“At the level I play, it becomes more psychological than mathematical”
Phil Ivey, arguably the World’s best poker player
It’s time to disrupt conventional trading education. Right now there are thousands of educational trading products to choose from that seem to focus on the mathematical side of trading, (teaching you Elliot Wave counts, 3:1 reward/risk ratio’s, Fibonacci numbers, or the endless amount of indicators and oscillators) yet most of them relatively skim over the psychological side of trading which they themselves will probably tell you is more important to long term trading success in the first place. Why do they do that? I believe the answer is simply because they have never had the right tool to teach with.
Educational Tool #1: The Demo Account Environment
My previous article, “3 Reasons Why Demo Trading is Killing You”, offers more detail, but to bottom-line it; Demo Accounts have no emotional component attached to it whatsoever, so how do you prepare for something you don’t understand?
Educational Tool #2: The Mini Account Environment
The “Mini Accounts – A Wolf in Sheep’s Clothing” article gives a few good examples on my thoughts of Mini Accounts, but basically Mini Accounts are slippery slopes that are tough to get right. Traders often have so little capital at risk that they don’t feel anything (similar to a demo), or they tend to pile mini lots up to a point where they are basically trading standard sizes anyway.
Alternative Tool: The TradingWheels Environment
(Full Disclosure I own this Intellectual Property)
What if, while you were learning how to trade, you had a choice of a trading environment where you feel like you are trading a standard live account, but you are actually in your demo account? In this type of environment you could learn any trading methodology you like while ALSO addressing your trading psyche at the same time. Wouldn’t you want to be able to adequately practice both the technical and psychological side of trading before risking too much of your capital? Let me explain.
(By the way, I don’t like getting sold things either so let’s address this now – I want TradingWheels to be a seamless experience and completely FREE for any trader. No spread markup, no commissions, no monthly fee, nothing. Just an alternative to the the conventional demo and mini account.)
Simple TradingWheels explanation: At its core, TradingWheels is just a randomizer built with your existing trading software (like MetaTrader 4, NinjaTrader, or eSignal) between your live and demo accounts, where you would have a 5% chance of logging into your live account and a 95% chance you’d log into your demo account. (Notice the trades themselves are not randomized, only you logging into your live or demo account). So when you login to trade, you do not know if you are trading your live or demo funds. This forces you to treat each and every trading decision you make as if you have live funds on the line (even when there is only a 5% chance) – something demo accounts cannot do, and mini accounts struggle with.
There is much more explanation of this on the TradingWheels site, as these articles are just to get the conversation started. Hopefully brokers and software firms will build TradingWheels into their existing platforms, and educators will embrace its strengths to enhance their current education, so you can be the best trader you’ve never known.