Pro-Gamer Turned 8 FIGURE Trader: 25% Win Rate Strategy That Made OVER $10M+

Name: Pro-Gamer Turned 8 FIGURE Trader: 25% Win Rate Strategy That Made OVER $10M+
Uploaded: 2026-02-19T15:01:28.000Z
Duration: 3 h 4 min 18 s

Trading Insights from a Professional Gamer

Transition from Gaming to Trading

The trader began with $30,000 and has now achieved over eight figures in trading profits, emphasizing that trading is not as complex as often portrayed.

A professional gamer turned trader transformed $5,000 into over $10 million by utilizing a high reward-to-risk profile, highlighting the importance of understanding market psychology.

The speaker believes much of price action is noise and suggests discretionary traders could significantly improve results by incorporating systematic approaches.

Importance of Psychology in Trading

Brian Lee, a systematic trader who relies solely on data for decision-making, discusses the critical role of psychology in gaining an edge in trading.

He reflects on his past misconceptions about risk management and emphasizes the significance of compounding and controlling drawdowns.

Personal Journey and Insights

Brian Lee shares his journey from esports to trading during the podcast "Words of Wisdom," which is recognized as a leading trading podcast.

He expresses that many gamers should consider transitioning to trading due to their competitive nature and ability to learn from mistakes.

Advantages of Trading Over Team Sports

Lee argues that while gaming skills like reaction speed are often cited as beneficial for trading, the real advantage lies in mental resilience and self-discipline developed through competitive gaming.

He finds trading liberating compared to team sports because it places full responsibility for outcomes on the individual rather than relying on team dynamics.

Community Connections Among Gamers

After achieving success in trading, Lee connected with other former professional gamers interested in making similar transitions into trading or poker.

He advises against pursuing poker due to its complexities but encourages exploring trading as a more accessible option for those with gaming backgrounds.

Transitioning from Esports to Trading

The Shift from Gaming to Trading

The speaker reflects on the challenges of being a poker player, noting that the industry is "topheavy" and requires significant effort.

Acknowledges the inevitability of leaving esports gaming, expressing concerns about lacking natural skills and formal education.

Transitioned into trading as a means to generate income after retiring from gaming, discovering day trading content that offered flexibility and autonomy.

Entry into Small Cap Trading

The speaker began trading in small caps through resources like Sykes, which focused on OTC stocks and small cap opportunities.

Highlights the prevalence of successful small cap traders featured in podcasts over the past year, indicating a trend within this asset class.

Advantages of Small Cap Trading

Identifies volatility as a key factor for success in small cap trading, allowing traders to scale their investments more effectively.

Discusses capital efficiency; smaller trades can be executed with advanced strategies like pyramiding due to fewer buying power limitations compared to larger caps.

Market Dynamics Post-COVID

Notes an increase in market participation post-COVID, leading to heightened competition but also greater volume and expectations among traders.

Emphasizes that while increased participants can benefit overall market activity, it complicates strategy execution due to competitive pressures.

Strategy Considerations Amidst Competition

The speaker discusses how game theory plays a role in adapting strategies amidst growing competition since 2018.

Reflects on how effective strategies like pyramiding have become challenging due to increased market participants altering traditional dynamics.

Understanding Trading Psychology and Systematic Approaches

The Impact of Market Dynamics on Trading

A small number of traders exiting a position can significantly influence stock prices, highlighting the importance of understanding market players.

Many traders experience failures, with high-risk trading leading to frequent setbacks; this creates a survivorship bias in success stories.

Comparing Pressures: Esports vs. Trading

The speaker finds trading less stressful than esports, emphasizing that trading is not as performance-driven as competitive sports.

A systematic approach to trading reduces emotional turmoil, allowing for more consistent execution without second-guessing.

Transition from Discretionary to Systematic Trading

Initially starting with discretionary trading, the speaker transitioned to systematic methods to mitigate emotional decision-making.

Systematic strategies allow for better analysis of past trades and clearer identification of mistakes compared to discretionary approaches.

Benefits of a Systematic Approach

Having a system provides consistency in performance evaluation; even during low win rates, one can remain calm by adhering to their strategy.

All traders have some form of system; enhancing it can lead to significant improvements in results through better exit strategies or risk management.

Psychological Resilience in Trading

Instead of relying solely on psychology for improvement, developing systems can yield more substantial benefits in trading performance.

The ability to trade effectively under various personal circumstances (e.g., grief or exhaustion) underscores the power of having a reliable system over fluctuating emotions.

Understanding Systematic Trading

The Limitations of Discretionary Trading

The speaker argues that purely discretionary traders may limit their potential, suggesting that a systematic approach could enhance trading effectiveness.

Mentorship from highly successful traders does not guarantee knowledge transfer; the complexity of discretion can hinder effective teaching.

A systematic approach allows for replicable results, making it easier to teach others how to trade effectively.

Knowledge Transfer and Systematic Approaches

The speaker shares personal experience teaching his younger brother to trade, highlighting the efficiency of systematic knowledge transfer.

Successful traders often struggle with conveying nuanced strategies; a structured system simplifies this process and enhances understanding.

Systems allow learners to test strategies independently over time, leading to deeper insights and conclusions.

Profitability Through Data in Systematic Trading

Systematic trading can lead to profitability from day one by relying on data rather than individual intuition or discretion.

Data remains constant regardless of individual performance; however, maintaining an edge requires ongoing analysis and adaptation.

Data Collection Methods in Trading

The speaker identifies as a hybrid trader who combines systematic methods with discretionary elements, emphasizing the need for a framework.

Instead of merely gathering data, he focuses on compiling information visually through charts rather than raw numbers.

Pattern Recognition and Indicators

Daily stock selection involves using scanners and recording patterns through screenshots for later analysis.

To make pattern recognition systematic, the speaker employs indicators and clear conditions (e.g., bar breaks).

While some criticize indicators as lagging tools, they provide valuable historical context for decision-making when coded properly.

Trading Strategies and Execution Insights

Understanding Trading Conditions

The speaker emphasizes the importance of identifying specific trading conditions that can be easily recognized, allowing traders to analyze multiple charts effectively.

Some traders may assign numerical values (1 for yes, 0 for no) to their data to calculate win rates, but the speaker believes that sheer volume of chart analysis is more telling.

Win Rates vs. Profitability

The speaker shares a personal experience with a low win rate (20-35%) yet remains profitable, suggesting that win rate alone does not determine success in trading.

Indicators should provide high expected value or balance win rates with lower expected values; their effectiveness is based on purpose rather than frequency of wins.

Market Participation and Strategy Execution

The excitement of trading popular stocks like GameStop and AMC is highlighted as an opportunity for diverse strategies to converge in one market arena.

Different traders can achieve varying results even with the same system due to differences in execution strategy; the focus should be on how trades are managed rather than just the edge itself.

Key Elements of Execution Strategy

Effective execution involves layering into positions, managing trade size, taking small losses, and having clear exit conditions—these factors outweigh mere pattern recognition.

A trader's performance can significantly differ based on risk management practices; measuring success by risk-to-reward ratios rather than profit-and-loss figures is preferred.

Capital Management and Professional Trading Opportunities

The discussion touches on how liquidity impacts performance; larger capital allows for better scaling opportunities over time.

An introduction to Alpha Prime as a new platform offering professional trading opportunities through live capital access and structured challenges for aspiring traders.

Community Engagement in Small Cap Trading

The speaker reflects on interactions within the small cap trading community, noting shared experiences among traders regarding successes and failures.

Insights from other traders' experiences highlight the learning aspect of trading dynamics, particularly around timing entries and understanding low win rates.

Understanding Risk-to-Reward in Trading

The Concept of Risk-to-Reward

Discussion on the surprising win rates of certain trading figures, emphasizing the importance of understanding risk-to-reward dynamics.

Acknowledgment that a 23:1 risk-to-reward ratio is an outlier, with a note that trades can collapse significantly when they fail.

Execution Strategies

Introduction to a layered execution strategy learned from a friend, which involves using partial stops to enhance risk management.

Explanation of how staggered stops can lower average losses and improve overall risk profiles compared to traditional single stop-loss methods.

Average Losses and Win Rates

Insight into how staggered stops can lead to an average loss below one unit of risk, depending on win rates and trade outcomes.

Emphasis on the significance of maintaining positive skew in trading results by managing average losses effectively.

House vs. Casino Mentality in Trading

Comparison between traders who approach trading like poker versus those who treat it like a casino; preference for the "house" mentality for consistency.

Discussion on simulating expectancy over numerous trades to understand long-term performance metrics better.

Erodicity and Strategy Improvement

Introduction to the concept of erodicity, highlighting its relevance in evaluating trading strategies based on their predictability and consistency.

Suggestion that any strategy can be improved through better understanding and management of averages, including wins and losses.

Advanced Risk Management Techniques

Proposal for increasing position size while staggering stops as a method to enhance potential rewards without proportionally increasing risks.

Clarification that effective risk management allows traders to maximize upside potential while minimizing downside exposure.

Understanding Trading Strategies and Risk Management

The Importance of Averages in Trading

Averages play a crucial role in determining long-term profitability; understanding data and statistics can lead to a mindset where profitability feels inevitable.

This mentality reduces stress during trading, as each trade becomes less significant compared to the overall sequence of trades.

Systematic vs. Discretionary Trading

While the speaker primarily employs systematic trading methods, they still incorporate discretion for managing entries and decisions.

The use of staggered stops enhances risk-reward metrics significantly compared to traditional single stop-loss strategies.

Staggered Stops and Invalidation Points

Partial stops allow traders to define clear invalidation points, which helps manage risk without prematurely exiting potentially profitable trades.

Traders can reassess positions after hitting an initial stop, allowing for re-entry if market conditions improve.

Dynamic Sizing and Trade Management

Many traders fail to consider their invalidation points properly, often leading to suboptimal trade management strategies.

Successful traders may experience multiple losses before achieving a winning trade; this highlights the importance of dynamic sizing based on setup quality rather than fixed rules.

Poker Mindset in Trading

The speaker draws parallels between poker strategy and trading, emphasizing the need for adaptability based on available information while maintaining a structured approach.

Understanding Trading Strategies and Risk Management

Position Sizing and Trade Development

The speaker emphasizes the importance of starting with a small position size when entering trades, as uncertainty is high initially.

As trades develop, the speaker increases position size based on the trade's performance rather than guessing outcomes.

A fixed percentage risk per trade helps manage drawdowns effectively, allowing for simulations of account growth over time.

Geometric Loss and Its Implications

The concept of geometric loss is introduced; it highlights how compounding losses can exponentially increase the required recovery percentage.

For example, a 10% loss requires an 11% gain to break even, while a 50% loss necessitates a 100% gain to recover.

Managing Drawdowns in Trading

The speaker views trading journeys as predestined and focuses on managing drawdowns rather than maximizing individual opportunities.

Liquidity events may present unique opportunities for some traders but are less significant for those building their accounts incrementally.

Psychological Impact of Losses

Taking large losses can be mentally taxing, especially if they significantly impact one's account balance.

The worst-case scenario involves losing a substantial portion of one’s account due to misjudging an opportunity.

Long-term Perspective on Compounding

Emphasizing that drawdown management is crucial; even successful traders can face crippling losses that hinder future growth.

Tax implications from significant losses at year-end can further complicate recovery efforts after poor trading decisions.

Misunderstandings About Compounding Risks

The biggest threat to traders is geometric loss during compounding periods; consistent risk management is essential.

Compounding risks grow daily; thus, maintaining control over drawdowns becomes increasingly important as one scales up trading activities.

Adapting Strategies Over Time

Traders must recognize that strategies may fall out of favor temporarily, leading to unexpected strings of losses.

While sizing down reduces exposure during downturns, it does not eliminate the potential for negative compounding if losses persist.

Understanding Drawdown Management in Trading

Emotional Responses to Losing Streaks

Traders often react emotionally during losing streaks, leading them to reduce their position sizes significantly (by 50%, 100%, or 75%) without understanding the long-term impact on their recovery.

Betting big can sometimes force traders through tough periods, but this approach lacks a systematic strategy for recovery.

Systematic Approaches to Drawdown

A friend employs a strategy using a 20-day Simple Moving Average (SMA) on his P&L; he reduces his position size when his P&L falls below this SMA, allowing him to manage risk effectively.

During a challenging month of losses in small caps, one trader maintained a minimal drawdown by staying "risk off," highlighting the importance of risk management strategies.

The Importance of Market Cycles and Psychology

Understanding market cycles is crucial as conditions can change rapidly; traders must be prepared for quick shifts in market sentiment and participant behavior.

Recognizing the psychology of other market participants helps traders anticipate rapid cycle movements and adjust their strategies accordingly.

Leveraging AI for Trading Insights

Traders can analyze past trading results with AI tools like GPT to identify ways to decrease drawdowns and refine their trading systems based on historical data.

By setting specific parameters (e.g., not exceeding a 30% drawdown), traders can receive tailored feedback from AI about potential strategies that could improve performance.

Developing Personal Trading Systems

One effective system involves taking half of any outlier gains and reserving it instead of reinvesting all profits immediately, which mitigates risks associated with overconfidence after wins.

Analyzing historical data with new systems reveals significant insights into how different approaches could have improved past trading outcomes.

This structured approach emphasizes the importance of emotional control, systematic risk management, understanding market dynamics, leveraging technology for analysis, and developing personalized trading strategies.

Understanding Money Management in Trading

Key Concepts of Money Management

The speaker discusses the importance of adjusting trading strategies, suggesting that a 20-day Simple Moving Average (SMA) may be too long for some traders. Instead, they propose using a five-day rolling sum to assess performance.

A risk management strategy is outlined where if the cumulative performance falls below a negative threshold (e.g., -10), the trader will reduce their position size significantly until a positive day occurs, at which point they can increase their size again.

The speaker emphasizes that while compounding returns from trading might yield better results, it often leads to significant drawdowns (30-50%). They prefer smaller drawdowns with slightly less optimal execution to maintain stability.

Optimizing Trading Performance

The ideal trading outcome is described as "perfect," but human emotions and mistakes complicate this. Traders are encouraged to apply money management techniques to enhance their profit and loss (P&L).

The speaker promotes staying informed about market conditions across various sectors (forex, futures, stocks, crypto), asserting that knowledge leads to profitability. They recommend subscribing to Market Journal for weekly updates.

Tools for Enhanced Trading

An introduction to Trade Zela highlights its role as an essential tool for all types of traders. It automates trade journaling and provides analytics necessary for maintaining a competitive edge.

Trade Zela offers features like backtesting and bar replay capabilities. Discounts are available through specific codes for subscriptions.

Automation vs. Discretion in Trading

A discussion arises regarding the potential automation of trading systems versus maintaining discretion. The speaker believes discretion adds significant value and enhances overall performance.

While acknowledging that automation could yield around 80% effectiveness, the speaker expresses a desire for perfection in trading outcomes and finds motivation in striving for improvement.

Challenges of Automated Systems

Despite having programming resources available, the joy of trading stems from performance rather than purely algorithmic success. There are inherent risks associated with relying solely on automated systems.

The speaker illustrates how understanding nuances allows them to make better decisions than an automated system would—highlighting the need for both technical analysis and fundamental insights in small-cap trading.

Reality of Execution Consistency

Acknowledging imperfections in execution, the speaker reflects on days when trades do not go as planned or mistakes occur despite statistical data guiding decisions.

Understanding Psychological Resilience in Trading

The Impact of Emotional Responses on Trading

Emotional responses can lead to unnecessary drawdowns, affecting a trader's psychological state and decision-making ability.

Competitive nature may either lead to complacency after winning or drive traders to focus more intensely on their performance following losses.

Learning from Losses

Significant growth often comes from losses; the speaker looks forward to adversity as an opportunity for improvement.

Finding solutions after mistakes can be more inspiring than focusing solely on profit and loss (P&L), leading to future positive changes.

Strategies for Managing Risk

Setting a maximum loss limit is crucial; it prevents traders from compounding losses by adding to losing positions.

Many traders blow up their accounts due to emotional decisions, particularly when they add fuel to the fire during downturns.

Maintaining Perspective During Setbacks

A common mantra for the speaker is "it's never as bad as you think it is," which helps maintain perspective during tough trading moments.

Reflecting on past losses shows that they often have minimal impact on overall monthly P&L, allowing for recovery.

Systematizing Behavior and Decision-Making

Establishing points of friction, such as waiting periods before making trades or involving brokers in decision-making, can help prevent impulsive actions.

Creating multiple layers of redundancy in risk management ensures that undesirable outcomes are harder to achieve than desired ones.

Understanding Numbers and Reactions

Pain in trading often stems from a lack of understanding; analyzing setbacks helps develop better reactions for future situations.

Traders must become obsessive about learning from mistakes and ensuring consistent reactions rather than vague promises of improvement.

Trading Insights and Position Sizing

The Importance of Collaboration in Trading

Discusses the significance of collaboration with peers in developing trading strategies, particularly in trade and risk management.

Emphasizes that while independent research is valuable, collaborative thinking enhances understanding and execution.

Fundamental Truths in Trading

Highlights key fundamental concepts in trading such as position sizing, risk management, and execution strategy.

Stresses the importance of optimizing ideas that are fundamentally true to improve trading outcomes.

Position Sizing: A Critical Skill

Argues that mastering position sizing is essential for traders before delving into other aspects of trading.

Shares a personal anecdote about learning to calculate risk per share, which transformed his approach to trading.

Common Mistakes in Risk Management

Illustrates how even successful traders can overlook proper position sizing, leading to missed opportunities for account growth.

Reflects on a trader's experience risking an arbitrary amount rather than calculating appropriate risks based on account size.

Systematizing Trading Approaches

Encourages discretionary traders to begin systematizing their processes by establishing confirmation points for trade sizes.

Suggests using indicators or clear conditions to filter noise from lower time frames when making trades.

Trading Strategies and Time Frames

Understanding Indicators and Time Frames

Utilizing higher time frames for indicators can significantly reduce false signals, enhancing the understanding of win rates.

When trading discretionarily, it's beneficial to split trades into smaller positions or scale in slowly until confirmation is received from a higher time frame.

Backtesting indicators on higher time frames can reveal win rates (e.g., 60% or 50%), providing confidence to adjust position sizes accordingly.

The Importance of Confirmation in Trading

Traders may find themselves taking full-size positions based on indicators during uncertain market conditions, which may not align with their personal assessment of the opportunity.

Confidence in trading decisions can be bolstered by exploring relationships between different time frames and observing how noise is filtered out.

Case Study: Student Success Story

A student improved his trading performance by incorporating a simple indicator for confirmation, leading to better timing and reduced average losses.

The student reported feeling more in control and less reliant on guesswork after applying systematic approaches to his trades.

Backtesting and Trade Development

Traders are encouraged to backtest their strategies over weekends, allowing them to gain confidence before executing live trades.

A key principle is that as traders move to higher time frames, they generally experience higher win rates but lower expected rewards due to longer wait times for signals.

Stock Selection Criteria

The speaker focuses on stocks making significant moves (e.g., large gaps), using mean reversion strategies while analyzing technical components and fundamentals.

Short sellers often have opportunities presented without extensive monitoring; however, they must still combine various factors for effective analysis.

Analyzing Market News and Trader Psychology

Impact of News on Trading Decisions

The speaker discusses the importance of evaluating whether news is impactful enough to warrant significant market movement, noting that not all news leads to substantial changes in stock prices.

Emphasizes understanding the current psychology of traders, particularly in small-cap markets where trader behavior can be more visible and predictable.

Understanding Trader Behavior

Observing other traders' performance can provide insights into their trading strategies and emotional states, which may influence market movements.

The speaker reflects on adapting trading strategies over time due to increasing competition and changing market dynamics, highlighting the need for flexibility.

Systematic Trading Approaches

Introduces the concept of "partial stops," a systematic approach to managing trades that allows for predetermined exit points based on specific criteria rather than emotional reactions.

Critiques common practices among traders who react impulsively to price action, advocating for a more structured framework that focuses on long-term strategy rather than short-term noise.

Technical Analysis Insights

Discusses the limitations of relying solely on level two data or tape reading for making trading decisions; emphasizes chart analysis as a primary tool for identifying entry points.

Shares personal experiences with traditional learning methods in trading, suggesting alternative approaches that focus on practical execution rather than extensive screen time.

Market Dynamics and Trade Selection

Explores factors influencing trade selection such as market capitalization and float size while emphasizing the unique characteristics of small-cap stocks compared to larger companies.

Highlights the importance of capital efficiency when trading small caps, allowing traders with smaller accounts to grow their investments effectively.

Identifying Clean Charts for Trades

Describes preferences for clean charts free from congestion, indicating that clearer patterns are easier to analyze and predict outcomes based on historical data.

Understanding Technical and Fundamental Analysis

The Relationship Between Technical and Fundamental Analysis

The discussion begins with the distinction between technical and fundamental analysis, emphasizing that both can align to provide insights into stock movements.

Clean charts are crucial; if a stock has a history of low volume after dilution, it may indicate higher odds for future price movements.

Short sellers should be cautious of high-volume breakout areas, as these can signal potential upward trends that contradict their positions.

Intraday Trading Strategies

A focus on intraday structure is essential; stocks that collapse do not offer good entry points for building positions.

Traders look for stocks that show consistent upward movement (stairstepping), which allows for larger position sizes due to increased liquidity.

Daily Chart Analysis

Daily chart cleanliness is vital; traders map out significant pivots from previous days to anticipate future price action.

Understanding past trading behavior helps in predicting current market agendas, especially in manipulated stocks.

Data Collection and Backtesting Tools

The speaker discusses the importance of backtesting tools like ThinkorSwim and TradingView for analyzing historical data effectively.

These platforms allow traders to apply ideas across multiple charts quickly, facilitating rapid testing of strategies.

Manual vs. Automated Processes in Trading

While some processes can be automated, the speaker prefers manual methods for tracking changes in trading parameters over time.

Recording daily trades through screenshots aids in developing pattern recognition skills without needing extensive prior knowledge.

Trading Insights: The Importance of Execution

The Role of Edge and Execution in Trading

The speaker emphasizes the significance of having an edge in trading, but highlights that execution is crucial for success. Effective execution differentiates successful traders from others.

A trader can have a 50% win rate and still struggle if their execution is poor, while another with a 30% win rate might achieve greater profits through superior strategy and system utilization.

The discussion points out that recognizing the effectiveness of one's trading system is essential; it can greatly influence overall profitability despite varying win rates.

Conclusion and Call to Action

The conversation wraps up with a reflection on the depth of insights shared, likening it to a master class in systematic and statistical analysis within trading.

Viewers are encouraged to share their biggest takeaways from the episode, indicating the value of community engagement in learning from such discussions.