Learning by doing: The process of turning knowledge into skill

Today I will talk about why learning processes in the financial markets, practicing, learning from your mistakes, and having a development-focused mindset are important. From what I have observed, individuals tend to declare themselves as 'market makers' after completing their education processes within one or two weeks due to the successful trades they have made, and they increase their risk appetite, then many people end up in disappointment. After experiencing disappointment, they either blame others, leave the market, or continue the learning process and learn from their mistakes.

Humans are always learning, inclined to acquire new skills, and evolving towards betterment. For example, let's consider a baby; when a baby is born, it knows nothing. Over time, it observes the behaviors of those around it and discovers that it can also perform these behaviors. It then tries to take its first step, overcoming this process with trial and error, and successfully takes its first step. As time goes by, it starts to act without thinking like us. So, how does this learning process happen?

According to the four-stage learning (competency) model proposed by Martin Broadwell and highlighting the final version of Maslow, individuals are initially unaware of what they know or do not know. After learning what they do not know, they start to develop their skills in that direction and gradually become competent. We can illustrate the four stages with examples from financial markets.

Stage 1: Unconscious-Incompetence

The basic logic of this stage is based on “I do not know and I am not aware of what I do not know.” At this stage, the individual is unaware of the existence of knowledge and therefore cannot use the knowledge, i.e., at the level of incompetence. For example, on May 22, 2010, Laszlo Hanyecz bought two pizzas for 10,000 Bitcoins, and this transaction is the first transaction in which real goods or services were purchased with Bitcoin. If, after it emerged, in (2, if anyone could predict that Bitcoin, which no one knew what it was for years, could come this far and never sold it, who knows how many thousands of dollars it would be?

Stage 2: "Conscious-Incompetence"

The basic logic of this stage is based on 'I don't know, but I know what I don't know.' At this stage, the individual is aware of the existence of knowledge but cannot use it. Maybe you heard about Bitcoin and its derivatives from a friend, an acquaintance, or social media and got curious. After reading a bit, you saw that it can be bought and sold, but still don't know how to do it.

Stage 3: Conscious-Incompetence

The basic logic of this stage is based on 'I know, I am aware, and I apply'. The individual is both aware of the existence of knowledge and using it at this stage. After the training you receive on this subject, you can think of the next stage as a conscious incompetence stage. You observe everything down to the smallest detail, try to take action by looking at your notes. For example, when you want to draw a Fibonacci, you try to figure out whether to take it from top to bottom or from bottom to top, and match the structures you see with the structures in your notes. This stage passes as the most exhausting stage of the learning process because it requires constant attention, as knowledge has not yet been automated and requires staying constantly alert.

Stage 4: Unconscious Competence

The basic logic of this stage is based on 'I know and now I apply unconsciously.' The individual is aware of the existence of knowledge and has linked it to automaticity because they constantly use the knowledge, without thinking about it. It corresponds to the stage where you can see structures without even looking at your notes, understand where and how to design a process, and determine both your risk and profit in advance.

In summary, learning is actually a process for us, and while we need to pay excessive attention to what we learn at first, it eventually becomes automatic. The most basic mistake many people make is thinking that they have completely solved their job by basing themselves on a few successful transactions shortly after they start learning and trying to automate it. However, the process of automation is actually influenced by the practices individuals engage in. For example, according to the well-known 10,000-hour rule proposed by Malcolm Gladwell, a person needs to practice consciously, notice their mistakes, receive feedback, and try to improve themselves for an average of 10,000 hours in order to master a skill.

The advantage of the investor experiencing his second bull

I am aware that all this learning and practicing process is quite difficult, requiring a lot of effort and hard work. Especially in countries like ours, where inflation is very high, people are not rewarded for their labor, and economically troubled, many people want to get rich quickly, but unfortunately, this is not easily possible in the financial markets. If you invest in yourself for a long time, increase your financial literacy, observe the markets, strengthen your technical knowledge as well as your fundamental analysis knowledge, you will eventually begin to see opportunities. There is something that many people I follow with pleasure often repeat: almost everyone loses money in the first bull market, but those who can learn from it in the second bull market can succeed in making money because these people understand how important it is to know when to invest, which pairs and metrics to follow, taking profits gradually instead of waiting for 10x-50x-100x, maintaining risk and portfolio management, and sticking to their principles and that their behavior really has consequences.

You can reevaluate your learning stages based on your own processes. Maybe you never knew there were opportunities in financial markets, and you were just trying to get through the day, content with 'safer' investment tools like gold and foreign currency. Now, you are in a vast sea and trying to seize the next opportunity that you think can save your future.

During this process, you can make a lot of mistakes, lose money, and go back to your old life by giving up. In my opinion, this is not very possible because once a person gains awareness about a certain issue, they do not remain the same as before; they are now within a new reality and need to adapt to it. My favorite movie, Matrix, has beautifully addressed this situation ), and if anyone still hasn't watched it, they definitely should (. At this point, what needs to be done is to develop a mindset focused on growth instead of giving up. In our next article, I will talk about mistakes in the financial markets and the mindsets proposed by Carol Dweck. Until then, I hope you continue to practice a lot and continue your learning process...

This article does not contain investment advice or recommendation. Every investment and trading activity involves risk, and readers should conduct their own research when making decisions.