There are so many trading courses out there that it’s often difficult to know what to look for to assure yourself that you’re going to get value for money, and that the person giving the course is truly an expert.

Having mulled this over, a recent trip to Oxford to soak up the sights made me realise something.

What a Lebanese tour guide in Oxford can teach you about trading courses

Although they cost more, I always prefer to do a walking tour rather than follow a guidebook. I get a lot more out of it and the guides themselves are usually characters. So it proved to be the case with Joe – our Lebanese Oxford expert. Ask a quick question and he’d ramble on about something closely related to the answer.

I found this quite entertaining and still managed to learn a fair bit about Oxford because I like to take in the background information. Others begged to differ and half way round we lost a few Australians who were disgruntled that there was too much talking and not enough walking. Joe blaming this on the Australians’ lack of interest in culture didn’t exactly enamour him to the remaining antipodeans, but it was an entertaining couple of hours.

What’s this got to do with trading?

Knowledge!

It’s a funny thing isn’t it? I was paying Joe the tour guide to share some of his knowledge of Oxford on the walking tour. I could have read a book for a couple of quid, but for me it wouldn’t have been as memorable.

You find the same thing with trading. You could learn most of the basics from a book, but many prefer to go on seminars where they can listen to the expert share their knowledge and experience.

One of the more popular seminars is called ‘Knowledge to Action’ run by a guy called Greg Secker. A well named course because trading isn’t just about knowledge – it’s about the doing. In many ways, trading is like golf. Going to a seminar with Tiger Woods isn’t going to automatically make you a pro-golfer, though it might help give you some pointers.

There are two questions in my mind in reference to the bewildering array of trading and investment seminars on the market at the moment

A) Is the person a genuine expert?
B) Can that person convert his knowledge into improving your action?

There was something in the paper recently about thousands of people flocking to see the Dalai Lama in Nottingham. The Dalai Lama has won many people over with his practical Buddhism, offering ways of being that can apply to everyday living. He is a genuine expert and although you won’t automatically be able to put into practice all he’s passed on, it may at least further your learning.

On the other hand there are question marks over some people offering investment seminars in the UK. On one end of the scale, I’ve attended a few seminars from genuinely brilliant traders, but like a savant, many don’t know how to communicate their knowledge. On the other end of the scale, it’s relatively easy to come across as a trading expert without having to demonstrate evidence that you are.

I have to be careful here lest my editor suffers a litigation-fearing heart attack, so I will stick passing on what is already in the public domain.

Darren Winters of WIN Investing runs one of the UK’s ‘most popular’ trading & investment seminars. You’ve probably seen some of his adverts, because they are everywhere. The usual formula is to advertise a free seminar that promises to show you the secrets of stock market trading.

The free seminar can be useful and contain some basics, but they are foremost a sales pitch for the premium seminars costing anything from £1,000 to £3,000.

Nothing wrong with that; it’s a pretty standard sales technique. However, recently Mr. Winters fell foul of the ASA (Advertising Standards Agency) with complaints over his adverts for his seminars.

You can see the full report and the adverts at the centre of the complaint here: http://www.asa.org.uk/ASA-action/Adjudications/2008/5/WIN-Investing-LLP/TF_ADJ_44463.aspx

ASA Issues raised:

1. One complainant challenged whether the earnings claims in the testimonial in ad A were misleading and whether they could be substantiated.

2. Another complainant challenged whether the testimonials in ad B were genuine; and:

3. Another complainant challenged whether ad B was misleading, because he believed the testimonials misrepresented the average profits people could make if they took the course.

4. The ASA challenged whether the claim ‘award-winning tutorial’ in ad B could be substantiated.

The results:

1. The ASA were happy that the testimonials were genuine and could be substantiated, but were concerned that the claims and testimonials would lead people to believe that they were related to the free seminar, unaware that they are from people who attended the paid-for course.

2. The testimonials were found to be genuine.

3. They were genuine testimonials, but unlikely to be from people on the free course.

4. The ASA noted WIN had been awarded the Business Britain ‘Financial Investment Solutions Provider of the Year’ in 2006 and we therefore concluded that the claim ‘award winning tutorial’ was unlikely to mislead.

There are a number of other criticisms of Mr Winters and his course floating around.

Incidentally, The Mirror recently questioned the legitimacy the Business Britain award. WIN has won a financial investment award from Business Britain – an organisation so obscure there are 18 million more visited websites than its own.

We make no comment on its ability to judge business acumen, apart from pointing out that Business Britain’s boss has notched up eight dissolved firms plus one that was put into compulsory-liquidation in the High Court.

Winters himself has come in for some criticism. Tony Hetherington of ‘This is Money’ has been on his case for a while

Then there is Winters’ previous role as a director of software company Amicus Solutions Limited.

He used to give audiences the impression he sold out of this successful business. In fact, it went bust owing about £250,000. A check at Companies House should show this as a previous directorship by Winters, but it doesn’t. His lawyers say this was a ‘clerical error’ and everything is now in order. It isn’t.

Many have also reported problems with refunds with unforeseen small print such as having to demonstrate that you have traded and lots money or in one case to prove you went along to the investment club meetings that he sets up.

The lesson seems to be ever clear: always read the small print!

On the positive side though, I think the ASA injunction reveals some interesting things. Aside from the quibble of the testimonials being related to the full course and not the freebie one, there appear to be people genuinely making decent money following the course.

But?

I do wonder something.

Many people criticise these expensive courses, but there do seem to be a good number of success stories. I’ve had feedback from a number of members who’ve been on his course and others like it. Many people say the materials are good, with solid lessons on money-management and psychology.

However, after the initial post course rush though, some are left feeling “Is this it?”

Psychologically, you are more likely to put effort into something if you have a sunk cost associated with it. In plain English: if you’ve paid for it, you’re going to use it. The basics of trading are there for us all to use and make our own whether we go on a course or not.

I wonder how much of the success people post is due to the fact that they’ve actually made an effort to start trading because of the sunk cost, not because of the materials and course itself per se.

Hard to say and another important question is to ask how many people were still making those kinds of returns 6, 12, 18, 24 months down the line? How much did these people risk in order to make the returns they made? Did they just get lucky? As Taleb wrote in his recent books on randomness, given a wide enough spread of people there will be always a certain number who make profits.

I cannot comment on how genuine an expert Darren Winters is. Without seeing his personal trading record it is hard to make a qualified statement either way. He will of course point to the number of success stories he has had, but I wonder how much of their success is specifically down to his course and what the percentage success rate is.

There will always be room for good trading education courses. We all need to learn. Yes you can get a lot from books and DVDs, but many people including myself like to learn by seeing someone face to face. As usual, it’s a case of buyer beware when it comes to trading courses. If you’re buying with the comfort of a refund, make sure you check the small print. Also, make sure you follow up on the course materials. Many people never act on what they have learned. Although many have also criticised Greg Secker, at least he’s got a good company name. ‘Knowledge to Action’ implies there also needs to be action on your part.

If you’re looking for good training course I’d recommend any of the free seminars usually put on by the spread betting and CFD companies. I’d recommend the courses and seminars organised by http://www.clickevents.co.uk/. These usually get good feedback. Also keep your eye out for some news of Canonbury-endorsed seminar coming your way soon.