The internet is chock-a-block with information about trading. There are videos, articles, free courses, paid courses, communities and various other resources. You could say, there’s everything a budding trader could possibly need.

In that case, why do so many traders continue to fail?

Of course, we could put it down to personal factors. The old maxim about trading success being “80% psychological and 20% skill” is an easy excuse. But I believe the problem is much more fundamental and applies to learning any complex skill online.

The problem with online learning

The e-learning market surpassed $250 billion in 2020, according to Global Market Insights. More people each year are turning to the internet to learn new skills. Trading is no different.

At The Duomo Initiative, we used to offer an online course for people learning to trade. Then, a few years ago, we discovered that a course alone was just not enough. There was an important missing piece…

Feedback.

Feedback is an absolutely critical part of learning a skill. Not only does it play a major role in deliberate practice, but it also helps inform learners of the direction they need to go in.

However, this presents a challenge for an online learning environment.

When a trader learns by taking a course, they reach a point where they know all the concepts and techniques but remain stuck at a plateau. They know something is not working for them, but they have no way of knowing what needs to be fixed.

We solved this issue for our members a few years ago by creating a community. Traders could now push past plateaus by having a member of our team look at their work and tell them what they need to do to improve. This has worked incredibly well as it allows traders to learn with a more one-to-one tailored approach, rather than ‘one size fits all’.

Unfortunately, the problem doesn’t end there.

We have a small team and a relatively small community, so at the moment we’re stretched but coping. In future, we will start to experience some growing pains, as the needs of our members exceed what our team can handle.

This is a problem e-learning companies as a whole will experience too — at least those that genuinely care about their members learning the skills, rather than just seeing them as a sale. These companies will need to figure out how to scale their feedback process.

If we take a look at the trading industry alone, there are estimated to be at least 20 million active traders around the world. The statistics show that over 90% of traders are not making money in the markets. Therefore, to use some very rough maths, at least 18 million traders are in need of guidance and development.

Most trading coaches are unsuitable for the role as they either have never been successful at trading themselves or don’t know how to teach and replicate their results in other traders. The coaches who are both successful and able to teach are few and far between. This means, coaches are not a scalable solution for the number of traders in need of support.

The solution to the problem

The real solution is performance data. This needs to take on a bigger role in the learning process for most complex skills.

We see data being used by elite-level athletes, who track all aspects of their performance to help direct their future training objectives. Premiership footballers will track everything, from their cardiovascular fitness down to their on-pitch positioning, so they can see which improvements will take them to the next level.

This is what my team and I are doing for trading too. Once a trader has learned the foundations and hits a plateau, we can look at their performance data to see where improvements need to be made. Traders no longer need to wonder what’s holding them back, the data will direct their development.

We are now working on making this process even more efficient and effective. There is still a lot to learn about this new area, but the potential benefits it could provide to people around the world makes it a very exciting and fulfilling project.

I believe this approach is something that should be implemented in all areas of education at a much quicker pace, and e-learning is the obvious place to start. Data is used everywhere in modern society, it’s time it was used to help us streamline and improve the learning process as well.

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