The Truth About Success - What I learned Losing A Million Dollars

this is Julian I'm here in Warsaw Poland and this week's book is what I learned losing a million dollars by Jim Paul and Brandon Moynihan and this is a book that actually hit me on a very very personal level why because actually went through something very similar okay I didn't lose necessarily a million dollars but you know to be honest and transparent here a house close to half a million in the recent media scandal that was in okay if you've been following my story or my journey okay you probably are aware of that and it's pretty crazy because I was reading this book and the exact same mistakes he made I made okay and you'll see me explain this in a video in terms of you know when you went from nothing to building his success in getting the money in the first place although you're making money there are traps you can fall into and they will come and bite you in the ass okay when they do I pretty much went through the same exact thing he did it's pretty crazy okay now of course this is in like 83 84 million dogs a lot more than it is now but it does who you want a personal level okay so what I thought I'd do here is kind of go over the main points of the book here and kind of link it to what I went through as well and how universal this actually is enjoy so the way starts off his book here okay as I mentioned before is with his own personal story about how he pretty much went from nothing okay just being dirt broke to making the money in the first place and I won't get into too many details here okay check the book out but what was interesting was the pattern that emerged okay and I'll explain this here but this is something that I could personally really resonate with and what he says here is he started off poor okay and he got his first job when he was a kid catting at a golf club and by hanging around all of these successful and rich people that's when he developed you know his love for money okay and this is a theme that's you can kind of see throughout the book he even writes down here it's not what you do but how much you get paid for it now for me personally his little side note was never really about the money it was more so about the fame you know ever since I was a kid I played guitar since I was eight and I was just obsessed with becoming famous okay that was my big drive and he started hustling okay from poor he started hustling getting all these different jobs even through high school k was able to afford a car and basically to pay his way into college okay you need to get the money to get into college to make even more money and was interesting here okay and he writes this down is he learned how to work smart and not necessarily work hard okay and he takes an example of when he joined a fraternity in college you know he was in the fraternity and one of the frat members asked him like hey do you know how to play gin KP card game and he tells the frat member like no no what's that and Frey remembers like oh well come on up you know let's bet some money I'll teach you it's easy now in reality he said he didn't know what gin was but he'd been playing for years and he pretty much tricked the frat member into betting a lot more money and got him in debt okay and that allowed him to skip all of the fraternity chores let's just say and what he started realizing here okay and this is very interesting is that with every success he started developing that little belief that you know he was a little better than other people that he was special you know it's like he could break the rules you know it's like everyone's playing ball these different rules he could take perspective see the rules of all the different games where people are playing be it a card game or be it in life and he could pretty much just hustle them you know he could break the rules and still win you know it's like look at this other guy playing gin I can hustle to make money okay he links it also to studying you know there were a lot of classes where he just didn't show up at all and a couple days before the exam he'd read the book and find it fascinating because he found it fascinating he just really gets sucked in and aced the test and I used to drive the teachers insane and once again it kind of reinforced that believe like look at that everyone else can go to class and study and waste all that time me I'm above that you know look I learned things fast I don't have to do things the way other peoples do um you know I'm special I'm unique okay and that's pretty crazy and I see rights here you know it's like I believe I could bend and break the rules I'm better and different than anyone else and that everything I touched turned into gold okay and what happens here is your ego starts getting in we start feeding that ego and the crazy part is you're not the only one who starts feeding it everyone else - it's like you think you're the like everything I touch turns to gold but then once you start getting that external feedback you know say classmates like damn what the like you just studied two days why and they start feeding that he goes well things can get pretty out of control okay and for me was very similar um you know I started playing guitar and I got pretty good I'm like damn you know here's here's like my first path to mastery in a way with school as well you know I didn't really have to ever work hard and I'd get good grades I'm like look at everyone else I always manage okay and even the times where I didn't get that good grades I was managed to get by you know I got in like a really hot like good school always managed even in terms of success with women I got pretty good fast you know I'm pretty similar where you know being very modest and I'm you know it's like this is how your ego sneaks in on you uh you know I could see the different games that I've been played because that's really life it's like there's all these different games I just notice the rules and either apply them bend them tweak them a bit and get ahead and similar to him I started feeding my ego like look at me I'm becoming more and more successful and then people would feed it to okay with success with women the women would start feeding it like look they all like me and then not only that when I started teaching it other guys would feed my ego of getting women which would feed my ego like through the women and through myself okay so it's again this crazy just ego feeding frenzy okay and what do you did here is he then worked his way up you know into the financial world and you know the high just kept getting just more and more insane to the point where you really believe that you're invincible you know it's like nothing can stop you in this high is more intense as he writes down here is any drug in the world you know it's like hey I'm on top of the world I can do no wrong okay it's really that belief there and that's what I was thinking before the whole you know media scandal I was really like hey look at me it's like all these different obstacles were thrown in my way I've always dealt with them I'm invincible look at this I'm just killing it dream job traveling the world you know I was like I am a god okay and I really believe this from like a very egotistical standpoint it's like hey I'm a god it's insane you know it's like look at me I'm just I can do no wrong every morning I wake up like damn like how could it get any better than this and every day to get better okay just on the up and up and he writes this down too you know it's like every day would just get better it's like man could it get any better of course it does okay and you reach a point where how much success is a given like every day's gonna be better and you just keep taking and expecting more okay and again you kind of get caught up in that ego frenzy or frenzy of success and he writes down here you know he started spending money like crazy okay considering insane purchases that you know only someone in an insane state of mind would consider okay signs you kind of start losing control you start up some days losing $30,000 okay just lose it I just be like what a great day with a smile on his face like no impact at all okay another sign that you lost it your rights down here a lot of successes give you this false sense of just you know infallibility and again it's really that belief that hey I'm above everything you start just spending money on little tasks you don't even want to do it's like oh I couldn't be bothered with that hire someone to do it um you know it's a very dangerous place to be coming from mentally okay and once again I can identify with that as well where before the whole media scandal things were just getting worse and worse I was just like you know throwing money left and right it's like I arrived at an airport I'm like I can't deal with this just get a ride hire someone to do this I don't care the price even in terms of you know different like filming equipment I'm like just get that good dad just totally obnoxious like throwing away money literally thinking that hey more will come because I'm a god and one day can he writes this down things did get worse okay one day the whole media thing hit and for him it was an investment we invested in soybeans and they were going really well okay they made him a lot of money and everyone he knew a lot of money and that can kept reinforcing I'm a God look at me I'm making money all my friends are making money yeah and then I started going down and the people he knew actually were you know bailing out they weren't as bought into it as him they were more realistic and for him the way he rationalized that is how a lack of courage you know for me I buy with pride and I hold with conviction I'm in this for the long run and things just kept going down going down going down going down for a few months okay and you know throughout that process he started losing weight he couldn't sleep started fighting with his family you know your rights down here time is very painful when you're losing money and all throughout this process there was always the belief the chance the hope that he could make the money back tomorrow and there's always tomorrow tomorrow tomorrow and you know he reached that point where at the end he was forced out of the position okay like he wouldn't even let go he would have stuck in longer but someone external had to force him out of the position and he lost all of his money kay actually not only lost the money but he found himself $400,000 in debt he lost his job he lost all of the different memberships all the different positions he had you know by a total coincidence he lost actually both of his parents unfortunately at the same time he pretty much lost everything that was important to him except for his wife and kids okay so it's really like the lowest point of his life and he talks about here how he contemplated suicide and he actually tried to carry it out in a way where he wanted to make it look like a car accident so he could get insurance money to give to his family okay because he couldn't even bear to tell them what happened and he actually went out drank a lot was in the car and he started driving and he wanted to hit a certain pole to really make it look like an accident and as soon as you know he's driving there's like a light behind him and it's the cops and they pull him over and they're like you know how fast you were going he's like Oh like 85 90 and they're like no 18 so he was like so drunk he can't even drive and you know then he went home and took some perspective and decided you know what it's time to stop losing okay it's time to be smarter humbled by all of this and you know use this as leverage to learn from mistakes okay and he then started seeking advice from you know pro traders because looking back at a lot of his successes although he you know took the credit and started reinforcing that he's a God uh you know being realistic he didn't know that much about trading okay a lot of them were actually really up to luck so he realized this he's like okay I mean look up all the advice like lets you know get myself out of this situation let's learn from it and when you notice here there were a lot of paradoxes okay there was all these different methods it's like you do this and then some other trader was like no but you do this and you do this it was very they're getting a lot of contradictions and what he realizes there is more than one way to make money in the markets okay so again he was a little confused and then he looked at what they said about losses okay and suddenly there was a common theme for example one said don't lose money the other one focus on protecting what you have don't hold on to losses get out cheaply learn how to take them quickly and cleanly okay you could all make money differently but they all knew how to control their losses okay and that was their primary responsibility it doesn't matter how much money you make if you don't know how to not lose money you're okay and what he noticed here is no one really talked about how to acquire this skill you know there were some books about losing money and you made a thought even this was one of them you know it's like oh just this entertaining story of losing money to just you know pander to people who find delight in the misfortune of others but you know there were no educational books about it and what he decided to do here was study his losses learn from his mistake and you know shared with you and me here in his book okay and for me being honest it was very similar actually I lost again close to half a million I lost you know even the ability to travel to certain countries I lost my you know any kind of reputation I had and now it's actually a bad reputation I lost many friends I lost many connections many opportunities pretty much everything like there was nothing I could grasp onto it's like everything was taken away and it's like you really reach that low low low point where things can get worse he says you start contemplating like even suicide it's insane um so I'll kind of break down here and he talks about this in the lessons learned what happened psychologically okay how you find yourself in this position and why it is so intense when you lose so much and what he says here okay is the loss of money is oftentimes due to two things okay either a Fault in the analysis or a fault in its application and more often than not it's the latter why do two psychological factors that prevent the application of the analysis okay and I love this because by psychological factors what is he referring to psychological distortions all of us engage in even though we are basically mentally healthy okay so I don't care who you are when you hear this like psycho a lot of critical distortions what the you have them okay we all engage this to various degrees and what he says here is a run of successes leads okay to more intense distortions let's just say okay where your ego gets drawn into the matter with every win okay every time he cheated the system every time he felt a little bit special ah okay that distortion from reality it's like oh I'm pretty amazing I'm even more than pretty amazing oh my god I'm a god everything that I touch is gold on that there you actually start buying into it okay you have 100% conviction and once again the distortion starts amplifying amplifying amplifying okay and he writes us down here to the easiest way to lose success is to become convinced that you are successful okay so he breaks down here pretty much what happens how it happens and he starts okay with the definition of psychology okay and that is the study of the mental processes behavioral characteristics and emotions of an individual or group okay so here in terms of the mental processes there are two types of losses okay there are internal subjective losses let's just say your self-esteem self-control love your mind and there are external objective losses say a bet a game a contest or money okay and what he says here is a losses objective when it's the same for you me or anyone else okay and an objective loss is impervious to how you feel or react to it it just must be accepted without evaluation okay so let's just take a sports game okay football game for example that there should be an objective loss okay one team loses done okay it's like okay they lost however and this is the interesting part is that we can personalize external losses if we equate our self-esteem with a success or failure of the team okay so more often than not okay if you watch a game it's actually a personal subjective loss why because how you feel pretty much or your view of yourself depends on if your team wins or loses and if they lose it's literally like a part of you loses and dies okay you'll feel a sense of personal subjective loss and we do this a lot okay and especially to with social conditioning okay we're conditioned to treat all losses as failure okay there are a lot of negative connotations to it we tend to equate loss with being wrong be bad or failure and on the other side of the coin there's winning being right good and success and what he says here okay is that in the market okay since this is about the financial world the market should be viewed as you know an objective external loss not a subjective internal loss similar to say when you buy a hundred lightbulbs you know most likely a couple won't work or when you buy a large amount of fruit probably some of that fruit is going to be rotten okay now there's nothing bad you should equate to that psycho of course you know it's you should feel the internal subjective loss if you buy some fruit and a little bits rotten okay your self-esteem is not tied to that however okay again the way we're conditioned it's like oh it's bad it's bad it's you know it's like if I lost this is bad I'm wrong okay that's the way we kind of connect the dots and this forces us to internalize a lot of the external losses okay and what he says here is that right it wrong winning or losing they have no place in business operations or market participation okay and he also makes the difference between a something that's been objectively verified versus an opinion okay and that's a personal assessment okay they can be right or wrong depending if they correctly respond with the facts and in terms of you know business here it's not about you know being right or wrong but about making decisions okay there is no winning involved as soon as you think like oh my god I made money i won its internal you're taking it personally and that's bad okay it can be very difficult especially say with money you know because you kind of you know associate money with reputation pride your ego easily gets involved and he writes down here you confuse networth with self-worth you know it's like I made money I was so smart and it's no longer a loss of money but a personal loss to you okay so this is the first trap that happens okay and I remember thinking the exact same thing you know with every success like I'm so special I'm so special like this is me every success is me my self-esteem my vision of myself is just tied into my work and all these successes is my brand grew I grew as a person okay it was like we were one in the same and when you go through okay an internal personalized loss he compares it here to you know there are five stages like the five stages of internal loss and he compares it to facing death okay now this sounds crazy and a little out there like dude losing money and like you know facing the fact you're going to die is very different but in reality once you've been personalizing this for so long it's become such a strong part of you that it does feel like a huge chunk just dive and you just have to face it okay and okay what do you talks about here is that the first stage is denial okay and you probably know this you know it's like the the soybean Investments arts going down for me even with the media scandal like it happened at first and I just started tonight now my god whatever you know it'll die down in three days well he said here's like oh it's not me you know this can't be true that the stock is dying down and you know you started looking for even reassuring second opinions okay and I remember even asking some my friends like what was this pretty out there like that three days you're fine I mean it could go up there but whatever and I would just ignore the could go up there I'm like oh yeah the three days over three days over three days okay just hanging on to stuff that can reinforce my optimistic opinion let's just say then okay the second stage is anger and that's when denial cannot be maintained any longer because there's just the evidence mounting and mounting at some point you're like oh my god I can't deny this and you start just really getting enraged you experience a lot of envy a lot of resentments and it's really displaced in all directions you know it's like projected onto the environment at random you know you start blaming in his case the markets like the market this stock this person this person me it's like self hate as well and you know it's like there's really you know because there's nothing concrete to really blame you're just like everything just popper firing out everywhere and this would caused also a lot of tension say with his family you know for me was the same thing it's like everything's going to and there was no one specific that was blaming I mean sure just play myself for you know creating that situation in the first place I was just like like insane okay so that's anger then the third stage is bargaining and that's when you try to succeed and entering some sort of agreement that may postpone the inevitable from happening so you know you may bargain with God and like oh why is this happening I'll be nicer I'll do this or you got a bargain with yourself you're like okay you know in his case he keeps losing money he's like well if tomorrow this happens then I'm out okay I'm promised I'm out and then it happens then the yury bargain tree bargain you realize like no matter what you do is like it just keep going down you really can't get out and the fourth one is depression that's you're like you know it's all and I went through that too and some of the symptoms are you know pervasive feelings of sadness distancing yourself from loved ones changes in appetite or sleep habits loss of energy inability to concentrate indecisiveness refusal to follow advice okay and I mean that was me - to a tee I was extremely depressed I I mean you probably notice in some of the videos if you've been following me for a while put on like a lot of weight couldn't sleep just look like total and lastly okay the fifth stage is acceptance and that's when you finally resign yourself to the inevitable now you either wake up one day and you're like it hits you or in his case here you know someone external to you just pushes you out of the position and for me was also someone external like I couldn't accept I'm like no no no there's there's still that hope that the ends like no it's over accept it let's deal with it accordingly and this is interesting because as he mentions the one thing okay they usually just persist through all the stages is that hope there's some kind of cure no matter how shady things go you solve a little bit of hope and as soon as there's a little glimpse you're just you just latch on to it and here's how it amplifies and how it gets even worse is that okay as soon as that Hope pops in you go back to denying okay instead of just jumping to acceptance you go through that cycle multiple times and that's happened to me it's like I went through the cycle I depressed and riot when it's you know acceptance time boom something pops up that gives you hope you know huh and then you go through a anger again bargaining depression again and it's a loop okay and then here he makes the difference between discrete events and continuous processes where a discrete event has a you know an ending you know it's like a games over you're like okay you go through you know maybe this a just got the game it's like you don't really go through the five stages as intensely but with a continuous process okay like something that just keeps going and going and going nothing really forces you to acknowledge it's a loss you know there's no real end point until you you know resign from the situation let's just say so you can you know continue to kid yourself that is a winner and yeah I mean usually it's only continuous processes where you really go through these five stages and over and over and over and over again okay so it's pretty insane and that's why it hits you on such a deep level and in terms of the behavioral characteristics okay the one exhibits when engaging in the act to D he has five of them here okay he defines him as one investing two trading three speculating for bedding five gambling okay and what he says here is that the behavioral characteristics determine the activity okay just because you're participating in the market for example doesn't mean you're investing or speculating okay any breaks these down into further detail in the book okay check it out but what's interesting is that often times you know we think we're investing trading or speculating when in reality okay what are we doing bedding or gambling okay and with bedding it really comes down to being right or wrong okay that's when your egos involved and that's the the objective you know it's like I need to be right and with gambling okay what's important here is the excitement you're not doing it necessarily to win to be right or wrong you're doing it for the emotional experience and you might have experienced this even going to a casino so you go to gamble off more often times than not it's like you're not there to win you might even expect to lose but you're willing to spend the money even though you're going to lose it just for the experience of gambling okay and again the way this applies is that even in business you think you're making smart calculated decisions you're following a plan you've different rules when in reality okay your ego may get involved and now you get sucked into betting where you have to be right or wrong or even worse your emotions get involved and you're doing it for the high and for me I was definitely gambling okay like I know as my band brand was growing and growing it started off very calculated and smart and I kind of got sucked into the excitement you know and I started pushing the shark marketing further and further like how much more shocking can I get and my videos you know especially the ones before the whole scandal you know they weren't even to to help people is more like what more provocative thing can I do I wonder what the responses will be you know some people are going to like it some people are gonna hate it and it was really for that emotional high and that's when you're in dangerous territory okay and he says this we're betting and gambling uh you know first of all they have no place you know in the marketplace let's just say but they're also not suitable for continuous processes okay let's just say you gamble on a discrete events there's an endpoint okay or you know when you stop gambling you stop losing with continuous processes you stop gambling but you keep losing okay so he expands on that he also talks about the psychological fallacies when estimating risk okay again how the distortions come into play there and you know some other interesting ones are that some dollars are bigger than others and he talks about how when you go to you know like a casino and you get a chip say have $25 $50 $100 it's not as real as real money let's just say in the same as money online if you're losing money online it's not the same as physically losing the money okay again psychological factors he then talks about being profit like motive motivated by profits with an F F or motivated by profit with a pH okay it's like are you in this for recognition or money and it should be money okay otherwise you kind of fall into the betting about being right and recognition let's just say and he says your self-worth self-image should not be dependent on particular successes or failures okay because oftentimes the outcome is beyond your direct control or exclusive control and as a result your self-esteem is in chronic jeopardy okay now here's what's interesting too is that I was gambling but I was also betting okay I was doing it for the high but every time you know the high was there psych I got this is so exciting when I won okay I was still like I was right bang I started fueling that ego it's like every little bit of validation like that's what was my self-image okay it's like my self-worth was my public image it was my brand and again you're in dangerous territory okay so those are some of the behavioral characteristics he then talks about the psychological crowd okay and what he says is you need a model to alert you when you're becoming part of a crowd okay so if you want to define crowd it would be say a gathering of individuals regardless of what has brought them to get okay that's a crowd but okay then builds on that and he quotes a Gustav libel okay who wrote a book called the crowd and the way he defines it okay from a psychological perspective it has a different meaning okay and he defines it as when the sentiments and ideas of all the people in the gathering take one in the same direction in their conscious individual personalities disappear then the gathering has become a psychological crowd this process does not require a gathering of people an isolated individual who displays those characteristics is for all intents and purposes a member of the crowd okay so even sitting alone let's just say in your den following the market you can be part of a psychological crowd okay if you know your decisions and how you feel is just like wavering back and forth like a candle in the wind you're displaying characteristics of the crowd okay in your let's just say individual decision-making processes you're making crowd trades as he talks about here and the difference is an individual acts after reasoning okay deliberation and analysis okay he thinks about his options versus a crowd acts on feelings emotions impulses and again you start just emote he calls it like emotionalism okay let's just say and he talks about how you need a structure to prevent that he kind of gets sucked into the crowd and when you get sucked into the crowd it's you know a few things happen okay one he talks about how there's this sentiment of invincible power okay and the way worked for him is when he was losing everything or even making money it was him and his friends you know I was like look we're all making money yeah and then losing money some people still stuck in longer than others and you can kind of talk back and forth and rationalize and for me was the same thing it was like the people watching my videos liking my videos I was getting all these comments and it wasn't just me making smart decisions for myself I kind of get sucked into this psychological crowd and that gives you again a sentiment of invincible power okay and you know it's like hey we're all doing it we're invincible now he writes down it makes up person yield to instincts and emotions that he would ordinarily keep in check okay in a crowd you're anonymous you know you can quickly put responsibility elsewhere so you do crazier and crazier things say pushing the shock marketing just too far okay like I would never usually push it that far but because I'm part of a crowd it's like look we're all part of this yeah boom you push it too far uh number two contagion okay and that's the tendency to spread as an influence or emotional state okay and when you're part of a crowd you're kind of hypnotized or mesmerised you know uh you know as he says here it's like getting quotes from a broker or watching the prices go up and down in the crowd you know it's like that same type of vibe it's like I'm watching the comments it's like up and down you're kind of like in this mesmerized State and the third one is a suggestibility and the way a hypnotized subject he writes down here in the hands of its Hypnotizer response to the power of suggestion you're highly suggestible and you're no longer really conscious of your acts okay you're in the hey it's in the hands of the prices on the screen and for me a lot of it was still the comments you know there's a saying being cured off the cliff it's like I'm in this state of just reading all the comments it's like yeah do more do more do more and although again if you took me aside snap me out of it like hey it's just really smart I'm kind of mesmerized Mike yeah do more do more and he writes down here you know once individuals no matter how like or unlike they are have formed a crowd it puts them in possession of a collective mind that makes them act in a manner very different from the way each individual would act in a state of isolation and allows himself to commit acts contrary to his most obvious interests okay and this is why you know you may say hey I'm not going to do this and then you go in with your friends and you do it okay because you're part of a crowd or you know you do something you said or you don't do something you said you would do let's just say okay and as he mentioned if a person exhibits these characteristics no matter if he's in a physical crowd or not he's part of a crowd so to tie it all together here okay this the third part of the book is he actually says you know the irony is that right after he got forced out the soybean market actually turned around and went up again so you would have made a lot of money if he's stuck in a little bit further but okay he writes this down that would have just postponed the inevitable loss and would have made that loss a lot bigger okay and that's pretty key when you lose so much is like what if what if what if you know I definitely thought about I'm like man what if I just never put those videos out okay what if it just never happened oh my god it should never happened or what if I just got out of it but okay uh in the state that I was in it was just bound to happen why because I was just seeing how far I could go I was pushing and pushing and pushing and if this shock marketing spikes something I'm so extreme uh you know if it didn't I would have just kept pushing it would been way worse okay I'd also would have snapped me out of this trance psychological distortions that I was in and it's the same for him it's like if this if losing 1 million did this to him what we're losing six million due to him it would have been much worse it's not about you know changing the situation or wishing it never happened it's about learning from it because otherwise it's bound to happen at some point okay you're caught in that pattern there and what he talks about is that uncertainty of the future is a common factor that triggers you know the mental processes behavioral characteristics and emotions okay if you're certain about the future there's no real emotionalism okay and he then breaks down dealing with the uncertainty of the future and I says you have three choices okay engineering speculating with the capital S this time or gambling can an engineer calculates everything he knows and controls most variables he operates uncertainty okay and you can't be an engineer in the marketplace you can't really be an engineer in terms of building a business the next one is speculating okay and that is that the speculator doesn't know every detail but has some knowledge about what determines the outcome of his activity okay and he pretty much comes up with systems of every different outcome in terms of how to react and the gambler lastly knows nothing not playing to win but just play okay and successful investing or say building a business is a result of successful speculation with a capital S okay and speculation here is forethought okay and that implies that there's reasoning before a decision is made okay you're not acting because your egos on the line to be right wrong you're not gambling there's no emotions okay you're thinking like okay what's the smart move you don't get sucked into all of that there okay you develop several possible scenarios for future events and determine what actions you know you would undergo in each scenario okay you think before you act and this is the only way to deal with uncertainty okay and the key here is to have a plan without a plan okay you become a better if your main concern is to be right or a gambler if your main concern is entertainment and he talks here about decision making okay so here's like for example a plan decide what type of participant you're going to be okay investor speculator so on and so forth select a method of analysis okay develop rules established controls formulates a plan okay so in terms of deciding what type of participant okay whatever you're engaging and now do your homework okay research testing so on and so forth then you have to come up with rules okay establish controls okay if this happens you get out for example there has to be an exit criteria and then you can't calculate how profitable you'll be but you can calculate your exposure okay so this applies moreso to the market and what he says is that most people say determine your entry point determine your stop-loss point and price objective and in reality okay it's determine the stop-loss first then the entry then the price objective okay and this is key before engaging and anything you need to give yourself rules that hey if this happens if I lose this much if this happens I'm out okay if you don't have a plan you don't have rules again it's very probable that emotionalism will kick in you'll start personalizing all this you will start becoming a better or a gambler and you'll be again like that candle in the wind just out of control and with the plan as well okay this is pretty key it allows you to jump to acceptance okay so no longer this continuous process of where you can just keep looping back to denial because you have specific rules okay it's like once this happens you're out you're forced to accept and what he talks about here is you know you'll still lose some with a plan okay it's like sometimes this happens you bounce out and actually if you were to stay then it would make more money but okay without a plan you'll lose everything okay so this is not about winning all the time you have to expect losses but at least now you have something that will keep you in check okay otherwise you really are he writes down to you know commit your plan to paper it objectifies externalizes and des personalizes your thinking and you know to kind of conclude it's like hey don't left the market okay don't cheat the system it will come and bite you in the ass you need a concrete plan that you think about before you engage in the activity because if you do it after or during your emotions are involved and your plan will be as well okay and with having a plan to you'll know when you're deviating and allow you to keep yourself in check okay so again the book goes way more in-depth than this but I highly recommend checking it out I mean for me I personally love this I really made me understand like the different traps you can fall into you know it's like a little bit special a little bit special psychological distortions in terms of the emotions okay you go from making rational decisions to betting and gambling and then you kind of get sucked into the psychological crowd and of course you're just going to go down okay so the key here is snap out of that get a solid plan learn how to make decisions get rules for yourself so you don't spiral out of control to keep yourself in check and you know I mean obviously you'll break it at times but at least you'll know okay otherwise you can just keep kidding yourself looping through the five stages and you're as I mentioned before okay so you know if this resonate with you check the book out be sure to check the comments here below for next week's book and as always until next time

Channel: JulienHimself

Views: 71,318

Rating: 4.8997574 out of 5

Keywords: julien blanc, julien himself, julienhimself, book of the week, best book, reading list, good books, what i learned losing a million dollars, stop losing money, truth about success, losing money, the truth about success, truth success, truth about success tyler, success, how to become successful, how to be successful, success tips, success principles

Id: zOIURw6Tpek

Length: 40min 12sec (2412 seconds)

Published: Tue Sep 08 2015