Stock market training

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Unfortunately, these are increasingly unstable times, but one person’s misfortune can be another’s gain. Some savvy investors make big gains playing the stock market, others suffer big losses, and why? Because there are principles to be respected, and these can be learned.

Earning money from home or from your vacation spot is the dream of many, but you still need to be competitive on the fierce stock market. To do this, you need to be better than the others, which requires the right information, the right stock market training and the right tools.

Why take an interest in the stock market

Many people who are interested in the stock market have good reasons for doing so:

• Their income is low with the banks, to whom they also have to pay fees even when they lose money. There’s a reason why financial institutions make billions whether the stock market is doing well or not! The reason for their low returns often lies in the fact that their investment funds are governed by regulations that prevent them from using all kinds of strategies.
• They’re fed up with their jobs, their bosses and their colleagues, and would like to do something else for themselves by being their own boss, thus gaining autonomy.
• Their wages are low, so a top-up is needed
• Their job security is not guaranteed, and they want to build up a regular source of income in case they lose their job.
• As they approach retirement age, they’re looking for something fun and profitable to do.
• Their work as financial advisors leads them to take an interest in more aggressive stock market strategies for themselves than for their clients.

An investor’s dream

The dream is to find a new activity that will provide :

• The security of a regular income to supplement or even replace your main income
• The pleasure of being able to control and manage your own affairs¸
• The search for freedom, to become autonomous, to no longer have a boss, to no longer depend on an organization with which you don’t identify
• The personal satisfaction of being able to beat your financial advisor or broker who only brings you low returns, generally between 3% and 7%. As far as I’m concerned, my main investment fund has only made 1.7% this year, and yet I’m in the private management division of a major financial institution.

I doubt you have all these dreams, but I’m sure you have at least one of them!

The harsh reality of the stock market

The sad fact is that 80% of people who trade on the stock market lose money, waste their time, and end up fed up after a few years. They give up, telling themselves it’s not for them. I’ve met a number of them myself, brilliant people, who thought they weren’t cut out for it.

Causes of stock market losses

In fact, the reasons are quite simple:

• 80% of traders are untrained and do not use appropriate strategies
• The majority of those who are trained don’t have the right tools. It’s humanly impossible to monitor all the right stocks, whereas machines can do it quickly and better than a human. The ideal is to keep a part of the process automated, so as to concentrate more on strategy, where the human takes precedence over the machine.
• Their strategy is based on bullish movements only, which severely limits their options.

In short, it’s not their ability that’s at fault, it’s just that they didn’t take the necessary steps to succeed. A good athlete has to be gifted, but first he has to learn his discipline, his techniques, and then have a coach to follow and train him.

Solutions for market success

There are four strategies for making money on the stock market:

• The long-term growth strategy: choose blue-chip stocks that will grow and weather crises. This is the safest solution, but it takes time, usually several years. It doesn’t require any specific training, just good information and intuition.
• Swing trading: a short-term profit-seeking strategy. The advantage of swing trading is that it allows you to profit more quickly, but it’s also riskier and requires a high level of training in stock-market techniques.
• Day trading: a strategy of buying and selling by the day, in search of immediate profits. You sell everything at the end of the day and start from scratch every morning. It’s an excellent method that requires daily discipline and a solid grounding in the stock market.
• The hybrid strategy combining day trading and swing trading. Surely the best method for making profits in the short, medium and long term, it’s also the most specialized, requiring the best stock market training.

Stock market training

• Management training to help you better understand how a company works and better assess the potential of the companies you want to invest in. These courses are particularly relevant to long-term growth strategies.
• Sales and marketing training to assess the growth strategies of the targets you wish to invest in, always with a view to long-term growth.
• Swing trading and daytrading training courses provide you with strategies, tactics and techniques for short-term trading.

How to succeed in day trading and swing trading

The solutions are simple and obvious, you must put all the means in place to succeed:

• Take a course on stocks and options to discover the principles of active investing, which enable you to win not only in a bull market, but also in a bear market or even a neutral one. It’s even possible to simultaneously play long term bulls and short term bears. In short, unlike those who wait for the right time to invest, any time is a good time, which explains the spectacular returns achieved by day traders. Some estimate that 70% of them achieve annual returns in excess of 50%.
• A good scanner can scan several thousand titles while you sleep, but you’ll never be able to do it as well manually. It’s not an accessory, it’s a necessity!
• Use monitoring or trackingtools for targeted stocks
• Being able to observe a professional trader both on and off the market is a great way to learn from the pros.

Each of these elements is necessary for success. Some stock market training firms offer this kind of service in the U.S., but very few offer it in French in Quebec; the only one we’ve noted that offers a complete solution is Daytrader Canada, which offers training, tools and tutoring.
Don’t be satisfied with half-solutions or free training, as short-term savings will cost you much more later on. And beware of Forex, where many experts say it’s almost impossible to win.

The benefits of stock market training

Of course, this comes at a cost in terms of time and money. From what I’ve been able to ascertain, the complete package including training, tools and coaching can run from $6,000 a year to as much as $24,000 with 4 years of coaching.
But, as Réjean Paul, President of DayTrader Canada and Quebec’s most recognized specialist, told me, it’s not the expense that needs to be looked at, it’s the income. And you can’t go into business without an investment, so let’s look at the profitability of that investment:

• If someone is already trading and has lost $10,000, why not invest that amount in himself rather than in his losses?
• If, on the other hand, you’re just starting out and have $60,000 to trade, a 10% return will be enough to pay off a $6,000 investment in yourself.
• Are you telling me that 10% is a lot? Possibly, but the $6,000 in training costs is deductible from your income if you declare it as a business, so it still allows you to lower your break-even point. Assuming you’re taxed at 50%, that’s a saving of $3,000, and brings your break-even point down to the 5% you need to break even in the first year with a limited stake.
• Of course, this only applies to the first year or two, after which you’ll be able to stand on your own two feet and deduct your business expenses. We reckon it takes 4 years to get good at it.
• If these figures frighten some people, you still have the option of acting like a business owner and giving yourself a monthly budget. We can consider that with around $380 a month for 4 years, you’re in a Cadillac. If you’re spending more on your leased car, why not use this amount to develop your financial independence and, above all, invest in yourself?

For greater security, the most important thing is not to start by putting in all your funds, but those you feel like “playing” with. Little by little, you’ll be able to increase your investments according to the confidence you gain in yourself. Even if some people reach staggering amounts of 168%, be reasonable, especially at the beginning, and set limited objectives.
That’s how you’ll be able to achieve your dreams, minimize your risks, benefit from a regular income, maybe even make some good money, work from home or from your travel destinations, and above all, develop a business all by yourself. Security, autonomy and freedom are priceless!

Jean-Pierre Mercier

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