The Truth on Trading Education | What I Learned After 10 Years (Learn About Trading & Investing)
Hey, it's Jonathan. If it's your first time here, to you, I say Hello, and if you're regular here, welcome back! In this video, I want to talk to you about trading. Now, not just any trading, but more specifically the journey and education of trading.
I'm going to a segue for a moment. The reason, I'm using the word trading, which is an often misrepresented word, is because trading and investing are very similar. There's only a few minor differences. And, the reason why I say that is because both trading and investing rely on the same principles, and that principle is research.
So whether you want to be a trader or an investor to simplify my explanation and examples today, I'm going to try and use the word trader just to convey the message. So, let's get back to the theory of trading and trading education. Now, what I'm going to do for you is I'm going to break this video down into three parts. The first part is a little bit about knowing myself or knowing that trader. It's an important topic, one you will learn about a lot.
Its main purpose is to understand your goals and what you're trying to attempt when it comes to trading. Now, it might seem like a bit of an overrated topic, but it can really mean the difference between falling into the habits of a gambler or animalistic like mentality, when it comes to trading or buying and selling for a very specific purpose and a very specific goal. Now the second topic I'm going to introduce you to, what I believe are the key areas that, you want to focus on when you become into the world of trading and also how you may actually want to go about in your journey of training and learning how to trade. This is one I was fortunate to figure out very early on and by early on I mean at least five years into my journey. And, for those who don't know, I'm 30, I'm quite old now.
I consider myself or at least in relation to where I am in this journey, though I did start trading and investing just right before I was 19. I was actually 18 at the time. Now, when I say early on, I mean for the simple fact that, my age based on other people's age in this industry, is very different.
You see, there's people who are out there that are in their 40s, 50s and even 60s plus, and they're still learning how to trade or they're still trying to learn the operations of the market. But just keep in mind that everyone's journey is going to be unique and your journey is going to be very different to mine. Now, I say that I have an advantage here because early on I decided that I wanted to make investing my career.
So I built and I took a certain journey that, may not have actually been typical, but it sure helped leapfrog me above and beyond, where I would generally be in my age group in a much shorter time. And I really don't Bluff when I say this. When I was back in financial planning, and allow me to digress for a moment, back in financial planning, we would fill a room for an event. And, when it came to my seniors and they would ask me to present to this room, they'd always choose a certain topic.
They'd ask me to teach about a certain theory or talk about the markets in a specific way. And to me, these theories were so simple and so boring, I really thought I'd put the room to sleep, later on, after the presentation ended, we'd all gone out to lunch. And so fourth, there would be often times that I get people come up to me to say, wow, I just can't believe that this is a way that I can look at the market that I never considered before or your presentation really helped me to get a grip on the markets and really goes to show that no matter if you're 20 or 75, you really don't know what you really don't know and that's for a reason sometimes even the simplest methods can be the best, not just to learn, but also to teach. So whether you are on my side of the screen or your side of the screen, simplest things can be often the most misunderstood. Anyway, before I digress and talk too much, let's just get back and continue. Now, the final topic I want to go over is going to be about my journey and my journey of the education of trading.
It's the steps I took and the things I learned along the way. And, this is the part of this video that I think you're probably going to get the most value out of, though just keep in mind that everyone's journey is going to be different. So, everyone's going to be getting different points as they go along. So, if you do learn anything or if it does help, just let me know. All right. So, let's talk about, know that trader.
Now, there are five key points that I want to talk about. Now, obviously, there are not only five key points, but these are the five points that I think are the best to start on. Those key points are your starting capital, your time frame, your risk level, your emotional intelligence, and also your current skill level. Now, I'm going to break these down. I'm going to go through each one of them and give you an idea of why these are important and why you may want to focus on understanding them.
So let's start with the top one. You see, knowing your starting capital is crucial. It's going to give you an amount that you can play with. It's going to also give you an idea on how much you can either.
Allocate either on a regular basis or non regular basis to this industry in the future. It also gives you an idea on, what asset classes you may want to focus on, when it comes to time, this one is very obvious if you are investing for a year because you're trying to retire next year, or if you're trying to retire in 30 odd years, your time scale is going to be different. How tolerant are you when it comes to risk? Now, obviously, tolerance to risk is very important. Risk levels and gambling are two very different concepts. So when I'm talking about risk, I'm not asking you if you want to be or if you're happy to punt on a stock, commodity or currency. Gambling odds are naturally 50%.
You either win or you lose, though in reality, the odds don't match up. In fact, around 80% to 90% of people who engage in gambling actually lose money over the long run. Well, that's if you read what's on the business insider, anywhere, so, what is a risk level? Well, when it comes to understanding your risk level and who you are as a trader, you use this so you can understand, what proportion of your portfolio should be weighted to both riskier and less riskier assets. This can range between 100% in safe assets and 100% in riskier assets or a mixture depending on where you sit on that scale.
Now, if you Google risk tolerant assessments, you might be able to find an assessment online, which you can do, but just keep in mind that each company that gives you an assessment in each country that you do this assessment in. It may be different to your local laws, but in general it should give you a guide if you're a more riskier investor or if you're a more conservative investor. Now, understanding your risk tolerance is important for two reasons.
First of all, it's good to understand how you are building your portfolio, based on your attitude to risk. And, it's also important because when the market's term, it's going to give you that stability, that the market is moving within your level of risk tolerance. So when the market scoops higher low drops dramatically lower.
Your portfolio will be structured in a way that can withstand the falls. Or if you have a higher tolerance to risk, you'll be comfortable with those levels in the market that your portfolio is moving at. Now, the next one on the scale is emotional intelligence. Now you'll often hear about this, it's one way that, you can understand how you can handle yourself? It's also important to get idea on your biases. So not only is it emotional intelligence, but it's also your biases you're looking at.
Are you cocky when it comes to the market? Are you overconfident? Or do you often heard and then regret later that you bought into an asset that was skyrocketing and then it declined? Are you able to make your own decisions? These are the sort of things that you need to focus on. Again, it's not the be all and end all these five points, but they are important points nonetheless. Now, I want you to know that if you do hurt and regret it, it's not a bad thing. As I said, it just means that you need to be consciously aware of this fact and you need to try and consciously prevent it. Again. You really need to focus here. It could be the difference between actually following rules and reaching the goals or ignoring them and going rogue and just falling into the gambling mentality.
Now, finally, it's time that, you accept your current level of skill. Now, skill level is defined not by how long you've been doing something for, that is unless you're going to focus on a specific niche, but by your understanding of that specific market or that specific niche. What I mean by this is, let's say you've been investing for 30 years. Your skill level may be much lower than someone who's investing for ten years. Conversely, you may actually have been just investing for five years, but your skill level may be much greater than that person who is investing for 30 years. Time in the market does not have a direct correlation.
Instead, the correlation to skill here is how much time you spent on actually learning. But not only do you need to learn, you actually need to begin to apply what you're learning, okay. What I mean is, it's one thing to read a book. It's another thing to go take that information from the book and apply it to the markets. Not only just apply it to start to modify
it, tweak it, and understand why the book is suggesting one thing or another. And then once you've done that, go back and back to the whole thing and then apply that skill into the future. So please, I just want you to not get confused between time in the market and it's correlation to skill, and instead actually understanding your actual level of skill when you go through this exercise, I actually want you to be honest with yourself. For example, out of ten, where do you honestly think you sit on a scale between someone who knows what they're doing and someone who is just starting out? Now, as you can imagine, this sort of assessment is just self analysis.
I personally sit. Well, I believe I sit maybe around a six or a seven on the scale, and you may put yourself at a nine or you may put yourself at a two. It's really just self analysis here, and there is no right or wrong answer.
But just consider this every time you learn something new, you actually drop in that scale, you don't move up it. And what I mean here is if you pick up a book on investing and you take points away from the book, your level of skill on that scale should actually decrease and not decrease only when you start to pick up books and stop learning or start to learn a lot less, I should say, and continue to apply the skills to the market with success, then you can move up that skill ladder. On the topic of success, just while we're on it, and applying your skill level, please allow me to digress for a moment and I'll try not to waffle too much, but I tend to. There's this random and illogical idea out there that, you need to be 100% right in the market 100% of the time. So, for myself, personally, I can't fathom this video and to even think for a moment that, a strategy or an idea in the market is accurate 100% of the time, shows an instant lack of knowledge for this field. Now, there is something you should know.
Every great trader always plans a scenario both to the Bull case and for the bad case. Even if the case isn't presented, the scenario must be built and the idea must be considered. No doubt, when I make a video, I'm only making you a video once a week.
My intentions are to not give you both sides of the trade as it's not my intention to actually provide you active advice. Instead, to provide you a case in which I think is the most probable based on my interpretation. And, when there is a case that the market won't follow what I think it will happen, I provide a quick snapshot of an alternative case, and this is important because a lot of people, they focus on one direction of the market or the other.
They don't, actually try to interpret both sides of the market. Now, I just like to point out that, Moon boys in the crypto world are definitely one example of this strange and illogical rationale. You can see this as soon as the market tanks they disappear.
There is no we're no longer Moon boys. Let's change the tune. For example, Perma balls, Perma bears, Perma ball, they're the guys that think the market grew up. No matter what happens, no matter how far it declines, they think that the price will always run higher.
Likewise, you have Perma bears, these guys tend to think that, no matter how high the price goes, that the price will soon come crashing down and they can short the market. Of course, this is not trading or investing. This is just pure speculation and gambling. Trading and investing is about having rules, and also it's based on probability, nothing more and nothing less.
Okay, so probably waffle too much. Let's take a step back. So understand your skill level. Let's talk about that because you really need to be true about your skill level. You want to get a grip on the Dunning Kruger Effect study it, understand what it is, because, you know, I see a lot of people, who come out.
They're not even active participants in the industry let's say, for example, your hairdresser, taxi driver, some random want to be on Facebook. These people, they buy into Bull markets, and during the Bull market, they may have made a buck and change. And now they consider themselves someone who actually understands the market, and someone, who is in a respective position to actually give you an opinion, when, in fact, they just got lucky. Anyways, I cannot stress that truly knowing your direct skill level is actually crucial. And I was stuck on this point for a while because it is going to pave the way in your approach to actually both education and the way you understand the market. So,
let me just wrap all this up, and just recap what we talked about because there were remember five key points that you want to be focusing on. So, the first one was starting capital, second one was your time frame, third one was your risk level, then you had emotional intelligence, and then finally, it was the school level. What you believe your current skill level was? Now, these are the first five areas you must understand about yourself, when it comes to understanding the markets, but they're not the only areas. Now you could argue that these areas are probably simple and over simplified, but sometimes it is, as I said before, the simple things that matter the most. Anyway, what I want to do is just change this tune right now and just switch over to my journey as a trader because I think there's probably some lessons here that you could learn. And I wanted to focus or at least give you an the outline of my journey because I wasted a lot of time and I don't want you to waste a lot of time when it comes to this industry.
Now, I want to say that one of the main reasons why I wasted a lot of time. One of the main reasons, I believe, is because I didn't know what was important. I hang out on forums like Hot, Copper and Reddit. I watched YouTube videos endlessly all day, every day. My partner would always get angry at me. I went deep into alternative finance, like the kind of shit you find on conspiracy websites.
I spent three years doing this and you know, what the biggest regret that I have? I wasted not just time, but also resources. Now, eventually, as I just said, I can't keep wasting my time. I got some goals to meet and I really want to learn how this is done.
So I got a bit more serious. And after wasting time, wasting money on the free options by money, I mean, like investment ideas that, didn't go right. My assumption in the markets that, I didn't fully understand, I decided to change. So, what I did was, I went out and I bought some services. Now, one of them was from Portfolio Publishing.
You may know them, I can't recall, but I think I spent around 6500 with them in around 2013 to 2014. Pretty much, I was signing up to an investment service, and I was going to receive weekly E-letters and monthly buy and smell recommendations. Now, I have to be honest with you, this is not something I'm advocating. Around 70% of the trades I took with them early on failed. I lost a tonne of money and I can't tell you, if they've improved now or not, because I don't really use them anymore.
But that is something I did do, and I don't have regret or remorse or anything like that. It's just part of my journey and something I did do. And the reason I don't have any regret or remorse is because in these e-letters, if you get rid of all the investment advice is education, and that education is key, and I'll admit, only about 5% of my total knowledge comes from them. But if you're just getting started these investment newsletters, whether it's monthly portfolio publishing, et cetera.
If you pay for the services, what you might get out of it if you ignore the stock tips and everything is excellent investment education. In 2014, I began applying for my IG 146, which is a license that is required to do financial planning here in Australia. Side Note, I'm no longer licensed, so, please don't come to this video looking for advice. Education only! No advice! In 2016, after I'd spent two years going through my financial planning program, I then switched phases and moved into another training registered training organisation which focused solely on share trading and investing.
Now, if you're unsure what a registered training organisation is or an RTO, it's a verified training organisation, that's been checked over by Australian standards and that sort of stuff. There's a framework you must follow. There's competency levels that must be met.
There's both exams and assignments that, you need to sit and go over certain levels, to be competent or not in a specific subject. It's exactly like going to University, but in this case, instead of learning about accounting or being a doctor, I studied investing. That's what I did. So for three years I undid everything I thought I knew about the markets and I restarted and I relearned all the most basic concepts all the way up to the advanced funds.
Now, if you want to get an idea of some of the topics that I learned, I'm going to talk them on your screen right now. These topics that are studied are things like market analysis tools, complying with share trading regulations, tools for charting market trends, trend analysis, price analysis, pattern analysis. Now that first course, I think took me around twelve months to complete.
After I completed the first course, I moved on to a more advanced program which covered the following topics like, applying Elliott Wave, managing trader psychology, constructing portfolios with different risk levels, and things like that, developing operational trading plans, so, learning how to actually move my trading plans around and view both sides of the market and then also how to use and apply time analysis. Now, it's completely your call if you want to venture down a path like I did, I saw there are many universities and tastes offering courses like this, though I must admit I did Cheque the other day and a lot of them have stopped offering these share trading programmes and I can only imagine it's due to lack of students due to COVID. So if you can find one, I do think that going through an RTO is probably one of the best ways to learn.
Another deterrent that you might face when you go to enrol in a programme like one of these is the cost. Now they're not cheap. They're really not cheap for studying both of these courses, both the basic and the advance. And then there's also supplementary courses etc. Just the courses I did with his RTO.
I spent around $26,000 for three years. Now, most people don't even have $26,000 in trading capital, let alone the ability to pay for education just so that they can go into the market. A lot of people skip the education route and they go straight to the free content. So that way they can utilise their trading capital and get into the market. By trading capital, I'm actually meaning their savings. But like as I mentioned already, the free route, and I'm honestly trying to give you some really sound advice right now.
The free route is a complete waste of time. Now, I'm not saying you won't learn anything because you will learn. But I'm talking about a waste of time here.
And by the time I'm talking about where your time is spent. Now, your time is best spent in a structured and managed environment. Well, that's what I learned anyway.
So point in case is comparing my ten year journey to someone who's been in the market for 40 years and how I, as a 25 year old, was able to enter a room and teach people that were 60 people that were learning about the market for a long, long time. And then at the end, of a so called presentation or event, having these people come up to me to tell me that they learnt something. Like I said, age or time in the market does not equal knowledge and skill. So let's move on. Let's say you decide to get involved in a structured learning programme.
What do you do after that? Well, you have two choices. You can take, what you learned in the programme and apply it to the markets and repeat for the remainder of your life, or you can do what I did. And that was honing in on specific skills. Now, for me, I didn't Hone in on price analysis. I didn't Hone in on Elliott Wave. I didn't Hone in on patent analysis or any of that sort of stuff.
Instead, what I decided to do was Hone in on the time elements of the market. No doubt, to somebody, completely untrained on the subject. This theory is a kin to snake rolling horse shit. That is the element of time analysis.
But to the trained, this is a theory that will change your whole perception. So, even though I just spent the blast three years learning how to invest in the markets. After I finished my programme, I went out and I bought more books, probably 30 at this point. And not only did I buy books, I also read them and I went through them. Now, the benefit of this is that, not only was I able to comprehend the information that was in those books because I now had a solid Foundation, I was actually able to go through that content much faster, again because I had a solid foundation behind me.
I was trained in a way that I knew what I was doing without having to go back to the basics. But the books are not. I also got private mentorship as well. That's right! I paid for Webinars, I paid for live seminars right here in Melbourne, which brings me to another point.
Don't let anyone else's experience about the market guide your decisions. It is your responsibility and sole decision to take decisions that you believe are right for you. I've spoken to many people over the years. My experience with dealing with extremely rich clients in the financial planning industry and also as a student at the seminars, everyone takes away different things from these events or anything in life is going to be different for different people. And, one of my mentors once told me, sometimes the right message comes to the right person at the right time. Now, you want to know something very ironic about this whole industry, this whole financial industry.
There are people who are in this industry, both participants and bystanders, who not only preach education, but at the same time preach not to get educated. And their very message is that education, most education out there is a scam. Not only have they told you to get educated and then not to trust anyone because it's a scam. These same people go out and they link you to these YouTube channels of other people who they believe and trust to be the right way to invest. Honestly, it doesn't make sense. So, I just want you to know that only you make the decision on what's best for you.
Eventually you'll learn what works. What doesn't what's a scam, what's not and become very clear through just thinking, rationale and experience over time. What I mean by that is this, if it looks like a scam, if it sounds like a scam, it's probably a scam, on the flip side of that, if it doesn't look like a scam, if it doesn't sound like a scam, it probably isn't a scam. Now, the only way you can find the answer to these questions. The two that we just mentioned is by applying common sense and asking questions. Another illogical reference point that these so called vigilantes say is that, those who can do and those who can't teach.
Now, I want you to scrap this sort of feeling from your mind because it's complete shit. And I know what it sounds like. If you can do it, why waste your time teaching someone else? I mean, it makes sense. It seems logical, but it's highly flawed. And not only is this a major risk to the whole community, you're essentially wiping out an entire industry. For example, let me just give you some examples. Why buy a book on parenting? Count the author just parent themselves.
Why buy a book on cooking? Count the author just Cook themselves? Why buy a book on gardening? Surely the author must know how to garden, and doesn't actually need to go out and write a course on gardening. So why is it that people teach investing? Why buy a book on investing? You shouldn't buy a book on investing, because of the author or content creator knew how to invest. Surely they wouldn't have time to write about it. And it makes sense, right? I mean, that's what they tell you.
Did you know, in 2010, there were roughly 130 books in existence that's a lot of knowledge being shared, but by the very standards, the very logic of the vigilantes is that, all these books should be null and voided as the author must have an alternative motive. And that motive is to scam you. To scam you have knowledge, to scam your money in exchange for flawed knowledge.
Of course, the outcome is simple. Apply common sense to everything, if you get scammed that's on you. But it's a lesson you did learn right now. I don't want to pretend that I've never been scammed or conned before.
It was around eight years ago that, I got conned into, what I believe was a pretty obvious binary option scam, and you're probably being conned yourself, but pretty much it didn't take long before I figured out that, this was a bad idea. Why did I do it? I've lost money, I've lost time, I'm stressed and I just jumped on the bandwagon of wanting to get rich quick. So, I bought into these buying options scams, where I was going to have a robot trading for me. And, you know, in six months time, I was going to be a multimillionaire but turned out waste of my money, but that's part of life.
I got scammed and now I know unless someone can present to me, one of these that actually works and they can prove it, that to me now, in my mind, they're all scanned. And that's why, when you learn from, when other people are telling you their stories, they're only telling you their stories based on their experience, ok. Now, not everyone's experience is the same.
I haven't been scammed in an education programme before, but maybe someone has. And maybe that's why their motivation right now is to tell you don't ever enroll in one because they got scammed one, so, now they're scared. Anyway, what I want you to do now is this if you want to learn, go buy a book, go pay for a subscription service, go join a group. Go enrol in a University on this very subject to finance or investing. Maybe you will get scammed, but if you do due diligence and don't do stupid shit like giving someone your crypto wallet or sending someone ten bitcoins and at a very high chance you're going to fall into good arms and you're going to get what you expected.
Take it from my experience anyway, because I've been through the path, I've got my form of education. I understand the markets on a much deeper level than, probably what you perceive in my videos. And, on a much deeper level than 99% of the people in these groups.
And, don't take my word for it. You go do your own education and then come back to me and agree with me that, you have a deeper level than most of these people in this group. And that is what I want for you. I want you to have Keith the Kingdom.
I want you to be free from the herd mentality. I want you to be free from following people on YouTube. I want you to be a creator of content and distributor of content because you know what you're doing and you actually want to actively go out and help other people do the exact same thing.
That's my message. Your message might be completely different. But together, we can achieve our goals, and that is investing with freedom and not out of fear. Anyway, if you really enjoyed this video or if you didn't, you'll let me know by leaving a comment hitting those up and down little thumbs, which give us a like and dislike and also subscribing. Talk to you soon.