This article is the result of a conversation I had with a trader whom I like and respect. He didn’t like Linda Bradford Raschke’s new training. Similar arguments often come up in conversations – “why is Linda training when she can make (more) money in the markets?” As it turns out, there are at least eight good reasons why good why traders should train others.
Reason #1 - good systems taught by professionals are very valuable.
Knowing that I am the author of a book containing interviews with great traders, many traders ask me to recommend some good system. These are both beginners and experienced traders who would like to learn something new.
The fastest way to learn a new system is to work under the guidance of an experienced trader who trades it all the time and can share his analysis and entries. This is an ideal situation and the fastest way for adults to acquire skills.
Independent work is usually a few years of struggling with relatively simple things. Sometimes it is several years. It’s more efficient and faster to pay someone who has it all figured out, has the system figured out, and can teach you something good. None of us learns physics, mathematics, biology on our own. Instead, one uses already prepared knowledge, tools and teachers.
Good systems are valuable, taught by experienced traders – precious. But, unfortunately, there are plenty of worthless systems on the market.
Reason two - as a trader, you understand the markets and your system better.
Teaching others also gives you a better understanding of your system. What makes up the market advantage gives you a better understanding of what makes the best entries different from the rest. It also enhances your understanding of market situations, technical, macro, fundamentals, and other factors. Finally, teaching others also improves your adaptation to market changes.
Over the years, I have told good traders to start training others if they want to get even better. And I have heard from virtually every one of them afterwards that it was an excellent idea. It developed them as traders. It gave a new perspective and helped eliminate weak points.
When training others, you have to answer many questions that your students will ask you. Often fundamental questions. Many of them will force you to re-think (and improve) your analysis and decision-making process.
You will not ask these questions yourself; they will never arise in your mind. So instead, it’s the students who will force you to have an even better, more profound understanding of what’s really behind your decisions.
These findings are very, very important.
What market factors do you pay attention to and why? In what order do you analyze them (and why in that order)? What does each of these factors do for you? For example, why do you join the market in some places and not enter in others despite the signal? And so on.
By explaining things (including basic things that you would never go back to on your own), you will take your understanding of the system to another level.
In turn, when you analyze your student’s inputs together – you have an additional perspective on what you would or would not do in a given situation. Thus, this process is yet another step in better understanding your approach to the markets.
When I interviewed a trading legend and great teacher, Joe Ross, I asked him what he learned from his students. His answer somewhat surprised me: – My students taught me what not to do in the markets.
By teaching others, you can better see changes in the markets and be better prepared for different courses of action.
Having devoted time to teaching others, traders often simplify their systems by focusing only on the best situations and entries. And this directly translates into concrete financial benefits.
“My students have taught me what not to do in the markets.” – Joe Ross
Full version of the article is available for you in New City Trader magazine (now free of charge):