can I learn to trade stocks and currencies?
I joined a group of aspiring traders to see if I could be successful on the stock market.
There is a certain glamor to trading – making your own money without dealing with fund managers, or having to accept horrible rates on savings accounts.
Additionally, the industry has gained some exciting notoriety since the crash, and more recently the cryptocurrency hype.
So when I was offered to learn to trade in a company run by a trader barely older than me, I was never going to refuse it.
This is how I came to spend two days in Watford, as part of the Junior Trader Program run by Samuel & Co Trading, learn more about stocks and stocks, currency trading (Forex) and much more.
Here is what I learned about trading and about traders.
Needless to say, this isn’t financial advice to trust (read on and you’ll see why), but it’s for anyone who has ever tried, or just considered trying their hand at trading.
This article is one of a larger series on investing, covering everything from stocks to rental, peer-to-peer and alternative investments. Click here for the full guide.
Samuel & Cie
âIn two weeks you could have a fund of Â£ 60,000 available to you,â our instructor Atish Patel tells us.
Patel, like almost everyone in the Samuel & Co office, had completed the Junior Trader program. The program is relatively unique in that participants can get real money – up to Â£ 20,000 or more – to trade, as long as they are consistent in their trading.
The 10 participants ranged from an experienced Maltese financier to a pool lifeguard; almost all had tried to trade with real money or free “demo accounts” – make money – and all were men.
They hoped to learn how to trade stocks, stocks and currencies and eventually follow the example of founder Samuel Leach.
During his college years, Leach had managed to raise Â£ 250,000 through trading; he now drives an Audi R8 and heads a commercial group that extends to Madrid.
Leach sells a system – a system that is supposed to give participants the techniques necessary to generate consistent returns, and Leach gives them the initial capital to actually make money.
There are many seminars and websites offering financial freedom. To be fair to Samuel & Co, the first day was dedicated to challenging misconceptions.
My first misconception was about the office itself.
Contrary to what the The wolf of Wall Street or the Big short, I didn’t see any screaming in phones or slamming desks and, while the almost silent room of traders had four to six computer screens each, these were as likely to be on Facebook as the last newsletter. financial.
In fact, that’s part of the point, Patel, our instructor explained: Traders need to be emotionally detached from trading.
Essentially, it meant not relying on a successful business and it meant having other sources of income.
Patel owned a restaurant and urged attendees to diversify their money – premium bonds and gold were discussed, as well as investment trusts and algorithmic trading.
These traders could spend as little as 15 minutes a day looking at stock charts and the occasional glance at forex opportunities sitting in front of a screen was disheartened on the grounds that this could lead to risky overtrading or even failure. “revenge trading” (effectively chasing losses).
In fact, many traders would only make a few âentriesâ (buying or selling stocks or currencies) per day; they were retail traders and happy to remain so.
All about risk
Making a trade is all about calculating and managing risk.
Trading stocks and volatile forex markets can be a dangerous business – as Patel explained, “if you gamble you will only lose what you have invested”, but holding a losing trading position “might leave you behind. your broker chasing you for money â.
It uses a variety of methods to prevent this from happening, as always using a ‘stoploss’, where you automatically sell if the market moves too far against you, various investment criteria and caution when selecting brokers. (they must be authorized by the FCA).
âThere is no such thing as a winning trade,â Patel insisted: You need a risk management system and the ability to take a loss when the going gets tough.
It’s all in your head
Learning to take a loss is a matter of psychology, not just finance, and it was the psychological part of the Junior Traders course that was the most intriguing.
The five-day course includes two days with mental coach Adrian Leach, Samuel’s father, where participants’ mental weaknesses are discussed and addressed.
Traders suffer from a variety of issues, he told me, unsurprisingly including greed – which manifests itself in risky trades and holding positions for too long in the hope of unrealistic gains.
On the other end of the scale – myself included – are those who are terrified of loss, preventing them from making the transactions they need to make money.
Only after traders learn to deal with these issues, says Leach, can they achieve the consistency needed to make money over the long term.
Trade is difficult
As you might have guessed, I didn’t make it to the end of the course, and Samuel & Co didn’t drop thousands of pounds on me.
This was in part due to time constraints, but I cannot deny that I found the trading extremely difficult.
Search in a dense “candlestick table” (read more about it here) full of data, it’s hard enough to pick a good opportunity to buy or sell, even in hindsight.
Once you simulate a live trade – where you don’t know what’s going to happen – it does indeed get very tricky, as you can see by comparing my chart with the correct example below. The green arrows are where I should have entered a business.
Knowing the financial news and keeping a cool head didn’t stop me from making silly mistakes and while I would only have lost 1% of my pot each time, those losses would have kept coming.
However, other participants did not find it so difficult, and while there is a lot of math involved, the profusion of online calculators and other tools makes it easily manageable.
And although the course was packed with material, it was not particularly pressurized and on several occasions Patel was happy to take the advice of the participants in attendance.
What the other participants had that I didn’t have was a real passion for trading and experience trading on demo accounts, work experience in finance, or both.
I can certainly see the allure of trading and I wouldn’t mind playing on a demo account in the near future, but my dream of escaping from the office may have to wait.
If you want to learn to trade, Samuel & Co organizes a variety of courses, many of them online. You can also watch their instructional videos for free on YouTube. Or you can see more investment options in loveMONEY (venture capital) investment center.