In our age of free and easy information, there is far more bullsh*t than useful advice.
After all, it takes much less effort to make things up, than to uncover information that is truly helpful.
Take vaccine science for example. It took 200 years for medical researchers to get to the information that enables us to prevent deadly diseases today. And all it took was a few people to claim – with absolutely zero evidence – that vaccines cause autism, and now there’s a substantial portion of the US population who doubt vaccine safetyโฝยนโพ.
Or take the news. It would be 10x easier to produce a clickbait article with no substantive proof, than to verify sources, cross-reference evidence and write a balanced, well-thought article.
Compared to reliable information, bullsh*t is far easier to produce.
The proliferation of BS
Today, there’s an order of magnitude more BS about Forex trading than even five years ago.
It’s a toxic trend that will only get worse because there is zero cost to publishing unsubstantiated claims on the internet. The predictable result of this, is a steady increase in the ratio of ‘garbage’ to ‘good information’ over time.
In other words, good information will get increasingly harder to come by.
Fooled by Marketers
A while ago I wrote a post called The Map is not the Territory. It briefly explains the difference between actual understanding, versus surface knowledge that only looks good on paper.
Related to this is one of the worrying trends I’m seeing today – the proliferation of what I call ‘textbook trading concepts’. It’s the idea that one can approach trading along the lines of “If you see A, do B”, as though there’s a step-by-step approach to making money from the markets.
Examples:
“Learn to trade with Elliot waves.”
“Make money with this secret indicator.”
“The complete guide to Keltner channels.”
The list goes on and on.
Every time I read such articles it quickly becomes clear that they were written with one purpose only: to rank well in the Google search listings. It has almost nothing to do with actually helping traders.
How do I know? Well, an easy telltale sign is the number of “how to trade” articles the author puts out.
The last time I came across one such content creator – let’s call him John – his website had guides to at least 16 different technical indicators (I stopped counting after 16). How likely is it that John uses all of these indicators in his own trading? The probability is near zero.
And this begs the question: why would John go through the trouble of writing dozens of trading guides, when he doesn’t use them in his own trading?
The answer: Because he’s not writing to share useful information about what he’s learned. He’s writing to rank his website on the Google search listings to get traffic.
There are far more marketers than actual traders
You see, the more trading articles John publishes, the more the Google algorithm considers his website to be an authority on the topic.
The algorithm, of course, has no idea whether John actually knows what he’s talking about – he doesn’t have to prove the validity of the information he publishes.
Now take the thousands of so-called trading “experts” like John, who fill the internet with countless articles teaching textbook concepts that only sound good in theory (but don’t work in practice), and you have the state of online trading education today.
Few people actually take the time (i.e. years) to trade with the same few methods long enough to truly understand how to use them. All these textbook traders know are the theoretical concepts they’ve read about from books or from each other’s articles.
So the tragedy is that the original and truly useful information (that takes years to discover) gets buried by the countless variations of the same textbook concepts that takes just days to copy and get published.
This is why you see the same useless trading ideas being repeated over and over again. There are far more savvy internet marketers than there are savvy traders.
So what can a beginner trader do?
Unfortunately, there is no easy solution. The amount of bullsh*t online has grown to epic proportions.
So the bad news is that it will get increasingly difficult for newcomers to learn how real trading is done.
On the other hand, the good news is that the rewards of good trading will get proportionately larger. The harder it is to develop a skill, the more valuable that skill becomes.
My suggestions are to:
- Prioritise learning from people who do, not people who talk,
- Personally verify everything you’re taught, and
- Do so as soon as possible
The curse of modernity is that we are increasingly populated by a class of people who are better at explaining than understanding, or better at explaining than doing. – Nassim Taleb
Great stuff Chris and so true. I am still green in this venture and that is why I read and study Icarus. It helps tremendously to watch the trades you make and see how they fit into the method. I am learning and growing with the knowledge you impart. Glad I found you.
Hi Damian, very glad to hear you are learning something useful. Thanks for the feedback and I appreciate the kind words. ๐
Chris I think not all those trading articles are complete garbage. Some can actually be helpful if you’re an individual with absolutely zero knowledge about the forex market as it provides you with a basic understanding of the market. But anyone believing they’re going to make any money with the help of those articles will have their heads handed to them.
It’s like a soldier training in a simulated environment. They can be helpful but no matter how sophisticated the simulation might be, it can never account for all of the factors that a soldier will encounter in a real war situation. And his military gear can only take him so far, if he has never experienced fighting on the real front.
Hi Okeke, yes not all articles are garbage. Just, in my opinion, the vast majority of them.
Hi Chris
Thanks for sharing all your honest posts and your practical experience. I am a private tutor myself. I teach primary school children. I give my 100% to all my students and share my pract
I have been trading since last February and have hired two coaches to do 1-2-1, no one is showing their screen to show how they are trading. I was much much better when I was first doing DIY and made a profit.
The only things I learned is just the information they are providing, but no one is giving me the real feel of the forex trading.
I am fed up now as a beginner- whom to trust. I think I will better go back to my DIY, at least I will save my money and will learn from my mistakes. The first STOP LOSS I MUST APPLY NOW IS STOP HIRING THESE SO CALLED FX COACHES/MENTORS… a hard lesson learned for me as a fx beginner.
Hi Beena, thanks for dropping a comment. It’s embarrassing to say this but I spent over $20k on such “courses” when I first started out… you are definitely not alone in this regard.
You the best bro…. love reading your articles.
Thanks for the kind words, Keenan. Glad you like my articles. ๐
Chris,
You are, once again, spot on. I’ve found so much value in your posts that I can hardly thank you enough: Thank you. Xie xie ni. Terima kasih.
Ask the publisher if he can provide a 2 yr backest by a Independent party like myfxbook.com or a Certified public Accountant.
Most will be not able to provide this. If not please ask for a Demo compatible
With your platform to see if the product can perform. A reliable vendor or
Developer will be able to provide this. A not Reliable Vendor will be not be able to
Meet these simple questions
Cant agree more with you Chris, I am receiving at least not less than 5 of these emails daily , so now occasionally I am just reading the contents of their claims and treating them as my own free entertainment or just as a joke instead of getting frustrated or angry… cos life is still gooood…..:-)
Hi yb, that’s a great attitude to have. Thanks for sharing. ๐
Chris,
I have a pip maven file on my computer.
First email is 7/6/2008.
You have gone through some good times and some rough times but have been honest transparent all the time.
I look forward to your post and read everyone of them.
Keep up the good work.
Irv
Hi Irv, thanks for dropping by. There has indeed been ups and downs and I’m always glad to hear from you guys. Cheers.
I can’t thank you enough Chris!! You helped me open my eyes. You’re spreading the hidden truth. Thank you again
It’s my pleasure, Gerard.
All so true. Forex trading has become a consumer item and like in all such markets we have snake oil merchants. But there is also a responsibility that the consumer has to exercise. Problem is that testing the methods put forward by doing manual trades is just not feasible and takes far too long.
But if you go to the Code Base tab on the MT4 platform you will get access to all sorts of free software that you can use to test many of the ideas for trading that are placed before us.
Eg, have you been told that the CCI indicator is really useful for determining trade entries? Well you can test this using the free CCI indicator based expert advisor from Code Base. An hour spent on back testing will soon tell you whether there is any merit in the idea. Heard about RSI? There is a free EA for testing that too. etc etc
And yes, don’t pay for courses. All the basic ideas and education about forex are available for free. Babypips.com is an excellent place to start. But of course understanding a subject matter and actually trading in real time are two very different sides of the same coin.