Learning How to Trade With YouTube Videos – The “Free” Approach:
I personally use YouTube as a resource for education and research all the time, so I completely understand how beneficial it can be for acquiring information. But when it comes to trading education – I think it has some major limitations to be aware of.
For beginners to the financial markets and trading/investing in general, the natural first step is to start doing some initial research on the subject. In most cases, this means searching for things like “how to make money trading” on Google and/or YouTube.
And while doing research like this is certainly better than blindly throwing money at the markets without a clue how anything works, it’s still very easy to get sucked down the wrong path filled with alert/signal services, false promises, and fake gurus.
In my personal opinion, YouTube can potentially work fine in providing you with some standard information as a complete beginner – like basic terminology and concepts. But that information alone isn’t what separates profitable and unprofitable traders.
Don’t get me wrong – this type of foundational knowledge is important. Terminology and concepts are the building blocks for understanding even more complicated and nuanced concepts. But trading is less of an intellectual game than most people think.
It’s not just about how much knowledge you can attain. But rather, the skills you develop and your ability to properly execute.
2 Major Reasons Why YouTube Videos Alone Won’t Make You a Great Trader:
From my experience, here are 2 reasons why trying to become a consistently profitable trader through YouTube videos is difficult.
1. Missing the Structure of an Organized, Comprehensive Curriculum
In an effort to deny the validity of all trading courses and programs out there, some people like to make the argument that they’re all scams because the information within them can be found for free online. But what they fail to consider is the value of organization.
There’s a major difference between various pieces of information being available out there somewhere for you to locate from various sources, and a well put together step-by-step guide. Would you prefer to search or to simply receive packaged information?
Another issue with going the Youtube route is that you don’t know what you don’t know – so how do you even know what your process might be missing and what to search for? Because of this, you’ll most likely receive a disorganized, incomplete education.
To top it off, most of what is offered on YouTube is geared toward entertainment. As a result, content producers typically try to make trading seem much easier than it is – focusing on “foolproof” indicators and systems as opposed to the realities of trading.
In the end, free resources like YouTube can actually end up being much more expensive than you think. You might not necessarily have to pay for the information you’re receiving, but there’s usually one gigantic hidden cost – your time.
2. Too Much Focus on Information and Not Enough on Building Skills
I mentioned this briefly at the beginning of the post, but trading isn’t solely an intellectual endeavor. Memorizing definitions – like what you might have done to be successful in school – isn’t what it takes to be a consistently profitable trader.
In fact, understanding what support and resistance, trends, short squeezes, and all kinds of other trading terms is the easy part of it all – yet it’s what most people solely focus on. The hard part is building legitimate technical, analytical, and mental skills.
To put it into perspective, most people approach trading from the angle that some secret or magical piece of information that they’ve yet to find will bring them massive, never-ending profits. But the real secret is in building skills for long-lasting success.
For example, there’s plenty of information on the internet on how to throw, catch, and hit a baseball. But only a small percentage of people become major league baseball players. And these major league players didn’t make it there just by watching videos.
What they’ve done over the course of years is train, practice, and immerse themselves in live situations to build skills and experience. Passively reading books and watching videos can only get you so far – you still have to go out and apply the information.
What to Predominately Focus on if You Choose to Go the “Free” Route:
If you understand the downsides of learning how to trade on YouTube and still choose to go this “free” route, I think there are two main components that you should be sure to focus on: 1) trading mindset/psychology and 2) trading statistics.
These are elements that often get overlooked, but are critical to overall success. Because when you understand yourself (through mindfulness and journaling) and understand the markets (through tracking your trades) – you have the recipe for success.
Again, I have to go back to how the typical beginner views trading. They think it’s about finding some great indicator, pattern, or setup that “works”. But what “works” depends on the timeframe and market you’re looking at. And it also depends on you.
The spots you choose to place your stops and profit targets, as well as how you might fiddle with them as trades progress – all impact your results. So a certain setup might “work” for one trader that manages his trades in a specific way – and not for you.
As individuals, we all have our own personalities and appetites for risk – which impacts the trading systems we feel comfortable implementing. There’s no one-size-fits-all strategy – and copy-cat/mirror trading flat-out doesn’t work. You have to be self-sufficient.
The bottom line is that if you can’t understand yourself and the markets you’re trading, then you have no chance at success. You have to use your own thoughts, feelings, behaviors – and the data you collect from your trades – as feedback mechanisms for growth.
The Route I Would Take If I Had to Start My Trading Journey All Over Again From Scratch:
Having the benefit of hindsight, it’s really easy for me to say what I would’ve done differently in order to become a consistently profitable trader much faster. But understand that I’ve personally made plenty of mistakes in my own learning process as well.
I was no different than most other beginners. I started out researching ways to make money trading on Google. But before I knew it, I was subscribed to all sorts of penny stock newsletters, chat rooms, and alert services thinking I’d capture huge profits fast.
But what actually happened was the opposite. I ended up losing over $20,000 over the course of several years – not only from the subscription fees of these services, but also the losses I was taking in the markets by trading impulsively and irrationally.
I went through plenty of video lessons and courses – which helped me understand some basics – but I was still losing money on a consistent basis. It wasn’t until I came across trading psychology at Trading Composure when things started to turn around for me.
From there, I cut ties with dependency and focused 100% on self-sufficiency. I stopped caring about what other traders were talking about on social media and honed in on my own process. I left “quick fixes” for a lifestyle of constant training and evolution.
So if I had to start all over again, I would be able to save years of time and thousands of dollars by focusing on what truly matters – building legitimate technical and mental skills with help from great mentors like Yvan Byeajee, Thomas Kralow, and Chris Capre.
Written by Matt Thomas (@MattThomasTP)
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