Why People Suck at Trading - Ross Williams

well it's a pretty long day I'm normally the person who had to speak last and I know the caffeine's probably wearing off and sugars spiked for the day anyone is feeling a bit tired has anyone been smoking weed today no then one earth would you ask me what I'm going to speak about this well seriously that was just to make sure that you're paying attention now the title of this speech is deliberately provocative we're not particularly interested about why people suck at trading and suck at life we're more interested in people who don't so for those of you don't know me Who am I my name is Ross Williams I represent I TPM in asia-pacific I live on the east coast of Australia if I sound a bit dopey I've been on the road for two weeks I've been through Hong Kong New York once Toronto and more brutally I've had four nights in a row with Anton so give me some slack for this so what have I done with my adult life well I started trading lies the equities back in the early 90s where I grew up I moved to London when I was about 22 first proper jobs at CIBC I was ostensibly a bond trader all fixed income derivatives I got hired to go to Bear Stearns a trade junk bonds and c.d.s did that for a couple of years and became a prop trader then I went and joined one of the Goldman spin-out hedge funds called peloton partners so I was a partner in that that was a global macro fund and 2006/2007 was really quite good 2008 unmitigated disaster during the financial crisis moved back to Sydney kind of hanging out on the beach for about a year tried to become a better surfer didn't work my then wife was sick too definitely being in the house so I had to go back to do something lucrative so I went back to UBS I was a prop trader there which was great we were kicked out because of the Volcker rule which you may have heard of very sad day in my opinion anyway I would say that and since then I've done a few things I run some money for millenniums which is a u.s. multi-strategy hedge fund my business partner Australia and I've got five high net worths that we manage the money for I do this I have a small consulting business to commercial banks and I'm also involved in our preventative health care business which is a start-up so what this talk about I'm not Tony Robbins I'm not a psychologist I can't delve into the frailties and the strengths of the human mind but the one age I do have is that I've been doing this for 22 years and I've met hundreds if not thousands of people over the course of my career and hopefully I can impart the things that I've learned from some of them onto you what I would stress is that there's sometimes a bit of a an aura around people who are professionals in the financial markets it's true to some extent there's also some idiots as well if I'm honest and luckily for me I've sort of learned more from observing their mistakes that I have from people who are successful traders but here I'm here I'm you know I'm here to talk to you about you know are there parallels between getting your trading together ie getting your together and hopefully using that to create some success in the rest of your life as well because it is important in my view quite often I think if you're going to take this seriously are you going to turn it into a profitable undertaking as opposed to a hobby I think definitely one thing can lead to the other I've seen people that we've mentored through the Institute anton's brought up some pretty poignant representations before of some of his students and it's not a corny thing to say it's not a cynical thing to say these people have changed their lives and they've changed their lives for the better and with pretty much a hundred percent conviction I can say they've done it because they've had a good work ethic work ethic and because they've wanted to just as importantly how do you survive how do you avoid the behavioural traits of people who'd lose money how do you stop becoming a loss a holic as anti-life quite often say but there's nothing wrong with seeking out profitable people and emulating their strategies being a copy-cat might get you kicked out of university but does you kicked out of the markets and it's an absolute fallacy for people to think that to succeed in this business you have to be a genius I don't consider myself a genius I've done okay out of it I've had my ups I've had my downs I think that's the same for all the mentors here but I think the one thing we have in common is we've all had a good work ethic and we've all stuck to it and we've learned from our mistakes we have an over celebrate our successes and we've treated this as a business a consistent and a profitable business most people are able to do that not everyone but most people are able to do that so who here has lost money trading is there truth serum in the water normally I get a couple of people stick their hands up but it's good to see that everyone's on the same page because I certainly have will probably talk about some personality traits that you can recognize within yourselves I'm sure that I can I have a times recognize those personality traits in myself but I think one of the one of the most obvious things to say is that there is no hack this business is not like becoming a dentist you don't go to university to learn how to drill teeth and then we get and then a handed a license it doesn't work that way education is just opening the door work ethic and application is the rest if you think there's a hack go do something else you'll make more money I promise you skeptical stock traders stay alive and cynical traders suffer from paralysis has anyone in here had the misfortune to work with cynical people how much longer do they make your day how much energy do they drain from you with negativity there is no room for cynicism in this business you think you can either do it or you cannot has anyone here been in a boxing ring do you think you want to lose the fight the minute you stepped in probably not if you're cynical about this business and we get plenty of cynical people coming to these seminars oh it's too hard or you know what you were born 15 years younger than me I was great in the early 2000s are you know I'll never have the informational ledger you do whatever there's no excuses the job is pretty simple you get a piece of paper every day with a number on the bottom and your jobs to make that number bigger and it's as simple as that it's not hard I'm not saying it's that easy to get there but we cut all the that's what it's about how do you make more money than you started with if you don't think if you think that's too hard do something else you know do something else you're wasting your time skepticism is not cynicism it's important to be skeptical being skeptical is what keeps people out of pump and dump schemes bubbles like Bitcoin and various other stock market frauds and melodious business models which are propagated on people through the financial press being skeptical is totally okay being cynical is not going to get you anywhere worthless opinions ie opinions on shares for instance which are based upon hunches oh I bought two coffees today I think I may get along Starbucks don't waste your time do something else you got to do the work an unwillingness to manage risk always ends badly I don't think I need to expand upon that point everybody put their hand up and said they'd lost money at certain points in time if they can identify why they did that great if they can't I'll identify it for you it was likely an inability to manage your risk learning how to risk management to risk manage I should say is not the most important part it's not the most difficult job in part of this job far from it but you can I want to do it once again do something else the conscientious trader will always out earn the lazy genius that's something I seriously mean I believe that wholeheartedly if you have a work ethic if you want to apply what you know you will outperform an idle genius there's not too many things in the world where can say that that trust me I've seen it again again I've seen geniuses with no work ethic fail miserably at this business this is a controversial topic you're not supposed to talk about IQ sometimes in the Western world because apparently everybody is equal there's no differences okay we're in the United States who knows what the average IQ is in the United States it's around about here I'm pretty confident in saying that most people in this room have an IQ of around 100 and there's going to be a bit of a scatterplot either side the point is with education and some application you can move your hundred to around about here that puts you on the right tail the bell curve ahead of most people the education gets you there the work ethic and the application moves you further to the right everyone knows what district what a normal distribution looks like look at how thin that tail is if you're in the top 2% you should be making money but genetics not going to get you there unfortunately it's going to be educational it's going to be some work ethic and that is the way of it frankly now there's some people we can't help it's the truth does anybody think they have an IQ lower than 83 does anywhere does anyone here exclusively wear slip-on shoes nobody in this room has an IQ of below 83 if you think you do you probably don't know what IQ means this is not us making fun of people the US army will not hire you with an IQ of less than 83 you go nowhere near live ammunition so why the should you have a live trading account everybody is smart enough to do this who's in this room has anyone seen summer Stan Druckenmiller as interviews I think there's one that just hit the press yesterday I haven't watched it yet but has anyone seen that guy speak well first of all does anyone know who he is probably the most successful money manager of all time numbers put Warren Buffett in the absolute shade I'm not talking about Soros I'm talking about Drucker not but yeah you're right he worked for so he worked the Soros but more importantly an incredibly honest humble and successful philanthropist who speaks coherently and frankly about his struggles and his wins I can't remember where he went to college but it certainly wasn't an Ivy League school but you know how he picked the college he went to where'd he go boudin Bois doing do you know why he went there because it accepted with low SAT scores and this guy went on to be the most successful money manager of all time if you can find his videos on YouTube or elsewhere I would HIGHLY encourage you to watch them the fact that this guy who is a multi billionaire who has had incredible success who openly declares himself not to be a genius has succeeded at this business better than anyone else admittedly it's a sample size of one but it makes a pretty powerful point as well so if anybody is sitting here today thinking oh I'm not really smart enough to take this seriously you know what I thought I'd get take a look at it but you know it's really not for me I'm you know I know all of these bright people whatever get a different excuse quite honestly with a bit of hard work you can do it just whether you want to or not losing a trading and losing it life there's a couple of parallels that hopefully we don't know what we these are things we want to avoid we know there's no hack but what is there there's education and understanding plenty of studies have shown that you can move your IQ 15 points to the right with adequate education there is idea generation which Anton talks about at length both in these seminars on his YouTube videos most of that has to come from you admittedly and then there's the application of those ideas I can genuinely say from the people I've worked with and the people I've mentored that most people and some of you who've been to my seminars and have been tired probably heard me say this five times but I'll say it again anyway most people are better at the idea generation process and they think most people have ideas it's in the application of those ideas ie turning a thought bubble into something that's profitable that's where they struggle I was certainly that way plenty of people I've known have been certainly in that way most people have ideas and they can generate them it's getting that idea from something that sounds intuitively correct to something that could actually put some money in your pocket someone before asked I think was over here why do these hedge funds have models and why they have these processes that's the reason turning an idea into some money that's what we're trying to teach people and at times frankly beat into people and I said it earlier but that is what the process allows you to do a process needs to be consistent and it needs to be repeatable you need to write things down and turn those ideas into something that you can make money off out of cynicism I'm going to make this point again madam can you name me a famous artist right can you name a famous art critic right can you name a famous actor not in the adult industry sure can you name a famous film critic right who knows a wealthy cynical trader I've never met one remove cynicism from your thought process and remove cynical people from your trading life they are there to prevent you from making money they are there to make themselves feel better by dragging you down there is no room in it there is no there is no need to be with them once again worthless opinions opinions which are based upon hunches coincidences drunken thoughts perhaps emotion worthless you cannot make money with a worthless decision-making process you must have a consistent and a repeatable process which is based upon facts we rag on technical analysis a bit in this in the Institute I'm fully aware of that we don't dislike it we just think it's something that's there to be suspected but I said I should say respected because it's you know many times its self-fulfilling but it's not the be-all and end-all but does anybody here really think that buying a stock because the 50-day moving average has gone through the $200 200 day moving average is going to make the money I mean genuinely that information that anybody in the world with an internet connection can tell you does anyone think they're going to make money with that sort of approach it's a worthless piece of information and the only thing you will get from that is a worthless decision why hope that dispels a few myths there is no shortcut it's not an impossible undertaking but there is no hack there is a process and there's the application of that process what's the big one what do you think people really why do you think a lot of people really struggle to make money yeah true but more specifically I suffer from it sometimes I just can't be bothered and do you know how much money I make on those days none and why should I expect to make any if you were a chronic procrastinator you probably wouldn't be here in the first place if you are once again do something else do something else seriously go and open a sandwich shop you'll make more money distraction what are our biggest distractions falling in love with potential outcomes and ignoring the pathways what do you think I mean about what do you think I mean by that I look I don't know what you're into but here here wants to drive a Ferrari and be surrounded by good-looking guys in g-strings or girls I don't know what you're into falling in love with a potential outcome and not having the steps in place to get there very common and frankly it's what a lot of these financial charlatans prey upon when in their advertising and their internet memes and what-have-you are driving around with wads of cash in Italian sports cars and what-have-you fine to have hopes and dreams absolutely no problem but there's a clear path to get there ie making the number on the bottom of the page bigger every day every week every month every year the pathway is unavoidable if you get to the outcomes you want great awesome but that's not what this is about this is a business and in the same way that it takes a while to get to where you want to be with any business it's absolutely true of this business as well nobody would go down the street and out the front of a vegetarian workplace open Arby's meats franchise without doing any work would they yet people are prepared to do stupid things like that with their own money in the stock market every single day it's amazing it's amazing why people can't see this as a business because that's exactly what it is but anyway social media the biggest distraction in most people's lives I've struggled with it at times web surfing why do you think people get paid millions of dollars a year to come up with web content which keeps you hot it doesn't make you money social media is there to be used don't let it use you I think I said before in the panel I thought Twitter was a fantastic free resource I use it for work only I don't use it for personal stuff that's for my business my point is it's there to be used it's not there to use you and unfortunately I think many people fall into the trap of you in social media thinking is going to do something for them and then four hours later they're looking at pictures of cats on Facebook it's there to distract you it's not there to make you money but if you want to use social media you can make it work for you don't lose the value exchange over communicating I think I receive 65 whatsapp chats most hours I'm over it frankly it's such a such a time sink and a drain on my ability to make money it's a distraction that I just need but anyway removing these distractions from our lives I think is is probably half the battle at the moment analysis is not storytelling what do we focus on in this business what do we focus on putting into our process numbers the spreadsheets that Kris quill was talking about before were they full of words they were full of numbers Jason's examples numbers if you're not competent or confident with basic arithmetic then learn it because unavoidable stories are great but there is a quantitative element to this business which you simply can't avoid you need to get you need to get your head around it it's not that difficult awareness what is this successful trader aware of everything to do with the stocks FX commodities currencies are involved with develop a filter it can be hard you need to do it prices everything as we said before information has never been more readily available to the retail trader now a lot of that information might be crap we know that but nonetheless it's still there the point is if you want to be willfully willfully ignorant if you don't like reading if you don't like accumulating information honestly do something else don't waste your time attention to detail who wants to tell me where the S&P traded up close last night unbelievable no one okay everyone knows what JPMorgan is what peds JPMorgan trade on fifteen point one give or take when does Netflix report its q3 earnings subscriber numbers he said that it's October 16th isn't right one person out of two hundred and however many knew that Netflix the biggest streaming company in the world trading on exchange down the street from here very popular stock for retail traders one person in the room knew when they're reporting the third quarter earnings I think I've made my point attention to detail if you have no desire for attention to detail once again it is something else you'll never make money in this business I think that laughs that next points rather self-evident a trader with no attention to detail is a gambler does anybody know what a post conditional Betty's on the craps table in the casino it's the only bet in the casino where the house has no edge and that's why by the way that's why the craps tables always buried away at the back because it's not particularly profitable you are better off going down there and spending your money playing craps and you are getting into the stock market armed with no education and no toolkit no toolkit no evaluation tools in fact your odds are probably markedly worse if you think this is a business based upon chance do something else quite honestly now in the same way that we make trading decisions based upon numbers and facts we should probably run our lives that way to some extent do I own or rent a property or how do I make that decision spreadsheet numbers what percentage return did I achieve on my capital last month how do I make that decision spreadsheet numbers should I save up and go on my holiday I should just banging on my credit card and hope for the best how do I make that decision spreadsheet and numbers I think I made my point there what is the opposite of being willfully ignorant it's being curious I willingness to investigate and do research and to be across the details Russia and touched on this when he spoke before he said that there were three personality traits which he's found has helped him very well through his career and by anyone's measure he is still in the midst of the successful career being a perpetual learner if you think you know it all I can give you the number of the Bankruptcy Court for a South South Manhattan because that's where you going to be pretty soon you will never know anything you knit everything you need to be a perpetual learner you need to enjoy the learning process staying on top of the numbers learning about the stocks the commodities the bonds whatever and being wilt and be willing to learn something every single day if you can't get your head into that space do something else being skeptical there's an element of skepticism in this business you need to have guess what financial rewards for certain people are high so people are going to tell lies to get what they want and further their own interests financial press is full of total everyone knows that what are you know complain about it I hope that it changes because it's not it's been that way for hundreds of years and it's not going to change you need to have a degree of skepticism to work out what's true and what isn't it's not being cynical it's being skeptical not everything is true write a letter to your politician if you don't like that but I'm telling you it's not going to change if you don't enjoy reading enjoy being unsuccessful reading is a huge part of this business not everyone is a voracious consumer of financial information I get that that's why they invented CNBC flashing lights talking heads graphics which are similar to a video game and fuck-all content that's why it's free if you think that's consuming financial information think again with a bit of controlling I know people who can get CNBC to talk about whatever the hell they want why is that right what's their business model they want to sell ad slots they want people in there who can talk they want to shout they want to have wind nuts like Cramer and lots of flashing lights and tickers sliding and lost across the bottom of the screen I have to wake up in the middle of night sometimes you know when I fall asleep at my desk with CNBC going I want me to have a heart attack when the US equity market open I mean they're on par of the world remember my time zones all screwed up there's pretty much zero informational content in that stuff develop a filter develop a healthy level of skepticism you'll not only make better use of your time but you'll avoid a lot of the the inherent conflicts in this business something you need to do yourself I can't tell you how to do that it comes with time it comes with experience if you've never had an original thought in your life and you want to be spoon-fed buy sell-side research or indeed your mentor or your best friend who's a broker or whatever do something else otherwise you'd just be donating money if you can't enjoy that process and get your head around that process do something else what's an aphorism it's a saying where there's a small element of truth to get a point across there's plenty of them out there what is it fail - was it trade the plan and fail to play no fail to plan and plan to trade or something like that what is it again right right right okay okay do you know the reason I had trouble remembering that it's meaningless it's totally many ways but it sounds good and all those phrases are seductive right and it's always some old hand who's who's telling you that stuff to try and make things sound easy and to sort of give people the impression that there's these rules you can learn and you get a little license and then you're going to get well at the end of it if you like repeating like all these sort of little cliches and buzz words and phrases that sound good once again do something else well get a job on CNBC actually actually pays alright I think critical thinking what is it there's a reason I've put it in red it's probably the most undervalued yet valuable skill set in this entire business I'm not going to read it out to you you can all read you can read it yourself anybody in here from maths or engineering backgrounds there's generally quite a few my competition on the CIBC grad program was a guy who came first in maths at Cambridge he didn't get her first he came first I cannot even hope to be as smart as that guy on my most lucid day in my life right but he's been phenomenally successful and the reason he's been so successful I think is quite common amongst people from those I suppose backgrounds which quiet which require a lot of academic rigor and discipline I think it's because they view the markets as a series of problems that need to be solved I think many of us myself probably included spent four years doing something in finance and something that's vaguely you know got a vaguely quantitative element to it and we think we have a good knowledge foundation there's not too many gaps that need to be filled absolutely not the case I have people coming to me in Australia who've done a fairly common degree done they're called the Masters of applied finance don't ask me what's applied about it because it's a mystery to them as well most of them and I'm not denigrating you know I'm not denigrating formal education at all you know there's a there's an element of understanding which people you know really do need to have but what I would say is it's very difficult for practitioners in traditional educational establishments to impart the knowledge of the real world of trading and it's not a comment on them or their lack of IQ or academic prowess it's just the fact they haven't done it so delve into option theory if you got problems sleeping I can recommend some fantastic books on second order derivatives you can get through more about eight or nine minutes of that have been better at night you're doing a lot better than me but my point is that somewhat quantitative skill set and the desire to apply a critical set of thought to the market is an invaluable skill set not everyone has it but it's invaluable you can develop it I said this before and when we're up on the panel everyone hears been a high school if you doing that thing where you cut off the frog or heating a milliliter of water whatever you're always taught to go through the experiment with you know in a repeatable in a consistent manner the core of what we're trying to teach people in this business is to have a consistent and a repeatable process so isn't there's a number of reasons for that if you sit down cold in the morning you've got no ideas you've got nothing your very first day of working out how to try to stock where do you start you've got to have somewhere to start if something hasn't worked for you and it hasn't you've stopped out of it for whatever reason or it's gone yo you along something has gone down or short something has gone up that didn't happen through a chance yeah look there's a bit of bad luck here in there but generally it's not the case but if you have a process which is consistent and repeatable you should be able to go back revise the work that you've done and pinpoint the mistake that you made that is the point of this that's the point that's the point of having some financial education to stop throwing darts and to know what to do when things go wrong and to deal with difficult situations anybody can high-five their friends when things are when things are going well when they're winning that's fine unfortunately there's not a lot of lessons in the winners or the success because people tend to put that down to their own good judgment rather than what's often their own good luck but there's a hell of a lot of lessons to be learned in losing money and having the process allows you to go back hopefully not that not make that mistake at the same time you know the same mistake again but also to pick up some learning from that and that's why we're such big advocates of having a step-by-step process in this business unfortunately nothing teaches a lesson like a losing trade most people can probably relate to that people without a process cannot because they don't know where they went wrong they'll put it down a bad luck or nebulous concepts which are generally wrong the quantitative side of trading and I'm talking more about equities in this in this instance it's very important to anyone's process though it's largely the most basic as well does anybody here know Python C++ advanced VBA do you consider that to be an edge good I wish it was but it's such a commoditized skill these days and so many people are good at it and so many people rise to the top of that profession I think it's probably the most difficult part of fact I think quantitative finance is probably the most difficult discipline in this industry to succeed in there's just so many good people out there now if you want to compete against these Harvard PhDs who've got quantum physics on their CV be my guest hope it works out for you reality as it probably won't so what I'm the point I'm trying to make is that the quantitative side of it is important but the quantitative side of it is generally well over time will actually become the simplest part of what you do bit of getting over the hump bit of practice and repetition P easy PS surprise price to book value relative strength on pairs etc etc sounds quite complex but you know after a while becomes second nature but a lot of people can do that stuff so technical analysis nothing wrong with it just everyone can do it if everyone can do it how can you out-compete them I think the basic point of equity trading is probably sadly quite similar does this past the pub test maybe that's a bit too much of an Australian saying there maybe I could have put that better in better context for North America but if you've got some artist in the bar telling you that he's just bought himself a new Ferrari and he's wearing a pair of flip-flops does it pass the pub test same in a stock market there's a certain element of common sense which you'll develop over time but you know sometimes takes some people longer to get there than others risk management avoiding losses and avoiding mistakes having a process in other words risk management is not about avoiding risks it's not about avoiding risks it's about taking calculated risks paradoxically the biggest risk is never taking a risk in the first place I think plenty of people can probably I see a few nodding heads I think some people can relate to that I'm not trying to get all deep and meaningful but it's pretty easy to go through life sitting there doing all that's a huge risk because your outcome is pretty much known from day one knowledge is the ultimate risk management once again the point of it is you know what to do when things go wrong the process again and again you're going like why is this crazy from the other side of the world banging on about the process so much because it's the truth without a process you're throwing darts you're flipping coins this whole thing is designed to get the odds in your favor it's not a game of chance it's a game of analysis and a game of hard work the trader with no process is like the blind squirrel who occasionally finds enough that's the best analogy that Anton and I could come up with when we're thinking about this is presentation demo accounts I didn't realize they existed for a couple of years ago don't understand it frankly didn't want to talk about it you can't pay your bills using a demo account people need to understand the emotional reactions that come with winning and losing money even if it's a very small amount of money even if it's 50 bucks or 200 bucks at least you can go down to the bar and buy your friend a drink and talk about it demo accounts what's the point it's just another procrastination tool or a distraction literally worthless cannot see any point if it seems like an incredibly popular undertaking for people I don't get it I just don't get it if anyone wants to explain to me the veracity of afterwards I'm how I'm open-minded to it I just I just can't get it once again numbers don't get happy sad or angry focus on them before you delve into the story and there's always a story focus on the numbers what are the common traits of the emotional and the subjective trader now unfortunately I think people in the room are going to see these traits in themselves but if you can see these traits in yourself deep down you know that you need to eradicate them if you can't see these traits in yourself you either don't have them which is great or there's something if I can run with you and you should probably go and do something else people who cannot be bothered to objectively expand their knowledge plenty of people like that people love being willfully ignorant people don't want to know the truth doesn't work wedded to certain ideas despite these ideas being demonstrably wrong how many people have been telling you to buy gold for the last eight years when it's been in a grinding painful death by a thousand cuts bare market why Cannot they why can they not accept they're wrong I don't know they're wrong get over it some people blindly do not want to accept the fact that they're losing money when they're losing money if you see this trade in yourself get rid of it eradicate it it's a Express train to the poorhouse and it's surprisingly common unable to accept criticism and hostile to new ideas hopefully you're not one of those people confirmation bias isn't it great when you own a stock that's going up and every bit of news flow is positive on that stock does it give you a deep warm feeling inside of course it does but doesn't really get you anywhere as Raj said before you're almost better off reading research when it contradicts your own view there's information in that confirmation bias is extremely dangerous and then by the way I think many professional investors investors or the ones I've come across suffer from this more so than retail people because they think they're very smart and there's certain character traits a lot of people on the buy side get when you have stockbrokers that call you up every day and tell you how good they are all they're really doing is indulging in confirmation bias every day and people get totally and totally utterly in love with that it's dangerous if you see this personally trade in yourself you eradicate it save yourself some money being in denial of people's own profitability same thing I'm willing to accept that things have changed what is a market what's a definition of a market I mean there's many but can someone give me a concise definition I heard a really good one the other day it's the money weighted sum of people's expectations once again it's the money weighted sum of people's expectations now there's thousands of people in the stock market every day there's a hundred different mandates every day there's technology there's technology changes on a constant basis there's changes in the speed of communication and there's changes in the performance of that company themselves new entrants new exits how is it possible logically that a market won't change over time it has to it has to people love really like are the rules still apply back in 1920 the rules still applied and it's the same thing now every day above a buck yeah there's some truth to that what's the other one that comes up with a financial privacy some the four most expensive words in history this time it's different it sounds pretty good doesn't it it's different every day how can it not be you know and Anton talks about his inversion narrative quite often right there's always a frozen's in this crap that gets in the way markets continually evolve continually if you can't accept that once again go to something else you'll make more money so what are the common traits of reasonable and objective people who in my experience tend to make more money willing to discuss both sides of the argument well you know I've been long gold for six years it's been going down [Laughter] have you ever considered I don't hear about it if you can't listen to both sides of the argument you're destined to fail adaptability accepting that things change accepting that you will make mistakes markets tend not to treat perfectionists very well it's great to have a high winning percentage it's great to be good at what you do but if you're a perfectionist the reality is you probably need to get over that to some extent because you're going to make mistakes I've made more than I can count and most professional investors who want to tell the truth will tell the same thing the importance is I've know when to cut those things quickly but there's going to be mistakes the point is you know make the same mistake more than once hopefully although I have profitability speaks for itself skin in the game real after-tax interest rates in the u.s. surround about 0% does anybody in here think with a bit of tuition a bit of time in a bit of application they can beat an annual return of 0.25 of 1% I hope so in my opinion not being involved is simply too high of an opportunity cost to consider $100,000 at a real interest rate 0.25 percent earns you 250 dollars a year on deposit that is financial repression that's the point it's designed to get you to go and do something else you can complain about it guess what it's the way it is in my opinion and most of the other mentors opinions the only way in a zero real interest rate world to get ahead is to take some calculated risks once again we can complain about that but reality is it's the way it is everybody to get there needs to get over this demo account thing and feel the purposefulness ie the feeling of achievement and success that comes with treating this trading thing like a business if you want to sit there looking at screens all day you want to sit there doing demo accounts be my guest it's not going to do much for you well you know it won't getting over the hump at some point do you didn't want to enjoy Chris quill spreadsheet presentation okay we've got some nerds in the room that's cool no well seriously the point I was trying to make was that we can sit there and crunch spreadsheets like that all day but at some point you got to put the spreadsheet down and push the button you know it's great to analyze things it's great to be across the story it's great to have these good traits be a habitual learner have a process that works but at some point you got to push the button sitting there using demo accounts and thinking about where you might be is not pushing the button you got to just do it not always easy but what I can tell you with a process that works and a feeling of conviction it's a lot easier than if you're just throwing darts at a board is everyone significantly depressed does anybody feel like shooting themselves after listening to this I hope not it's not all doom and gloom plenty of people do this and plenty of people to it successfully this island is basically built upon the business of real estate and stock speculation so someone's got to be winning it's not an impossible undertaking you just got to do it properly number one avoid the behavioural traits that we've spoken about before if you see those traits in yourself eradicate them there's no nice way to say it eradicate them be adaptable be wary of the expert or the old hand or they're people who want to impart their wisdom to you particularly if they're poor profitable traders focus on the future adaptable traders are open to change and to changing their minds and once again most people are better at the idea generation process than they think most people are don't get me wrong people come up with stupid ideas as well but generally speaking most people are ok with the ideas it's the implementation of those ideas where they fail stock selection sector selection valuation tools sorting ranking and finally pulling the trigger it can be a long journey to get there but most people with the right work ethic can get there in the end accepting that the hack doesn't exist hopefully you've accepted that already it doesn't there is no hack the hack is crap it doesn't exist now I think we've had something like 12 million people look at our YouTube videos we've got what 200 something in the room what a but that that percentage is so infinitesimally small I can't even do it my head my jaws out till 12 last night but still what's the point I'm trying to make everyone in this room has done something ie getting off the couch and making their way here that 99.99999 percent of people who watched our films couldn't be bothered to do why couldn't I be but I don't know why they don't do it doesn't change my life but you're all got yourself here I mean this guy's flown from Sydney believe me I know if I can painful that feels and I'm getting paid but you're on your way you guys are on your way you've a shoot you've consumed Oh video content you found your way here you've managed to sit through six hours of this and I don't see anyone with a gun in their mouth so you're on your way just do it pick up a pen start writing things down think about your process think about what you want to achieve and think about how you want to get that once again plenty of people do it is it harder than it used to be I don't know it's always been hard plenty of people do it and not all those people are geniuses you're well on your way like I said it's not psychology it's getting your together so to sum this up what does it take awareness and attention to detail if you don't have it develop it curiosity you're all curious otherwise you wouldn't be here creativity and critical thinking street smarts and common sense comes with time unfortunately probably comes with losses as well nothing teaches a lesson like a good loss that's life the idea is avoiding as many of those as possible emotional control and objectivity and finally skin in the game shut down your demo account seriously stop wasting your time seriously you can't pay a bill with that what do you do when you've been on your demo account for 12 months in a grand total of zero dollars whereas the letting in that do something maybe this is not for you maybe this business is not for you we've had people come to Thailand and spend ten days and then decide it's too hard knows why you do that but they do push the button take a risk take a calculated risk and do some work most people can get there the people who don't get there are the people who can't be bothered so everyone was pretty truthful before when they put their hand up everyone said they're taking a loss trading something and that's quite admirable the next step is being honest with yourself and saying is this for me am I prepared to do the work to make to be profitable firstly to survive and turn this into something that's more of a hobby I can't answer that question for you you can only answer that question yourself but just like it is with a stock at some point you've got to be long or short you got to be long or short yourself you know when you go home tonight when you get up tomorrow hopefully with a hangover if you hanging out with Anton probably time for a bit of self introspection decide whether you really wanted to it and if you're going to do it do it properly otherwise do something else let's think of the ideal world we're all get to the point where we're winning biggest fallacy when I made all this money I'm gonna live this great balance life oiled up guys and g-strings pink helicopter with mink seats perfectly coiffured poodle on my lap I don't know what you're into the point is if you get to that point where you're winning it's not that's not the time to introduce some balance to your life having some balance in your life and having a creative thought process and being interested in various things that's what's going to allow you to get there now it took me a hell of a long time to work that out trust me this this business shouldn't be all-consuming if it's all-consuming it's probably not going to work for it to be honest you probably gotta have other things it should be a means towards an end not the end in itself it's very easy to be a slave to the market when in reality you know that it's the market that should be working for you like I said this is not a talk on psychology this is about getting your together I don't think I can put it any more simply than that knowingly or not you're here you did more than 99 point whatever percent of people residue you're on your way if you choose to give up now big deal you down a couple of hundred bucks if you want to keep on how many go at it time to make up your mind I'm going to leave you with that thought you [Applause]

Channel: InstituteofTrading

Views: 428,888

Rating: 4.7384496 out of 5

Keywords: ITPM, Institute of Trading, Institute of Trading & Portfolio Management, Ross Williams, Finance, Stocks, Stock Market, Currencies, Commodities, Bonds, Trading, Investing, Money, Millionaire, Billionaire

Id: sSj57fpHlb4

Length: 56min 39sec (3399 seconds)

Published: Thu Mar 12 2020