The Best Loser Wins (Trader Mindset)
- FinancialWisdom
- May 17
- 6 min read
How to acquire the best trading mind- Tom Hougaard
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Video Transcript Below:
Best Loser Wins - How to acquire the best trading mind
Most people enter trading thinking it’s a game of charts, patterns, and indicators. That if you can just figure out the right setup, the perfect moving average, or the magic candlestick pattern, money will start flowing in. But the truth is far more uncomfortable. Because the problem isn’t the system. It’s often the trader.
That’s the hard lesson Tom Hougaard delivers in his book Best Loser Wins. This isn’t another book teaching you how to read RSI or Bollinger Bands. In fact, Hougaard argues those tools are what keep most traders stuck. Not because they don’t work, but because they become crutches. Distractions from real work: mastering your own psychology.
In the beginning, Tom was like everyone else. He obsessed over technical analysis, printed thousands of charts, and drew lines and levels until his eyes hurt. He chased every indicator he could find—from Fibonacci ratios to Bollinger Bands to obscure pattern theories. In the poetic opening of his book, he even describes his early pursuit of the market like a love affair, trying everything from Keltner Channels to arcane methods with names that sounded more mystical than practical. He was consumed, convinced there was a secret code waiting to be cracked. But none of it worked. Not sustainably. Not consistently. And certainly not profitably.
Because the market doesn’t care how many chart patterns you know. It doesn’t care about your education, your work ethic, or your passion. The market rewards one thing above all else: your ability to control your emotional reactions.
Hougaard doesn’t claim to be the best analyst. In fact, he admits his technical knowledge is average. But what makes him elite is his mind?. He’s trained it to lose without spiraling into fear, frustration, or revenge. He doesn’t flinch when a trade goes against him. He doesn’t fight the market. He flows with it.
That’s why he says, “The best loser wins.” Because every trader will lose. But very few can lose well. Most will panic, freeze, overtrade, or worse—try to impose their opinion on the market. They’ll see a stock crashing and say, “It’s cheap now.” They’ll see a breakout and say, “It’s overbought.” They interpret the market through their feelings, not its reality.
And that’s where most fail. Because the market isn’t a supermarket. A stock dropping 50% doesn’t mean it’s on sale. It could mean it’s heading for zero. Tom learned this lesson the hard way when he warned clients not to buy Marconi stock, which had already fallen from 1,200 pence to 450. He called it garbage on live TV—and was fired. Later, the stock hit zero. And those clients lost fortunes.
Still, this mindset—of seeing what you want to see—is what drives most traders. They look at an indicator, like stochastics or RSI, and they think it’s telling them what will happen. But it’s not. It’s just data, a reflection of the past.
Hougaard tells the story of a student who bought the Dow Jones at the end of a brutal down day. Why? Because stochastics showed it was “oversold.” But the market kept falling. There was no bounce. That trader wasn’t following the market. He was following his hope.
And hope is not a strategy.
The real battle in trading isn’t against other traders. It’s against your own biology. Your brain is hardwired for survival, not speculation. It wants comfort, certainty, and control. Trading offers none of those. It offers risk, randomness, and emotional pain.
So most people react exactly as evolution designed them to: they avoid discomfort. They cut winners short to lock in gains. They hold losers too long, hoping they’ll bounce back. They trade more when they’re losing, less when they’re winning. They think like humans, not traders.
Hougaard flips this logic on its head. He doesn’t seek to feel comfortable. He seeks to become comfortable being uncomfortable. He doesn’t try to avoid fear. He trains himself to operate in its presence. He’s like the Navy SEAL of traders—calm under pressure, trained to perform when every instinct says run.
This mindset is especially critical when you’re in a slump—a brutal, drawn-out period where nothing seems to work, and confidence vanishes. Hougaard dedicates an entire chapter to this: “Trading Through a Slump.” And it’s one of the rawest, most honest parts of the book.
Because slumps are not just about losses. They’re about identity. You start questioning everything—your strategy, your skills, even your worth. Tom describes the pain vividly. The self-doubt. The desire to “fix” things by changing systems, increasing size, and chasing every new setup. But that only deepens the hole.
His advice during slumps is both simple and brutally hard: Stop trying to trade better. Start trying to think better. Reduce size. Go back to basics. Trade small. Journal every thought. Focus not on outcomes, but on execution. Because in a slump, it’s not the market you need to conquer—it’s yourself.
He admits that during his worst slump, the temptation to quit was real. But he didn’t. Instead, he studied himself more closely than ever. He realized that slumps are the ultimate test of discipline, not skill. And when he emerged, his edge wasn’t stronger—he was.
And here’s where Hougaard’s approach becomes radical: he believes that normal thinking will always lose in trading. Why? Because “normal” means emotional, reactive, and hopeful. It means trading the market as you wish it were, not as it is.
That’s why he says trading success starts not with learning a system, but unlearning your instincts. The goal is not to find the perfect edge. The goal is to become the person who can execute any edge with discipline, detachment, and consistency.
As Charlie DiFrancesca, the legendary bond trader, put it, “Good trading means combatting the emotions that make us human.” It’s less of tools, strategies or indicators and more of psychology.
One of the most revealing stats in the book comes from a massive broker study. 43 million trades were analyzed. Over 60% of them were winners. And yet, most traders still lost money. Why? Because they lost more when they were wrong than they made when they were right. They cut their winners and held their losers.
This isn’t a strategy problem. It’s a psychological one.
Hougaard also points out how brokers try everything to help their clients win. They offer tight spreads, free education, and advanced tools. Yet still, 80% of retail traders lose money. Some brokers even wish their clients would win—because winning clients trade more, and longer. But the numbers don’t change. Because no amount of tools can fix a flawed mindset.
That’s why Tom’s message is clear: if you want to succeed, you have to stop being normal. You need to build mental models that are abnormal by everyday standards. That means:
● Holding onto winning trades longer than feels comfortable.
● Cutting losers before they turn into disasters.
● Sticking to your rules when your brain is screaming to break them.
● Trading small enough in stress that a loss never rattles you.
● Journaling not just your trades, but your emotional state.
He even trains with breathing exercises during trading to stay centered. He reviews not just entries and exits, but also why he made those decisions. He builds self-awareness the way others build strategies.
And the results speak for themselves. At one point, he went 39 straight trading days without a loss, making over £300,000. Not because he had a crystal ball. But because he had control. He didn’t need to be right. He just needed to execute with precision.
The takeaway isn’t that you need to become a robot. It’s that you need to become aware. You can feel fear, but don’t act on it. You can feel greed, but don’t let it take the wheel.
Trading is simple, but not easy. The rules are clear. But the execution is brutal, because it pits you against your own programming.
And that’s why Best Loser Wins is such a powerful book. It isn’t about indicators or secrets. It’s about transformation, not of your strategy, but of your self.
Tom says, “I win because I’m really good at losing. In trading, unlike life, it’s the best loser that wins. Do you think a dentist or a doctor would be in business if they had a 60% win rate? Of course not. But a trader can thrive and prosper on that kind of success rate, as long as they are prepared for it. Most are not.”
Though Tom Hougaard is a successful high-stakes day trader, don’t be mistaken—his insights on trading psychology go far beyond intraday charts and fast execution. The mental challenges he explores are universal, whether you’re swing trading, investing long-term, or trading options. Fear, ego, hesitation and overconfidence show up in every timeframe. What makes Best Loser Wins so powerful is not just the diagnosis of these mental pitfalls, but the detailed prescriptions Tom offers to overcome them. From breathing techniques and journaling routines to thought training and mental rehearsals, the book gives you practical tools to reshape your internal responses. Because in the end, no matter what you trade, how you think will always be the difference between success and failure.
As always, thanks for watching
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Great video! I am listening to the audio book and will buy the book as well. Logging my emotions is paying off!