Best Loser Wins by Tom Hougaard stands as one of our favourite trading psychology books at Phantom Trading. Often referred to as the modern “Trading In The Zone”, this book brought something truly revolutionary to the table when it comes to trading. Even better, Tom Hougaard is a verified high-stakes trader who often trades live, demonstrating his trading psychology teachings in real-time.

In this book review, we’re going to go over some of our favourite concepts the book has to offer at a very high level, but fair warning, this isn’t meant to be a substitute for reading this amazing book yourself! We’re not trying to distribute Tom Hougaard’s hard work online for free, so again we urge you to pick up a copy at your local brick-and-mortar bookstore, or buy it online! You can find Tom’s one and only official website here:

Also, we should mention that we have absolutely no affiliation or relationship with Tom, we’re just going to give you an unbiased review of the book.

Common Misconceptions and Thinking When It Comes To Trading

Early in the book, Tom dispels several common myths and misconceptions about trading and the way that people think about trading which most people (and even beginner traders) may hold as beliefs. This immediately helps put any preconceived notions that may impede your progress as a trader to bed. 

These misconceptions about trading, and the way to think as a professional trader can often come up as mental barriers or pitfalls that will crop up and make your journey to consistent profitability harder than it needs to be.

Again, we won’t go into specifics, but in our opinion, this is the first step to shifting your mindset and building a good foundation for your trading psychology when you start trading before you develop bad habits. Not to say you can’t untrain bad habits or shift your beliefs, but it can be harder to do that if you’ve spent time already and truly believe these myths that may be holding you back mentally.

Developing a Strong and Adaptive Mindset

As we get further through the book, Tom goes on to explain the importance of developing a strong mindset. Much like that Bear Grylls meme. We want to “Improvise. Adapt. Overcome.”

There is something to be said about training ourselves through things like exposure therapy. Trading is a deeply emotional game, and we can really only develop a strong and adaptive mindset by putting in the hours and building experience in the live market with real money on the line.

It’s one thing to backtest or demo trade to learn your trading strategy and develop the technical skills, but it’s another thing to actually get your emotions involved, and there is no substitute to training your trading psychology than actually trading in a live market, and putting real money on the line.

Fear, Greed, and Being Drunk on Emotions

Tom goes on to explain the role of common emotions such as fear, greed, and what happens if you try to trade while tilted on them. He also explains and demonstrates how fear and greed can acftually be used in a positive way, hence the reason we didn’t just refer to them as “negative emotions”. 

Fear and greed can in fact be powerful tools when it comes to trading. Most people think that being scared and being overly greedy can hurt someone’s proftiabiltiy and consistency as a trader, and they’d be right (in some cases). But again, a healthy amount of fear, and a bit of greed in the right situations can actually be a positive thing, and have a positive effect on your trading. 

This in and of itself has to be one of the most interesting things that Tom brings up in the book, and we can tell you for a fact that in our experience, this take on fear and greed ring true.

Trading Systems

As a trader, the choice between a low average risk-to-reward ratio (+R) with a high strike rate and a high average R with a low strike rate can greatly influence a your profitability and consistency. A low average R coupled with a high strike rate often leads to more frequent, but smaller, gains. This system is particularly beneficial for maintaining steady account growth and reducing psychological stress, as traders experience wins more regularly. 

Conversely, a system with a high average R and a low strike rate typically involves less frequent, but larger, wins. While this can lead to significant profits, it requires a higher tolerance for risk and patience, as losses can appear more substantial before the eventual profitable trades occur.

Tom goes on to explain how both systems are viable options when developing and trading your system, including an example of a friend who trades a high R, low strike rate system. Tom on the other hard opts for a much lower average R and higher strike rate system as shown in his daily live trading calls within his free telegram channel.

How Reading Best Loser Wins Can Benefit You As A Trader

Reading Tom Hougaard’s “Best Loser Wins” is an absolute game-changer if you’re looking for a good quality trade psychology book that isn’t Trading in the Zone by Mark Douglas. This book will take you on a deep dive into the psychological pitfalls that most traders struggle with, and where managing losses isn’t just recommended—it’s essential. Tom, with his wealth of experience as a broker for almost a decade, and his experience with trading, argues that learning to lose well can paradoxically lead to greater profitability. Imagine reshaping your view on losses, seeing them as stepping stones rather than setbacks.

Best Loser Wins doesn’t just theorize but offers actionable strategies to help you embrace and learn from each loss. It’s about becoming the ‘best loser,’ where you handle setbacks so efficiently that they pave the way to your eventual victories. Plus, Tom’s advice on setting realistic goals and building mental resilience can radically shift how you handle the pressures of trading. In essence, “Best Loser Wins” equips you with the tools to enhance your decision-making process, urging you to adopt habits that lead to sustainable success in the volatile trading market, and thats why we at Phantom Trading recommend it!

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Robert Castillo
FX Trader & Analyst
Writer & Editor

Rob is a funded trader from Toronto, Canada, and has been trading currencies, commodities, stocks, and cryptocurrencies for over 7 years. Outside of trading, he enjoys making music, boxing, and riding motorcycles.