Adrian Reid:

Welcome. I’m here with Dr. Takanori Endo, a good friend of mine, who is a clinical psychologist who lives in Tokyo, Japan. Dr. Endo is also a trader with many years of trading experience and a global trainer and educator. He travels all over the world. I think, Taka, right now you’re in London at a conference?

Taka Endo:

Yes, I am in London.

Adrian Reid:

Tell us a little bit about that, and then tell us a little bit about yourself as a trader and your background, and why this is so interesting for you.

Taka Endo:

Right now I’m in London attending a neuromarketing business science association conference. It’s a world forum that happens once a year. My major is in academic. One more thing to add to what Adrian is talking about is I used to be a statistics professor, so a statistics professor combined with my doctorate in psychology, it was a best match if I wanted to do investment where people’s psychology moves the market. where else should I go was stock trades and option trades. In terms of doing FX, currency exchange, I’ve been doing it more than 20 years. In terms of stocks and options, it’s the ninth year now. I have nine years of experience. [crosstalk 00:01:26] Go ahead.

Adrian Reid:

I was going to say, very few people have even one of those two advantages that you have got. The understanding of the statistics and the mathematics of the markets, and the understanding of the psychology and what actually moves it. What advantage does that give you as a trader when you pull those together when you approach the markets?

Taka Endo:

It’s very simple. It’s a confidence of what I’m doing is correct. It definitely gives me a confidence on what is going to happen. Of course, you can’t really predict the future, but the high likelihood of what’s going to happen, and when you know how likely that you are going to fail and how likely that you are going to succeed, it’s comforting to actually do the trading.

Adrian Reid:

Absolutely. One of the things I’ve found dealing with a lot of traders, particularly new traders tarting out, is a lot of people have some resistance to even taking that first step. “I want to be free. I want to improve my life. I want to build some wealth,” but yet, they don’t take that first critical step to actually go and learn something. What holds people back? Why does that happen, and how can people get through that quickly and easily?

Taka Endo:

It’s a fear of failure. If you want to keep it simple, it’s a fear of failure, and about investment is … One time, one of my teachers told me this. If there’s a professional job that 70% of the time you will fail, would you want to take that job?

Adrian Reid:

Absolutely, no.

Taka Endo:

A lot of people say, “No.” However, that job you just turned down is professional athlete in baseball. If you had a 30% hit rate, you’d make millions in baseball. That’s the truth about trade. There will be times, like the majority of times, my trade goes sour, meaning it’s the other direction than I believe, but it doesn’t matter because, when it goes to the other direction that I believe that it will go for, I make a huge profit that cancels out all the failures.

Taka Endo:

Wannabe perfectionists cannot be really into trades because there is no such thing as a perfect rate. If you are ever going to meet a trader that says, “In my whole trading experience, I got trading 100% of the time,” that guy is telling you bullshit because that can’t happen, for sure, unless that person is like, “Yeah, I’m a trader. I never traded,” or, “Yes, I’m a trader. I traded once, and it went good, and since then, I’ve never done it.”

Adrian Reid:

In my experience, people who haven’t yet had a loss, they’re either avoiding or delaying the losses and making them potentially grow bigger and bigger and bigger, so eventually when the loss comes, they are going to blow up and lose everything, right?

Taka Endo:

Exactly. If you want to lose money … This is the thing that I experienced, I myself, doing marketing consulting and business consulting. You will lose money at some point, but the intelligent people is to make sure that their loss is the minimal that they will get, and the small losses that you had in the first few times in the beginning will definitely pay back because that is experience. Never try to just put all your money in one go and hope and pray. That’s not how it works. Any profession always has always practice, so in the practice are you willing to lose a little bit of your time, a little bit of your financial money, that will give you total freedom and millions is a question.

Adrian Reid:

For the people getting started who haven’t yet taken that first step, the key thing is, what I’m hearing, is to be aware that what causes you to procrastinate or delay is fear of failure, but failure’s okay, and it’s part of any profession, and this is a profession like any other.

Taka Endo:

Yes, definitely. There are some professions that failures are looked down upon very strictly. For example, in my field of clinical … Originally I was in forensics. Sometimes we’d do negotiation with hostage situations. Come on, you can’t fail at that real practice in the real life because, if you fail, it means somebody is going to die. You can’t fail. So what we do is … It’s in the scene that is not seen. Like, from movies and TV dramas people, see that all the perfect world happening, but in the background of the scene we are practicing so many times of the negotiation, so many role plays, so many times, until that moment comes that, when we actually need to do it, yes, we will succeed.

Taka Endo:

In the same way, I was taught, too. There is paper trades. You don’t put your own money. Make sure you do that a lot of times until you actually have the confidence to get on the market. Well, some people keep on practicing forever when they’re having a good hit ratio. They never go into the market. That’s the second problem.

Adrian Reid:

Assuming someone gets past this first stage and actually starts their learning journey, the next challenge that I see a lot of people falling victim to … Say you invest in a program. I’ve got the Enlightened Stock Trader Certification Program. There’s lots of other training programs out there. Often a new trader will launch into one of these with gusto, get into it for the first few weeks or the first few modules, but then the interest wanes and they end up getting distracted by the next shiny object or whatever it is, they get busy in their life, and they don’t follow through. They don’t complete, so the value is lost. Why does that happen, and again, what can they do to avoid it?

Taka Endo:

We both got trained by Rich Dad advisor, so we know one of the successes in Rich Dad world is focus. Follow one course until success. Many successful people do that and unsuccessful people don’t. The reason behind it is, from a psychological perspective, it’s their motivation is geared by fear. Fear starts off in a behavior, so when you’re fearful that, “Oh, I might continue this lifestyle. I’ve got to be working all the time. I’ve got to be stressed out. I might burnout from this current job situation. I want to become an investor. That’s the only way out. That’s the freedom that I want, and it’s not that I’ve got to just burn out.” That’s based on fear, so they go out of it, but something that allows us to continue is the motivation of the future.

Taka Endo:

A lot of people forget why are you doing the trade for? Why did you anyway start? What future do you want? And they don’t motivate their self. Look into the future of what lifestyle you’ll get by investing your time and money and your effort now will pay off so much later on. But the brain is not that smart to really everyday without being-

Adrian Reid:

Reminded?

Taka Endo:

Yeah, reminded. There’s no way the brain will be like, “Yeah, I’m doing this for the beautiful future that I want.” When I started my trade, I always had a goal of how much I wanted to make, or how much I wanted to make plus, not only the monetary value, but why do I want that? What do I want to use that money for? That was really planned out. I was looking at that. I still remember, I had the paper by the screen to make sure that I remind myself, “Why am I doing this for?” And it was a good thing, not because I’m fearful about it, but it’s something to go towards. That’s probably the thing … and encouragement from your environment is another thing.

Adrian Reid:

What I’m hearing is that, to get started, that fear motivation, that away from motivation, is important because that makes you want to change your circumstances, but once you’ve started moving, there’s only so much away from motivation can do, and you need a big goal. You need something that you want to move towards, an objective to attain, not something to avoid. Is that right?

Taka Endo:

Exactly.

Adrian Reid:

What is the most powerful way that you know of creating that vision, that towards goal motivation and reminding yourself each day? Because, like you said, your brain can’t remember. You need to show it, so how do you do that?

Taka Endo:

There’s different ways of doing it. Visualizing it, every morning looking at it, telling people what your dreams are to other people, because a lot of people … It’s the same thing as fear of failure. You tell people the dream, and if you don’t get it, then you’re a failure. Plus, once you put the word out there, you need to actually takes action, so there’s a responsibility. Our brains naturally don’t tell dreams to people, especially people who it matters the most.

Taka Endo:

For example, for me, if I told my dream to my wife and probably my older sister, it’s a done deal. If they know it, I need to … There’s people in your life that definitely, when you tell them that you are going to do it, it’s a done deal. Everyone needs to figure out who that person is. Talk about your dream, what you want to get. Regardless of the trading, just talk about your dreams.

Taka Endo:

Trading is a method that gets you there, and definitely stock trading will be a method of your first step definitely for freedom, that you know how people think, how to read your market because, at the end of the day, all I learned from the trading it’s still applicable in business, applicable in real estate, same thing.

Adrian Reid:

Absolutely. The essence of that then is to find the accountability partners, or the people that, once they’re aware of what I’m trying to achieve, what new traders are trying to achieve, my clients are trying to achieve, once they’re aware of that, it’s like an accountability trap. It’s like, “Well, I’ve told this person I’m in. I have to live up to that.”

Taka Endo:

Exactly. One thing that you must believe is there’s a way to win in the game because people around you all probably lost money or know somebody who lost money in the stock trade. They are not going to be the positive people that are, “Oh, you’re doing stock trading. Good for you.” They won’t talk to you in that terms, so you want to make sure that the environment supports you with, “Your dream is awesome, and your method that you use is totally awesome.” That kind of environment is a necessary environment for you to keep going.

Adrian Reid:

How do you create that environment either for yourself or when you’re dealing with clients in other circumstances as well? What is a good method for creating that environment that does ensure success?

Taka Endo:

If I’m correct, how did I keep my motivation up? Is that-

Adrian Reid:

Right, or how would you encourage other people to keep their motivation up with an environment? How do you create that environment if you’re … Traders are alone. We’re like this, at home. There’s minimal human contact. How do you get community?

Taka Endo:

For me, I was part of a trading community. Once a week, we would go to this coffee shop. We would sit around and we’d talk about our own trades face-to-face, and we also did it online. My wife, she not only trades, but she is an investor, she has her investing girls community, and it gives shared ideas. Of course, there’s times that it’s shitty trading options, and sometimes there’s amazing trading opportunities, so you get hit and miss. The whole point is to keep us, ourselves, engaged with other people, sharing ideas.

Taka Endo:

Until we put it out there and we get feedback from others, our brain doesn’t take it as reality. As Adrian says, if we are doing it alone, and it’s me and myself and my story the whole time, it’s not a reality. You will never feel like you are a trader. Engaging with traders and talking about it, your belief of who you are slowly becomes a trader. Once that sits in and now you define yourself as a trader, one part of it is who you engage with.

Taka Endo:

I’m a doctor. I didn’t become a doctor when I got a doctorate degree. Actually, I became a doctor when I joined the doctoral program, and I started hanging around with doctors because I started to think that way, and I understand what doctor was about.

Adrian Reid:

Brilliant. In my program, the way I teach, it’s a combination of multiple mediums, so the Enlightened Stock Trader Certification Program has online video, exercises, games where people can go and do the learning, the cerebral stuff. Then there’s also group coaching where they get together online in a forum like this, online video, everyone can see and talk to each other, and then it’s sharing, questioning, debate, getting that input from other people. Then there’s the online community. What I’m hearing is, to be successful, you actually need to engage in those things the community aspects, not just the cerebral learning?

Taka Endo:

Yes, well if everybody would act based on what you know, the world would be a little bit of a peaceful more wealthy place.

Adrian Reid:

Absolutely, right.

Taka Endo:

The reality is, that’s not the case because we what feedback. We need to get confirmation. We need to get acknowledgement. For my community that I was joining, we always talked about pre-trade, meaning before we do the trade what were we going to be trading about and the reason why. People gave feedback, “That’s a good idea,” or they’d say, “No, that’s a shitty way of reading your chart.” You’d get a good feedback. If you believe that it was a shitty way of chart reading or if you missed something, you’d say “Okay,” and you will potentially not do a trade that would be a miserable failure if you got the feedback before that. Then the post-trade was, “I got a win. I made money.” Then people would say, “Good job. It was your first win.” It’s good to celebrate because that’s keeps the motivation. If you did lose money, you’d say, “Well, I lost money,” but everybody would say, “So, what did you learn?” You’d get feedback too, so you’d never make the same damn mistake. Either way, you must talk pre-trade and post-trade in order to be successful as a trader. That’s how I … I don’t know if there’s other ways of becoming a great trader, other than you have an IQ of 260 or something.

Adrian Reid:

Sadly, most of us don’t.

Taka Endo:

I don’t.

Adrian Reid:

No, me neither. What would you say to those people who join a program like mine, the Enlightened Stock Trader Certification Program, and they’re resistant or hesitant to engaging in that community aspect because maybe they feel like they didn’t know enough yet, or maybe they just want to get through more of the work first so they are credible or something? I hear a lot of this over and over again, and sometimes it’s hard to pull people into the community. What would you say to them?

Taka Endo:

Well, there’s no such thing as a dumb question when it comes to trading, unless you suddenly talk about your cat or something in the community. As long as it has to do with the theme of the group, there’s no such thing as a dumb question because the question that you just asked probably helps three other people that had the same damn question or similar question. Second of all, yes, like it or not, we will go towards online community more in this near coming future. This is just one type of online community that you will be joining, and there will be much more to come if you want to be successful.

Taka Endo:

That’s just the world is becoming flat, as one of the books said. It’s not really becoming flat, it just means we are so global on the internet face that you just need to get used to it. We never got trained in how to use online community. That’s true. Nobody is, so it’s a great place to start off. I would recommend … You’re already joining, probably these people that are listening to this recording, you are already in a great community, use it. Ask questions. If somebody posts, “I’m going to trade this,” or, “I got a result like this,” and there are some questions like, “Why did you want to trade that? What was the thing that you made a decision on? How do you trade like that?” Those kinds of things. Ask questions because people, when you ask questions, it opens up conversation, and it’s just conversation that needs to be opened up.

Adrian Reid:

The number of times I’ve learned something or got a really great distinction from either asking or being asked questions, it’s the only way to get step changes in thinking. I don’t believe that I can sit here at my desk, researching my trading, and have an epiphany. There has to be some external stimulus to jolt the thinking a little bit to create that magic. I believe truly the best way to do that is with community.

Taka Endo:

Yes. there’s a funny story, historically speaking, why did the industrial revolution happen, was the question. The reason why behind that is, when the industrial revolution happened, a few years before that, there was places called coffee shops started to show up in Europe. Before that, people used to drink alcohol as a method, a way to get some level of liquid because everything was polluted. Now we have coffee. You went from a downer to a stimulant, and people was more brighter, and what they did was they started to talk in coffee shops getting great ideas, and that’s how industrial revolution started.

Taka Endo:

Same idea, you just need to talk. Maybe it’s a good idea that, I don’t know, have a cup of coffee or tea and engage in a social media interaction, and you will … It’s a habit. It’s not only about trading, this is a habit of successful learning, successful person, I guess. It’s a habit of being more social regardless of whatever the platform is. You can’t just be a …

Taka Endo:

I’m originally not a person person, like a human person. I’m a researcher, but look at this. I’m talking to Adrian on Zoom have conversation, and it’s a natural part of my business. My personal preference is being in a laboratory testing on rats and mouses, but that’s a preference. If I want to be a lazy bum, then that’s what I do. If I want to create more impact in the world, create more better living for my family, have a successful life and freedom, I needed to do things that I wasn’t trained to do. I needed to change my bad habits. Trading, it’s all about habit. I could guarantee one thing that I’m grateful for, Adrian, is, when I did the trading, I wasn’t in … such programs didn’t fucking exist, I just needed to look for a community-

Adrian Reid:

Yeah, same.

Taka Endo:

There were communities that were sketchy. At the end of the day, they would try to sell you on stocks, like penny stocks, shitty stocks, and you are lured into it. It’s almost similar to a bad meeting with an MLM business offer [crosstalk 00:22:21]

Adrian Reid:

The sad thing is, those groups are still out there. There’s so many scammy, skanky groups that are just about pumping up tiny little stocks, everyone talking their own book, so that it pushes up the trades that they’re already in. Finding the right community … That’s why I formed the community around the Enlightened Stock Trader Certification Program because I wanted my students who were being trained all the same way going on the same journey to be able to interact on a regular, weekly basis, so they can get past that.

Taka Endo:

My wife tends to have a great opportunity of investment all the time. It’s crazy because I taught her how to trade. She never lost money until this point. It’s ridiculous. It won’t happen that often, but one time we had a bad offer that. It was a scam offer that happened. I was grateful for her because she never had seen a bad offer.

Taka Endo:

In a similar way, maybe one thing that I could recommend to people that’s in, Adrian, your group, the people that are listening to this right now, you, is go out there and go to those shitty community meetings of so called “I am a trader” “AKA.” Listen to it. They talk about how much they lost that week, and they are proud about it, and there’s no resolution or learning to it. They just talk about how shitty they are and that’s … There’s bad communities out there. Once you’ve had a bad community experience, maybe you will have gratitude towards the current community.

Adrian Reid:

The final area that I think really holds people back in the process … There are many mental challenges that hold people back, but just in the process. We’ve already covered taking the first step. We’ve covered once you get started why people stop, and we’ve covered how to get past that point with community, and so on. The last area that I see people fail to progress is when they have a system, when they have a set of rules, and it’s all tested and it’s ready to go, but they can’t pull the trigger. They don’t take that first trade. They don’t follow through and actually launch their career. What holds people back from that final step? They’ve done the testing, they’ve got the rules, they should have some level of confidence because they’ve done back testing, they’ve followed the program, they’re theoretically read to go, but they just can’t pull the trigger.

Taka Endo:

I would say congratulations. That’s your first step to the freedom. In the US there’s a trading platform called Thinkorswim. It’s T-H-I-N-K but it sounds like S-I-N-K or swim. Once you go, you need to … It’s great. Your unconscious mind knows what’s coming because, once you pull the trigger, there’s no going back and your unconscious or subconscious or non-conscious or whatever word you want to chose, your brain will hold back to your comfort zone which is right now, here and now, regardless of …

Taka Endo:

It’s funny because I used to do forensic stuff, too, and people who are in domestic violence situations, so a wife that’s been beaten up … sometimes it’s the husband that’s been beaten up, but they don’t get out of the marriage because at least that pain they know. At least that bad situation, they’re comfortable because they know that it’s bad, even though they feel like they are going to be killed at some point. I’m sure that the students you have, a lot of them, a lot of you that’s listening, your spirit was dying at where you were working, and you know it, but your dying spirit is comfortable because you’re used to it, sadly. When you start off this new career as a trader, it’s such an unknown world, so your unconscious mind will dodge, evade unknown over possible death. You must know this, and it’s not that bad. Seriously, it’s not that bad.

Taka Endo:

You hear about stories about the worst case scenarios, “What if …” Your brain goes “What if?” before you pull the trigger. “What if? What if? What if?” But that “What if?” is not going to happen. What if I lose all of my savings and my life expenditure, or more that that because I leveraged so much, if I become a trader? I’m sure you haven’t been taught to do that.

Adrian Reid:

Not if you’ve done my program.

Taka Endo:

Exactly. Watch Wolf of Wall Street. If you’re one of those literally really passive investors, one day you get a phone call and you get lured into, you get sold into this sales talk of investing your money on a shitty stock, well, if you do that, then yes, your life savings will be gone. If you’re signed up for 401(k) [inaudible 00:27:38] RRA’s, any type of savings account kind of stuff they government have [inaudible 00:27:47] mutual fund shit, then yes, you will lose money because, if you trust broker, you will be broked, is the joke that we always say. Traders are not brokers. You are going to be a trader. We are traders, so we know … Plus, on top of that, we know how much we are going to lose, right?

Adrian Reid:

Absolutely.

Taka Endo:

As a trader, you should know how much you are going to lose. Absolutely, because that’s how you set the trade, and how much you are potentially going to gain, or more than that. That point or more.

Adrian Reid:

Here’s the problem. We go to school for 13, 14 years, 12 years, whatever it is, and we’re trained. It’s ingrained in us to get the right answer, to not be wrong. One of the number one keys to success in trading is to know when you’re wrong and cut your loss and get out. Take the loss, take the mistake, before it gets big, but we’ve had so much time, so much conditioning, to engrain us that we have to be right. How do we get past that? I mean, I know I get past it by just applying a trading system and just following the system, and I judge my being right by, “Did I follow my system?” Not, “Did I make money that day or that week or did I win on that trade?” So that’s my method, but what would you suggest?

Taka Endo:

My method is, one of my trading teachers said to me, “Do 100 trades on paper. See your hit rate and, unless your hit rate is not good, you never go and trade.” I didn’t listen to him, and I went into trade right away, and I lost money, obviously. Then after that, I actually did practice more. Practice is the point and I made sure what my hit ratio was. I’m very logical in that sense. Once that was done, I knew, as long as … In a way, when I did the practice, the system was in my body. If I did that much practice, it’s in my body. I could close my eyes … not close my eyes, but I could almost automatically go through the whole process, where to push, what to do. There’s no mistake of, “Oh, I forgot to press that,” or “I forgot to calculate that.” At that point, I was like dut, dut, dut, dut, dut and you’re done. After that, you already set the stop loss and all that, the computer will take care of it. Come on, you know?

Adrian Reid:

Yeah, it’s not that hard after that. The point is, it’s a lot about being outside your comfort zone, fear of failure, all those sorts of things, but if you simulate, if you practice, if you repeat enough, it becomes part of you. It becomes in your comfort zone. If I added up how many losing trades I’d taken over the last 15 years, I mean, most people would seriously fall off their chair, but it really is for me now, it’s place the trade, place the stop loss, wait, and if the stop loss gets hit, the stop loss gets hit, the stop loss gets hit, it’s like, “Okay, next?”

Taka Endo:

Exactly. It’s too much emotion attached to the trade, I would say. For me, I’m an investor, so it’s just more like it’s just how it is.

Adrian Reid:

Acceptance, right?

Taka Endo:

Acceptance. I’ve never seen, at least if it’s professional … You probably will see some of them, but majority of professional baseball players, professional football players, professional whatever athletes, I’ve never seen them go, “Shit, I missed that one shot.”

Adrian Reid:

No, it’s not about the one shot.

Taka Endo:

It’s always, they turn it around, they refresh their mind, and, “All right, next one,” and they move as they practice. I’m sure people who are listening to this would say to this, “I thought it would have been more easier,” because I know that’s one of the little voice that the unconscious mind is saying. I’ve got to tell you the truth. There’s no such thing as easy money because easy money will go out easily, out of your pocket. That’s for sure. Because you have put your time in it, you have put your practice in it, that’s why you are allowed to grab onto that wealth that you’ve put your effort in it. If there’s anybody who said it’s going to be just … all the machines will just take care of it, or in an hour you’ll be good at it and you will make tons of money, it’s not going to happen. Legally, ethically, morally it’s not going to happen.

Adrian Reid:

Absolutely.

Taka Endo:

I know that’s what the brain is saying.

Adrian Reid:

I guess the distinction for me is that when someone is not pulling the trigger, they are not taking action, it’s fear and concern around that one trade, that first trade or that second trade, or what is going to happen when I pull the trigger this time, right?

Taka Endo:

Yes.

Adrian Reid:

In reality learning successful trading is not about one trade, it’s about the process you follow. Would you agree?

Taka Endo:

Yeah, it’s the process. It’s the bulk.

Adrian Reid:

The bulk, yes.

Taka Endo:

It’s the bulk of the game.

Adrian Reid:

My students trade systematically, so they’ve got rules that tell if this and this and this happens, then buy. If this or this happens, then sell. There’s no emotion. Success is not about one trade or two trades or 10 trades. It’s about the many hundreds of trades you make over your year, or over your career, and following that process well. I guess, when you think about it like that, it takes the pressure off each individual trade because you can reward yourself by following the processes and the wins or losses don’t matter that much.

Taka Endo:

Earlier on in the training that I gave to my wife, she said … Now, she’s actually lost some of the money on some of the trades, and I said, “Good for you, because you followed your rule. That’s more important than not following the rule.” The success always comes from being able to follow the rules.

Adrian Reid:

Absolutely, great. That’s been fantastic, Dr. Endo. Any final thoughts or words of wisdom that you would want someone to hear before we wrap up?

Taka Endo:

The thing is this, in the beginning your wins may look small, but once they get to a certain point it becomes exponential. By following the rules, you will see yourself a totally different result that was totally not imaginable a year ago. A year later, you will be standing in a different location, in a different position, making a different amount of money that you did not imagine by just following the rules. Your brain is not capable of imagining that, so you just need to have the faith into the system and follow it, and just wait. Give yourself a year. It’s going to be a totally different place. A lot of times, when I do the trades, as an investor, there’s no way that I could imagine who or how or what I will become in a year.

Adrian Reid:

Great. Dr. Endo, thanks so much for your time. I look forward to speaking with you again soon.

Taka Endo:

Yes, thank you, Adrian.

Adrian Reid:

Thanks so much.

Taka Endo:

Bye.