Trading Professionalism: ethics, regulation and mentoring

01

Before you start: what a professional owes other people

In simple words

Anyone can kick a ball in the park. A referee, a coach or a team doctor is different: other people trust them, so they must follow rules and put the players first. In markets, a professional is someone other people trust with their money, their information or their learning.

Before this course: Trading Plans & Psychology: rules and discipline (course 5.11.3), and before it Trading Styles Compared (course 5.11.2) and Types of Trading (course 5.11). You have written a versioned trading plan in if-then rules, built limits and circuit breakers, measured your own biases on paper trades, scored process over outcome, and run weekly reviews. We do not repeat those. This course moves from "managing myself" to "being trusted by others": ethics, regulation and mentoring.

Key facts

Education only. This lesson describes duties. It does not suggest that you work in the industry.
Skill is not the same as professionalism. A professional has three things on top of skill:

Duties to others: clients, employers, the market and the people they teach.
Accountability: a regulator, an employer or a professional body can check their work and act on misconduct.
A written code: standards they agreed to follow before any hard moment arrives (the same pre-commitment idea as your trading plan in course 5.11.3).

Worked example of a code: CFA Institute says its members and CFA Program candidates are required to follow the CFA Institute Code of Ethics and Standards of Professional Conduct. The Standards have seven parts:

Standard	Topic	Plain meaning
I	Professionalism	Know the law, stay independent, do not mislead, behave well, stay competent
II	Integrity of Capital Markets	Do not misuse inside information; do not manipulate markets
III	Duties to Clients	Loyalty and care, fair dealing, suitability, honest performance, confidentiality
IV	Duties to Employers	Loyalty, disclose extra pay, supervise well
V	Investment Analysis, Recommendations, and Actions	Have a reasonable basis, communicate clearly, keep records
VI	Conflicts of Interest	Disclose conflicts, put clients' trades first, disclose referral fees
VII	Responsibilities as a CFA Institute Member or CFA Candidate	Behave properly in the program; describe the designation honestly

CFA Institute names the Standards of Practice Handbook (12th edition, 2024) as the current guidance. We use the Standards as a learning map; this course does not prepare you for any exam and does not copy the Handbook.
The education line. Teaching how markets, risk and rules work is education. Telling a particular person what to buy, sell or hold is advice, and in many countries giving advice as a business needs registration (Lesson 2). A mentor who stays on the education side is safer for everyone.
Failure modes:
"I'm not a professional, so ethics don't apply to me." People who teach, post or mentor are trusted too.
Ethics as a poster on the wall, never used in a real decision.
Saying "not financial advice" while still telling people what to buy.

Step by step

Open a new document called "Professional Practice Portfolio" with today's date. You will add to it in every lesson.
Write the three things a professional has on top of skill: duties, accountability and a written code.
Copy the seven-part Standards table. Next to each row, write one situation where you, as a learner or mentor, could meet that topic (for example "a friend asks me what to buy" next to III).
Write your own education line in one sentence: "I teach ___; I never ___."
List three people who already trust you about money or learning (a sibling, a study group, followers). Write what each one might expect from you.
Check: your portfolio has a date, the seven rows each with your own example, and an education line with a clear "never".

LESSON 01Before you start: what a professional owes other people

LESSON 01 / ANIMATED LESSON / AI VOICE00:00 / 01:00

Voice

Read the video script

[Host] "Anyone can kick a ball. A referee has to follow the rules, because people trust them."
[Text on screen: duties, accountability, a written code] "A professional has three things on top of skill: duties to others, someone who checks their work, and a written code."
[Screen: seven Standards from Professionalism to Responsibilities as a member] "One example is the CFA Institute Standards: seven parts, from professionalism to conflicts of interest."
[Text on screen: teach how it works, never tell someone what to buy] "Draw your education line: teach how markets work, never tell a person what to buy."
[Host] "Start your Professional Practice Portfolio today. Education only."

Try it now

Start your Professional Practice Portfolio with the seven-part table, one personal example per row, and your education line. Do not place any trade.

ClaudeStuck? Copy a ready-made prompt for Claude

Copy this, open Claude, paste it, and Claude will walk you through the lesson step by step.

For a grown-up: Claude is for adults (18+). Copy this, paste it into Claude, and use the answer to explain the lesson to your child.

I'm learning "Trading Professionalism: ethics, regulation and mentoring" on The Future Market. Lesson 1: "Before you start: what a professional owes other people".

What the lesson teaches:
- Education only. This lesson describes duties. It does not suggest that you work in the industry.
- Skill is not the same as professionalism. A professional has three things on top of skill:
- Worked example of a code: CFA Institute says its members and CFA Program candidates are required to follow the CFA Institute Code of Ethics and Standards of Professional Conduct. The Standards have seven parts:
- Standard - Topic - Plain meaning
- I - Professionalism - Know the law, stay independent, do not mislead, behave well, stay competent
- II - Integrity of Capital Markets - Do not misuse inside information; do not manipulate markets
- III - Duties to Clients - Loyalty and care, fair dealing, suitability, honest performance, confidentiality

The exercise I'm working on:
Start your Professional Practice Portfolio with the seven-part table, one personal example per row, and your education line. Do not place any trade.

I'm stuck. Please:
1. Explain the main idea in plain, simple words with one everyday example.
2. Walk me through the exercise one small step at a time. Ask me what I've done so far before giving the next step.
3. Don't just give me the final answer. Help me do it myself, and check my work when I share it.
4. This is for learning only. Remind me to check with a licensed professional before I make a real decision about my own money, health or legal situation.

I'm a parent helping my child (about 8 years old) with a lesson called "Before you start: what a professional owes other people" from the course "Trading Professionalism: ethics, regulation and mentoring".

Here's what the lesson says:
Anyone can kick a ball in the park. A referee, a coach or a team doctor is different: other people trust them, so they must follow rules and put the players first. In markets, a professional is someone other people trust with their money, their information or their learning.

The activity:
Start your Professional Practice Portfolio with the seven-part table, one personal example per row, and your education line. Do not place any trade.

Please explain this so an 8-year-old understands: short sentences, a fun everyday example, and no hard words.
Then give me 3 simple questions I can ask my child to check they understood, and a way to do the activity together, one tiny step at a time.
Keep it general and educational. This is not advice for a real situation.

Open Claude

Sources

CFA Institute, Code of Ethics and Standards of Professional Conduct: www.cfainstitute.org/standards/professionals/code-ethics-standards

My notes

I learned this

02