Think back to when you first started learning about trading. The potential, the excitement, the learning curve, your first gain and your first loss. Its a process we all went through. I read books, blogs, basically anything I could get my hands on. I definitely learned a lot, but looking back on my experiences, I learned the most by going through the process of starting and running a trading club at Penn State.
I was lucky enough to meet Jason Gordon, another student who was interested in trading, during my second year. Our mutual dislike of the school “investment” fund pushed us to create our own trading club. The regulatory process was quite simple, we got a professor to sign on as an adviser, drafted our constitution and came up with a name. Two weeks later we were approved.
We had no idea what we were doing. We combed the Internet for educational material and combined what we knew into a 4-5 lesson course, mainly focusing on technical analysis and the psychology of trading. We figured a majority of our new members would have no idea what technicals were and we would go from there. Our first meeting had over 40 students, the next meeting that number dwindled to about 20 and after that we only had about 10 members left that were dedicated to the club. Although this was disappointing at first it worked out better in the long run as we were able to focus and define our vision for the club. After that we steadily increased our membership over the next few semesters.
Here is a list of things that I would recommend you think about if you are planning on starting a trading club. They are by no means the best way, but simply my way.
- Aggressively recruit. Go to club fairs, send announcements through listservers, ask professors to spread the word to their students, hang flyers around campus. After your first few meetings you will be left with a core group of dedicated members
- Keep it interesting. Have a variety of interactive activities planned out. Use simulations such as ChartGame (www.chartgame.com), run a mock portfolio, publish a weekly newsletter, have guest speakers come out etc.
- Expand your domain knowledge. Members will have varied interests in the financial markets and will want to talk to you about it. While you don’t need to be an expert in any particular area, be prepared to point them in the right direction. Interests include quantitative trading, forex, commodities, etc.
- Advocate reading and research outside of the club. Some of our members thought that they could learn trading and TA just from coming to our meetings. However, constant self-education is required. Give members a list of blogs, publications and books that you think would be beneficial for them to follow.
- Encourage discussion. We learn best by talking about our ideas, this will help you and your members become better traders
- Think about succession. Have members participate in the leadership of the club, this will help the club continue once time comes for you to graduate
- Involve faculty. We all know that technical analysis is looked down by academics but try to have professors attend your meetings as it would probably encourage debate and might even prompt them to add more material about trading into their curriculum.
Last week a fellow trader from UPitt, Steve McMannis and I started a new website that is dedicated to college traders. We compiled a significant amount of resources, basically everything you would need to start a college trading club. Check it out at www.collegetradingexchange.com and sign up to our mailing list for future updates we have planned.
Feel free to email me any time at [email protected] if you have any questions, comments or just want to talk trading.