Tools – not fools!

The tools referred to here are ‘physical’ things – as against ‘psychological’. This is about some of the stuff that could be of use in learning or live trading. The quality of your tools matters much to the quality of your learning. And of course it goes without much saying that if you don’t invest time in using the tools they will do nothing for you.

There are some new traders who will go, ‘I don’t need all that. I’ll just have a go and see what happens.’ I can tell them in advance what will happen with that approach: they’ll lose money repeatedly in big excess of a few wins – making serious overall losses. They’ll conclude, ‘It doesn’t work for me. I haven’t got the knack… it takes too much time.’ And as I’ve said before on this blog, it isn’t meant to work ‘for you’; you’re meant to make it work for you.

It’s quite possible to become overwhelmed with tools by having too many, so I don’t suggest that new traders take on all at once. I’ll try to prioritise them as best as I can below. Don’t take on all at once. And I’ll also suggest some ‘tools’ and  ‘fools’ to avoid.

Key list to go for:

1. Good computer and good internet connection: the whole business relies on internet access, so there is hardly a point compromising on the physical resources to access your trading account. For handheld devices, I’d recommend 3G or 4G with better than 10Mbit/s average connection. For desktop devices, better than 20 Mbit/s. You can check internet speed at www.speedtest.net. Now you don’t want any device that is sluggish or freezes up – so a good computer or handheld device is absolutely essential. Your devices should play sound and video well, because there are many good educational videos out there to learn new tricks from.  The larger your viewing screen the better. I’ve been using my 17-inch laptop for the last year. Recently I moved to a new 32-inch screen (and new desktop) – it makes a world of difference. So much more can be seen and appreciated.
2. Good broker: Go with the best!! Yes – every broker thinks they’re the best and you will see many a flashy advert online. Of the top brokers (from my experience), IG.com & Capital Spreads are most user friendly. In addition they offer good telephone access and friendly sound support. Yes – you can call them up and they will literally take their time (for free), to hold your hand and explain a few features about their trading platforms. After experimenting with some others, I’ve settled on IG.com as the overall best.
   • Amazingly IG offer £10 Million in free demo money on each of their free demo accounts. Visual layouts of charts etc are top notch – and their telephone response times are immediate. In almost all my telephone calls to them, I have met someone on the phone at IG, who was supportive and understood what we were talking about. One bad experience I had was after 18:00PM when their phone lines transfer to a base in China. No I didn’t get Chinese spoken to me over the phone – but the person though fully fluent in English (with little accent), didn’t have command of the finer nuances of English. IG is fully regulated by UK law – and all their stuff is fully transparent and available online.
   • EXANTE is also quite a good broker and platform but it is pretty high powered, and they cater mainly for clients with live starting accounts of >£10,000 (that’s what they told me over the phone). Their platform is also not as easy to use. But I’m with EXANTE on a demo account because they run some very good webinars which they post to their YouTube channel for later viewing.
3. Tradingview charts: These charts are about the best in the industry – used by all the top and new traders around the world. They do take much time to learn, like you might expect for most good tools. It’s totally free to join Tradingview, which allows you to save charts and do a lot of good stuff.  A yearly subscription is best for those who want fuller features , “Purchase an annual subscription to PRO Plus before your 30-day trial ends for only $199.80 and save 33% from regular price of $299.40.” [And to avoid suspicion or doubt as much as possible, I make no pecuniary or other advantage by giving any information in this post, or any other]. It’s best to sign up for the free package at the start, you may never need more than that for the first few months.
4. Timeleft: This is not even a trading instrument. It’s a thing that lives on a Windows operating system that reminds you what to check on. Basically you create notes to self and set it to pop-up those notes to on your screen at a certain time. You can even set it to nag you at certain intervals. There are several similar applications out there. For android based phones I use Life Reminders. Of course, one can used pen, paper and notebook but notebooks tend not to pop out of pockets on their own. They require your active memory, and that could well fail. I’ve learned from long experience, that if I don’t have some sort of alert system to check on ideas I had, that I will forget more times than not.  The outcome of that is that I lose track of what I was thinking – and I’m not just talking about trading-specific opportunities. I like Timeleft because I can set it to cause my simple Notepad (a simple text file on Windows), to pop up.
5. Screen-shot and screen-recording software: Most of these are free. I’d recommend Jing for starters.  I use Gadwin Printscreen Pro – which is paid-for software – as I find it the most flexible for my purposes, but from memory I think the non-pro version is free. Gadwin screenrecorder is useful for capturing some videos of some trading (or other situations) from your screen which you can upload to YouTube in one go (and then share with public or keep private). Check Jing further, which I suspect does the similar. [Update @ 2016-04-08: I’ve moved on to using Snagit for screenshots and Camtasia for video screen recordings with annotations. Both are at Techsmith.]
6. Diary: This is a physical thing even if it lives on a computer. I’d recommend a computerised diary. For those familiar with OneNote – this is easy and best. But a simple word processor can do the trick. Basically you use your screenshot software to capture images which you paste into your diary. You can then record your thoughts and learn from mistakes or good trades. You will not remember all your trading situations (demo or live), so it’s absolutely useful to reflect on where you went right, or wrong [but do avoid ‘confirmation bias’].

List of things to avoid:

1. Courses: I’ve said before that courses are not necessary. Still many new traders will spend on these, and then find out that they are really no better off. Had they knuckled down and accessed key free resources online they would have had the same and kept their money in their pockets. What’s the point of spending £1000 – 2000 and coming out no better. Most courses just give information, they do not give skill (or even experience). This site has links to some important key resources that are free on YouTube.
2. Fools: Yes – these are people out there, who will go “Sign up for my system and you’ll win – we guarantee 80% wins.” – they’ll then show you some charts and sums of money made. You’ll sign up for it  and discover that you’ve parted foolishly with your money and lost money trading their system. DON’T!! Just DON’T. You see these idiots on YouTube all the time. DON’T even think about listening to them – unless of course you wish to join some idiot bandwagon and waste your time and/or money. These fools play on other peoples ‘psychology’. They know that a small number of people will think, “Oh maybe I should give this a go. What if I make it big.” There are some of these idiots out there preying on other idiots, by selling trading signals. You don’t need this. Note that at this site we’re not selling anything – and we’re not saying that one system is better than another.
3. Signals: There are a whole bunch of scammers out there feeding of noobs and hopefuls, by offering signals. Some start off free of charge, others end up charging you and some will be paid services. New traders need to ask themselves a simple question, “If signals make for winners.. why don’t everybody just get on them and become millionaires in short time?” The only people who might become millionaires are those behind these signalling systems. DON’T! Just DON’T even think about signing up for signals. Did I try them? Yes. Did I pay for them? No. Do they work? No.
4. Social Media trading sites: There are loads of these out there and I won’t get into naming them. I’ve tried a few. There are some new and seasoned traders out there making some money and you can copy their trades – but are you gonna do that on a long term basis? I have noticed that many of the winners out there do not remain winners. Would you trust your own hard earned cash on some self-made celeb on a social media site who’s basically giving tips and signals? Not me.

Just to be clear – I’m not saying that all courses and systems are stupid. I’m basically saying that the number of good courses and systems out there are exceedingly small and that new traders are at a statistical disadvantage in picking the good ones. The above things are there to create hope and to waste your time. By taking up any of the above on a longer term basis, new traders risk becoming demoralised, not learning new skill or gaining rich experience. The outcome could well be that they just give up and go, ‘It doesn’t work for me.. tried it.. worn the T-shirt.. blah blah‘. Keep in mind that 90-odd percent of noobs give up and of the 10% or so who stick with it, only about 1-3% become really profitable. So – the chips are stacked against you from day one. Why do foolish things that will increase the chances of you flunking out? The choice is yours of course.

Key systems and people to follow:

1. Any site associated with Jason Stapleton and Akil Stokes e.g. www.tradeempowered.com Both of these guys have good YouTube channels with tons of free basic and advanced materials.
2. Simon Hunt: The Market Sniper
3. Chris Moody (usually found via Tradingview).
4. Alessio Rastani and Simon Shepherd at www.leadingtrader.com
5. Other sites flagged at this blog.

[All the above may run courses, but for beginners all the free resources they put out is much more than enough to get going and develop sound trading habits]