Becoming a Profitable Trader - Lesson 1
Summary
TLDRThis video script offers valuable trading insights from eight years of experience, emphasizing the importance of understanding one's identity as a retail trader and the distinction from institutional traders. It highlights key traits of successful traders, such as patience, emotional composure, consistency, and discipline. The speaker stresses the significance of a life portfolio, balancing various life aspects to mitigate the impact of trading losses. Furthermore, it underscores the need for structured education from experienced sources and the pitfalls of misinformation, advocating for a holistic approach to trading and life planning.
Takeaways
- đ The importance of understanding who you are as a trader, whether new or experienced, and recognizing the difference between retail and institutional traders.
- đ The majority of retail traders are not profitable and are often categorized as gamblers due to their approach to trading.
- đ§ The significance of being patient and emotionally composed in trading, which involves more than just waiting for opportunities.
- đ€ The misconception that experience alone leads to emotional composure; the right training and mindset are crucial.
- đ The correlation between the abundance of information and the decrease in wisdom, highlighting the need for discerning quality education.
- đ The necessity of a structured education source for acquiring trading skills, rather than relying on unstructured or misleading information.
- đ The traits of profitable traders include patience, emotional composure, consistency, and discipline, which are essential for success.
- đŒ The concept of a 'life portfolio', which involves balancing different aspects of life such as relationships, health, spirituality, and income to mitigate the impact of trading losses.
- đŻ The need for traders to have a clear purpose and direction in life beyond just making money, to avoid getting lost once financial goals are achieved.
- đïž The value of infrastructure in education, such as access to funding and investment opportunities, which can provide a pathway for traders to grow their wealth beyond trading.
- đŁïž The emphasis on learning from experienced traders who have built wealth through multiple assets and income sources, not just from trading profits.
Q & A
What is the main focus of the video script?
-The main focus of the video script is to provide trading tips and insights based on the speaker's 8 years of experience in the financial markets, emphasizing the importance of understanding the nature of being a retail trader and the traits of profitable traders.
What does the term 'retail investor' refer to in the context of trading?
-In the context of trading, a 'retail investor' refers to an individual who trades their own money for their own financial gain, as opposed to someone who trades on behalf of an institution, who would be considered a professional market participant.
Why is it important for traders to understand the difference between being a retail investor and a professional trader?
-It is important for traders to understand this difference because it helps them to recognize the information and advice that is relevant and beneficial to them as individual market participants, avoiding misconceptions and marketing ploys that may mislead them.
What is the correlation mentioned in the script between information and wisdom?
-The correlation mentioned in the script is that as information increases, wisdom decreases. This suggests that an overload of information can lead to a lack of discernment and understanding, which can be detrimental in the trading world.
What are some of the key traits of a profitable trader according to the script?
-According to the script, key traits of a profitable trader include being extremely patient, emotionally composed, consistent, and disciplined.
How does the script differentiate between patience and correctly waiting for opportunities in the market?
-The script differentiates by explaining that patience is not just about waiting; it's about knowing how, when, and why to wait, and being specific about what one is waiting for, which affects decision-making in trading.
What is the misconception about emotional composition among traders that the script addresses?
-The misconception addressed in the script is that emotional composition comes with time and experience, such as backtesting or accumulating losses. The script argues that this is largely incorrect and that emotional composition comes from the right training and approach.
What is a 'life portfolio' and why is it important for traders to have one?
-A 'life portfolio' refers to a diversified set of investments and income sources outside of trading, such as business investments, relationships, health, spirituality, and income from various sources. It is important for traders to have one to balance potential losses in trading and to maintain a sense of fulfillment beyond just trading success.
Why is it crucial for traders to have a clear understanding of their life purpose and goals beyond trading?
-It is crucial because once traders achieve financial success, they may hit a brick wall if they don't have a clear purpose or direction in life. This understanding helps prevent a sense of aimlessness and ensures that they have a structured plan for their life's journey.
What defines good education in the context of trading, as mentioned in the script?
-Good education in the context of trading is defined by the script as coming from a structured source, preferably from someone with experience in the market who has achieved wealth through their skill, not just from trading profits, but from multiple appreciating assets and income sources.
What is the importance of infrastructure in the context of a trading education program?
-Infrastructure is important in a trading education program because it provides a clear pathway for learning and growth, including access to funding, investment opportunities, and a support system that is designed to help traders succeed in the long term.
Outlines
đ Understanding the Retail Trader Mindset
The video script begins by emphasizing the importance of recognizing oneself as a retail trader, distinguishing between professional and non-professional market participants. The speaker, drawing from years of experience, discusses the common pitfalls of retail traders and the fine line between trading and gambling. The speaker also warns against the misuse of terms like 'retail' to manipulate retail traders and stresses the importance of understanding one's identity as a trader to avoid being misled by misinformation in the financial markets.
đ§ Traits of a Profitable Trader
This paragraph delves into the characteristics that define a successful trader. Patience, emotional composure, consistency, and discipline are highlighted as essential traits. The speaker refutes the misconception that experience alone leads to emotional stability in trading, arguing that the right training and mindset are crucial. The paragraph also touches on the importance of aligning one's consistency and discipline with profitable behaviors, and the need for self-awareness and introspection to track and improve one's trading behaviors.
đŒ The Importance of a Diversified Life Portfolio
The speaker introduces the concept of a life portfolio, explaining how a diversified investment approach can balance financial outcomes and reduce the emotional impact of trading losses. The paragraph contrasts the resilience of traders with a well-rounded life portfolio against those who have all their financial eggs in one basket. The emphasis is on the need for traders to have a structured life that includes multiple sources of income and fulfillment beyond just trading, to maintain a balanced perspective and avoid being overly affected by market fluctuations.
đ Charting Your Path to Profitability
The final paragraph focuses on the importance of having a clear vision and plan for one's life and trading career. It discusses the risks of achieving financial success without a purpose or understanding of what comes next. The speaker advocates for structured education from experienced sources, cautioning against the pitfalls of misinformation. The paragraph also touches on the value of infrastructure, such as access to funding and investment opportunities, as part of a comprehensive educational and trading support system.
Mindmap
Keywords
đĄProfitable Trader
đĄRetail Investor
đĄInformation Overload
đĄEmotional Composure
đĄConsistency and Discipline
đĄLife Portfolio
đĄStructured Education
đĄMentorship
đĄInfrastructure
đĄProp Account
đĄAsset Diversification
Highlights
Importance of understanding who you are as a trader, whether new or experienced, in the context of being a retail investor.
The differentiation between retail and institutional traders in the financial markets.
The misconception that all traders from investment banks are successful, with the reality being more nuanced.
The critical role of patience in trading and how it differs from common understanding.
Emotional composure as a key trait of successful traders and the common myths around it.
The necessity of consistency and discipline in trading and how they are intertwined.
The idea that everyone is consistent and disciplined in some way, but the challenge is directing these traits towards profitable trading.
The concept of a 'life portfolio' as essential for a balanced trader's life.
The impact of a diversified life portfolio on emotional resilience in the face of trading losses.
The importance of having a clear purpose and direction in life beyond trading success.
The pitfalls of focusing solely on trading without considering the bigger picture of life goals.
The necessity of a structured education source for acquiring trading skills.
The difference between education from experienced wealth holders versus those with prop accounts.
The infrastructure of a proper education system, including access to funding and property investment opportunities.
The power of mentorship and the benefits of learning from those with diverse and substantial wealth.
The warning against the overload of information and the lack of wisdom in the trading world.
The emphasis on the importance of tracking behavior and thought patterns to align with profitable trading.
Transcripts
[Music]
waste too much energy you using too much
muscle
[Music]
[Music]
all of you want to become profitable
Traders it's the reason why you're here
and you want to make money what I'm
going to mention in this video are tips
from my 8 years of experience in trading
the financial markets and also the
previous few years that I've coached
Traders some Traders getting from
absolutely nothing to then trading
multiple six figures and some even seven
figures the first things first that you
have to understand is who you are as a
Trader whether you're somebody who's
brand new and this is your first time
coming across any type of trading
content or whether you're somebody who's
been trading the markets for a multitude
of different years you will eventually
if you haven't already come across this
term retail unless you actually have a
job role with an investment Bank whether
it's City HSBC JP Morgan any kind of
investment bank and unless you work
there you're always going to be
categorized as what is known as a retail
investor or retail Trader and I'll tell
you why in a second this is very
important to understand because people
skip over this but get to the point a
retail investor is somebody who trades
their own money for their own Financial
game they don't trade on behalf of any
institution of any kind nothing like
that naturally these Traders are
referred to as nonprofessional Market
participants the professional Market
participants are the ones who
essentially trade on behalf of an
institution they're considered
professional now not every single person
who trades on behalf of financial
institutions are actually great Traders
Believe It or Not For example A friend
of mine family friend actually used to
trade for City Bank a few years back I
don't exactly know what he specialized
in terms of the trading assets ECT when
he was trading there he made it very
clear to me not everybody who trades in
an investment bank is actually a great
Trader we've always got the different
tars you've got the bottom te the mid T
the high tear Traders it doesn't mean
that if you are a retail Trader that
you're a poor Trader but it just so
happens to be as I mentioned in my
previous video that I would even say 97
let's up the start at this time 97% of
people involved in the retail investment
industry are terrible and in fact
they're not even Traders they're what is
known as a gambler now I'm not even
saying this is a joke there's a very
very fine line between a retail investor
and a gambler and I'll get into that in
later lessons but for now anyway getting
to the point retail investor this is
what you are now why is this important
to know and it's fundamentally crucial
for you to know this the reason being is
all down to one word and that word is
information information always remember
this is a correlation when information
increases wisdom decreases this is a
Time proven correlation the more
information that is available the less
wise a society become there's also proof
of this in the trading World there is so
much information but the failure rate is
only increasing and why is that is
because there there is more information
available than before and the problem
with information is someone like you who
may be brand new or maybe you've been
trading for a few years you won't know
who to listen to you won't know who's
right you want know who's wrong because
everyone's saying I'm right this
person's wrong listen to me don't listen
to them this is why you should learn off
me I'm the best blah blah blah I've got
this many payouts all this nonsense so
the reason why I talked about the term
retail is because you'll find a very
quick way to figure out whether someone
doesn't actually know what they're
talking about to their entirety is if
they use terms like retail in their
lingual so for example if I will say
don't trade this method because it is
retail or don't do this because this is
what retail Traders do that would then
in turn report that I am an
Institutional Trader wouldn't it if I
was saying to you guys don't do this
because this is what retail Traders do
or the biggest mistake that retail
Traders make is they do this and this is
why you should do this instead that
would then report that I am an
Institutional level Trader which doesn't
make sense because if you look at the
Google definition of what an
Institutional Trader is versus a retail
Trader it's a very simple Google search
that will help you understand the
difference that you'll find is a
marketing Ploy that a lot of people
online use just to grab your attention
it's a very very smart tactic because
they know with asymmetric knowledge when
they know more than you they can use
terms like that to grab you in so that's
just a very quick introduction right and
whether you're somebody who's brand new
whether you're somebody who's been
trading quite a number of years
important for you to know that before we
begin anything watch out for things like
that you are a retail Trader and you
need to know what that means and the
purpose of it is you're trading your own
money for your own financial gain of
course secondly before you begin you
need to understand what a Trader is and
how they think like how do they behave
how do they perform who is a Trader if
I'm trying to teach you to become a
world champion boxer for example exle
you need to know what a world champion
boxer is like for example custom when he
was training Mike Tyson he didn't even
let the guy step in the ring for a few
weeks all he did was literally brainwash
him on the psychology of what a world
champion boxer is like and he drilled
that into his mind because if you don't
know who you are to become how are you
going to get there in the first place if
you don't know what a profitable Trader
thinks like acts like trades like how
the hell are you going to become one
that's why you're going to find a
struggle to decipher between what
information is worth listening to and
what is not to understand that you need
to get the traits okay traits are very
very simple first one they're extremely
patient extremely patient
now being patient doesn't just mean you
wait for things this is a big
misconception a very simple example that
you've all experienced when you're
hungry every single time you were hungry
in the past did you not notice your
emotions start to get more heightened as
time went by you're getting more
agitated more annoyed you're being
patient but you're being patient the
correct way you'll end up saying things
that you don't mean to someone you end
up becoming a dick okay and this happens
to people when they get hungry it's a
very simple life example that I can give
you the same way that waiting for an
opportunity in the markets for the next
couple of weeks you might be waiting for
it but how are you waiting for it
because that's going to massively affect
your decision these guys here are
patient in the correct way they know how
to wait when to wait and why they're
waiting and exactly what they're waiting
for they're very very particular people
missed a little te there okay next one
is they're extremely emotionally
composed so I'm going to put emotion
composed now this ties into being
patient for example they take a loss or
they have a win it doesn't really move
them now to get to that stage is very
very difficult but it's very possible
with the right training which I'm going
to get to in later lessons people
wrongly think let me explain this point
because this is this is ridiculous why
people think this right so you'll get
brainwash into believing that the more
that you back test and those who aren't
familiar with with that that means when
you have a particular method that you
approach the market with you go back and
test that method people have told you
that if you go back and test your method
over and over again or that if you
accumulate loads of losses over the
years and you have that experience
you'll become more thick skinned and
you'll become much better at becoming
emotionally composed and that is 90%
wrong if you take this bottom part as
being time that would technically mean
that as time goes by so put scale here
that you become better if that's the
case why have I spoken to dozens of
Traders who've been trading multiple
years and it's still not profitable the
reason why you're watching this entire
Series in the first place is to know how
to stick it out in the right way if the
way that you're doing it at the moment
is the right way to approach the markets
and learning around actually becoming a
profitable Trader so this is not true
with time you don't just get better if
the information if the info is correct
then this is true if the info is not
correct you'll be like this and that 97%
of people that I talked about are like
that the next two traits are
consistent and disciplined to be
consistent you have to be discipline so
these are intertwined in a way this is
very important every single one of you
funnny enough actually has these traits
already you're already consistent and
you're already disciplined before you
come into the markets every single human
being on the earth is consistent and
they're all disciplined but at what
smokers for example are consistent and
they're disciplined at smoking people
who are out of shape and fat are
consistent at eating junk food and not
training and living a poor unhealthy
lifestyle you're all consistent and
disciplined but are you consistent and
disciplined at the right thing for
example when coaching people have spot
something very very key straight away
their language everybody's language is
very consistent with who they are all of
you can do some introspection and figure
this out for yourselves that the way
that you speak the way that you talk
walk and act and think all the thoughts
that you're having in your mind have you
ever paid attention to it when was the
last time you actually tracked your
behavior some of you might do this very
rare that a lot of people do how are you
not monitoring and how you not keeping
track of your behavior which is going to
be the very reason why you succeed or
fail in the end you can learn a very
very good method to approach the market
you might already have one if you don't
behave in the correct way you don't
think in the correct way and you don't
think like a profitable Trader you won't
become one it's the most overlooked most
under analyzed aspect of trading is the
way that you behave you need to track it
okay so you are consistent in you are
disciplined but you need to restructure
that to be around the right things and
that is exactly what profitable Traders
are like these are the only other traits
that I can talk about now you have an
idea of what a profitable Trader thinks
like and their traits you need to mold
yourself into that third point now you
have an understanding of what kind of a
Trader that you are also know the traits
of a profitable Trader now third point
is is probably the most important of the
Bunch Every profitable Trader has got
something called a life portfolio
and what is a life portfolio let me give
you an example let's say for example I'm
invested in the S&P I've got a couple of
businesses I've got income coming in
from different places if I am down in
one of my investments but I've got
income somewhere else it's going to
balance itself out I won't then feel
that loss that I'm in in one investment
when I've got another investment that's
up and it cancels itself out I'm going
to draw on here the average person okay
this is your everyday person let's say
all they've got is a bank account now in
that bank account they might have let's
say a ,000 if they lose ÂŁ300 out of that
now have a net of 700 they're going to
feel that far far more then for example
another person who's got extra income or
they've got an investment so I'll put IV
here for investment and they've got
let's say 2,000 in there them being down
ÂŁ300 in terms of their bank account they
might have spent that on something I
don't know had night out on the weekend
they're not going to feel it as much
because they know they've got extra
Capital sitting somewhere else that's
just a general example now let me talk
about it from a trading perspective so
Traders are focusing on these things
relationships Health this is mainly
physical health
spirituality I don't literally mean
lighter full of candles and sit there
and like literally hold your hands there
meditate and pray for profitability
that's not what I'm talking about here
and then they've got trading down here
and the final one I'm going to put here
is income say for example I'm down in my
trading I have a couple of losses draw
down whatever it is completely normal
but if I'm up in my relationships my
health is up my spirituality is up and
my income's up do you think I'm going to
feel that as much do you think that
those two three losses that I would have
had or that draw down streak that I'm in
I'm going to feel it as much of course
you won't because you're up in other
areas of your life now imagine you have
nothing nothing in your life that's good
other than trading all you've got in
your life is literally trading because I
get it you're all passionate you know
and you love what you do I do okay I've
been trading for8 years plus I love
trading but if all you've got good in
your life is trading and you're now down
in that not going to be good and guess
what's going to happen you're going to
feel those losses a lot deeper you're
going to feel that losing streak a lot
deeper you're going to feel those break
evens a lot deeper so profitable Traders
all have a structured life portfolio
very very important to structure your
life portfolio well you need to know
where the hell you're going in the first
place that's you now this is where you
want to get to if I was to say to you
you wake up tomorrow and you've got $10
million in your trading account you're
profitable you've done all those things
you've had a few watches you've had the
nice cars you've got all this stuff
right you've got a nice house Etc do you
even know where you're going to go next
do you even know what your purpose in
life is now I know that's a very deep
question to ask and not everybody's
going to have that figured out in the
beginning but are you even attending
your mind to focus on those things what
do you think your actual purpose on this
Earth is and the reason why this is very
very very very important and the reason
why this is critic I'm telling you it's
so so important is that when you
actually get access to the money that
you want to trade and you start making
the money people hit a brick wall
because they've put that on a pedestal
for so long they don't know what the
hell's next I've seen it hundreds of
times people go fulltime they get bored
they've got no purpose no fulfillment
nothing they might have made 50,000
100,000 whatever it might be they
splurged and they don't know what to do
anymore they've got access to the money
that they always dreamt of having but
they don't know what to do next and
again when you've got education out
there and you got people who are
inexperienced giving invaluable
information you're going to go in a
downward spiral it's going to get worse
and worse and worse for you and that
should not be the case you need to have
some kind of planning and some kind of
structure not everything's going to go
to plan but you have to have a structure
of what exactly do you want your life to
look like you need to write it out as if
you're literally directing a movie and
you need to understand it in layman's
terms where are you actually going if I
want to drive to London I know the
pathway that I need to take in order to
get there my satnav is going to
calculate the quickest route for me to
get there but if I don't even know the
destination what's the satav going to
calculate it's not even going to give me
a pathway to follow so if you don't know
where the hell you're going and you
think making money is the end of it it
you're going to get lost in your track
now obviously we know to get from where
you want to get to to where you want to
be you need the skill the skill to trade
the markets how are you going to get the
skill information as I said before now
your source of information has to come
from a structured education Source I'm
not going to go into explaining the
stupidity behind people who tell you you
don't need a mentor you don't need
education it's silly I don't want to
lose brain cells talking about this
ignore them people they don't know what
they talking about to get the skill you
need the right information and to get
the right information you need a
structured education Source Link in the
bio you might be wondering what in the
world defines good education because
there's a lot of it out there and as I
said before that the principle that I
gave you the correlation of the more
information you have the less wisdom
there naturally is one of my favorite
quotes that I like to go by that we're
living in a day and age where we're
drowning in information but starving of
wisdom and it's Food For Thought So what
defines good education this is a second
point because if education is going to
be literally the thing that gives you
the skill that's going to carry you
through from where you are now to where
you want to be how do you actually get
good education well I mean hint hint you
need to learn off somebody who's got
experience in the market the right type
so I'm going to put right here and this
leads on to the next Point they've
actually got wealth through the skill
wealth doesn't mean you're trading a$1
to $2 million account that's not wealth
true wealth it's very simple you have
assets that are appreciating in value
that are saving you more time and your
income isn't dependent on One Source
they've not just got one pocket where
they can dive into for money they've got
multiple different assets multiple
different Pockets that they can actually
pick into in order to attain money these
are the kind of people that could stop
Trading today and they won't need to
trade ever again because Investments and
assets are paying for their lifestyle
and their future Generations these are
the kind of people you want to learn
from so this is a major problem because
what's happening is the majority of
people who are teaching you now their
wealth is
literally
categorized in this a prop account for
those of you who are not aware prop
account is an account that is given to
you by companies that fund you and give
you money and say that well if you can
do what you say you can do which is
trade profitably then we'll give you
access to Lords of money in most cases
is this is simulated money so if you've
got a million dollar in one account in
one prop account you don't own that
money that's not yours okay that's money
given to you you don't have ownership
over it you can't extract anything you
please you can only extract that of
which The Profit that you made on that
account that's very very important to
understand somebody who's got a million
dollars or a million pounds in personal
capital of owned money compared to
somebody who's got it in prop Capital
One is actually a millionaire Trader and
the other person is managing seven
Figures it's a far big difference these
kind of people they're going to have a
certain type of experience there's only
so many things that they can teach you
about their financial literacy is only
going to expand so far and if you're
aiming to get to such big Heights do you
really want to learn of somebody whose
wealth is only categorized off of one
pocket like this a prop account really
that's like learning how to get in shape
of somebody who's fat you wouldn't do
that second Point
infrastructure now I all these terms
sound boring but this concerns your
future so it's important infrastructure
is key for example at Falcon we've got a
pathway where you start here so this is
you you learn the skill
through content material weekly webinars
all that kind of stuff again you've got
all that there then you get to a point
where you've got access to funding
through our in-house fund we're not
affiliated with anybody we've got our
own funding company inhouse which means
we are more flexible with the rules that
we can give to our students our students
are better suited with this fund because
it's designed in a way that C is for
them and not against them and this was
specifically designed in that way for
that reason we also got attach with that
that is literally in the works at the
moment the property fund okay so
students that make money through our
funding program they might for example
managing 500,000 each there might be 10
of them because a total of $5 million in
capital allocation there might be a deal
that pops up that says well does this
property available whether it's
residential or commercial it's going to
give you this much Roi per year this is
the investment required it might be
something like a quarter of a million
down these Traders can get together and
think well in q1 we just made 20% okay
in total now if they're managing $5
million in total Capital allocation
that's a million 25% of that is the
investment required 250k they all split
that amongst themselves they can then
get access to a property that can yield
x amount of return can split that
amongst themselves we've pretty much
built this property fund and that's
happened how through Marx contacts
that's the power of having a proper
Mentor I'm not going to bore you with
all the multitude of different things
that we've got for students again that
can be given forward in a different
video but this is lesson based again
education this is what proper education
looks like
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