Module 1 – Foundations


This course teaches the art and practice of trading stocks, bonds and commodities. It is intended for beginners as well as for those with considerable trading experience. What you learn will set you apart from the vast majority of traders who buy and sell without a solid understanding of the market’s inner workings. Prepare for this course by discarding what you know, or think you know, about the stock market. Begin your study with a clear and open mind.

Throughout this course, no distinction is made between investing and trading. All market participants, whether they consider themselves investors or traders, are speculators. We will use “trader” to refer to anyone speculating in markets.

Markets make sense. Successful traders understand how markets really work and use that understanding to earn consistent profits. Anyone who trades without a rational foundation for his operations is gambling.

The worst traders operate from untutored instinct. They come into the arena as victims, who face the lion naked, without armor or a weapon.

The best traders also operate from instinct, but from instinct shaped by proper education and experience. Every successful trader has paid his tuition. The most expensive tuition is exacted by the School of Hard Knocks. The least costly approach to success is first to learn the principles of successful trading, then gradually to commit capital as skill grows.

Risking a significant portion of your capital before you have mastered at least the most basic skills can be devastating. Many new traders do not survive early financial and emotional disasters, and their education is cut off before completed. There is no substitute for the hard work of study and the discipline of patience.

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