Too Young for Trading?

Posted by jmot in Thursday, November 26th 2009 under: General No Tags

A 17-year-old blog reader asked me recently if he is too young to start learn trading and how can he start. That got me thinking. Mmm, how would I teach my girls if they expressed interest in trading?

You need to have “spare” money

Well, how young one may start to learn trading depends on when he can save up the capital to start trading. Nowadays, this barrier is lowered greatly with forex brokers that allow trading of nano lot sizes. A broker I know of allow trading of any lot size and this allows starting capital of US$500 and still allow proper money management to be applied.

It is easy to lose everything

This is up to individual. I was thinking some parents may like to let their children understand the risk of trading. Let them start trading without any rules. Let them fiddle and familiarize with the trading platform. Let them experience margin call, let them experience account blow-out. US$500 is cheap to learn all that.

You’ve got to execute the trades without fail, even if you’ve lost the last 10 trades!

1210526715_a0c837e371_m After that, I would give my girls a decent trading system (including money management rules) that they can trade without interfering their studies (and their studies also don’t interfere with their trading too!). I would monitor that that trade the system consistently even if they experience losing streaks. Children are unpolished gems. I would think children are more likely to follow trading systems.

Side dish

Also, importantly, treat it as a means of bonding with our children, a game that we can play together!

Is this how you will teach your children how to trade? Or would you even teach them at all?

inpost image by yomi955

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24 Comments Already

Forex Educator Said,

November 28th, 2009 @12:53 am

George Soros start trading forex at age 13 and he become a guru when he reached adult age. So its good to start young.

But educate the kids that trading is not gambling, it is taking calculated risk and requires a lot of hardwork analysis.

coconut Said,

November 28th, 2009 @11:01 am

like it or not, we all born as a trader.

michael Said,

November 28th, 2009 @5:52 pm

But not everyone is born a coconut…

jmot Said,

December 1st, 2009 @11:05 pm

Hi coconut, interesting! Are we all “born as a trader”?

coconut Said,

December 2nd, 2009 @11:32 am

yes we are,

as long as you can make decisions, consious or unconsious, you are a trader.

we trade every minute of our lives.

coconut Said,

December 2nd, 2009 @11:44 am

where are u right now? at work?

you trade your time and know how in return for a fix income.

lunch?

you trade $3-4 or whatever in return for a meal.

driving?

you are risking your life in exchange for a quicker time to get home.
oh, together with the cost of petrol and car expenses.

in bed with your wife?

er…. i won’t get to that.

coconut Said,

December 2nd, 2009 @11:51 am

“After that, I would give my girls a decent trading system (including money management rules) that they can trade….”

you already have.

coconut Said,

December 2nd, 2009 @11:56 am

“Also, importantly, treat it as a means of bonding with our children, a game that we can play together!”

yes, well said.

a game not just in trading but in living as well.

living and trading cannot be separated.

coconut Said,

December 2nd, 2009 @12:48 pm

“A broker I know of allow trading of any lot size and this allows starting capital of US$500 and still allow proper money management to be applied.”

there are a lot of such “broker” in Gelang (s’pore) as well.

coconut Said,

December 2nd, 2009 @1:00 pm

“I would think children are more likely to follow trading systems.”

very true.

in fact they are following the system that you have unknowingly present it to
them since very young age.

whether you have given them a good system or not, you be your own judge.

coconut Said,

December 2nd, 2009 @1:28 pm

damn, can’t even spell Geylang!

jmot Said,

December 3rd, 2009 @10:08 am

Haha, that’s trading in a lighter sense =)

coconut Said,

December 4th, 2009 @9:32 am

it is every sense of trading.
it is the fundamental at work.

you can spot your trading mistake if you look closely in your everyday life, without even need to trade.

not to judge on you, but thats how i seeing you making trading mistake by looking at how you live your life.

they are many, but one example is you spend too much and earn too little (relatively).

a sign of cutting your profit short and let your loser run, or in best case, can’t ride the winner.

you can’t spot your mistake.

even you can, which is unlikely, you have a more difficult task of changing it.

good luck.

coconut Said,

December 4th, 2009 @9:59 am

please don’t take my critisium too hard, you are not uncommon.

i said it hopefully it can strike your mind. (for your hard work on this blog)

you live by the sword, you got to be prepare to die by the sword.

my truthful advise is don’t do it, you are not ready yet, you might not be ready forever.

save the money with your family and not trading (gamble) away with it.

and don’t teach your children to trade or gamble, if you yourself can’t do it.

coconut Said,

December 4th, 2009 @10:55 am

jmot

i know what i’m talking about.

i’ve been trading full time for almost 20 years not actively, but very actively. having exposure in the market at any moment.

i am handling my own account size in millions and not have a single year loss in the pass 11 years, (which i myself is quite surprise)

i also made millions in a single trade before, does it surprise you?

you will never know me in real life becos i choose not to be known. but on the internet, its different.

i choose not to pass my skill becos at the end, i’ll tell them to leave trading.
and probably losing a friend as well.

coconut Said,

December 4th, 2009 @11:02 am

oh, and also, i’m a typical chinese educated guy. so many mistake in my english, but not too bad right?

coconut Said,

December 4th, 2009 @11:37 am

after all had been said and you still want to give a try, this is my advice.

forget about the money management,
forget about all other things except:

design a trading system that will allow you to

cut the loser short
ride the winner long.

ask any successful trader and they will tell you the same thing (especialy jesse livermore).

not becos it is a fix rule but becos all loser are doing the opposite, they cut the winner short and most likely, ride their losees long, or taking too much risk.

your result, if you do it correctly, will be having lots of small losses and very few big winners that will over shadow all your loser and come out net winner.

while the loser have all their winning and losses all over the place.

you got that?!

coconut Said,

December 4th, 2009 @12:00 pm

if you can trade,i assure you millions will be waiting for you. its yours for the taking.

but if you can’t trade, you just can’t trade. don’t force yourself.

coconut Said,

December 4th, 2009 @12:16 pm

or you will end up like a gambler not only destroying yourself but your family will suffer too.

coconut Said,

December 4th, 2009 @12:44 pm

one perfect example is after survive the financial crises, and for some lucky one who got courage to pick up some stock beginning this year, they mostly sold-out.

after seeing their shares double in value, they sold-out.

i am talking about my family member and friends. i have to shout and scream at them not to sell-out but they did.

they just can’t stand the “profit” that they have made.

it is just another loser play. what can i say!

coconut Said,

December 4th, 2009 @1:01 pm

worst of all, they, after knowing i make a killing in the stock market, advise me to follow them and sell my share and take profit.

does it sound familiar or funny?

i guess the market is going to go much higher.

coconut Said,

December 4th, 2009 @1:43 pm

jmot,

you are actually witnessing a live trading in action, from the beginning of the year when i told you, i sold my apartments to raise cash for the stock market.

the apartments were fully paid and i don’t use leverage in my trading or investment.

the trade is still on going, i’ll let you know if i’m out of the market.

but i’ve a feeling its going to take a long long time. may be and hopefully until the day i die.

coconut Said,

December 4th, 2009 @2:08 pm

althought i like to give advise as to what market to trade, but right now, there are only two trade that possible.

one is to bet against deflation and the other against inflation.

the crises hit us so hard that all financial instruments are like in a melting pot.

it dosn’t matter what market you trade, it is inflation vs deflation.

i’ve not seen a market that are so co-related before that all you need to do is bet in one market alone.

for example, if you like stock, you can short the USD instead or long the cruel oil or commodities (CRB). they seen to react the same way.

coconut Said,