The State of the Art in Trading Education

Photo Credit: Front Team Investments

Trading Education Software Solutions

Aside from the blessedly lucky and those who are fortunate enough to have a mentor, becoming a successful trader requires going out of your way to get educated. Trading without a plan has another name: it’s called gambling. Luckily there is an entire industry dedicated to helping beginners learn the art of investing. Trading education can be expensive and there are many different options to choose from, but the latest trend in virtual trading that goes above and beyond the “demo account” may be the most promising and exciting.

Forget about blindly trusting the latest technical indicators or putting your money on the line based on some fancy algorithm/system that takes all the thinking out trading. There’s no substitute for experience in trading and learning from an experienced trader is a great way to master the basics and learn more advanced techniques. In order to trade successfully, you have to truly understand how markets and trading works. Real traders know there’s only one way to learn how to trade successfully, and that is to actually make trades; “The game teaches you the game.”

Where are people learning today?

A quick Google search reveals thousands of websites offering trading education. Websites such as TradingAcademy.com have thousands of graduates successfully trading the markets. Even the most high quality investing conventions, such as MoneyShow, have no shortage of trading experts with proven track records offering their services as coaches. Everywhere you look, each offering claims to be the best choice, so how can you actually differentiate one offer from another in this large market? One thing to consider is what is unique about their offering.

One way to get experience without risking money before you’re ready is paper trading. In the beginning, novice traders would literally write down their hypothetical trades on paper and calculate how they would’ve done if it was a real trade. Today, most online brokers offer “demo accounts” that allow you to use the actual trading platform but with virtual “monopoly money.” Most trading courses will teach you their way of trading and then tell you to try it out on a demo account if you’re not comfortable using real money.

But as we all know, successful demo trading rarely materializes into actual trading success. Without something at stake it just doesn’t give you a feel for real trading. Demo accounts do a great job of teaching you to use a trading platform, and for a long time they were as close as you could get to making real trades without putting down money; but there’s something missing. It’s too easy to click buy or sell and just “see how it goes” – something we all know you should never do when trading real money.

That’s the beauty of today’s constantly advancing technology. Three innovative companies have figured out their own unique ways using the latest web and trading technology available to come even closer to creating the feel of making real trades without risking actual money to do so.

A Look at Some  Innovative Trading Education Software

TradingView.com is a web-based charting platform with real time data and powerful tools for drawing charts and using indicators. Their software is top notch, but what makes it stand out is that they have turned trading social. Traders are able to share their predictions, charts and even custom indicators with the public. After publishing a chart, you can press a button to see how the market has moved since it was published. Just like on Twitter or LinkedIn, you can “follow” your favorite traders to stay up to date on their actions. Instead of telling long tales of how you predicted the big move in the S&P 500, you can prove it by linking to the chart you published. Or you can feel the shame of making a big prediction and having it go horribly wrong. The addition of published charts that your peers (and the general public) can view make you think twice before fooling around. Your money may be safe, but your reputation is at stake!

Investopedia.com, the go-to source for a crash course on all things finance, has their own take on “enhanced” demo-trading. They make trading into a competition. Their Stock Simulator platform allows you to pit your trading skills against hundreds of thousands of other Investopedia users using a virtual trading account. Not only is there a leaderboard for the best performing traders, you can create private challenges between your trading peers. The winners may only get bragging rights, but that is still higher stakes than nothing.

The last company we’re going to look at is possibly the most interesting of them all. Kapitall is a broker that does something very unique: they gamify trading. Gamification is the application of game mechanics in non-game contexts. In other words, Kapitall’s trading platform gives you goals and achievements to work on that feel like you’re progressing in a game but are actually teaching you how to be a successful trader. Rather than learning the old “textbook” way, traders can learn or brush up on their skills in an environment that challenges them the way a good video game does – but still on a broker’s platform. Take a look at their video below to get a better idea of what I mean:

The world of trading education is constantly evolving. Some will stick with tried and true methods like webinar based lectures and one-on-one coaching but there are definitely companies out there leveraging the latest in software technology. We took a brief look at some examples of such innovative products, but there is no doubt that someone out there is thinking up the next big idea.

What’s next?

If you’re a trading coach or student, feel free to use our paper trading demo platform to learn, teach and practice. ETNA Trader is a white label online trading platform that’s used by brokers, developers, educators and trading firms. The platform features a HTML5 widget based web frontend and native iOS and Android mobile trading terminals, along with a back office. Some features include real time streaming quotes, level 2 quotes, advanced charting tools with drawing capabilities and indicators. Feel free to contact us with any questions you may have or to discuss your ideas.