Consider this post an invitation to a dialog. Feel free to use the comments section to share thoughts and ideas.
I have been thinking for some time about creating an introductory course for The Art and Science of Technical Analysis. As a I said in an earlier post, early on I abandoned the effort to write a book that would connect to beginners and instead chose to write a book that examined concepts in considerable depth. I feel I was successful in that venture; you’ll find information in the book you’ve never seen before. However, I have now created a problem in that the book may be unapproachable for traders at certain stages of their development. Other traders may have so many misconceptions and be so beaten up by losing quarters or years that they may find it difficult to hit “reset” and start anew. If you are pleased with your trading results and are a consistently profitable trader, then I am confident you will still find some new ideas and directions that you can incorporate in your work. (This has been confirmed by a number of experienced traders who read early drafts and found ideas for trading edges they had not thought of in the past. There is even a very simple idea that professional portfolio managers should find offers value literally hundreds of times larger than the book’s cost.) If you are not yet where you want to be in terms of consistency or profitability, ideally I want you to see my work with “beginner’s eyes” and leave all of your preconceptions and past experiences behind. This is much easier said than done.
The obvious solution was to create another work, whether a short book or a training course, to connect to those traders: to teach the beginning trader the basics of trading and to take the experienced but struggling trader back to the starting line and point them in the correct direction. I intend to create a lot of high quality content–actually, I’ll just be bold and say that I intend to create something that is as good or better than the existing training courses out there. In terms of pricing, my initial thought was to make it fairly low-cost and/or offer some kind of substantial rebate at some point. After long discussion on the pricing issue I have decided to take a radical step — it’s going to be free and available through this blog.
Now, this creates some problems. For the reader, things are often worth what you pay for them, so I know that making this material available at no cost will, to some people, lessen the value of it. I’m fine with that because I’m confident of the value. (Pearls before swine, and all that…) From my end, I recognize that it may be difficult to commit to building a body of work for no compensation, but this is essentially what any blogger does. The only difference is that this will be focused and structured a little bit differently. There’s also no hidden upsell, but I would hope that someone who finds value in the free course would realize that the book is the logical continuation and expansion of the ideas in the course.
With the pricing question settled, I next moved on to the format question, and settled on a combination of written materials and video. (There may be a set of charts and illustrations, but they may also be baked into the videos to save some time on the production side.) I’m not sure the scope of the course, as I will honestly have to assess my availability and time commitment as the project matures, but, as a ballpark estimate, assume probably 15 hours of video and accompanying written material.
I have very specific ideas as to structure and content of the course, but here is where I would like your input: what would you like to see covered in a course like this? What do you think is inadequately addressed in the existing material? I ask because I got some good insight when I did the same thing for the book; comments from the community and my early readers had a substantial impact on the finished work. In this case, I feel like I have a pretty good vision of where this course needs to begin and where it needs to end, so I may well ignore much of the advice. However, there are probably ideas that I’m missing, so let me open the floor for discussion.
This is a noble idea and I will be interested> Let us know the next step and I will suggest you make the training free initially to generate enough interest < initial trial should generate enough interest for you to start a subscription service
hi Sly,
It will be free… and it’s not an intent to upsell to a paid service or subscription service. The only “upsell” is that, if you find the course useful, the book is a logical continuation and will go into many of the ideas in much more depth.
I certainly see why this might look like a lead in to a subscription service, but that really isn’t my plan. I guess I’d reserve the right to modify the plan somewhere down the road, but at this point I’m just looking at this as more of a public service than anything else.
“…What would you like to see covered in a course like this?…”
A: More sector analysis as it relates to the quest of keying that study to given stock vehicles within the respective sectors. I find your sector/money flow analysis to be most notable. Yours is intermediate/long term….perhaps it has to be IT/LT to have any relevance. However, any study/tools for short term assessment of the key sectors/money flow would be of noteworthy value to numerous kinds of intrady/swing trading approaches.
I’m not sure if it is possible to glean accurate money flow/sector information in the short term so that it is purposeful. But if it is, that would be very good and fertile stuff to cultivate….as part of this course.
I very much appreciate the tenor of your work.
Press on.
Evans Bush
Principal
Evans M Bush Interests
You raise two issues here: the first is the sector flows and I already had a section planned on relative value trades/analyses. The other issue is short-term timeframes and that is another issue we will spend some time on.
Adam-
They say timing is everything! I’m looking to try to improve my game and her you are looking to write another book!!
I’m a veteran sales trader trying to morph into a full time prop trader, and I need all the help I can get!!!! I’ve learned 30 years of bad habits, that will be hard to break, and I’m trying like hell to rewire my brain. Last week I signed up for T3’s three month Active Trader Course and last night signed up for SMB’s Radar screen. G Man sent me an email this afternoon with three videos you made on using the Radar Screen and that’s how I found out about you. And just now stumbled across the fact that you want to start training! Adam, I’m all ears!
My thoughts for a novice program, would be to address consistency first. If a trader can find simple daily consistency, then confidence grows. Beginning traders need both before one can progress to any futher out along the skill line. Also focusing on overcoming bad habits of people who’ve been trading for some time without being able to find profitability would be helpful.
I don’t think the specific trading vehicle is as important as screen time, but without a slightly positive strategy, people get discouraged before long.
Let read some more of your posts and videos and perhaps I can come up with some specific suggestions.
Regards,
Gordon
Hi Gordon,
Chances are, as a sales trader, you actually don’t have that many bad habits to correct. You do have a deeper understanding of how the market works in some specific ways than most people, but you also need to understand (I’m sure you do) that this doesnt actually translate into a trading edge.
Your points are good here re: consistency and overcoming bad habits. Already on the list! 🙂
I hope you enjoy the radar and find it useful. Joe Palau (another trader) and I actually created the radar, so I’m intimately familiar with the screens and concepts. For intraday traders, it is a great tool and is honestly quite a bit better than most other scanners/screens out there. (There are more than three videos, make sure you get the rest.)
You are undertaking a challenge. My perception is that the greatest hurdle for all beginning traders is to unhinge their trading decisions from their basic emotionally driven instincts. Training to do that would employ some kind of psychological method that works. I think that was Dr. Brett Steenbarger’s real strength – what he called Brief Therapy. I suspect if one were trading with him beside, one would hear emotionally jarring comments with the intent to break trough.
yes… though i also think experience and desensitization play an important role… certainly will be a focus
Hi Adam,
I first wanted to point out that your desire in undertaking such a commitment is very noble of you. Your actions will be rewarded by good karma, few professionals these days come out of their way to help struggling traders for free.
Personally, I would love to see more literature on volatility. I have been a trader for a couple of years and its rare to find anything on the topic and as you once pointed out, its importance is underestimated by trading professionals.
It would also be very interesting to see how you incorporate valuation techniques into trading, how does DCF and valuation techniques add value to your trading decisions? I know these techniques from my MSc in Finance in which I almost never incorporate in my trading.
Other than these two, it would be great if you included literature on rarely addressed matters by bloggers such as how to incorporate academic finance, market mechanics and quantitative analysis into day/swing trading.
Regards,
Ahmed
Ahmed,
Yes… already had an entire section planned on volatility.
As for valuation and DCF, etc… I dont find it particularly relevant in my timeframe. I did a lot of fundamental research / modeling and actually did find an edge to some fundamental factors (though the results were somewhat counterintuitive), but fundamentals simply aren’t relevant in shorter timeframes where behavioral factors tend to rule.
And your last suggestions concerning academic finance, market mechanics and quant analysis are a major focus of the book. I may touch on those issues in the introductory course, but they will not be a focus.
Thanks for your insight and ideas. I think you’re right on target.
Thank you, Adam, for this effort. It’s much appreciated.
There are certainly a plethora of courses out there about the abstract nature of technical analysis, but there are not that many that show the linear aspects of individual trades from beginning to end. Some traders’ blogs do this, but they are often inconsistent in their approaches. As a self-taught trader below is, very, very briefly, the structure of the curriculum that I defined for myself. I’m a former software development manager, and my overarching theory is that trading, like any other skill, has mental/theoretical concepts that must be expressed through repetitive procedures, so any training must first teach the concepts, but then provide methods that will convert those concepts into process, into actions–actions that can then be practiced or simulated.
I would like to see an analysis of single trades, both good and bad, from beginning to end–concrete representations of concepts.
Pre-Trade Analysis
– T.A. and Fundamentals
Day of Trade Context Identification of Market using volume and volume profiles, volatility, momentum, and price
– Trend vs Range
– Trend: Beginning vs Middle vs End of Trend
– Range: Extremes vs Balance
Entry of Trade
– Timing and Location
– Scaling In
– Order Placement
– Initial Stop Placement
Trade Management and Exits
– Scaling Out
– Dynamic and/or Trailing Stops
– Profit Maximization
Re-Entry of Trade, if necessary, on Failure or Success
Thanks again. I’d enjoy speaking to you about this further.
Hi Jeff,
Good thoughts, and you’ve basically laid out the structure for a significant part of my book. 🙂 I was trying to do exactly what you’ve described here, and I think you’ll find a lot there that resonates with your ideas. The introductory course will walk a slightly different ground, but leading to exactly what you suggest.
Also happy to discuss further. Thanks for your ideas!
Adam-
After several hours of reading your blogs last night, i guess the one that really stood out to me was the one on arbitrarily drawn lines and then seeing how in the future they looked like significant “locations”; pivots, support and resistance etc. To me this post gave me an idea of how you look at things in an abstract, non run-of-the-mill but value-added approach.
Which brings up a question that you will be uniquely qualified to answer. Can people be taught to trade? Of course some people may be gifted (like you in music) and make fast studies. But there are many, many more who have all the passion and practice basically all waking hours, but will never become moderately capable musicians, athletes, artists or traders.
After years of mentoring and coaching clearly you had students who showed promise from day one, and others who didn’t get it and didn’t really care to apply themselves and it was clear they would wash out. But what about the large majority in the middle, those who struggled hard and passionately? What do you think about the potential for this middle group to become proficient and continue to improve? Sure it is possible, but is it realistic? What percent of that middle group from 3, 5 or 10 years ago is currently trading profitably now?
Perhaps I have too fixed a mindset, (big believer that a tiger can’t change its stripes) but I’ve only seen two types of traders, those who without any coaching or books just figure it out instinctively and have been consistently profitable from day one and continue to be so after decades, and the others who no matter what resources and effort is expended, never can become profitable. I’ve never seen somebody who was a lousy trader from the get go, become otherwise. Have you?
Regards,
Gordon
This is worth an answer in a whole blog post so please give me a few days.
For what it’s worth, I think I was a pretty lousy trader from the get go and I figured it out. I had lots of help (guidance, mentorship), did a ton of work, kept my losses small, and just kept trying to learn and get better. So, yeah it’s possible. But I also agree with the subtext to your question, which is that most people pursuing the dream of “trading for a living” are not going to get there for any number of reasons.
Let me spin this out over the next couple weeks. Ask again if I don’t clarify enough.
Adam,
Kudos to you for sharing your market/trading knowledge & experience and helping other traders improve! Hopefully, my thoughts are not too basic for your training course.
As a newer trader, the following are areas would assist me in moving closer to my goal of becoming consistently profitable (no specific order):
1. Playbook development: Improve or further develop my ‘basket’ of higher probability setups/plays and the underlying concept of each play, along with the ‘how to’ aspect (foundation, identification, do’s & don’ts, confirmations, entry, exit, trade management, stops, etc.).
2. Aspects of tape reading. This is a vast topic with many considerations, but any guidance or examples would be helpful in developing an edge.
3. Market structure and it’s influence on a trader’s approach, play/setup selection and trade management.
4. Market psychology: an understanding of how other professional traders think and react in given situations/market conditions.
5. Trade identification/selection: How to locate and identify high probability setups on an intraday basis. What techniques/tools have consistently proven to assist a trader in locating setups (if any…) Setup selection (S/R, range, B/O, flags, fade, pullback, relative strength, momentum, etc.) given market conditions.
Thanks again for ‘paying it forward’ and helping others.
Looking forward to the book.
Thomas
Wow, I was about to write almost the same things as Thomas, so am not going to repeat…
Additional ideas:
– More focus on swing trading and how to deal with the fact that many/most non-professionals cannot trade throughout the day, which creates different problems, e.g. unfavorable trade executions, few time to find a daily routine and set up new trades, adjust existing trades etc. peak load work which keeps you away from markets during various days etc. How would you approach these problems?
– After-trade Analysis. I know it depends on the approach, frequency etc. But a lot is talked about keeping your diary and statistics etc. but I never saw anything really useful so far, maybe except Diary of a Commodity Trader
Thanks for all the great content, looking forward to reading the book!
Adam,
Thanks for taking on this challenge! Some additional topic that I have always wondered:
– How does a trader know what timeframe or style that fits him/her? and therefore can focus his/her effort in building their strength in their playbook.
– Some possible ways to refine each play on their own playbook. e.g. knowing which bull flag or breakout has more edge and how they should be managed differently.
– How to manage trades when the pattern of a trade has morphed into another pattern. e.g. from bear flag to double bottom.
Thanks again for putting out great educational posts!
Chris
Tape reading for people who trade on a shorter time frame. I’d have busted long ago if I didn’t learn that skill 20+ years ago.
Also, how to incorporate fundamentals into trading. I disagree with people who just trade symbols. Knowing underlying issues can really help your results (financings, lockups expiring, insider buying and selling, etc.)
I have been trading over 25 years and I expect to learn all kinds of things I didn’t know. I’m looking forward to the book and I’ll also follow the newbie course. I’ve been around long enough to know I don’t know squat.
All good ideas and I’ll touch on all of them (some are already covered in the book to some extent.) As for not knowing squat… join the club. Every week I find something I didn’t know or something I knew… but I didn’t know it was important. Some lessons are more painful than others, but it’s also interesting to remember that when we trade, we live right at the edge of what CAN be known.
Thanks again and have a good weekend.
Hi Adam –
I think your methodology for getting book and training feedback — for content, organization, usability, and usefulness is brilliant.
I haven’t read enough of your blog posts yet to have a feel for your approach — but I will rectify that.
You’ve had some excellent suggestions so I will take a slightly different tack.
Since discovering and following stocktwits, I’ve been getting a fairly good feel for different approaches — much of that psych — to the market, analysis, and trading. I was wondering if there might be some corollary to Meyers-Briggs personality typing for traders — something that might help people to find an approach and tool-set that would work best for their type — with perhaps multiple paths (pick one appropriate to you) through hyper-linked reading and training content. Even when all the students learn the same techniques and material, some might learn better with, for example, (overview, hands on, back up and get some theory, more hands on…) and some might do better with (tell me everything I need to know to understand this intellectually and then help me apply it with tools…).
I only skimmed other responses so I don’t know if anyone mentioned it but overview of toolsets, selecting and acquiring your own toolset and bringing it together to make your personalized trade station. You could probably establish relationships with tool vendors so links to reviews, trial downloads, and vendor site are available.
A community area on your site would be good for students to interact with each other as well as you. There is a lot a teacher can learn from observing students interacting with and learning from peers.
Given your investment of yourself in sharing your book (in development) and training with students, it would be good to establish a way for you (and them ) to evaluate content, techniques, etc from the start — and evolve as you go — so that you get the most value from the project. Identifying how you want to evaluate content as a part of the content design and development process should also aid in better articulation of the purpose, form, and content of the chapters / components of the book and training materials as well as how the pieces “fit” to achieve a given goal.
Rosemary (aka Cogence)
Hi Adam,
I’m a new trader and I’m currently trading the S&P 500 Emini Futures. Thought best to follow just one index so I can focus on honing my skills instead of wasting time everyday looking for the best stock to trade. I’m growing frustrated at the fact that most of my trades don’t work, and so far I have lost a lot of my account equity. I still believe I can do this, but now you see why I’m need of such a course like this. I believe in my self and I’m willing to learn and to discipline and apply myself so I can be able to develop consistency in profits.
Everybody already posted on exactly what I want to learn so I won’t repeat them again, I would be more than happy to see all that in this training, but thought on sharing a couple more:
-What you personally think best(or personally did) to overcome overtrading and controlling your emotions?
– How professionals think and act, how not to trade with the herd(which usually lose in the mkt)
– Being a futures intraday trader, what timeframe would be best in your opinion? (i.e 377 ticks or 5m?, etc)
And lastly, but not least, I would like to thank you for making this course/training FREE. I haven’t found anyone on the whole world wide web or blogosphere giving away all his insight and vast knowledge, from which I’m sure I’m going to learn a lot, for free. I’m new at your blog so I’m now devouring your blog posts(they are amazing!), but I already know that if your training is as in depth and explained in such a non-complex way as all of your previous posts, then it will be a tremendous read. It will be my pleasure to learn from you.
Keep up the good work, and good luck with your soon-to-be-released book.
Rodolfo