How to Trade Like The Manager Of a Hedgefund - Blackswan Fx

How to Trade Like The Manager Of a Hedgefund

The disparity between a professional hedge fund manager and an aspiring trader lies only in the account balance and self-discipline. Top money managers embarked on a comparable journey to master the art of trading, refine their approach, and develop emotional control. The ability to regulate emotions and behavior is the most significant factor distinguishing pros from amateurs. While anyone can gain the confidence to trade, the key to success is treating each transaction as a dispassionate execution of their edge. Trading for multi-million or billion-dollar hedge funds necessitates mental and emotional fortitude. Only those who possess complete control over their minds and actions can effectively trade large sums and cater to high-net-worth clients.

It’s just zero’s…

To succeed in trading, it’s essential to alter your perception of the money in your trading account. Professional hedge fund traders view their accounts as scoreboards, keeping track of their performance in a global game. The account balance is simply digits on a screen, and the more zeros after the first couple of digits, the better their progress. Managing a billion-dollar position requires the same mindset as managing a $1,000 position – remembering it’s all just zeros. Feeling the power of money can lead to emotional decision-making, which is detrimental to success.

The only weapon for small retail traders is not allowing emotions to interfere with their trading decisions. This can be achieved by avoiding trading with funds that cannot be lost, knowing overall net worth, limiting the risk per trade to a small percentage of liquid funds, and using the “sleep test” to gauge comfort with a position. Adopting a hedge fund manager’s mindset regarding money is the final step. Hedge fund managers need self-discipline to generate above-average returns for their clients, and personal trading is no different.

How do they do it?

By viewing the money in a trading account as mere numbers, traders with large accounts can eliminate emotional trading decisions. Those who have transitioned from demo accounts to real accounts and experienced losses have likely allowed the money to control them, rather than controlling their thoughts about it. By adhering to the aforementioned four points and recognizing the account balance as mere digits on a screen, traders can regain power over their trading and ultimately achieve success. This may sound cliché, but from personal experience, it is a fact that one’s perception of the money in their trading account directly impacts their trading success.

Whether you think you can or you can’t, you’re correct

A trader’s mindset is a critical factor that affects their trading performance. Whether you believe you can or can’t become a successful trader, you’re probably right. To achieve success, you must convince yourself that you can and truly believe it.

In trading, it’s important to act as if you’re already successful because it’s the only way to remain disciplined and consistent in your approach. For instance, do you believe a hedge fund manager or a trader with a million-dollar account spends their days day trading in front of screens?

No, and here’s why…

Experienced traders understand that day-trading is challenging and stressful due to the limited high-probability signals available each week. Hedge-fund traders benefit from their extensive research and access to information that retail traders lack. Rather than relying on simplistic technical indicators, they take a macro view of events and analyze price action to identify opportunities. As a retail trader, you can utilize price action to gain insight into the activities of hedge funds, and combine this with disciplined trading and consistent self-control. This is the essential recipe for success in retail trading, and it is a strategy that has been proven effective.

Where does the phrase “fake it ’til you make it” fit in? Simple…

To succeed as a smaller retail trader, it’s essential to trade with the same level of mastery and consistency as hedge-fund managers handle their large accounts. Rather than seeking a high volume of trades, focus on the quality of each one, waiting patiently for ideal setups to emerge. By leveraging price action and exercising strong self-discipline, a smaller account can gradually grow. This process requires the persistence to fake it until you make it, starting with a $1,000 account and gradually increasing the size of each trade over time. With consistent effort and successful results, even a small account can eventually yield significant returns.

Let me be completely honest with you for a moment…
Most traders fail because they do not understand this simple principle…

Trading a small account successfully over a significant period of time is a prerequisite to trading a larger account successfully, rendering account size irrelevant.

What matters instead is:
1. Your ability to trade with discipline
2. Your ability to trade with consistency
3. having mastered a simple yet highly effective trading method such as price action.
4. Daily chart and end of day trading, low-frequency trading
5. Sound money management


Achieving the dream of trading successfully and earning a good income is entirely possible. The mental aspect of trading is crucial, and our trading course focuses not only on analyzing price charts and trade entry but also on developing the right mindset and emotional control. Professional hedge-fund managers understand that the entry is not the hardest part of trading – it’s the ability to handle the feelings and thoughts that come with it.

Trading and investing are our life-force, and my purpose is to share our experiences with aspiring traders to help them achieve the same freedom and happiness that we have. By changing how you think about the money in your trading account and taking control of your emotions and behavior, you can achieve success and live the life you want.

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