Traders Ask: Do I Have to Go to the Right School to Become a Great Trader?

BellaMike Bellafiore's (Bella's) Blogs, Traders Ask5 Comments

I just turned 19 over the summer and I’m a student at UNC-Wilmington. I’ve been interested in trading stocks and options (mostly options) for a few years now as my father day trades some, but he’s a carpenter so he can’t watch the market all the time so he has had mixed success. I’ve done a fair amount of paper trading over the last year but I have never been very disciplined in my studying and research as I was only paper trading. I never put in the work I needed to because I was using fake money and Ii made no real life gains or losses so I recently funded my own options house account. Last month I attempted three SPY trades and lost money each time. After the third loss I realized I’m simply not ready to make high risk real money trades or any real money trades right now. The only success of my brief trading career is that I have lost less money in each successive trade.

Over labor day weekend I went home and a friend of mine who does some day trading gave me your book and I’ve been enjoying it and learning a lot from it and that is why I was hoping i could ask you for some advice.

Over the last year I have developed the want to be the best at something. When I go to the gym at school, I think, man I would like to be one of the bigger guys in here, but that’s not really want I want to do with my time. Same thing with playing basketball in the rec center. I think I would like to be one of the better guys in there but I really don’t want to invest my time into something that will yield as little benefits as being a good basketball player. I want to be the best trader in the world. I want to know the markets better than anyone, have more knowledge than anyone and be able to predict the markets like none other. Being a marketeer is what I want to be best at.

Being at a school as little known as UNCW I feel like I may be wasting my potential. I do market research on my own, I watch CNBC, read some books, currently reading a book called Profitable Candlestick Trading, and constantly look at charts. I could have gotten into Chapel Hill out of high school and I could get in now. Do you think I should stay here and just focus on doing my own studying, research and learning of the markets while getting my degree or do you think I should try to go to a more respected school where I could possibly learn from better professors? I’m here on scholarships so I would probably have to get loans if I wanted to go to Chapel Hill or even a more respected business school like NYU or UVA.

For me to become a market master, what actions and decisions do you think I should make at this point in my life?

Thank you for any feedback.

Bella Responds

The two questions most important to me during an interview are: 1) Do you own a personal trading account? and 2) What trading blogs do you read? Dr. Steenbarger would argue that if you’re passionate about trading then you will find a way to trade. Those most passionate about trading, who sustain the energy to build trading skills, have the best chance of success, and not those necessarily from the right school.

So open up a trading account. Start building your trading skills. If you don’t have the money then go get a job, save, and then open up a small account. And start trading. Develop a track record. Check the StockTwits stream and blogosphere for passionate young traders and develop relationships with them. Learn from them. Bounce ideas off of them. Create your own trading community. Read trading blogs. You build trading skills by your actions not by your words or from where you graduated.

And for some proof you do not have to go to an Ivy League college to become a great trader, let’s consider some of the greats:

1. Arthur Cutten (aka Guelph’s Wheat King). In 1929 it was believed that he amassed a fortune that estimated over $90 million. In 1924 He was notorious for having cornered the wheat market, making him “the wheat king.” There is no record of him attending any universities. The last school of record is Guelph Collegiate, which is a high school.

2. Paul Tudor Jones,  founder of Tudor Investment Corporation, a multi-billion dollar hedge fund. He is worth an estimated $6.3 billion. He earned an undergraduate degree in economics in 1976 from the University of Virginia. He applied to and was accepted to Harvard Business School but declined the offer because he believed that there was nothing of value they could teach him.

3. Stanley Druckenmiller, President, CEO, and Chairman of Duquesne Capital. He’s ranked as the 91st richest person in America, with a net worth of $3.5 billion by Forbes. He earned an undergraduate degree in economics from Bowdoin College. He attended a three-year Ph.D program in economics at the University of Michigan, but dropped out after accepting a position as an oil analyst for Pittsburgh National Bank.

4. David Tepper, a successful hedge fund manager and the founder of Appaloosa Management. His estimated worth is $4 billion. He earned an undergraduate degree in economics from the University of Pittsburgh.

5. Richard Chilton, he started his career by working at Merrill Lynch, Allen & Company, and Alliance Capital. Soon after he founded Chilton Investment Company in 1992. His net worth as of now is $1.2 billion. He graduated with a Bachelor of Arts and Science from Alfred University.

Mike Bellafiore

Author, One Good Trade

5 Comments on “Traders Ask: Do I Have to Go to the Right School to Become a Great Trader?”

  1. One of the great myths I discovered too late was that it actually matters which college you attend.

    Of the top 100 Forbes Most Wealthiest, those without degrees average a higher net worth than those with degrees by a few billion or so.

    Ultimately, you are the master of your destiny.

  2. Here’s an answer:

    If you want to trade your own money then it doesn’t matter what school you go to. In fact, the college degree in itself is unlikely to do anything at all for your trading. What does matter is what you learn, whether in a college or elsewhere. Things like programming, statistics and anything creative would be helpful.

    However, if you want a ‘profession’ to fall back on (which is not a bad idea) or you’re not sure trading is for you or you’re thinking of joining some financial firm then that’s a whole different ballgame and the usual rules of life and education, Ivy League/degree etc. apply.

  3. It all well and good to look at a few special cases of Billionaires with average degrees. But if you go to a Top University its easier to get a ‘Good’ trading job and learn from the best and therefor easier to become a trader.

  4. In Australia we have compulsory Superannuation and can choose to self-manage this. With 2 kids and a wife I didn’t have much spare capital but wanted to learn to trade and look after my future. I elected to run my own super using the past 17 years of employer contributions to essentially fund my trading education.

    It’s going to take years and plenty of draw downs but the future benefits far out weigh working a soul destroying job until the age of 65 where I then would be lucky to see 5 years of benefits out of this fund.

    Obviously this isn’t for everyone, and some would never consider risking their future capital, but I made a decision to put everything on the line and go for a better richer life – now – doing something I love than face the inevitable retire broke outcome, and 3 years later I’m still struggling yet dedicated to this cause (and slowly making progress).

    Just one suggestion for how you can fund an account if you don’t have much cash to spare 🙂

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