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Finance Hacked

Stock Market Truths: Human Nature & Profitable Trading | Finance Hacked  ----------------------------  FINANCE HACKED team would like to thank the audience for their interest and support of the Channel in the past time. We hope that the content of FINANCE HACKED will bring long-term value to the audience.  All contributions to support the development of the Channel, dear viewers can send to:  - PayPal: https://paypal.me/FinanceHacked - Wise: https://wise.com/pay/me/hongnguyenphuongd  ----------------------------  Welcome to Finance Hacked! In this eye-opening video, we delve into the profound wisdom shared by a seasoned shipping magnate to his son about navigating the ruthless world of the stock market. Through a captivating story filled with trials and tribulations in a casino, we uncover invaluable lessons on emotional control, risk management, and the crucial art of knowing when to walk away a winner.  Discover the timeless truths about the stock market, including: 💰 The power of self-discipline over seeking external validation. 🧠 Developing a sound and well-founded investment philosophy. 🧐 The importance of thoroughly understanding the companies you invest in. ⏳ Why patience and long-term perspective are key to success. ⚠️ The dangers of greed and fear and how to manage them. 🔑 The ultimate secret: learning to control yourself to become a true winner in the market.  This video is packed with actionable insights for both beginner and experienced traders looking to improve their trading psychology and achieve financial freedom. Don't miss these crucial lessons that can transform your approach to the stock market!  🔔 Subscribe for more valuable financial insights and strategies to help you hack your finances and build wealth!  #StockMarket #Investing #TradingPsychology #FinancialFreedom #ValueInvesting #RiskManagement #EmotionalControl #WealthBuilding #MoneyTips #InvestmentStrategy #FinanceHacked

Transcript

00:00Valuable facts about the stock market, American shipping magnate Harry once told his son,

00:06young Harry, when you are 23, I will hand over financial control of the company to you.

00:13Yet on his 23rd birthday, Harry unexpectedly took him to a casino.

00:19He gave young Harry $2,000, saying, let this be your introduction to the math at the card table,

00:26and carefully instructed him not to spend all the money under any circumstances.

00:33Young Harry repeatedly nodded in agreement, but Harry continued to worry,

00:38repeatedly reminding him to save at least $500.

00:42Though young Harry pledged with his chest, he eventually became so absorbed in the game

00:48that he forgot his father's words and gambled until not a single cent remained.

00:53Deeply disappointed, young Harry said that he had thought his last two rounds might win him back,

01:01as his cards had begun looking promising, but instead he lost even more.

01:07Harry then said, you will have to go back to the casino,

01:10but this time I won't give you any capital, you must earn your own money.

01:16Young Harry worked for a month and earned $700.

01:19When he entered the casino for the second time, he set a rule for himself,

01:26if he lost half of his money, he must immediately leave the table.

01:31However, this time young Harry failed, when his funds were reduced to half,

01:36he felt as if he were nailed to the spot and couldn't leave.

01:41He could not stick to his principle and bet it all.

01:45Ultimately losing everything.

01:47Standing silently by, Harry observed without a word.

01:54Leaving the casino, young Harry told his father,

01:57I don't want to go back to the casino anymore,

02:00my nature will make me lose all my money, I'm just a loser.

02:05Contrary to his son's wishes, Harry insisted that he must return to the casino,

02:10saying, the casino is the most fiercely competitive, ruthless, and harsh place in the world,

02:18life is like a casino, how can you not continue?

02:22Reluctantly, young Harry went to work once more.

02:27Six months later, he entered the casino for the third time.

02:31This time his luck was still not good, but he had learned his lesson, becoming calmer and more composed.

02:40When he lost half his money, he decisively left the casino.

02:45Although he still lost half, he felt as if he had won, because this time he had conquered himself.

02:51Noticing his son's inner joy, Harry said,

02:56Do you think you enter a casino to beat others?

02:59You must first beat yourself, only when you control yourself can you become a true winner.

03:06Later, after becoming familiar with the casino,

03:10young Harry began to win, not only preserving his capital, but also earning a few extra hundred dollars.

03:17Yet when his father stood beside him, urging him to leave the table immediately, young Harry refused.

03:26Having won so smoothly for the first time, he could not bear to leave.

03:32After several more rounds, he won a little extra, and his money was almost doubled.

03:38This was something that had never happened before, filling him with great excitement.

03:43But at that very moment, the tide suddenly turned as his opponent dramatically increased the bets,

03:51and in just two rounds, young Harry lost all his money, falling from paradise into hell in the blink of an eye.

03:59Breaking into a cold sweat, he then recalled his father's words,

04:03If you leave when I tell you, you will be the winner,

04:06yet regrettably he had missed his winning opportunity and became the loser instead.

04:11A year later, when Harry took him back to the casino,

04:17his son had become a professional gambler.

04:21He always controlled his limits, whether winning or losing, never exceeding ten units.

04:28Even at the most favourable moments, he would leave the table without hesitation.

04:34Moved, Harry recognised that in this world only those who can walk away while ahead are true winners.

04:41He decided to hand over financial control of his multi-billion dollar company to his son.

04:49Surprised by this unexpected decision, young Harry still did not fully understand the company's business.

04:57His father smiled gently and said,

04:59Business is but a minor matter.

05:01Many people fail not because they don't understand their work,

05:06but because they can't control their emotions and desires.

05:11Harry understood that the ability to control one's emotions and cravings is often the decisive factor in achieving success.

05:19The secret of Maritime King Harry's success was indeed encapsulated in the saying,

05:25The one who can walk away while ahead is the true winner.

05:30Ultimately, the market's issues must be resolved within the market itself.

05:36The fluctuations may seem unpredictable at first glance,

05:40but in reality they are merely the result of seemingly random ups and downs.

05:45To explain these phenomena, a price index line and a candlestick are sufficient.

05:53However, many traders,

05:55especially those new to the market, tend to complicate everything.

06:01In truth, you already think that trading stocks is too difficult.

06:05There is a saying that describes the learning process as one that goes from simplicity to complexity and back to simplicity,

06:15learning about the market is much the same.

06:18In mastering trading techniques,

06:20knowing many things is not as good as effectively using one method,

06:25and when it comes to developing trading psychology,

06:28it is like a journey from seeing mountains as mountains and water as water,

06:33to perceiving mountains as not mountains and water as not water,

06:37and finally returning to see mountains as mountains and water as water.

06:44This is an elevation in understanding rather than a regression in perception.

06:49Sometimes, to achieve enlightenment in trading,

06:53only a small step in awareness is needed,

06:56yet for most traders that step is so difficult that some may never overcome it in their lifetime.

07:01An interesting psychological phenomenon is that when we present a problem in an overly simple form,

07:09it is often not trusted,

07:10but if we wrap that problem in an elegant guise,

07:13the level of trust increases significantly,

07:16even though the nature of the problem remains unchanged and flawed or irrational aspects persist.

07:24This phenomenon is widely observed,

07:27especially in the stock trading market.

07:29The reason may stem from a human instinct,

07:33a primordial fear of the unknown.

07:37Because the outcome is uncertain,

07:39we often add extra layers of complexity to feel more secure.

07:44In a market filled with chaos,

07:46traders can only change their subjective predictions.

07:50In speculation, there are no shortcuts or detours,

07:54it is simply that most traders endlessly seek a shortcut,

07:58and that is a mistake.

08:01Even though there are many roads to roam,

08:03no road comes without effort or sacrifice.

08:07Every trader is continually taught lessons by the market.

08:11The more one is taught by the market,

08:13the more cautious and conservative one becomes.

08:18Unwilling to take risks or seek easy solutions.

08:21Yet this is no different from drawing a circle to confine oneself in an industry

08:27where risk and reward always accompany one another.

08:32If you try to avoid risk, you are also foregoing profit.

08:37Therefore, so-called risk-free trading tips or formulas for success are often the most worthless.

08:43Before exploring trading methods further,

08:47remember that every method has its limits and no path guarantees absolute success.

08:53Don't forget to follow the channel for more truths about money

08:56and to help you quickly achieve financial freedom.

09:01Finance Hacked warmly greets you and our dear friends.

09:04Trading strategy and capital management are the tools traders use

09:09to achieve outcomes with higher risk-reward ratios.

09:13In the contest between profit and risk,

09:16the market cannot change its inherent chaos.

09:19This is an objective fact.

09:22A trader can only continuously adjust his subjective judgment,

09:27which invariably comes with emotion.

09:30When the market fluctuates,

09:32the trader's emotions change too,

09:35sometimes opposing and sometimes agreeing with the market.

09:38The saying a top simulator trader in the world is still not as good as the worst real trader holds true,

09:46because predictions do not create profit or loss,

09:49only actual trading can do that.

09:53Among all the most harmful emotions,

09:55greed and fear are the most dangerous.

09:58These two extreme emotional states are like the two ends of a psychological scale,

10:04influenced by the bullish and bearish cycles

10:07that silently determine every action a trader takes.

10:12Such extremes often generate pressures beyond the mind's capacity.

10:17The fear during a steep decline or the greed in a sudden surge

10:21can turn even the most sensible adults into novices trying to understand the world.

10:27The immediate result of fear is that a trader dares not stand against the majority view.

10:34In other fields, the consensus may lead to correct outcomes,

10:39but in speculation this is not the case.

10:41This market has no fixed rules.

10:44And every movement is born from panic.

10:49Analyses that seem scientific often fail to deliver accurate results.

10:55Because human behavior is inherently unpredictable,

10:58even experts in other areas often suffer disastrous failures when entering the speculative market.

11:05The main reason is that they are misled by overconfidence in their personal experience.

11:11Fundamental or technical analyses may help a trader feel more secure

11:17by offering reasonable explanations for unexpected fluctuations,

11:22but you cannot expect them to predict every surprise.

11:26The only constant in the market is that the unexpected will always happen.

11:32The differences in thinking and perception have predetermined that trading is a solitary path.

11:39While you may admire the methods of others,

11:41it is nearly impossible to apply them completely.

11:44Thus, a trader must learn to work with himself.

11:48To improve your ability to control your emotions,

11:51you must continuously raise your self-awareness

11:54and clearly understand your personal trading philosophy.

11:59Many traders believe that outstanding traders rarely discuss techniques

12:03and instead talk about matters that may seem unrelated.

12:06In essence, they are emphasizing that trading is akin to a form of personal cultivation.

12:13Whether enlightenment comes gradually or suddenly,

12:17it is ultimately about building a solid trading mindset.

12:20The three principles for success in stock investment are,

12:25First, success in stock investing depends on personal discipline rather than on others' approval.

12:32Second, it is paramount to have a sound and well-founded investment philosophy.

12:37Third, only buy stocks when you truly understand every aspect of the company.

12:42Otherwise, do not invest.

12:44Before purchasing any stock, take the time to research the company to avoid major mistakes.

12:52You must know its financial condition thoroughly.

12:56Investing always involves gray areas,

12:59and you cannot simply rely on someone's advice that a company is very attractive for investment.

13:04The decision must come from you,

13:08for stocks that some favor for their growth can sometimes become disastrous for others.

13:14After conducting your research, allow your ideas to cool down.

13:19When you hear an attractive investment tip,

13:22the temptation to act immediately before the stock price starts rising is very strong,

13:27yet a cool and rational evaluation is always preferable to haste.

13:31Often, additional research will reveal that the investment is not as appealing as it first seemed.

13:40Seek companies with a strong competitive advantage.

13:43This advantage helps a company defend itself against competitors.

13:49If you can pinpoint why a company can fend off its rivals and maintain above-average profits,

13:56you have discovered the source of its competitive edge.

13:59Most highly profitable companies will gradually see their profit margins erode due to competition,

14:06but a genuine competitive advantage can enable a few companies to sustain above-average profits for many years,

14:14making them the best long-term investment targets.

14:18In general, the longer a company can maintain superior profit margins,

14:23the better its long-term stock performance tends to be.

14:27However, always ensure a margin of safety if you pay too high a price,

14:33your investment return may disappoint you.

14:37Every investor's goal should be to buy stocks at a price below their intrinsic value.

14:43Unfortunately, people tend to overestimate stock value, creating potential future risks.

14:50We can only counteract this emotional tendency by trading only when the stock price is sufficiently

14:57low relative to our valuation.

15:00For example, a 20% margin of safety is reasonable for stable businesses,

15:06but for less stable companies, you should allow for an even larger margin.

15:11Some worry that if they do not buy a particular stock today,

15:15they will forever miss the opportunity.

15:17That may happen, yet the opposite is also possible,

15:22such as when a company suddenly faces financial troubles and its stock plummets.

15:28The future is always uncertain.

15:32In any case, if you wait long enough,

15:34most stocks will eventually trade at a discount to their fair value.

15:40Remember, not making money is often less painful than losing the money you already have,

15:45a simple way to evaluate a stock is to examine its historical P.E.V.

15:50price-to-earnings ratio.

15:53How much are you paying for each dollar of earnings?

15:57Look at the data from the past 10 years or more.

16:02To justify that today's stock price is reasonable,

16:05you must have enough confidence that the company's future prospects will be much better than in the past

16:11decade.

16:11Sometimes, if a company is valued abnormally high compared to before,

16:18be cautious.

16:20The market might be overestimating its growth potential,

16:24and you might face a stock with poor performance for years to come.

16:29Holding on for the long term and avoiding excessive trading will help you reduce costs.

16:34Investing in stocks should be seen as an important purchasing decision,

16:40best approached with a long-term perspective.

16:44However, you must know when to exit a position and continuously monitor the company you have

16:49invested in.

16:51Instead of obsessively checking the stock price,

16:54spend your time updating yourself on news and industry information about the company.

16:59It is far more beneficial than checking prices 20 times a day.

17:06Do not sell just because the stock price fluctuates.

17:11But if, after thorough analysis, you notice one or more of the following signs,

17:16your initial purchase was a mistake,

17:18the company's fundamentals have deteriorated,

17:22the current stock price far exceeds its intrinsic value,

17:25you have found a better investment opportunity,

17:28or this stock occupies too large a portion of your portfolio,

17:32then you should consider selling,

17:34the stock market holds important truths.

17:38First, the market operates according to rules,

17:42and these rules stem from the unchanging nature of human beings.

17:47Wall Street is nothing new,

17:49for speculation has existed since ancient times.

17:53What happens in today's stock market has happened before

17:57and will continue to repeat because human nature never changes.

18:03An inability to control emotions is the greatest enemy of the speculator.

18:09Fear and greed always reside in our minds,

18:12causing us to repeat the same behaviours over and over.

18:15This is why chart patterns and trends keep recurring.

18:21Second, be patient and wait for the perfect market trend,

18:25do not rush into predictions or actions before the right moment arrives.

18:31Timing is everything, you need to buy and sell at the right moment.

18:35Trading isn't something you must do every day.

18:40Those who believe they must trade constantly often overlook one important factor,

18:45trading must be based on reason.

18:48Objective and logical reason.

18:52A good stock investor must confront and overcome many inner adversaries.

18:57To earn great profits,

18:59you need to wait rather than act or think impulsively.

19:02Be patient until all favourable conditions align for you.

19:08The market will signal when to enter and when to exit.

19:12Major trends do not conclude in just a day or a week,

19:16they require time to complete their natural cycle.

19:21Third, right is right and wrong is wrong.

19:25Do what is right and avoid making further mistakes.

19:28A brilliant speculator once told me,

19:32when I see a dangerous signal,

19:34I do not argue with it,

19:36I step away.

19:38A few days later,

19:40if everything seems fine,

19:42I return.

19:44I think of it this way,

19:45if I'm on the tracks

19:46and see a train coming at 60 miles an hour,

19:50I jump off to let the train pass

19:52rather than foolishly stand still.

19:55After the train has passed,

19:56if I want,

19:58I can always get back on the track.

20:01These words perfectly illustrate the wisdom of speculation

20:04and continually remind me in this game.

20:09Analyzing the market is crucial

20:10and starting at the right moment

20:13and holding your position with determination

20:15is equally important.

20:18However,

20:19my greatest insight is that

20:20one must study and evaluate

20:22the entire situation

20:24to predict future possibilities.

20:26I no longer act blindly

20:29or rely solely on mastering trading techniques,

20:33instead,

20:33I focus on careful research

20:35and thoughtful reflection

20:37to achieve my own success.

20:40I also realize that

20:42no one can avoid

20:43making foolish mistakes in trading.

20:46If you trade recklessly,

20:48you will pay the price

20:49for that recklessness.

20:51The market is forgiving

20:53and absorbs everything,

20:54it is always right.

20:56Going with the flow of the market

20:58is the wisest choice.

21:01My theory is that

21:02behind major trends

21:04there is an unstoppable force,

21:06and understanding that is enough.

21:09Delving too deeply

21:10into the causes of price fluctuations

21:13often yields no benefit.

21:16Losses are merely the cost of failed trades,

21:19they are not frightening,

21:20the true fear lies in failing

21:22to learn from them.

21:23No matter how experienced

21:26a trader may be,

21:28the possibility of mistakes

21:29and losses always exists,

21:32for speculation

21:32is never completely safe.

21:36Experience is,

21:37in truth,

21:38a series of profound,

21:40painful,

21:41and unforgettable lessons.

21:43If you do not experience the pain,

21:46you will neither remember

21:47nor reflect upon it,

21:49and that is precisely

21:50how things work.

21:51Mistakes are normal,

21:54but if you learn nothing from them,

21:56then they are a true waste.

21:59Trading is a battle

22:00between reason and emotion

22:01that requires a well-thought-out plan.

22:05I realized early on

22:07that the market

22:07has never been a simple place,

22:09it is designed to fool

22:11most people most of the time.

22:14The two prevailing emotions

22:15in the market

22:16are greed and fear,

22:18which usually arise

22:19from ignorance.

22:21Greed,

22:22fear,

22:22impatience,

22:23ignorance,

22:24and baseless hope

22:25can all drain a speculator.

22:28After a few failures

22:30and disasters,

22:31an investor may become

22:32demoralized,

22:34disheartened,

22:34and ultimately abandon

22:36the market

22:36and the opportunities

22:38it offers.

22:39The biggest challenge

22:41a speculator faces

22:42is controlling

22:43his own emotions.

22:44Remember that the market

22:47does not run on reason,

22:49logic,

22:49or pure economic factors,

22:51it is driven by human nature,

22:54which never changes.

22:56Control your trades

22:57and manage your finances.

23:01Do not execute any trade

23:02unless you are sure

23:03it is financially safe.

23:06Inexperienced speculators

23:08often struggle

23:09because they risk

23:10too much on each position.

23:11Everyone wants to buy

23:14at the lowest price

23:15and sell at the highest,

23:17but you must remain calm,

23:19not argue with reality,

23:21and not pin your hopes

23:22on impossibilities.

23:25In speculation,

23:26there is no room

23:27for blind hope,

23:28conjecture,

23:30fear,

23:30greed,

23:31or unstable emotions.

23:33The greatest enemy

23:35of an investor

23:36is not the market

23:37or external factors,

23:39it is oneself.

23:40Volatility can be the key

23:43to making great money.

23:45I want to emphasize

23:46that I never made big money

23:48from impulsive decisions,

23:50it was patience

23:51that enabled me

23:52to earn large sums.

23:54Do you understand?

23:57It is patience,

23:59not predictions

24:00or rash actions,

24:02that counts.

24:04Making the right market assessment

24:06is nothing unusual,

24:07I know many

24:09who have predicted

24:10correctly at the right moment

24:11and when they began

24:12to buy or sell,

24:14the prices were

24:15at their most profitable levels.

24:18Their experiences,

24:20much like mine,

24:21show that they did not

24:22truly earn money

24:23from those predictions.

24:26People who can both judge

24:27correctly and patiently hold

24:29on are extremely rare.

24:31I've come to realize

24:33that this is one

24:34of the hardest lessons

24:35to learn.

24:36Yet for stock speculators,

24:39only by truly grasping this

24:41can they make big money

24:42on Wall Street.

24:45Many people,

24:46though not outright fools

24:47or rash actors,

24:49still incur losses.

24:51The market doesn't defeat them,

24:53they defeat themselves.

24:56They possess intelligence

24:57but lack the necessary patience

25:00to wait.

25:02Speculation is a game,

25:03but it is also your job.

25:06It demands continuous effort,

25:08dedication,

25:10and learning from experience.

25:13I seek a game that is greater

25:14than mere entertainment

25:15or socializing.

25:17I want,

25:18through my own efforts,

25:19to become one of the best

25:21in the stock market.

25:23This brings me true joy

25:25and deep satisfaction.

25:27In essence,

25:28stock trading is like a game

25:30and you must win at it.

25:32A great trader invariably

25:35resembles a professionally

25:36trained athlete.

25:38They must cultivate

25:40healthy habits

25:41and maintain

25:42robust physical condition.

25:44If they wish to keep

25:45their energy at its peak,

25:46both their body

25:47and mind

25:48must be in harmony.

25:50After all,

25:51no battlefield

25:52is as tense

25:53and stimulating

25:54as the stock market.

25:57Don't you agree?

25:59Goodbye

25:59and see you next time.

26:02All right.

26:02See you next time.

26:03I will see you next time.

Stock Market Truths: Human Nature & Profitable Trading | Finance Hacked

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