trade. Next thing you know, the trade ends up in a loss.
Trading is not only about direction. Indeed, the market direction is an important thing. It certainly helps to know that the market is prone to rise before you buy. Or, fall, before you sell. That alone doesn’t guarantee a positive outcome for a trade. The mindset matters a lot. Understanding what the market can give and what a trader can offer, is critical.
Risk management and overall money management strategies help too. There is virtually no guarantee that all trades will end up with a profit. Instead, robust risk management rules guarantee that the trading account survives. And, the trader is there to trade another day.
Following the courses of an online trading academy is a time-consuming process. Most wannabee traders have day jobs. If you add a family on top of that, there’s little or no time left to dedicate to trading education. The benefits, though, of enrolling in a forex trading university or any other online trading academy, far outweigh the drawdowns. If you want, it is mandatory that retail traders go through such a process.
Invest in a Private Mentoring Program – Is It Worth the Cost?
For this reason, many choose to try it on their own, to come up with a trading system that works and that’s it. But even for that, the time is limited, not to mention that the overall process is quite expensive, as we said earlier. If one doesn’t like how the online trading academy works, there’s always another option. Private mentoring.
A private mentoring trading course is an elevated method to learn to trade. Typically, it comes with one-on-one training, and its costs exceed the ones of a financial trading academy. A big chunk of the costs of a private mentoring program comes from the mentor. Not the program.
Typically, the mentor is a well-established trader that makes it day in and day out in the markets, and his/her experience is worth more than any courses combined. Unfortunately, good private mentoring courses are booked well in advance.
One good question people ask is why would someone with successful in trading would like to run a private mentoring program? There are plenty of reasons for it. The joy of teaching and passing experience to other people, the beauty of interacting with new minds, and expanding the trading knowledge. Last but not least, it keeps the mentor up-to-date and close to the markets all the time, helping with his trading too.
Moreover, at such a stage in life and trading, private mentors have a different time horizon for their trades. They most likely invest rather than scalp or swing trade. The number of trades taken in a week or month becomes irrelevant. What matters, though, is the quality of a trade, together with all the attributes that come with it: solid risk-reward ratios and a trading plan when things turn out for the worse.
Long-Term Investing vs. Short-Term Movements
Like most things in life, there isn’t a straight way of learning how to trade. Or, the best way. In fact, every trader needs to decide for him/herself what works best. Knowing your personality helps a great deal.
For instance, many people do not have enough patience. This turns out to be one of the worse obstacles to overcome when trading financial markets. Take the currency market as an example. Traders come to it as they see the quotations on the forex dashboard changing so fast and all they can think off is the profit to make. But that’s just an illusion. The numbers that do change aren’t pips, but merely the fifth digit in the market’s quotation. They’re irrelevant in the profitability of a trade.
Instead, even the FX market, known for its volatility, does range a lot. That’s especially true ahead of important economic events like central banks interest rate decisions and press conferences. Lack of patience leads to overtrading (to make up for the lack of market movement, traders open more positions than otherwise recommended), and overtrading leads to the account being wiped out.
An online trading academy has courses covering everything. From the benefits of long-term investing to the power of compounding, as well as he advantages and disadvantages of short-term trading (scalping). In the end, it is up to the trader to select and focus on what fits best with his/her trading style and personality.
Conclusion
This is not the first, nor the last article to treat the advantages or disadvantages of taking the courses of a financial trading academy. And, unless human nature changes, the decision-making process of taking such courses will remain the same.
People tend to try to make it on their own. Which, by no means, is a bad thing. Unfortunately, despite statistics and warnings, some end up losing a lot before realizing they need help. It is not a shame to want to learn, at any age. Just make sure that the typical pitfalls like time availability, funds to pay for an online trading academy, and willingness to make an effort are there.
Again, there’s no guarantee of making it after following a financial trading academy program. What is sure, is that the trader will end up with a better understanding of the complexities of trading financial markets.
Retail traders are only a small part of any market. In the case of the largest market in the world, foreign exchange, retail trading is responsible for only about six percent of the daily turnover. In other words, the market moves based on the other entities’ inputs. Corporates and central banks, brokerage houses and liquidity providers, institutional investors and family offices, money managers of all types, they account for the rest.
Therefore, unless the retail trader finds an edge to come on the same side of trading as the big guys do, he/she will have a big problem. And what better way to find everything one needs to know then signing up to an online trading academy that explains everything from the most basic to the most advanced concepts?
