Trading College Blog
We recently launched a brand new blog for our members, students, non-members, browsers!
Come back each week to read articles about trading, markets, top tips, education, Trading College news and our sought after Trader of The Month feature!
Our first “Trader of the Month” for 2017 is Colin Jones.
After spending a year or so practicing on dummy accounts and educating himself on trading strategies, Colin was ready for the real thing. He attended a 2-day introductory Trading College course and enjoyed it so much that he decided to sign up for the Mentorship programme. He asked Lee what he should do in the interim, before the mentorship programme started.
“I remember that conversation so clearly,” Colin tells us. “Lee told me to do nothing, but I went against his advice. I opened a real trading account, started trading and within a couple of months had lost about 75% of what I’d put in. At that point I decided to cut my losses. I closed the account and waited patiently to start my training with Lee.”
Colin soon discovered that this experience was to become familiar.
“Everything Lee told us to do felt like the opposite of what I instinctively wanted to do. I had to learn to make choices based on the strategy I was using rather than my emotions and instincts. This was a hard adjustment to make, and took a lot of discipline, but once I got it, I started to make real money.”
A few months into his mentorship programme, Colin felt that he’d really turned a corner and was making good trading choices. He was doing so well that he decided to take six weeks off his day job as a London black cab driver and devote himself 100% to trading.
“That six weeks showed me how passionate I was, not just about trading, but about being part of a trading community, which is what Trading College has given me. I really appreciate getting tips and advice from more experienced members of the online community, and I like being able to help newer members.”
Even now, when he sees a good trade set up but hasn’t got time to place a trade himself because of the demands of his day job, Colin will post it on the Trading College forum in the hope that someone might take it. Although there is a certain amount of flexibility driving a black cab, Colin says he can end up working 60-70 hours a week.
“There’s always work if you want it, so it’s hard not to keep going, earning more and more, especially if you’ve got a young family to support, as I do. The flip side being, you never see the family.” With trading, Colin knows that he can do it whenever and wherever he wants, allowing him far more time to spend watching his children grow up.
Colin’s ambition is to become a full-time trader
To have a sizeable account that makes him enough money to provide a comfortable life for his family. But, thanks to his Trading College experience, he’s also become passionate about the teaching side of trading and is going to take his STA (Society of Technical Analysis) qualification so he can start coaching.
“I wouldn’t have come so far as a trader or got involved on the coaching side, which I’m so passionate about, if it wasn’t for Trading College,” Colin explains. “I’m so grateful to all the members and staff there for helping me start to turn my dreams into reality.”
How was 2016 for you? The world certainly looks a very different place today than it did at the beginning of this year. The UK is poised to leave the EU and the US is reeling from one of its most controversial elections ever. But some things stay the same. No matter what happens, the days go by and the seasons change.
The same could be said about the trading world. Technology moves at a breakneck speed, there are new algorithms, robots and scanning software being developed all the time. But it is still real people who trade, and human beings will always be emotional creatures, driven by fear, excitement, greed and frustration. Yes, new “algos” can destabilise the markets by firing off automatically at any time of day or night, but then traders respond and create even bigger waves, so the markets will always be unpredictable and vulnerable.
We asked Lee Sandford how 2016 has treated him and what his goals for 2017 look like.
“2016 has been another good, solid trading year for me. This is a theme in my life. As a footballer, I had a good, solid career! I’ve actually had my best trading year to date, and yet I’ve also enjoyed the most time off, had the most holidays with my family. That’s because I have a good, solid trading plan. Your trading plan doesn’t need to be long and complicated, it just needs to have the four fundamental key elements and be right for you.”
If you feel your trading plan is working for you, Lee advises, then stick to it. If not, make some changes before the New Year. The key elements your trading plan should include are: time, strategy, scanning and execution.
You must trade regularly, at the same time every day. You can set the hours that will work for you, but then stick to them. When you are first learning how to trade, it’s time intensive, but once you know what you are doing, it shouldn’t take up too much time at all. You have the flexibility of deciding when you fit your trading into your busy life. Successful trading is all about disciplined time management, not spending more time doing it. Don’t over trade.
You don’t need to know any complicated strategies in order to be successful; the simplest strategies work just fine. But you need to ensure that you are following the ones you pick and not deviating from them.
Once you have picked your strategies, you must set your computer to scan for all the trades that match those strategies. The technology is there, you just need to use it. It’s never been easier to find trades; the technology we have now is incredible. It allows you to spend far less time behind the wheel... the trading wheel that is; the idea being that trading gives you far more time behind the wheel of whatever vehicle or project you are passionate about!
No matter how much technology you have, and how much planning you do, in the end you will never make money unless you actually take action and place those trades. You can’t look at all the trades you’ve found thinking, “Should I?” You have to push the button and take the trade without hesitation.
“My goal for 2017 is to keep doing the same,” says Lee. “My trading plan is working so I’m not going to change it.”
Your trading plan needs clear, firm rules that you know you can stick to. Don’t let the instability of the world change your trading plan if it’s working, but don’t be afraid to make a new one if you’re not getting the results you want.
We’d like to wish everyone a very Merry Christmas and Happy New Year from all of us at Trading College. We hope 2017 is your best trading year yet. Don’t forget, we’re always here to support you and help make it happen!
What we traders ideally want is volatility. We need movement in the markets in order to make money. As long as we are trading in the right direction, we will make money whether the market goes up or down. And we make the most money when there is the greatest movement, i.e. in a highly volatile market. Unfortunately, it is often a tragic event, such as a terrorist attack or a natural disaster, which causes high volatility. So how do we live with ourselves knowing that we have made money when so many have suffered, when we make money as a result of an adverse situation? In fact, how do we ensure our trades do not affect the world in any negative way and trade with integrity?
Firstly, you must remember that, in most cases, your trading will never have any significant affect on the markets. We are just retail traders. The only traders able to manipulate the markets, who can trade with enough money to move a market, are the big bankers, as was shown during the 2008 crash. Your trading doesn’t have any significant affect on the world unless you invest directly in a company by buying shares. If you invest in an arms manufacturing company, your money is supporting the production of weapons for conflict; if you don’t want to do that, don’t invest in that company. Or you could put your money into companies that test products on animals, which might not sit well with you. You have enough choices, as a trader, to keep your conscience clear.
If you really want to make sure your money doesn’t go towards supporting a company that might be conducting practices that you find unethical (without having to check up on everything they are doing) then stick to trading currencies. When you trade currencies, you are not directly supporting any company. Ostensibly, the same goes for commodities. When you trade crude oil, your trade is not going to make a direct difference to the amount of oil produced. The oil companies are going to keep drilling for oil and people will keep buying it. You can choose whether to make money from the fluctuations in the prices they pay or not.
You can never predict the future so it’s not as if you ever purposely went out of your way to make a profit out of a tragedy. Is it ethical to buy shares in a construction company after a major hurricane? Well, if something bad has happened, something good might as well come out of it. The local construction company money makes more money and so do you. You then have the choice to spend that money in an ethical way. Many traders, including Lee, made huge profits because they were in short positions when the 2007 London bombings caused a massive dip in the markets. A situation like this will always feel uncomfortable, but you have to remember that nothing you did caused the tragedy, and keep your focus on what the money you made can do... it might mean the difference between your child getting music lessons or not, which is ultimately a positive thing. Your trading probably won’t change the world, but your world might change from your trading.
In the end, it’s all about perspective. You have to keep looking at the big picture. If you happen to be in a short trade when there is a big terrorist attack and you make a big profit, you know that you being in that trade had nothing to do with the actions of those terrorists, that you wouldn’t have stopped the attack by not being in that trade, and that you making money is in no way causing any additional harm or grief to anyone who suffered as a result of the attack. Nothing you have done has caused anything negative to happen. However, the money you have made might make a big positive difference to the lives of those around you. If you can get something good to come out of something bad, that’s something to feel okay about.
Our “Trader of the Month” for December is Paul Whenham. Paul first contacted Trading College two years ago. Having worked in the construction industry all his life, he had risen through the ranks to hold a senior position with a great deal of authority. But when he got there he found he wasn’t happy. He was working in civil engineering in the railway sector and the hours were long and antisocial (he often started work at 4.30am and didn’t get home until after 10pm). He also found he didn’t enjoy carrying the huge amount of responsibility put on him. “It was a shock to get to where I thought I wanted to be in life, to the top of my chosen profession, and discover I didn’t like it,” he told us. “I felt lonely and isolated. I missed the banter with the lads I used to work with before I got such a senior position. I just got the gut feeling it wasn’t for me. Eventually I took a step down from Project Manager to Supervisor, but I still wasn’t 100% happy.”
Paul started looking for ways to make a second income that could eventually become a main income. When he came across Trading College he says he was struck by how approachable and transparent it seemed compared with other companies he’d researched. He signed up for his first course and gradually moved up to the mentorship programme. Paul immediately impressed Lee with his commitment and discipline. “He sent me his trading plans with detailed charts explaining the trade strategy examples,” says Lee. “I think that’s why he got excellent results from the start.”
When we asked Paul what motivates him he explained, “For me, it’s never been all about the money, it’s primarily about the freedom. I’ve got three wonderful grandchildren and I want to watch them grow up. Trading offers me the ability to do that. The prospect of making a living by trading an hour a day instead of spending all my time at work with the odd day off on a rainy Tuesday, is what drives me.” Paul says he loves trading “with a passion” and that the secret to his success is in doing exactly as he’s told. He believes people only really fail when they try to interpret what they’re taught and put their own spin on things. “At Trading College they give you all the tools you need, and offer full-time support,” he says. “The rest is up to you. If you stick to what you’re told, you’ve got a good chance of being successful. It’s not rocket science.” Mirroring Lee’s motto, Paul says, “Believe me, if I can do it, anyone can do it.”
A few months ago, Paul handed in his notice. He leaves his job next week and begins a new chapter in life as a full-time trader! We wish him every success and look forward to watching his continued progress.
One of the first questions that people generally ask when considering trading is, “Why do it?” Trading involves a lot of risk with no guarantees, so it’s definitely not for everyone. When we talk to our traders about why they chose to pursue the trading path, these are the top five answers they usually give:
1. Freedom from the rat race
Some people like the structure of a “nine-to-five” environment and the security of a monthly pay cheque. For that, many people are willing to sacrifice their freedom. For others, working for someone else, plus the daily commute and rigid working hours, is too high a price to pay. The possibility of financial freedom gives them all the incentive they need to choose trading.
2. Work-life balance
Many people pursue the trading path to get a better work-life balance. For them, the idea of being able to make enough money to live on by spending just an hour a day trading is highly attractive, as it offers them the opportunity to spend the rest of their time with their family, or pursuing interests that thoroughly fulfil them. As long as you have an Internet connection and a computer, tablet or smart phone, you can trade from anywhere in the world. People who love to travel love to trade to finance their goals.
3. UK Tax-Free Profits
Many traders cite the opportunity to make tax-free* earnings as their greatest incentive. Even though trading is most definitely not gambling (it is betting with calculated risk management), when you trade using spread betting your profits are considered “winnings” and are thus tax free*.
4. Life Skills
Trading skills are skills for life. Once you’ve learnt how to trade, you can do it whenever and wherever you want. Yes, you always have to work on your discipline, and maybe you’ll want to try out new strategies from time to time, but the core techniques will never change.
5. You can do it
Our favourite reason people give for taking up trading is directly in line with Lee’s motto, “If I can do it, anyone can do it.” Many people tell us that they were attracted to trading precisely because they did not need any academic qualifications to do it. All they needed was the money to pay for their education and to open a trading account, and then it was all up to them. This empowers people who have previously felt like they can’t catch a break in life.
Do these reasons match yours? Are there any other specific reasons you’d give for why you decided to trade that we haven’t covered here? Let us know. We’d love to hear your comments.