Is it possible for a complete newbie trader, with only two weeks of training, to make money trading the financial markets? If the lessons learned from the BBC reality show Million Dollar Traders are anything to go by, then it's highly probable that anyone can create wealth by trading the financial markets. The show broke many long held myths about the financial world of trading, and how difficult trading actually is. It also highlighted valuable lessons that every wannabe trader should learn in order to survive and succeed in the world of trading.
Million Dollar Traders was in effect a project that explored the hidden potentials of ordinary men and women and how effective they were in playing the market. The project was conceptualized by Lex Van Dam and Anton Kreil, both former Goldman Sachs traders. The concept was simple. A group of eight ordinary people belonging to different age groups, employment history, educational background and demographic were given one million dollars capital to finance their trading activities over an eight week period. The money was provided by Van Dam. Anton Kreil was the supervisor and mentor to the group. The participants underwent two weeks of intensive training and were then unleashed with the one million dollars, to trade as they wanted too for the two months. The only goal was to make money by building their portfolios and successfully trading them in the markets.
The format of the series combined the popular elements of typical modern day reality shows and informational documentaries. Refreshingly, there wasn't much of the normal overacting that you would associate with most reality shows. It was presented in a very straightforward manner and in my opinion was edited very well by the production company Century Films. The complexities and intricacies of the financial world of trading were for once explained really well to the mass audience, especially by Kreil. The production team seemed to strike a perfect balance between giving enough information to the audience so they understood what was happening, and at the same time managing to steer away from dumbing down the show too much. Of particular interest was how the show demonstrated that everyone can become their own trader.
The first episode introduced the wannabe traders and followed them closely as they began building their stock portfolio's. The second episode tested the mettle of each participant in trading and managing their risks, and the final episode turned dramatic when four of the underperforming traders resigned and walked out of the office in protest. This was in reaction to when Van Dam and Kreil fired one of the traders for chronic underperformance. At the end, only a soldier, a student and a single mum had survived the eight week ordeal. The three of them together then had two weeks to trade one million dollars between themselves in an attempt to claw back the losses of the original group.
Incidentally, Million Dollar Traders was filmed when the global financial meltdown occurred in the summer of 2008. The context provided much stress, excitement, anxiety, and confusion for the novice traders. As U.S. Mortgage giants Fannie Mae and Freddie Mac were blowing up, Kreil summed up how difficult the markets were perfectly
If this happens the U.S. could be over for a generation, for anyone that has been in the markets for a long time, this is proper scary stuff.
Even as a viewer watching you could feel the pressure of the moment. One contestant broke down in tears for almost ninety minutes. Another one totally blew his investments, which made Van Dam furious. However, some of the contestants did show exceptional skills beyond their experience in managing risks and handling the stresses of trading.
At the end of the show, the entire team had lost two point four percent of their investments. But this figure was far better than the performance of most professional traders who lost more than five point five percent on their investments. Van Dam and Kreil showed that a novice trader can perform well in any market versus the professionals. I was certainly a fan of the show and I'm eagerly awaiting the second installment.