Teach trading at School.

[grantx]

DaveJB,

23 years RAF. Respect. I've got my poppy.

Transferring your skills from the RAF to teaching – napalming as an alternative to detention – may not go down too well with the more liberal-minded parents

Regarding the difficulty of teaching trading, I would suggest it’s because trading per se lacks a theoretical basis and coherence. How often does one hear that a top trader can show another how to trade but success is far from assured? All one can teach are basic principles of supply and demand in markets, and the underlying economics of markets, ie the principle drivers.

Those who can’t teach become management consultants.

Grant.

 

[Hook Shot]

Gambling.....

Talking about trading in the same breath as gambling is an easy way to attack trading, there's no need for it. Ask anyone who has had their home repossessed in the last 12 months about gambling, bookmakers are always a real easy option for someone with a bit of a wild gambling streak, people are always gambling in some way, shape or form.

So are we saying trading is not a gamble (albeit a calculated one) or not ? Do we know we are going to make money from each trade we place or is the outcome uncertain ?

Then there are those stats about the number of people who start new "ventures" who fail within x period of time... Many good traders had to pay a heavy price (Losses) to get as good as they are ...why should it be any different for the youngsters ? Of course there will be exceptions but .......... I think we should be wary ..........just as any father would be about giving his young son the keys to his flash sports car - just because he's past his test. Maybe I'm alone on this one.... but hey

There is fast money in trading.... and that's my worry. As a total novice I remember making £500 from my first ftse trade within 3hrs..... not the earth I know but shortly after that it was over £1000 from one of the wild last hour rallies in the dow which we used to get ..... stuff like that can radically change your outlook.....and who knows where it might lead them...

However, I do agree that it is easy to lump trading with other forms of gambling.... which can be annoying ...

 

[Paul71]

Sorry for the slight delay,
I only pop in now and then...


Does it stand you in good stead? As a subject that requires data handling and numerical skills, and a touch of logic I'd say that it probably doesn't hurt - but I doubt it helps particularly. I doubt very much if trading success and intelligence are linked, by the way.

Why do I teach it? It's the study of how the Universe works, which makes it 99.9%fascinating... unfortunately many educational systems dictate which bits of the fascinating whole are to be taught, it seems common to pick the boring bits. (The other 0.1%). I suspect commitees are involved, probably involving zombies.

Easy route - yep, I just dropped straight into it following my 23 year RAF career. I had 10 years left to retirement, and put my 18 months notice in - a young family etc meant I had to earn a crust still (my RAF crust was quite a decent one), but I had a strong desire to do something more constructive...old age setting in perhaps, I wanted to be able to say I had contributed something and I thought educating kids was a good way to do that. My previous career helps provide some 'real life balance' that young 'straight in' teachers can't provide, they bring other gifts instead - like they can bend easily, and don't need a crash cart after running 50 metres.

To complete the story, and avoid any more guessing -
I am quite popular with the majority of pupils, they like my bad jokes and non_PC view of life...I'm quite well rated on ratemyteacher.
Thanks in no small part to the skills I acquired in the RAF I didn't dip in pay for very long, I'm the dept head, so my boss quite likes me too.
My department's record in national exams at all levels is very good, and has been for a few years now.

Newly qualified teachers aren't a bad thing - they are often very keen and willing to work very very hard, there are good and poor teachers at all levels/ages. When I took the department over I had two recently trained colleagues on my team - the exam results would not have been as good as they have been without their willing support and enthusiasm.

The saying 'those who can do, those who can't teach' is a complete load of bo*****s, often promulgated by those who can do neither.
(Excuse me for fence sitting on that one).
I have read a lot of trading material over recent years, I would endorse the opinion that many good traders couldn't teach trading courses - they know what they are doing, but many seem to experience extreme difficulty getting their ideas across with clarity. Some teachers do too I guess.

Ex RAF, Dave. I'm a parent myself i have two lads, and i have thought about their future (like you do ) , I personally believe that the RAF is an excellent career choice and i would be pleased for my two if this was to be a career of their choice.

Getting back to the Scots....

I did 3 years in the Scots Guards, so it may seem ironic that i was insulting them at the start of this thread. Blame the forces for my somewhat twisted sense of humour. I enjoyed my three years, but the RAF would have been the better choice for myself. Enjoy the teaching, Dave.

Regards,

 

[Paul71]

So are we saying trading is not a gamble (albeit a calculated one) or not ? Do we know we are going to make money from each trade we place or is the outcome uncertain ?

Then there are those stats about the number of people who start new "ventures" who fail within x period of time... Many good traders had to pay a heavy price (Losses) to get as good as they are ...why should it be any different for the youngsters ? Of course there will be exceptions but .......... I think we should be wary ..........just as any father would be about giving his young son the keys to his flash sports car - just because he's past his test. Maybe I'm alone on this one.... but hey

There is fast money in trading.... and that's my worry. As a total novice I remember making £500 from my first ftse trade within 3hrs..... not the earth I know but shortly after that it was over £1000 from one of the wild last hour rallies in the dow which we used to get ..... stuff like that can radically change your outlook.....and who knows where it might lead them...

However, I do agree that it is easy to lump trading with other forms of gambling.... which can be annoying ...

Morning, HS.

This is an old argument about trading and the markets, but, the loss of one trade which may be 1% or less of a persons account does not make trading a 'crazy gamble'. In any type of business there is room for error, error is factored into nearly everything in life. Why should the 'error' that is factored into trading be viewed as 'crazy gambling'.


People have to learn and they have to be careful about whatever they choose to do with thier lives.

 

[Rhody Trader]

Regarding the difficulty of teaching trading, I would suggest it’s because trading per se lacks a theoretical basis and coherence. How often does one hear that a top trader can show another how to trade but success is far from assured? All one can teach are basic principles of supply and demand in markets, and the underlying economics of markets, ie the principle drivers.

But trading DOES have a theoretical basis. It is explored in collegiate finance programs, if one focuses on financial markets and not corporate finance. I'm not saying, of course, that someone with that kind of training walks out of school with a comprehensive understanding of trading, as they don't. In fact, from what I've seen the main focus is more on the institutional/portfolio level rather than the individual. But one does still come away with an understanding of the market structure and the theories of price movement (supply/demand).

Let's face it. A school education in just about any field is nowhere near enough for true competence, never mind excellence. That takes experience on the part of the individual.

I think the biggest mistake that gets made in regards to trading is thinking that it's somehow very different than other pursuits. It really isn't.

 

[counter_violent]

Question for anyone.

So, if a trading teacher lecturer was asked to set a course...what elements would you include and why...what general headings...what sub headings...what research...books etc etc...and from a practicle point of view...what experiences would be worth course time.

cv

 

[Tawe Trader]

I think the biggest mistake that gets made in regards to trading is thinking that it's somehow very different than other pursuits. It really isn't.

I believe it is different, doesn't trading require a high level of fortitude where you are risking your own hard-earned cash on each trade, where there are no guarantee's of the outcome ?

Fortitude/courage/mental strength is not something that can be taught from a textbook, though it can be developed, through experience. ie starting with small stakes and building up your risk tolerance.

You could be teaching the brightest, most attentive, highly disciplined pupil in the school but if they haven't got the courage to carry out the trades then it's a non-starter.

 

[DaveJB]

I seem to find myself nodding agreement with Rhody quite a lot...
You can break just about any activity down, I reckon, into recognisable lumps. The big problem in teaching successful trading (imo) would be persuading pupils to remove emotional involvement from the trading process.

The mechanics of trading you could teach, and it wouldn't really require a successful trader to tutor.... turning the ability to trade into the ability to trade successfully is the hard part. I suspect you have to have the right tutor-pupil pairing for that to occur, so the 'mechanics' side could go into the classroom if that was judged a good thing, but I don't see the 'success' part of it being a practical expectation.

(Be an interesting final exam, wouldn't you say - 'This exam lasts 2 hr 30 mins, here's £50, if you've turned it into £100 before the bell goes you've passed).

 

[Rhody Trader]

So, if a trading teacher lecturer was asked to set a course...what elements would you include and why...what general headings...what sub headings...what research...books etc etc...and from a practicle point of view...what experiences would be worth course time.

Having already gone through this process in terms of a traditional semester timeframe:

The Basics
- Trade Mechanics
- Order Types
- Structure of Markets and Instruments
- Managing Positions (P&L, etc.)

Price Action & Influences
- Influences on price
- How prices move

Building a Trading Plan
- Personal Assessment
- Journals

Risk & Money Management
- Definitions
- Trade Basis (hedging, stops, etc.)
- Portfolio/Account Basis (correlations, VAR, etc.)

Market Analysis
- Fundamentals
- Technicals
- Quantitative

System Design & Testing
- Entry & Exit Rules
- Performance Metrics
- Types of Systems

Along the way there are definite ways to make the whole process interactive and experience based. Obviously, in an area like the Market Analysis one you're talking a survey approach as that material could be multiple courses unto itself. Elements of classic financial theory (Efficient Markets, Modern Portfolio Theory, etc.) should be discussed as well.

The overall idea is to provide a foundation for further exploration. No course is going to turn out a master trader, but one can definitely lay the groundwork.

 

[Rhody Trader]

I believe it is different, doesn't trading require a high level of fortitude where you are risking your own hard-earned cash on each trade, where there are no guarantee's of the outcome ?

I would suggest that any meaningful field of pursuit requires such.

You have to keep in mind that cash in trading is just a measuring stick. Wins in sports are another. Test scores are a third. We could rattle off loads of them. Any time one is in pursuit of some objective - monetary or otherwise - fortitude is required.

 

[Rhody Trader]

(Be an interesting final exam, wouldn't you say - 'This exam lasts 2 hr 30 mins, here's £50, if you've turned it into £100 before the bell goes you've passed).

Of course we couldn't test people in that way, if for no other reason because market conditions are an uncontrollable external factor (unless you use a simulator, that is). You could, however, test folks on their knowledge of trading and the markets, their ability to construct a well thoughtout plan, and the ability to trade well (meaning sticking to that well thoughtout plan). I submit that you're probably talking about final project rather than a sit-down exam, though.

 

[Tawe Trader]

(Be an interesting final exam, wouldn't you say - 'This exam lasts 2 hr 30 mins, here's £50, if you've turned it into £100 before the bell goes you've passed).

But another pupil may have carried out 3 trades, adhered to the trading plan he's been taught and still lost money........who's to say he shouldn't pass also ?

 

[Tawe Trader]

Sorry Rhody to overlap on your reply - my typing is a bit slow.

Darren

 

[Paul71]

But another pupil may have carried out 3 trades, adhered to the trading plan he's been taught and still lost money........who's to say he shouldn't pass also ?

Why would the person have 3 losing trades? What kind of trading plan could allow for three losing trades in one session. If a pupil can clearly and accurately define/identify a markets parameters on various time frames including daily/intraday then 3 trades resulting in a loss should not be happening. PA defined clearly within S/R and varified with volume should not give 3 consecutive negative trades, this would purely be down to the individuals psychology, or lack of understanding, and nothing to do with a person not being able to cope with the market structure.

 

[Rhody Trader]

Why would the person have 3 losing trades? What kind of trading plan could allow for three losing trades in one session. If a pupil can clearly and accurately define/identify a markets parameters on various time frames including daily/intraday then 3 trades resulting in a loss should not be happening. PA defined clearly within S/R and varified with volume should not give 3 consecutive negative trades, this would purely be down to the individuals psychology, or lack of understanding, and nothing to do with a person not being able to cope with the market structure.

You're making an assumption that the trader in question has a high win % with their system, making strings of losing trades improbable. Not everyone is in that position, but it doesn't mean their results can't be just as good, if not better.

Consider a system with a 50% win rate. It actually has very good odds of having three losers in a row over any sufficiently large number of trades. If the average winner is worth 10 and the average loser only 1, though, it will come out way ahead in the long run.

 

[Paul71]

You're making an assumption that the trader in question has a high win % with their system, making strings of losing trades improbable. Not everyone is in that position, but it doesn't mean their results can't be just as good, if not better.

Consider a system with a 50% win rate. It actually has very good odds of having three losers in a row over any sufficiently large number of trades. If the average winner is worth 10 and the average loser only 1, though, it will come out way ahead in the long run.

What you are saying is quite true Rhody, but it smacks of inefficiency on the traders behalf, and seems to rely more on percentages and ratios rather than accuracy and understanding.

Regards,

 

[Rhody Trader]

What you are saying is quite true Rhody, but it smacks of inefficiency on the traders behalf, and seems to rely more on percentages and ratios rather than accuracy and understanding.

Inefficiency? Maybe it speaks rather of maximum efficiency. A lot of folks seem to be very happy with the idea of 3:1 win/loss ratios. The system performance I've described is 10:1. This is all hypothetical, of course, but the point I'm getting at is you can be extremely efficient using a system which has a low percentage of winning trades, just as you can be extremely inefficient with a system which has a very high percentage of winning trades. An inefficient system will produce inefficient results regardless of the efficiency of the trader, while an inefficient trader can make even the most efficient system produce inefficient results.

In the end, it really all comes down to trade expectency and how frequently you can apply your system: Expectency x Trades = Profit.

 

[Paul71]

Inefficiency? Maybe it speaks rather of maximum efficiency. A lot of folks seem to be very happy with the idea of 3:1 win/loss ratios. The system performance I've described is 10:1. This is all hypothetical, of course, but the point I'm getting at is you can be extremely efficient using a system which has a low percentage of winning trades, just as you can be extremely inefficient with a system which has a very high percentage of winning trades. An inefficient system will produce inefficient results regardless of the efficiency of the trader, while an inefficient trader can make even the most efficient system produce inefficient results.

In the end, it really all comes down to trade expectency and how frequently you can apply your system: Expectency x Trades = Profit.

Curve fitting is not accuracy, and new traders should not go down the messy road of curve fitting messy ratios and percentages, it's not good for the mind and certainly breeds an inaccurate approach to identifying exit and entry points.

Good theory and hypothesis does not always make for a good practical approach.

 

[Rhody Trader]

Curve fitting is not accuracy, and new traders should not go down the messy road of curve fitting messy ratios and percentages, it's not good for the mind and certainly breeds an inaccurate approach to identifying exit and entry points.

Good theory and hypothesis does not always make for a good practical approach.

Who said anything about curve fitting? For that matter, who said anything about accuracy? Certainly not me. My point was simply that a high win % is not necessarily an indication of more efficient trading, as you seemed to have suggested in your previous post.

 

[darktone]

What kind of trading plan could allow for three losing trades in one session

Maybe one that enters at limit S/R for a scratch! Perhaps!! But im sure your way is so much better!

Paul71. In case you truly dont know! Your attitude sucks!