In today’s financial services industry – and particularly in the derivatives-broking world – there is a problem that most people would rather sweep under the rug. It is uncomfortable to talk about. It is inconvenient. And it challenges the fantasy that many new traders cling to. But ignoring it does not make it go away. It is time to be blunt: there is a vast education gap in this industry, and unless you take personal responsibility for bridging it yourself, you are walking headfirst into danger.
At the core of all of this is a very sizable portion of the industry who, even if they do have your interests in mind, considers you to be too complacent to even want to understand the essential mechanisms that determine your financial fate…
Don’t prove them right…
Listen to a conversational review of this article:
The So-Called “Education” Trap
Much of the education offered to retail traders is nothing more than a marketing exercise. It is free in the same way a free sample at a supermarket is free – a bait to get you hooked, a nudge towards becoming not just a client, but an uneducated client. And when the business model of your broker or service provider does not rely on your success – only on you continuing to push the button, take trades, and generate commissions – their incentives are misaligned with yours from the start.
Of course, it would be lazy to paint everyone in the industry with the same brush. Some firms, and some individuals within firms, genuinely want clients to succeed. Some even try to educate properly. But too often, education is either oversimplified to the point of meaninglessness, or else it is made so needlessly complex that it becomes inaccessible to the very people who need it most.
How Clients Contribute to Their Own Undoing
It would be easy to blame the industry alone. But that would be dishonest. A large part of the responsibility lies with the clients themselves – with the retail community. Too many traders, too many investors, are willing participants in their own downfall. Essential concepts are either not explained to them, or they are explained and dismissed. Either way, the result is the same: critical knowledge ends up in the too-hard basket, gathering dust while clients climb into the pilot seat without even a basic understanding of gravity.
Expectancy: The Gravity of Trading
Expectancy is one of those concepts. It is not fancy. It is not complicated. It is not some new-fangled strategy or technical indicator. It is the equivalent of gravity for a pilot. Foundational. Unavoidable. Universal.
Yet when expectancy is mentioned – if it is mentioned at all – it is often wrapped in complicated formulas, algebraic symbols, and academic jargon. But the reality could not be simpler:
- Total up all your trading results over a set period – winners and losers included.
- Divide that total by the number of trades you took.
That number is your expectancy. Your expected value per trade. If you have made $100,000 over 100 trades, your expectancy is $1,000 per trade. Sometimes you will have losing trades. Sometimes you will have winning trades. But across a big enough sample, that average return tells the real story.
And here is the critical point: without positive expectancy, you are mathematically guaranteed to lose in the long term. This is not a matter of opinion. It is not something that depends on market conditions. It is a law of financial physics as inescapable as gravity itself.
Why They Do Not Teach It Properly
So why, if it is so simple and so crucial, is expectancy not front and centre in every trading course and onboarding process? There are three main reasons:
- Ignorance: Many financial services professionals simply do not know it themselves. Despite holding certificates and licences, they are not properly educated.
- Conflicted Interests: Some understand expectancy perfectly well but choose not to educate clients on it, because frequent, emotion-driven trading is more profitable for their business model than long-term client success.
- Client Apathy: And some – perhaps the saddest group of all – have given up trying. They have decided that clients do not want to understand. That it is too difficult to get clients to care about something that does not fit into a marketing slogan or a colourful infographic.
When Good Intentions Are Defeated by Reality
Even the better-intentioned professionals often find themselves giving up. After enough experiences of clients glazing over, pushing back, or flat-out refusing to engage with anything that seems even slightly challenging, they retreat. They tell themselves it is not worth it. And, painful as it is to admit, in many cases, they are right.
The reality is that many clients do not want to know. They want the dream. They want the excitement. They want to believe that flying the aircraft without understanding gravity will somehow work out fine. And the industry, seeing that reality, often responds by offering what sells rather than what saves.
The Tragedy of the Too-Hard Basket
When something as essential as expectancy – something so simple, so foundational – is seen as “too hard”, something is badly wrong. And it is not the fault of the markets. It is not the fault of gravity. It is the fault of the would-be pilot who refused to learn before taking off, risking not just themselves but often the financial well-being of their families and loved ones too.
Don’t Prove Them Right
Make no mistake: you already have enough enemies in the market. Technology gaps. Complex instruments. Rapidly changing environments. An industry that, by and large, does not have a vested interest in whether you succeed or fail. The last thing you need is to become your own worst enemy on top of that.
It does not have to be difficult. Sometimes all it takes is asking for help. Sometimes it is as easy as finding a simple spreadsheet, an online calculator, a basic template. Sometimes it is as simple as sending an email to someone like us at IU, and getting a custom solution or a quick explanation that clears away the fog.
There is no shame in not knowing. There is only shame in refusing to learn when the path to understanding is right in front of you.
And when you do learn it – when you do finally grasp expectancy, and see how simple and powerful it really is – you will wonder why you ever resisted it in the first place. Why you ever put something so crucial in the too-hard basket. Why you ever thought you could fly without understanding gravity.
The world is already full of people betting on your ignorance. Do not give them the satisfaction.
Don’t prove them right.