How I would learn to trade! (If I could start over)
Summary
TLDRIn this video, the speaker reflects on their trading journey starting in 2007 and shares a structured approach for beginners in 2023. They recommend investing a portion in an index fund and mastering equity trading through learning basics, technical analysis, and developing a trading system. The speaker emphasizes the importance of backtesting and mindset, suggesting that trading should be viewed as a long-term business. They also highlight the value of free resources like screener.n, TradingView, and their own YouTube channel for educational content, urging viewers to subscribe for quality stock market education.
Takeaways
- ๐ **Structured Learning:** Start with a structured learning approach on platforms like YouTube to avoid getting lost in scattered information.
- ๐ผ **Investment First:** Consider investing a portion of your capital in an index fund like Nifty for a stable base before trading.
- ๐ **Master Equity:** Begin with mastering equity trading before moving on to more complex financial instruments like Futures and Options.
- ๐ **Technical Analysis:** Learn the basics of technical analysis and focus on understanding a few key indicators.
- ๐ **Trading Systems:** Develop a systematic approach to trading with a set of rules that dictate entry and exit points.
- ๐ **Backtesting:** Before trading, backtest your strategies to understand their historical performance and potential risks.
- ๐ก **Free Resources:** Utilize free resources like screener.n, TradingView, and reliable YouTube channels for education and analysis tools.
- ๐ง **Mindset Matters:** Adopt a long-term mindset similar to running a business, focusing on consistent growth over years rather than quick gains.
- ๐ฐ **Risk Management:** Implement strict risk management rules to avoid risking too much on a single trade and protect your capital.
- ๐ **Long-Term Perspective:** Recognize that success in trading and investing is a long-term game, and patience is key to sustainable growth.
Q & A
What is the first thing the speaker suggests doing with an initial investment of 50,000 rupees?
-The speaker suggests taking out 30,000 rupees and investing it in an index fund in Nifty.
Why does the speaker recommend not trading Futures and options initially?
-The speaker recommends not trading Futures and options initially because new traders should first master equity trading.
What is the sequence the speaker suggests for learning to trade equities?
-The speaker suggests learning the basics of the stock market, then moving on to technical analysis, and finally learning how a trading system works.
What is the importance of having a trading system, according to the speaker?
-Having a trading system is important because it provides a methodical and mathematical approach to trading, reducing the reliance on guesswork.
Why did the speaker's account double and triple in 2008, and what lesson does he draw from this experience?
-The speaker's account doubled and tripled in 2008 because the market crashed and he was on Futures, but he cautions that this was due to luck and not a reliable strategy, emphasizing the importance of having a backtested system.
What is backtesting and why is it crucial before starting to trade?
-Backtesting is the process of evaluating the performance of a trading strategy using historical data. It is crucial because it helps to quantify the strategy's effectiveness and potential risks before real trading begins.
What are the two types of free resources the speaker mentions for learning to trade?
-The speaker mentions tools for analysis and educational content from blogs, websites, or YouTube channels as the two types of free resources.
Why does the speaker emphasize not following someone else's trading strategy without backtesting it?
-The speaker emphasizes not following someone else's trading strategy without backtesting it because each trader should understand and validate the strategy for themselves to ensure it aligns with their risk tolerance and trading goals.
How does the speaker compare trading to running a business?
-The speaker compares trading to running a business by highlighting the need for a structured plan, consistent execution, and a long-term perspective on growth and profitability.
What is the speaker's advice for someone who doesn't have the time to learn trading?
-For someone who doesn't have the time to learn trading, the speaker advises investing in an index fund and focusing on long-term investing.
What demographic advantage does the speaker mention for India in terms of economic growth?
-The speaker mentions that India's demographic advantage is its young population, most of whom have not yet entered the workforce, which implies a potential influx of cash into the economy over the next two decades.
Outlines
๐ Starting Over: Trading and Learning
The speaker reflects on their trading journey, starting in 2007, and shares how they would approach learning to trade if they could start anew in 2023. They outline a three-part strategy for beginners: 1) Scattered learning through various resources like YouTube and structured learning through a defined curriculum. 2) Utilizing free resources to accelerate learning, such as subscribing to educational YouTube channels. 3) Understanding the importance of mindset, which is crucial for success in trading. The speaker emphasizes the importance of not rushing into trading and suggests starting with a small investment in an index fund for stability, while using the remaining funds to learn and practice trading. They also stress the sequence of learning: starting with the basics of the stock market, moving to technical analysis, mastering a few indicators, and then understanding how a trading system works. The speaker shares a personal anecdote about a simple trendline bounce system they used, which led to initial success but was ultimately based on luck rather than a robust strategy. They conclude by advising viewers to learn about backtesting to avoid costly mistakes and to not trade without a well-thought-out system.
๐ผ Trading Mindset and Resources
In the second paragraph, the speaker emphasizes the importance of having the right mindset for trading, comparing it to running a business. They explain that trading should be approached with a long-term perspective, similar to how a business operates with plans and strategies over years. The speaker advises against risking too much on a single trade and highlights the importance of risk management, patience, and consistency. They also discuss the value of backtesting a trading system over a significant period to ensure its viability. The speaker introduces free resources for both investors and traders, such as screener.n for fundamental analysis and tradingview.com for charting tools. They recommend their own YouTube channel as a trustworthy source for educational content. The speaker warns against blindly following others' strategies and encourages viewers to backtest any strategy before implementation. They conclude by discussing the potential for growth in the Indian economy and the opportunities it presents for both investing and trading, urging viewers to learn and apply these skills wisely.
Mindmap
Keywords
๐กStructured Learning
๐กFree Resources
๐กMindset
๐กIndex Fund
๐กTechnical Analysis
๐กSystem Trading
๐กBacktesting
๐กRisk Management
๐กEquity
๐กFutures and Options
Highlights
Starting trading in 2007, a lot has changed by 2023.
Structured learning on YouTube can prevent getting lost in scattered learning.
Free resources like this YouTube channel can speed up the learning curve.
Mindset is crucial for trading success.
Investing 30,000 rupees in an index fund would have been a wise initial move.
For new traders, mastering equity trading is essential before moving to Futures and options.
Learning the basics of the stock market is the first step in trading education.
Technical analysis is fundamental, but not all indicators are necessary.
Understanding how a trading system works is crucial before actual trading.
Having a systematic approach to trading reduces reliance on guesswork.
Backtesting is essential to validate a trading strategy before live trading.
Risk management is more important than patience and consistency.
Trading should be viewed as a long-term endeavor, similar to running a business.
Screener.n is a great resource for investors for fundamental analysis.
TradingView and charting apps are useful for technical analysis.
Always backtest strategies found online before implementing them.
A trading mindset involves treating trading like a business with plans and risk management.
Long-term perspective is key in trading and investing.
India's demographic advantage can be leveraged for long-term investment strategies.
The channel offers honest advice and educational content for trading and investing.
Transcripts
here's how I would have learned to trade
if I could start all over again for
context I started trading in 2007 and
it's 2023 now A lot's changed and in
this video we'll cover this in three
parts one we'll talk about how to
actually get started there is scattered
learning that's on YouTube Etc and then
there's structured learning I'll give
you an actual structured learning you
can do on YouTube itself so you don't
get lost two we'll actually learn free
resources that you can use right away to
speed up that learning curve including
this YouTube channel so you should hit
that subscribe button right now and
three will talk about mindset if you
don't understand mindset you are bound
to fail so watch this video till the end
in 2007 I was given 50 000 rupees the
first thing I should have done was take
out 30 000 of those rupees and invest it
in an index fund in Nifty Nifty back
then was here and today it's here
but anyway now that we know that is a
mistake that's what I should have done I
would have made this much extra money
even without a sip just that 30 000
rupees now the reason why you actually
do an investment in the index fund is so
that you know you have money in the
account to trade but you can't use it
and you know you have better chances in
earning there now with the bakika 20 000
rupees you can't trade fno you can't
trade Futures and options
if you are new you should first Master
equity and to master Equity you need to
learn this sequence and I've written it
down here learn the basics first what is
the stock market why is the stock market
what's the history get into it watch a
few videos too I think we have a bunch
of nice movies on scam Etc watch them
it'll give you context on the world of
trading then move on to technical
analysis actually there's a lot of
information on the internet on the
basics of technical analysis why does it
work when does it work when does it not
don't spend too much time on technical
indicate does just learn technical
analysis and maybe say three indicators
at most so after learning technical
analysis you should learn how a system
works a system is just a bunch of rules
put together telling you when to buy
what to buy and when to exit even if
it's a loss or a profit this is called a
system for example one of my earliest
systems that I tried was basically
called the trendline bounce system
okay I made that word up it was
basically I draw a trend line if the
market comes near the trend line I would
just buy it and I did this for a long
period of time and then I did the
opposite when I wanted to learn Futures
the trend line broke and I shot it Nifty
and this was in 2008
when the market crashed
and I was on Futures my account doubled
and tripled and I was celebrated as a
stock market genius but I was just lucky
I could have blown my entire account
because this is based on a weird line I
drew on a trading software so you should
not trade Futures but you should have a
system in place so one example of a
system is a moving average crossover
where if there's a crossover over a long
term chart
like a weekly or monthly chart you're
buying and when there's a cross under
you're actually exiting this may not be
the best way to trade but at least you
should understand how System trading
works it's methodical it's mathematical
it is not a guess and I think that's
what you should spend the next few
months on what System trading is one of
the biggest traps you'll fall for is
actually trading once you've found a
system and I'll tell you exactly what
will go wrong so you don't have to make
the mistakes I made look at this simple
system don't worry about the entry and
exit just imagine a line going up and a
second line going up as well whenever
this cross happens we buy and whenever
the opposite happens there's a line
going down and another line Crossing
below it we sell
simple don't get into the details but
let's look at some actual trades here
here you will place a buy order Market
went down and you lose money here you
will try to short the market or buy the
market and the market went sideways lose
money again so on and so forth all these
confusing lines you see over here will
result in you losing money now the
problem is not the strategy the problem
is you you looked at a chart and
believed it never do this you are
supposed to actually quantify this and
that my friends is called back testing
when you take all of these strategies
put it in an actual Excel sheet or any
broker or trading Viewpoint script or
python or some way
to actually know number of Trades number
of wins number of losses how much did
you lose when your stop-loss was hit how
much did you make when you're when your
profit Target was hit and see over the
last five years did you actually make
money which is why I'm saying after
you've learned strategy move towards
learning how back testing works and
please don't trade before that and if
you do maybe trade one share just to
understand how it works but learn that
testing
so in summary learn the basics first
move towards technical analysis then
learn some kind of strategy then comes
the hardest part learn how back testing
works then think about actually trading
it and this brings us to part two which
is free resources you can find on the
internet that you can trust if you're an
investor then screener.n is a great
place for you to actually run screens
find companies based on fundamental
analysis Criterion so you can search
companies with the highest market cap
with the highest profit margins sales
that have been growing over the last
five five years etc etc if you're a
Trader which I'm sure you are use
trading you for charts it works really
really well there's also chart Inc and a
bunch of other websites there's also
learn apps YouTube channel if you want
to go to trustworthy places you're in
the right place right
right so subscribe and watch the videos
that we push out because we try our best
to give you the best quality education
in stock markets right here so there are
two types of resources you'll find on
the internet one is a tool where you
input a bunch of metrics and you'll get
an output and you do the analysis
yourself the second kind of resource
could be a Blog website telegram group
or even a YouTube channel where they
tell you what stock to buy and sell now
that may be working for them you have to
make sure at the end you are back
testing and deciding for yourself what
to do with your own money in any case no
one should decide for you so if you find
a strategy that you really well for
someone else don't follow it do it
yourself back test it yourself and that
final decision should be your analysis
not someone else's the third part is
trading mindset now this is the hardest
part because we come to the market to
put in energy to actually say I'm gonna
earn x amount in the next X years and
that will get me my vacation my home Etc
but here is the reality trading is just
like a business now I want you to
imagine a business does a business post
a profit or a growth every single year
no neither will your trading do you
think a business has professional
managers a plan an annual operating plan
quarterly plans weekly plans and then
people have to follow that plan to
achieve a goal well that's exactly what
your trading has to be there has to be a
back tested trading system that is
followed every single day without fail
in a business things sometimes go wrong
and sometimes go magnificently right but
over a five year period it will be
growth but you can't look at business
over a three months two week one week
period right so the same thing you can't
look at trading as a short-term thing
you may do it very often but results
happen over years possibly even decades
the basic thing over here is you can't
risk ruin which means you can't risk
everything you can risk half a percent
on each trade and lose a maximum of five
six ten percent on your Capital but if
you lose too much you won't be able to
play so risk management is actually more
important than patients consistency and
a back tested system in the end I'm
sorry to burst your bubble but as you
age time will actually become really
really fast so 10 years is really not
that a long time if you balance trading
and investing properly you can actually
make money over the long term just make
sure you understand what you're doing
and if you don't just put all your money
in an index fund and just sleep we are
very lucky we live in India most of the
demographic graphic is Young most of the
demographic has not really entered the
workforce yet and there's a lot of cash
coming into the economy over the next
two decades
use this basic information if you don't
have the time just learn investing if
you do then learn the magic of trading
and how you can earn that extra Alpha
over Nifty by just doing a bunch of few
things and of course don't forget to
subscribe to this channel because we're
super honest and we'll help you out and
say something nice in the comments if
you found these useful check out the
other videos we have see you in the next
one
[Music]
foreign
[Music]
Browse More Related Video
M1. L1. Introduction into the Financial Markets
8 (BRUTALLY HONEST) Things You Must Do Your First Year Of Trading...
Trading Psychology is Bullsh*t... here's why.
Die einzige Trading Checklist welche du jemals brauchen wirst....
NVDA | This Is Where Iโm Buying!
Let's talk money | Monika Halan | TEDxHinduCollege | Monika Halan | TEDxHinduCollege
5.0 / 5 (0 votes)