194: Day Trader Turns £100k to £1.5m in 8 Months w/ Tom Hougaard – Part 3/3
Sep 28, 2022
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Discover how a day trader turned £100k into £1.5m in 8 months, mastering the trading mindset and focusing on gradual growth. Learn about transitioning to trading larger positions and building trading capital while emphasizing the importance of proper hedging and disciplined trading practices.
Gradually increase trade size to build resilience and improve weaknesses in trading.
Utilize smaller trading capital for discipline, adaptability, and continuous improvement.
Deep dives
Approach to Trading Larger Size
In the podcast episode, the speaker discusses the approach to trading larger size by drawing a parallel to free climbing without ropes. Starting with smaller positions and incrementally increasing size is emphasized as a key strategy to acclimate to the added pressure and risk of trading larger amounts. By gradually exposing oneself to larger trades, weaknesses can be identified and turned into strengths through a meticulous review process. The speaker advocates for a slow and steady progression in trading size to prevent overwhelming fear responses and to ultimately become a better trader.
Challenging Traditional Risk Management Strategies
The podcast challenges traditional risk management strategies, particularly the concept of trading a percentage of one's account. The speaker advocates for a different approach, suggesting that having a smaller trading capital can actually instill more discipline and prevent false confidence. Rather than using risk-to-reward ratios, the speaker focuses on adapting to what the market offers and utilizing a smaller portion of the account for trading purposes. The emphasis is on continuous improvement and pushing boundaries without being reckless.
Mindset, Process Focus, and Continuous Improvement
The discussion delves into the importance of mindset, focusing on the trading process, and striving for continuous improvement. The speaker likens the dedication to trading to the relentless pursuit of excellence seen in athletes like Kobe Bryant. Muscle memory in trading involves habitual responses that prioritize adding to winning trades rather than abruptly closing them out of fear. The philosophy encourages traders to avoid complacency, constantly review and challenge themselves, and embody a mindset of continual growth and learning.