Simon Ree Exclusive Trading and Investing Secrets through the Tao Of Trading

Pamela Bardhi
Hello, everyone, and welcome to another episode of underdog. Today I have an amazing guest here with me. Simon Ree, Simon, how are you?

Simon Ree
I’m really well, Pamela. It’s lovely to be here.

Pamela Bardhi
You have quite an interesting journey. So what has inspired you to get you where you are today.

Simon Ree
I started off my life in the finance industry. Which is where I’ve been for my whole career, nearly 30 years ago. And I’ve been working for major global investment banks for really all of my corporate career. I got to see some of them, you know. The ugliest sides of that industry, ensuring my time there. And I got to a point in my life, where I was feeling unfulfilled and when you’re kind of spending every day doing a job. That you don’t really believe in and you’re not sure, what your real purpose in life is anymore. It can lead to a fairly unfulfilling existence and you get to that sort of stage in life paychecks are kind of immaterial, it doesn’t even really matter.

I moved back to Perth in 2016 for family reasons. And I got offered a job in investment banking in Australia. I had been living in Singapore previously because my wife is Singaporean. Anyway, I was living in Perth. They wanted me and my family to move to Sydney, six months after, I joined and I said, look, thanks. But no thanks doesn’t work because we need to be in Perth and we parted company on amicable terms. And then I thought, I’m not gonna get another job. I’ve got a skill set here, it’s time for me to share the skill set. That I’ve developed over a really good 25-year corporate career with people. Who could really benefit from it, I realized that the people that I’ve been helping really. Throughout my career with people who frankly didn’t need the help.

There were people that any normal person’s wildest imagination. Were already incredibly wealthy and I was really just helping them, stay wealthy or get even wealthier. But I thought I’ve got to build a really good skill set here. And what I want to do is help ordinary folks, middle-class, people really kind of get up. The first couple of rungs of that ladder to wealth creation and show them that it’s possible. I mean, I’m a big believer in abundance and the law of attraction and all of those things. But it’s a very, very ambiguous topic for most people. And teach somebody how to trade and it becomes very concrete. You can start to see, wow this is how I can create abundance. So that’s what I’m doing now and enjoying great success.

Pamela Bardhi
I love that. So let’s unpack your story a little bit, so what inspired you into the finance world in general.

Simon Ree
I think I’ve just been attracted to it since I was a teenager, I mean, I used to love looking at the stock price tables at the back of the newspaper. And if it is for listeners of yours, who are old enough to remember those days. My second last year at high school was when the 87, stock market crash hit, all the stones movie, Wall Street. And I just found it all quite sort of intoxicating and stimulating and just felt kind of drawn to it. One thing I love about markets is it’s just this never-ending chess puzzle.

It’s just this puzzle that you never quite solve and every now and then, you think you’ve got it solved. And every time you do you’re in for another learning experience. You had a great podcast with Dr. Ruth coached a little while back. She talked about the four keys to success and that the first one was being intrinsically motivated. And I realize I’ve got this intrinsic motivation when it comes to markets. I just love trying to crack that code.

Pamela Bardhi
That’s amazing. So that leads me to the question of, what did you want to be when you grew up as a kid?

Simon Ree
What I really wanted to be was a lead guitarist in a rock band and I almost got there. But it got to the point where I was in my early 30s and I just had to make a choice. Do I pursue the kind of a rockstar career or do I get serious about the corporate career? No, of course, I chose the safer option and here I am today.

Pamela Bardhi
But you’re a rock star in your world. So technically it translated somehow.

Simon Ree
It’s very kind thank you for saying that.

Pamela Bardhi
And so, you know, in your life was there a particular person that inspired you tremendously. Or something that you live by that is sort of guiding your journey?

Simon Ree
I think it’s just about your contribution. Legacy is probably too strong of a word, but one thing to have a contribution. I think that you get to a point in life and for me, it was, I guess my early 40s. Where you just want to feel as though you’re contributing to the greater good. And I didn’t feel as though I was doing that and again. It was just a bit of soul searching involved. But the other thing that I realized that I’ve always loved doing is teaching. Whenever I learn something new, I’m always asking myself. How can I break this down and explain it to somebody else, if I was teaching it?

And this really kind of hit home to me a few years ago. When I was learning how to kitesurf and I was standing there on the beach. I had the kite and I was putting the board on my feet and getting up and running. And as I was going through the learning process with my instructor. I was actually thinking to myself. How would I explain this to somebody else? If I was to teach kitesurfing? I’ve got no business teaching anybody how to kite surf, I’m terrible. Okay.

But it was just it was at that point, I realized, oh, my God, I do this all the time. In addition to teaching people how to trade I’m also a G kundo instructor. Martial Arts is something that has been a big part of my life for most of my life. And one of the things that I find really gratifying is when you see the penny drop. When you see that light bulb go off for somebody and something that they’ve been practicing for a while. They suddenly get it. I just find that intensely rewarding.

Pamela Bardhi
The thing that you pointed out some things that were really important, that you were mentioning to you, it mattered your contribution. Which I thought was really key. Because one of my biggest questions is always like, what was your aha moment from transferring, from a job that was secure. Life is good, you have experience in it. You know your stuff and then, you want to shift into the entrepreneurial world. Because that’s where a lot of people get stuck, right? They’re like, I don’t want to do this, I wanted something more, well. How did you personally make that transition and what helped guide you through that process to be like, you know what, boom. I’m gonna do this.

Simon Ree
It wasn’t that hard for me. Because I’d been thinking about trading for a living for the last several years. I mean, I got very serious about retooling my own trading methods. After the 2008 global financial crisis, I lost a life-changing sum of money and realized that I had to do things differently. And it really kind of hyper-motivated me to figure things out properly, which I was very motivated to do. I was working at a very highly regarded investment bank at the time. That was at the top of its game and I had awesome people around me. To learn from and pick their brains and I really kind of thought it, was just a great opportunity.

I had access to a Bloomberg terminal, you know. 24 hours a day and it’d be an hour or two a day. Or I could go back to systems and play around with things. And so I really had a great opportunity to do that. When the opportunity came. Well, it was serendipitous, wasn’t so much an opportunity. But it was just a case of, well, we’re not going to move to Sydney, it doesn’t work. Now’s the time, now’s the time to pull the pin. It’s never an easy decision to make. When you’ve got that stable paycheck that comes in every month. It’s a difficult thing to walk away from, I guess I just had a lot of confidence. And a lot of belief in my own ability to trade.

Because I’ve been doing it for myself and for others for many, many years. From that perspective, I thought it was quite easy. And then I thought, well, here’s something really powerful that I’ve done. I’ve sort of given up work, I’ve started trading and from day one. That’s how I’ve paid the mortgage and put my three daughters through private school and all the rest of it. But what if I can teach other people how to trade and they can use that as a bridge.

So maybe you’re stuck in a corporate job, that’s unfulfilling. You’ve got this side hustle that you’d love to devote all your time to. But you’re scared of giving up the paycheck and starting from ground zero? Well, what if you can learn, how to trade and make a decent amount of money each month from your trading. It may not fully replace your paycheck. But it may just give you enough of an income. And enough confidence to launch yourself into the world.

Pamela Bardhi
Amazing. And a lot of people mentioned trading, I’m always like. What does that mean? You know, like, and so can you give us like one on one, if you will, of what is trading different elements of it? Because of the marketplace? It’s like when anyone mentions real estate, it’s like, oh, you’re a realtor, right? So it’s like, oh, I’m a developer and I did it. Like it’d be cool to hear from you like trading one on one,

Simon Ree
Sure. What you’re doing with trading is you’re looking for an asset. And in my case, I trade stock options. So options on US-listed companies and what you’re looking for. Is to buy an asset that you think you’ll be able to sell at a higher price at some point in the future. Now, the reason I trade options is because there are several reasons. But some of the key ones are options. You don’t actually have to own the underlying stock to make money trading options. I say that options are like the Airbnb of the stock market. Because when you buy an option, when you buy a call option, it’s almost like you’re renting the stock.

So you think about maybe you want to go and live in a beach house in Malibu, alright. But it costs, I don’t know $5 million you can’t afford it. What if you rent one for two weeks? Maybe all of a sudden that’s something that isn’t such a pipe dream and maybe you could afford to do that. And renting it for two weeks gives you all the benefits of ownership with none of the downside. If the property market crashes, you’re not gonna win big loss. You’ve got no maintenance or upkeep or anything. But you get all the benefits of it for those two weeks, you can do the same thing by buying call options on Google or Amazon.

You buy 100 shares in Amazon, it might cost you $250,000. But you could buy a call option on Amazon and it might only cost you a couple of $1,000. So it costs you a fraction of the cost. And you get to basically rent Amazon stock for a small period of time. If Amazon stock doesn’t go the way you think. Your maximum loss is that small amount of money that you’ve paid to rent the stock. And if Amazon stock does go the way you hope, you can make amazing returns, you know. 50, 100, 200% in a matter of days or weeks.

Pamela Bardhi
That’s fascinating to me. I didn’t know there was such a thing as Airbnb in the stock market.

Simon Ree
Was it? That’s my terminology.

Pamela Bardhi
Well, no, I think it’s an amazing thing. Because you know, when I think about buying stock, that’s exactly right. You buy stock that you didn’t even know, there was an opportunity to even rent it.

Simon Ree
caught a lot of renting. Yeah, you can make money on the stocks with it. Without ever actually owning them or buying them, you just buy an option on them.

Pamela Bardhi
So what would be your best tips in terms of trading stock options? Or would they have to go to your quest for that? So?

Simon Ree
Well, I’ve written a book called, The day of trading. Which is the reason I wrote that book, there are hundreds, if not 1000s of books on trading out there. And there are hundreds on options trading. But most of them just suck the life out of us. He tried to read them because they read like textbooks, they really do. What I wanted to do with this book, was write a book that was engaging and entertaining and even a little bit fun. And the feedback I’ve got from the book has led me to believe that I have succeeded in that.

It’s a very readable book, It’s about 340 pages. Many people have told me they’ve read it in a day or within 24 hours. So it seems to be very, very readable. And it just breaks down technical analysis trading. What is trading? Why should you consider trading, what is an option? How do you trade options, how do you identify trends, how do you manage your risk? And how do you master your psychology? All of that is contained in those 340 pages.

Pamela Bardhi
Oh, my God, and what inspired you to really write that book and put it together? It was just like your legacy imprint.

Simon Ree
I think it’s a book that’s been in me for a while, I think there’s been a gap in the market. Because I don’t think a book like this has ever been, written before in terms of a book about options trading. Which is kind of one of those topics. That people might think is a bit advanced and scary and complex. But in really plain English, accessible, simple, easy to access style. That was the purpose behind it just to bring it something, that is a little bit more sophisticated. But bring it to something that pretty much anybody can do.

Pamela Bardhi
Can you give us a teeny bit of a summary of what the synopsis of the book is or an outline?

Simon Ree
So I call it the Dow of trading. The Dow meaning the way, as I said earlier, I’m a cheap kendo instructor. That the inspiration for the title was the Tao of G kundo, by Bruce Lee. So what I really take you through is the journey of what are the big myths of finance. That are holding a lot of people back from making great returns. I talk about why trend following is the ninth wonder of the world and how to identify trends and how to spot trends. And then, importantly, how to identify those high probability moments in time to join a trend. All right, that’s really, really key that I explained what options are. How to use them and how to combine the trading methods with selecting the right option to buy.

Alright, so that’s how you can get into starting to make money. When we talk about risk management, risk management is absolutely key to your success as a trader. Because that’s what will keep you in the game for a long time. Unfortunately, most people who get into trading learned some fancy indicators and how to buy. But they don’t know how to manage risk. And that’s why most traders end up unsuccessful, so risk management is really important and then, I talk about the emotional aspects of trading. How to manage your psychology and sort of really get your mind set up for trading success. And then at the end, we talk about how to write a trading plan. Which is a contract between you and yourself about what you’re going to do.

Pamela Bardhi
And as somebody, who’s kind of an outsider to the industry, like what are like. The most common misconceptions of the trading world. And what advice would you have for that?

Simon Ree
The most common misconception about the trading world is that you need to be right. And you need to predict the future to make money and neither of those things are actually true. Being right is something that the ego wants to do. The job of a trader is to be mentally flexible and to be able, to admit when you’re wrong very quickly. Because part of life as a trader is taking lots and lots of small losses. There are absolutely going to be losing trades. But you need to be able to identify when you’re wrong. Put your hand up and admit it to yourself very quickly and say I’m out and it’s just a business expense.

And a losing trade should cause as much of an emotional reaction inside you, as having to buy photocopying paper for your printer. You know, it is just a business expense. But people get very upset. Because what happens is we go through life and from the time. We’re two years old, we spend our whole life trying not to screw anything up. Because you think about it. If you screw something up your parents will scold you. Your friends will make fun of you, your teachers will yell at you, your boss will demote you, or whatever.

And so you go through life trying to screw anything up. But if you take that attitude into trading, it causes all sorts of problems. We think that our losses are a screw up or a mistake and it isn’t. It’s just that we’re trading, we’re always dealing with probabilities never certainties. And so with a probabilistic mindset, what you got to say is. If A happens, B is more likely to happen, but anything can happen. Whereas we’ve kind of grown up with a very deterministic mindset of if A happens, B happens. The trading world doesn’t work like that. So it’s forgetting about trying to be right all the time, accepting being wrong, and learning how to manage that risk.

Pamela Bardhi
Interesting. So like what are like the top three mistakes, that you think people like getting into the trading world make in the beginning.

Simon Ree
The top one is trying to be right all the time and not immediately lose. And the second one is just not having proper risk management in place. So there are two types of risk management I talk about in my book. There’s position risk management and portfolio risk management. Position risk management is talking about. How much of your account you’re prepared to risk on any one trade. And when you’re going to pull that pin. Portfolio risk management is talking about. What combination of trades you’ve got on.

How much of your portfolio you’re going to risk at any one time. And where you’re going to draw the line and sort of pull the pin on everything. So risk management really and truly is the thing that will kill most people. Improper execution of risk management or just not knowing how to do it. The third mistake is focusing on the money, focusing on the outcome and not on the process. Trading is the same as any other undertaking in life. If you focus on the process, the results will come and trading is no different. And if All you think about is how much money you’re going to make, again, your eyes sort of off the ball of the process.

Simon’s Biggest Advice To Somebody Getting Into Trading

Pamela Bardhi
Interesting. And what would be your biggest advice to somebody? Who’s getting into trading aside from your book and your course? Which we’ll get into later? For sure.

Simon Ree
Yeah, I mean, we’ll get a proper education. I mean that the free youtube video you watched on how to pick the right stocks is probably worth exactly, what you paid for it. It’s very hard to get a proper education. Another analogy I draw in my book is that a lot of people will say it’s impossible to trade. He can’t make money trading, you can’t beat the market. And the only people who say that are either people who’ve tried and failed or people who’ve never tried.

So why would you listen to them? But saying that it’s impossible to trade for a living is a bit like saying it’s impossible to fly a jumbo jet for a living. It’s only impossible if you haven’t acquired the skill set. But learning to trade might be more difficult than learning to fly a jumbo jet. And I say this with all due respect to pilots. My father was a pilot for 30 years. So I know where I’m coming from here, but if you want to learn to fly a jumbo jet. There is kind of one book, there’s one source of truth.

And you go to that flight manual and that’s how you learn. If you want to learn how to trade, there are 1000s of courses out there. 1000s of videos, most of them are crap. And then so trying to pick the right one is a bit of a mission. So I wrote my book to give people a very, very cost-effective introduction to the world of trading. It costs $9 on Amazon and if they liked my book and like my style and want more of me. They’re more than welcome to find out more about my course.

Pamela Bardhi
I love that and I want to dig into your inspiration part sort of a little bit, so it’s jeet kune do, correct. Yes, use it. So tell me how did you get into that? What inspired you to get into that?

Simon Ree
So I’ve been involved in martial arts since I was about 10 years old and went through Judo and karate and Ninjutsu and I did some boxing and I did some more Thai. But I was always a fan of the Bruce Lee movies and Bruce Lee and just the way he moved and read his book and just found the guy. Very impressive in terms of his philosophy as well as his martial arts.

When I moved to Singapore in 2010, I had the opportunity to train with a jeet kune do Instructor here. And I really dislike these my martial arts are better than your martial art-type conversations. I think almost lots of beautiful, they all have something to offer. But jeet kune do just resonated with me and it was the one that I really kind of found my footing in. It’s got some technology that I hadn’t seen in any other martial arts and it just seemed to resonate with me.

Pamela Bardhi
I love that. So what was it that resonated with you in that? Because it sounds really fascinating and I’ve never heard of it. So I’m like, oh, what, like, you know. What is this? I’ve never heard about it.

Simon Ree
Well, I mean. There’s some things that she can tailor to slightly differently. One of the key principles is you put your strongest side closest to the target closest to the opponent. You know, normally if you’re boxing, your jab will be your weak arm and it’s sort of you finding the distance. And just kind of softening the guy up and then the cross is like your big weapon. So your jab is your big weapon, you’re big right. If you’re right-handed, close to your opponent, and same with your right foot.

And the other big prints. The other big principle is mass accelerated movement. F equals MA force equals mass times acceleration. So there’s a lot of footwork that was borrowed from fencing. Which enables you to close distance to your opponent very, very quickly. And put a lot of acceleration behind the force, that sort of a couple of pieces of technology. That I just hadn’t seen in any other martial art, which I thought was really clever.

Pamela Bardhi
That’s so cool. So how long have you been practicing that?

Simon Ree
About 10 or 11 years?

Pamela Bardhi
Is there anyone in particular who inspired you on that route?

Simon Ree
I mean, Bruce Lee was the original inspiration. And then Mark Stewart, who trained with Ted Wong. Who is Bruce Lee’s last private student and he used to run the LA Chinatown, jeet kune do Studio. So he’s got great, great credentials as well.

Pamela Bardhi
Incredible. And then I also read about that you’re in the Reiki world to what inspired you in the spiritual realm?

Simon Ree
I don’t really know actually, it’s just curiosity. I think there’s a slight overlap between martial arts and the spiritual arts. But yeah, just always been curious about it. That’s just real curiosity that there is no kind of defining moment or anything like that. But it’s something that I’ve really enjoyed and got some benefit from. And yeah, it’s sort of another part of my life and another dimension that I enjoy.

Pamela Bardhi
So cool, because it’s just so diverse and it’s like. When you think about somebody in the finance world like I’ve never heard of somebody else having these like g condo. And then also like, you know, being into Reiki, I’m like, this is so cool. It’s such a beautiful, beautiful mix and it’s so dynamic. So that’s why I didn’t know if there’s a particular thing that led you to another and the thing about Reiki is all energy transfer is so beautiful. And some people thought that’s garbage and I’m like there’s a story that a future mother in law, she was in the hospital, she was really, really sick.

She told me, like, very sick and like they didn’t doctors, couldn’t figure out what was wrong with her, she was in her 40s, like, very early 40s. And she had three kids, young kids and one of them was my fiance. She said that there was a volunteer that came into her hospital room. After they couldn’t figure out what was wrong with her for like days, her fever was like. It was so ridiculous that it was alarming and doctors couldn’t figure it out.

And everybody’s freaking out and they’re coming up with all sorts of crazy things like, Oh. She might, she might pass like easy stuff, and all of a sudden, she said. A volunteer came in and she was like. Can everyone just exit, everybody exit, and then she just laid hands on her hand, to have been Reiki because there’s no way. And after that, after like an hour, she had no fever, felt totally fine, and just life was back to normal for her. Local methodologies and I think this is going to be a really fascinating space to watch.

Pamela Bardhi
Interesting. Do you think that’s going to translate into any companies with stocks?

Simon Ree
I haven’t looked at it yet. But I’m not sure it will. Yeah.

Pamela Bardhi
That well because, now wellness, you know, like, holistic wellness is really on the rise. So I’m wondering how that’s going to translate into the actual markets, being head to head with pharmaceuticals. Have you seen any of that in the market at all?

Simon Ree
But it’s all its very early stage, very, very early days at this point. So I mean, I mostly trade kind of big mega-cap, blue-chip type stocks. I don’t really trade small IPOs so much. Yeah, I’m really looking for stocks that are gonna establish trends, because they’re much easier to trade.

Pamela Bardhi
So cool. I just love your dynamic experience and everything in all that you do which is so much fun. And throughout your years and throughout your life. I mean, you mentioned your teacher was a.

Simon Ree
Box to it. His name was…

Pamela Bardhi
Yeah. So was he a major source of inspiration for you. Who has really served as a big inspiration in your life who or what?

Simon Ree
I mean, probably the biggest source of inspiration for me professionally, was a boss I had several years ago. When I was working at Goldman, I was asked to basically set up and head the markets test for Australasia, Australia, New Zealand. And my boss at the time, his name is Paul, he basically gave me a blank sheet of paper with a little kind of scribble on it and said, I want you to build something that kind of does this. But go away and figure it out.

Hong Kong has got one and London’s got one and New York’s got one. And I want Australia to have one, go figure it out, sell it to the board. Let’s see where we go and it just gave me an opportunity to. I guess, figure out what I was capable of. In terms of coming up with the idea, selling the idea to the board, hiring staff and then, implementing and running it. It really kind of played outside of my skin as a result of being given that opportunity.

Pamela Bardhi
That’s amazing. And he just told you to just run with it. Roll with it and go.

Simon Ree
Yeah, I mean, he was always there, if I needed, needed direction. It was very much showing me what he got, it was just very empowering. So that was something that I really took on board with people in my team. Just give them the power and get them to tell you what they’re going to do. Instead of telling somebody what to do, get them to tell you what they’re going to do, give them some ownership of it. And the chances of them doing it are much, much higher.

Pamela Bardhi
I love that, I love it so much. And I mean for us You have such a dynamic and amazing journey. What would your older self tell your younger self, as a piece of advice? Based on what you’ve been doing?

Simon Ree
Say yes to risk, I think one of the key skills. I want to be part of my kids and learn how to identify risks that are worth taking and take them. Manage the risk, but be a risk-taker, not blizzy. But learn how to identify risks that are worth taking and don’t be afraid. Don’t, don’t live a small life. You go through trials, you get you go through periods, where you think what the hell have I done? What the hell am I doing, but you know. With a positive attitude and gratitude and what have you things, just things tend to work out. They tend to work out in the end. And the old saying is that everything works out in the end. It’s not okay. It’s not the end.

Pamela Bardhi
Yes. I love that. Just go for it. Be fearless. That’s one of my biggest things. My biggest quote is this, like, regret is far worse than fear.

Simon Ree
Yeah, I love it. I think that’s brilliant.

Pamela Bardhi
Yeah, it terrifies me to like, think about me, like down the line and being like. I wish I did that.

Simon Ree
The itch you can never scratch. Yeah.

Pamela Bardhi
Exactly. So I love what you just mentioned. Oh, man, Simon, you’re awesome. And also to you know. What are you up to in the world? You mentioned your, your book, you mentioned your courses and all of that. So like, where can those be found?

Simon Ree
So I’m really busy with my courses, so I’ve got an online Academy. I call it options Academy where I teach people through a series of 55 over 55 video modules. The ins and outs of what is technical analysis, how do you trade what is an option? How do you manage risk, how do I densify trade setups? Where to buy, where to sell, it’s all laid out in over 20 hours of video recording. That is that taoftrading.com. And what I like to do Pamela is for your listeners offer a really special discount. So my entry-level program is called options Academy on demand. And it retails on my website for $797. But I’d like to give your listeners a $300 discount, so if they hit taoftrading.com forward slash Pamela. They can pick it up for $497.

Pamela Bardhi
Thank you so much for doing that. Because I know I mean, there’s a lot of people in my world they’re interested in real estate. But then also they I always preach diversify your revenue streams. Don’t just put your money in real estate start to flip it around a little bit, so this is a perfect opportunity for them to do that. So thank you so much for that.

Simon Ree
My pleasure. Look, I love what you’re doing, I love what you’re doing with the underdog. I think you’re doing great work. I’m a fan of your podcast. And if I can help the community, I’m really happy to help.