The Mindset of a Trader | Hicham Benjelloun | TEDxYouth@RAS

now the background when I was asked to make up this presentation it took me a while to decide what to talk about and since I have a finance perspective I had somehow to bring in some finance and more more specifically the psychology of fineness okay so here it is one of my biggest hobby is myth-busting Sal Viscuso myth-busting that means taking some concepts I've been doing that all my life you hear things a thousand times after a while you start believing it's the truth right and it takes a while to realize sometimes it's just conditioning okay so I enjoyed doing that with small things and big things so I will combine myth-busting with finance and I will give you the my statements in few minutes okay so I teach finance I've been doing it for 20 years it's funny it's fun can be boring sometimes but it's a very interesting topic I've done some research about it and for the past few years I'm also trading financial instruments you know what that means right and since I'm tea I'm researching I'm doing trading and I'm researching traders do you know that traders you know people who buy and sell stocks currencies right you understand that they the the the success rate is less than 5% that means if we have hundred people here less than five will make money sometimes even less than that so why is that the question you know deserves some research now trading is very fun very exciting very unpredictable okay you buy yourself stock you hear some news you think it's gonna go up but it's go down you think it's gonna go down it goes up you don't understand alright so how can you make money in such and predict the predictable environment well the the trick is to get into the psychology of trading the mistake of some people is that they think there is some magic somewhere okay there's some magical strategies or this some magical indicator or magical formula I will find it and then I will make millions of dollars but trading is very hard right for psychological reasons just like almost any field psychology is very important so let's explore that that the minds the mind of a trader of financial trader okay it's very interesting okay a successful trader has a poker face just like mine what is the poker face poker voice no idea well first of all at poker if you see successful traders talking expressing their ideas you don't know if they're happy or said okay you don't know if they're having a good time or a bad time they just have the same tone same face and they keep it for a long time to them being in the marriage of funeral is the same thing okay making money or losing money or at least in appearance is the same thing okay they they control their emotions okay you cannot stop emotions or things popping up in your head but they don't let these emotions control them okay they are highly organized and highly disciplined okay they wake up everyday at the same time they do exactly the same routine they don't think they work like like machines okay they they have the same working hours they have the same resting hours they do their exercises at the same time every day okay so they are highly disciplined beyond the normal person and in trading the characteristic of trading is that you make money and you lose money sometimes okay that's that's part of the nature of the game and to them when you see them a successful successful trader is you know when they win make money or lose money it's exactly the same thing you will find the same they will still go out there and do the same routine and do the same thing do their exercise have their dinner at the same time etc nothing really changes so I have to have this poker life they don't show their face okay and that's really the nature who let the characteristic of this personality they have also what we call a probability mindset and and here I'm about to get into my statement and what is the probability mindset a probability mindset that means they think in terms of probability and this is not very natural very few people can think in terms of probability what does it mean really think in terms of probability they don't think in a deterministic way like people who you know would like to have a fixed salary would like to have a fixed life would like to know what they will have for dinner tonight etc now these guys they can have a winning month they can have a lose in month etc so probability means that they get into something and they know the probability of success and the probability of failure just like when you flip a coin right if flip a coin what is the probability that you will have head 50% right so you don't know exactly in each flip if you will it will be head or tail right but you know if you do it ten thousand times what will happen it would be 5050 this is how they think so to them you have to keep doing the same thing over and over and over thousands of times in a very boring way without thinking to get their probability of success which to use v2 them is more than 50% right so it's okay if you lose sometimes you know you will win more than you lose but this is so heavy on to think in mind that it's you know 95% of the people cannot do that okay usually because they don't know how to do it so these people they're not projecting in the future I'm talking about these people like they're aliens there are supernatural in a way they have no projections in the future right they they don't think about tomorrow after tomorrow well actually they think about it but it's it's not it's not affecting their emotions right they are here now okay they can feel their body did their sensations they can hear you they can analyze what you say in an unbiased way which is very hard because the mind tends to be projected in other things that are not here right this is the natural way of doing things to them nothing is a problem it's it's a situation everything is a situation whether we perceive it to be good or bad we are in a situation we have to manage it okay so if the situation is what we call bed well I will get rid of it as fast as possible okay that translates into them when you have a losing trade I will not let the loss go very far away I will get rid of it now before the loss gets bigger okay and that's very hard to do because we don't accept a loss so sometimes we have a losing possession and we keep a losing possession and so it gets worse and worse and worse and worse okay when a situation is bad then you try to make them all or good sorry what we perceive to be good we try to keep it as long as possible make the most of it okay so we pronounce the good situations and we shorten the bad situations and this is the probability mindset this is how you win it's this is similar to what people say you know you do it over if you fail you do it over you fail keep doing it until you succeed it's kind of similar but it's not exact it's a probability way of thinking now the interesting part is that and here it's a little controversial because positivity is is really a big thing for everybody right well these guys they don't do what they do in terms of Passau positivity okay and I will go as far as there is a confusion of what positivity is because I don't really think positivity gets you the good things okay it's other things that will get you there positivity is more of like sugar it makes you feel good right but if since we live in a world of duality if you think about positive but there is no way that you can forget about negative things okay so it's a tricky concept so it's not about positivity positivity is the future it's not now these guys are not about hope again hope is similar to positivity okay I'm not really you know saying these things are bad what I'm saying is that they have a dark side to them okay positivity and hope can be very tricky I know people who've been positive all life and they really haven't done much but when you see them they're positive you know if you throw something bad at them they will look at it from a perspective and they won't interpret it as being good so they always play in this ping-pong game of good bad good bad you cannot think about bad and not good or think about good and not bad so you always play in this ping-pong game and it's very tiring believe me can be very tiring for some people okay so not positivity no hope so we replace this concept by clarity they have a clear mind what is a clear mind a clear mind is a mind that is here present that is not affected by the future the past by the hope no it's here completely empty and biased interpreting things as they are not as the mind thinks they are okay and we will replace hope by focus so into the world of trading in finance we change positivity and hope to clarity and focus in other words we want to be here and not there okay so what's wrong with positivity I'm not saying it's wrong I'm just talking about the dark side of positivity okay well you know that saying the people are positive you know that saying when life throws that you are limited what do you do you make a lemonade right that's that's famous saying for for the positive community which is almost everybody but the problem is is if you have a lemon do you know how to make lemonade if you know what I'm saying because there is always a gap okay and if life gives you what you think is lemon is it really a lemon because sometimes what you think is bad you think something happens bad to you you wait a little bit you realize it wasn't so bad because it threw you into something that opened some doors for you okay so it's always a mind interpretation what appears to be bad can be good in a longer perspective and vice-versa okay so there is this gap well an example would be okay I want to have this nice house but I don't have a nice house now there's a gap and that gap can can widen why well because you start wondering how on earth am I gonna get the money to get this house right is this legitimate right so you can get into a vicious cycle of thinking that widens the gap and it happens all the time okay like what he just said before you know it's it's it's not because you think positive about something that it will happen okay because there is there is now a reality that is in front of you that keeps throwing you away from it so at the end it might get worse and this is what happens to most people that's it reality so it's not easy to manage so closing the gap is between what you want and what you see right now because what you see right now can be very bad according to your judgement okay but it's here so it's affecting you and it's hard to get away from it that's why most of the rich people are from family who have money most of the poor people are from families who do not have money that's the way it is because that's what you see it affects you all the time so the people who go from one to the other is because they they applied you know the very high self-discipline or some kind of self pressure self clarity that will call their what that got them to there and and it's really a minority we have to be real about it the last thing about positivity you know or before last thing is that you know positive it's positivity and hope willpower motivation these things need a lot of energy isn't it right you have to keep pressure in yourself to remember to think about this all the time right and this this you know in a sort of funny way can be fueled by sugar yeah I mean if you want to motivate yourself all the time keep repeating affirmation all the time keep doing all this and you might have to eat a lot of sugar because you need that energy it's an energy that you need that will go away so I know a lot of fat positive people I'm sorry about that but that's it's it's one of the risks if you use positivity in in I would say wrong way and it can lead to depression that's I mean there are scientific studies about this you know people tend to ignore the dark side of these things but there are some negative or some studies that actually link positivity to to depression why because this of this gap that I said the gap between what you want but you really want that what you have and that you cannot close by not closing it you can have some mental issues okay all right so we want to replace positivity and hope with clarity and focus okay so clarity and focus that means you are here okay not there I'm not in tomorrow I'm not in the other building I am here I'm watching you I'm trying to fill you I'm trying to fill the building without any bias judgment okay this is what clarity is I'm empty in my mind so I cannot just you based off of all my programs so I can judge you as you are okay this is what clarity is and of course focus goes with clarity that means I have to find a way to focus on you to be here right here right now okay so I really believe that you know a lot of people who make it you know who do good things they talk about positivity but somehow they have this clear mind okay and they add positivity to it and they have very nice mix but some people just cannot make it with positivity okay and they are not given the right directions into starting working on unclear in their mind before they can become positive okay so when you are clear it's not that you have no emotion that's not really exact but it's we are human beings you cannot stop thinking you cannot stop emotions but what you can work on is stopping or limiting the impact of your emotions on you okay and that can be done with some work okay so no emotions things are what they are not as I am I'm seeing you as you are hopefully not as I am not filters of my mind this is you know this is how traders make money because they are able to judge the market based on what it is not on what my mind is okay on what happened yesterday one week ago etc okay that's what clarity is I cannot judge things well if I'm positive positive is tomorrow no you know what I mean okay and these guys are single minded of course because they are very focused and they have realistic expectations okay realistic expectations and I think somebody touched on that is that you know it's things are not as simple as you might think you know for example few days ago or few weeks ago I was interviewing one guy to work in finest Academy for me and he wanted to impress me and he the first thing he said you have to hire me I'm the future Warren Warren Buffett I am very positive very you know I told him first of all Warren Buffett is not a trader he's an investor where he invests in financial instrument but he's not a typical trader and I don't like that much positivity and I wanted to say something but it's gone but anyways I ended up hiring him not because of him because because it was really funny because he knew about finance somehow okay but but you know I told him you know Warren Buffett is not an investor and it's not realistic there is only one what Warren Buffett there will never be another Warren benefit you know people like Warren Buffett Bill Gates Steve Jobs or whatever these big names this these people we call them statistical outliers I don't know if anybody knows what that means Siddiq alive even I mean just listen to Bill get he said he says that I am here because I'm lucky there's nothing about you know being positive or something okay of course if you do good things good things will happen to you but don't expect to become Bill Gates expect something good to happen okay so these guys that's what I mean by realist and realistic expectation you have to do your best you have to work hard you have to create expectation and objectives and expect to good things to happen but don't try to be you know something that is purely a statistical error okay for example I am statistical error because I'm almost two meters right how many people are two meters I'm the tallest guy in the building right that's that's what bill gate is you know it's like a two meter 20 basketball player you know you will have very few people that will get to that point and usually it's pure luck it's not success that is pure luck it's the extent of the success that is pure luck okay however let's remain positive right if you work hard if you do good things good things will happen but just don't be unrealistic okay now I will just finish by giving you talk you notice maybe how a little bit to become clearer first of all you know if since we're talking about success we enjoy success we'd like to have success well success first of all it's up to you to define it you define what success is for you if success is having a salami sandwich that's fine it's nobody's business to judge you right if success for you is to have a lot of money good for you just make sure that you don't have that gap that you can get there that the gap is not too strong for you okay so you define what success is then you clear your mind try to find or learn some tools that will help you clear your mind okay learn to live in the moment right now you know I want to be here not there I want to judge thinks as they are not as I am that's another way of saying walk the path of probability the path of the probability is repeating the same thing exactly without thinking over and over and over and over and over right and the statistic will be on your side at the end by probability you will win when you do it hundred there is nothing it's not a miracle it's purely mechanical when you repeat things over and over statistically speaking you will if you choose a good distribution you will win okay so it's not magical okay it's exactly like a blind box right a blind walks successfully by going this way then this way then this it's never straight bad okay that's that's the the the probabilities way of thinking okay well how do you pick have a clear mind well I'm sure there are many ways but to me I think the best way to just learn how to breathe it's as simple as that simple does not mean easy right simple just means that you know the path is very clear if you learn how to breathe I'm not necessarily talking about meditation when you've learned how to focus on your breathing you learn to become single my if you focus on your breathing you are here okay so this is an exercise that you can read about it research it but it's it's clarity or mind care clarity is directly linked to to to how you breathe if you breathe well if you learn how to breathe you will have a clearer mind and maybe you'll become a good trader okay thank you very much [Applause]

Channel: TEDx Talks

Views: 94,446

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Keywords: TEDxTalks, English, Business, Finance

Id: R8SE3RxqaTY

Length: 23min 36sec (1416 seconds)

Published: Thu Oct 24 2019