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The first commandment of profitable trading is you’ve got to learn the language. If you want to go into a foreign country and function effectively, you need to know the language or translate. In trading, most people come into the markets and think “I’m a smart person. I’ll figure it out.” But then they realize that the stock trading is confusing, and so they start to do some research and reading. When they get confused and don’t understand a term or a piece of information, a bit of their attention gets stuck on that. And the cycle goes on when they hit another confusing piece of information until they have no more capacity to learn.

You’ve got to understand the terms like drawdown, compound annual growth rate, pullback, and etc. I put together a document of trading terminology which you can download. If someone reads that once, they sort of know the language all of a sudden. That way, you can have more time to read a book, watch YouTube videos, read blogs about stock trading to expand your knowledge rather than struggle with the language.

If you want to learn effectively, you must know the language of the topic you’re learning. Just like everything else in investing, you have to learn the lingo.