What the Trading Floor Taught me About Financial Education

Research from the Money and Pensions Service in 2024 found that 76% of teachers say most pupils leave school or college without the money skills they need, which can have negative effects on all aspects of life. A greater understanding of the basics is a must, and access to this sort of education must be offered at all levels of education.

Why I started Financial eLearning

I was trading Brent Crude oil at the time and the market had plateaued. My experience taught me to cease trading until liquidity and market fluctuation returned. We saw in the market an influx of supposed market professionals taking advantage of young people trying to better their lives, and people were falling for a promise of great wealth and financial freedom.

One such person was a friend of the family, saving for a deposit for their first house. They followed a trading influencer online who promised wealth at an expedited rate, showing them only their winning trades, and for a monthly fee, they would be shown how to reach this. Within three months the entire deposit was gone, and three years’ worth of hard graft and saving with it. This was not the only horror story within our circle of friends.

The promise of easy wealth? Nonsense. Understanding the markets was only viable through education, patience and experience. So I partnered up with some trader friends of mine to bring financial education to the forefront, in the form of basic and diploma-based trading courses.

It isn’t easy money

People think trading, as a secondary income or as a main vocation, offers quick profits and that the rewards are immediate. This simply is not true. It’s hard work, dedication, discipline, long hours, financial education and experience. There are no guaranteed profits, and losses play a big part in your education as you learn from mistakes, such as bad planning, position entry and flattening. Trading is a profession that requires all of the above to help you succeed.

Social media traders only post winning trades, no one has a 100% record. Sure, there are traders who are very wealthy, but only a tiny percentage of people reach this height. They charge monthly fees for trading ideas. To be honest, if I had a winning formula, I wouldn’t share it with anyone and risk diluting my potential profit.

What the trading floor taught me

Working on the London International Financial Futures and Options Exchange (LIFFE) and the International Petroleum Exchange (IPE) taught me many things, from a good and a bad perspective, each a valuable lesson. Understanding risk, position sizing and discipline were the most important. I saw numerous traders build positions that were too large and take on too much risk. Then the market would move against them, and rather than reducing or cutting their entire position, they held the trade, hoping for a retracement in price. Seeing part, or in some instances all, of an account wiped out on one trade is so disheartening, but a valuable lesson well learnt.

I have used these rules in other financial aspects of my life, such as buying a house or a car. When I bought my house, I used disciplines such as budgeting, renovating the house over time rather than buying everything I felt I needed at once. I realised the value added to the property once the work had finished, and gave up holidays to complete the venture. I did the same when I bought cars: thinking about resale value, and understanding the full amount I’d repay on a loan, including interest, rather than just the face value of the car.

More than buying and selling

We’ve had learners who didn’t understand the full scope of what trading actually is, or the complex roles people have within this sector. Students think it’s only about buying and selling financial instruments, but soon realise there are numerous roles to be had with companies. Some have found successful careers away from trading their own personal accounts, in areas such as broking and sales trading.

Get the basics right

Balancing income and expenditure, budgeting, is the key to financial success, and we strive to instil this in all our learners. Get the basics right and the rest follows. I believe there’s no downside to education when it’s a life skill.

What principals can do

I’d encourage college principals to review how financial education is currently embedded in their curriculum, and consider whether students are leaving with the practical knowledge and confidence to manage their money effectively. Even a small step towards making financial education more accessible can make a meaningful difference to students’ lives beyond school and college.

By Martin Hills, a former LIFFE and IPE floor trader and the founder of Financial eLearning