Speculative attacks on markets have been thwarted repeatedly by the various interventions of governm...
Be Part of the 1% Who Succeed
03/30/2012 3:00 pm EST
Traders must have desire, discipline, and be committed to forever learning and improving in order to be part of the 1% who are consistently profitable, says Tom Hougaard.
My guest is Tom Hougaard, and Tom, I want to know if trading can be learned, or are the best traders born?
I’m sure they’re born somehow, but, of course, it can be learned. Anything can be learned. I can start playing golf like Tiger Woods. The only thing that separates me from Tiger Woods is desire and repetition.
Is that the same for trading, then; desire and then the discipline to repeat over and over again?
Over and over and over. So when you’re off to the pub, or you sit and watch your favorite TV program, I stare at charts and I go over the trading day.
Just like Tiger Woods, he created a new wave of sincerity about golf. When everyone else hit the clubhouse, he went and worked out, and that created a new kind of momentum within the sport.
He paved the way for a new kind of mentality. Traders who want to battle it out every single day in the trenches of the market, they have to be sincere about this; otherwise, you just open an account and you blow up one after the other.
It’s easy to call yourself a trader, but it’s very difficult to get to the level where you are a consistently profitable trader, and there are no shortcuts. You can’t buy a book, you cannot attend a course, you can’t listen to anyone.
You see, you can’t be taught anything. I cannot teach you anything. You have to decide to teach yourself. I can guide you, but ultimately, you—in any endeavor in life, be it sports, be it politics, be it education—have to want it yourself.
That’s what separates the 99% from the 1%, the ones that truly dream and dare and go for their goals and their vision. That’s the Pareto Principle all over.
What’s the role of failure in learning how to trade or becoming a successful trader?
Well, that depends on your frame of mind. Do you run away from something or do you run towards something?
Failure is a compelling protagonist toward achieving your goals, so use failure; be scared. Be very scared of failure and you will succeed. The most successful minds in the world are profoundly scared of going bust, and they work double hard. There is no magic pill.
Here in Las Vegas, you have a resident called Andre Agassi, who was a tremendous inspiration to me when he slipped from number one in the tennis world down to 173 and then made his way back up to number one. The only way you do that is through shear grit and determination.
A gentleman you’ve interviewed, David Paul, he taught me the most important thing about trading. It isn’t technique; it’s in the mind.
The great trader and the great trading mentality is born in the mind. That’s where you start.
Talking about your experiences, what was your worst trade, and what lessons did you learn from it?
I learned nothing. I didn’t learn anything for the first two, three, four years.
That’s because we don’t. We fund our account. We have a well-paid job where we’re on this neverending repetition of blowing up accounts, coming back, blowing up accounts, and coming back. It’s the proverbial zig-zag, but at some point you grow tired of the zig-zag, you grow tired of the drama, and you sit down and you say to yourself, “Okay, this has got to change.”
Very few people do that. Very few people have enough respect for themselves and go into their track records, begin to look to the nitty-gritty of where they go wrong and where they go right.
That’s what separates the 1% from the 99%, but it’s good, because I need the 99% to feed my account.
Somebody has to pay the tuition.
Of course they do, and I paid my dues.