In this episode of Truth About FX, Walter answers whether having a Finance Degree would matter in learning how to trade forex. Is it an advantage or would it hurt you? Walter also talks about “copying” trading system from “trading gurus” and why we can’t be all Tiger Woods or Roger Federer.
Download (Duration: 04:49 / 5.52 MB)
In This Episode:
00:31 – a bit of practice
01:41 – we all can’t be Tiger Woods
03:15 – play the game
04:20 – formalized Degree
Announcer: Sometimes, forex trading is a wild and wooly place to be. That’s why Hugh is here, to post your questions to Walter, the naked forex guy. Hugh’s got questions and Walter’s got the answers. Here at the Truth About FX Podcast.
Hugh: Hi, Walter. A trader writes and says that, “I’m a beginner trader” — and this person has education in Finance and been doing a bit of practice in forex trading which brought up a quite interesting question in my mind. Which was, can a Finance Degree help with learning to trade forex or can it hurt you? What do you think about that?
Walter: Wow. I’m really biased. It’s probably not going to hurt but my gut is to say that it will. I think you’re better off in every instance. You’re better off adapting an approach, an approach that fits your beliefs rather than having someone lay them on top of you and tell you this is the way it is.
The problem with the formalized education is that’s what they do. They’ll say, “Look, this is the way it is” and so, it’s one of those things where I think you’re better off to come and make your own way. But then, the other side of it is maybe having a Finance Degree gives you a framework, a way for you to view the market and maybe it’ll make sense to you.
In that case, maybe it is a good thing but I am of the opinion that everybody should dig deep, find out what you believe in as a trader and then everything you do, you should build your system accordingly.
The reason for that rather than finding someone who’s really good at trading and just copying what they do is because if you find someone who’s really good and you just copy what they do, it’s the same reason why we can’t all be Tiger Woods or whatever.
Who’s the Swiss tennis guy? Federer?
Walter: Yeah, Federer. It’s the reason why we’re all not Tiger Woods or Federer when it comes to tennis or golf. It’s because you just can’t find someone and copy what they do and expect that it’s going to work.
Hugh: It makes a lot of sense.
Walter: Yeah. So, the main thing is that just do what you believe in. I have friends who have been like in institutions, a relative who work for funds and they’re like bank traders or hedge fund or stock traders and they call me a virgin.
That’s what they’ll say. “Hey, Walter, you’re a virgin because you don’t know anything about this.” And I used to always make fun of guys at University where they’re getting their MBA and stuff and I thought what a useless Degree, but that’s just my bias.
I think you’re better off just working through your beliefs and building something from the ground up rather than letting someone tell you what to do, but that’s my take. Do you have any sort of Finance background? I don’t have any.
Hugh: No, I don’t. I actually have a Biology background.
Walter: The other thing is when you get these licenses and stuff, they’re going to teach you these things too. You have to pretend like, “Okay, that’s how a MACD works” and all that to get all your CTA’s and all these licenses in different countries.
You have to play the game and say this is how it works and why the interest rate numbers and this and that. You’ve got to figure all that stuff out. But, maybe you are like me.
Maybe you’re just a technical trader and you look for patterns on the charts. Maybe that’s what makes sense to you. You really don’t need to know all that other stuff. So, it’s one of those things.
We have a trader in England. He’s doing really well but the problem was he was so new to trading that he felt he needed to know all the other indicators that he didn’t know. To a trader, everyone in the room said to him — it’s a small group, 10 people — and every single one of them said, “No, don’t do it. You’ve already got it. Don’t go and confuse yourself.”
But he said, “But I want to have more. A breadth of knowledge in this and that.” I said, “That’s great but don’t do it. Don’t do it because you’ll confuse yourself. You don’t need to know all about the Stochastics and the MACD and all those other stuff.”
You’ve got system that works, stick to that, become an expert to that. Don’t worry about the other stuff. That’s how I view having a formalized degree but, obviously, if it’s important to you, it makes sense and you want to know about the fundamentals and all that, what you’ll get when you get your Finance Degree. For me, it’s not. I don’t think it’s that critical. So, there you go.
Hugh: Okay, cool. It’s great to get your opinion on that. Thanks, Walter.