By Matt Hensley, Two Roads Trading
For many of us, learning how to trade may be the first truly new skill or concept we’ve learned in many years. After school and moving into a career, we usually don’t have time to spare for new endeavors outside of the occasional hobby. Adding trading as a second career or “side-hustle” requires us to go back to school in a lot of ways.
Setting foot in the live trading rooms or taking one of our courses can feel like being back in a classroom, and, it requires us to re-engage the learning areas of our brain. And, while we all learn at different speeds and in different ways, there are some basic concepts to help us learn the information we need as efficiently as possible.
The following strategies apply specifically to our video courses, but the concepts translate well into our live trading rooms as well.
Learning Strategies for Trading Courses
- Watch the entire course(in just a couple of sittings, if possible) for first exposure to the material.
- Re-watch the course in segments of 10 – 30 minutes. Take notes as you watch. Handwritten notes are preferable as the physical act of writing engages more areas of the brain than keyboarding. This accelerates the process of moving the material from short term memory to long term memory making it available for use in a meaningful way.
- Interact with your notes in some way.This is especially important if you took notes on a computer of some type. Options include rewriting your notes, adding more detail to your notes, reorganizing your notes, reading your notes aloud, etc.
- Spend some time thinking practically about the material.When, where and how can I use this information? Incorporate this into your notes.
- Spend some time thinking abstractly about the material.“This is like ____, except ______.” “This is different from what I’ve heard before in this way: _________.” “I could use this instead of ______.” Incorporate this into your notes.
- “Explain it to a 5-year-old”. If you don’t have a 5-year-old handy, explain it to someone who has little or no knowledge of the material. There is nothing like teaching material to help you master the material. When you teach it to someone else, you are forced to think about the material in a careful and sequential manner, and break it down into manageable components that are the most meaningful to you.
- PRACTICE. Paper trade.Knowledge does not truly become yours until you practice it to the point of mastery and automaticity. Automaticity means the ability to do something quickly and easily without having to stop to take too much time to think about it and without having to review all the related material each time you need to use it. This is essential in trading. Physicians need to practice (internships), teachers need to practice (student teaching) and traders need to practice (paper trading).
- Learn with a group. Your ability to successfully use new information expands when you learn, practice and use information in the context of a group. A group containing at least one or two individuals with considerable experience and expertise and other individuals who are at various stages of mastery is ideal. Whether in the live trading rooms or with a group of ‘real life’ friends, you can create this type of environment.
Disclaimer: The author is not a financial advisor and the following should not be taken as financial advice. This is by no means a complete discussion of the pros and cons of trading and/or investing. Please consult your own qualified advisors to determine what is appropriate and best suited to your specific investment objectives and risk tolerance.