#1 EPIC Hack That Will Transform Your TRADING Profits
James Tilstead, a former bank trader, presents a money-management technique: use percent-based position sizing (risk a fixed percentage of account per trade) instead of fixed lot sizes. He uses an anecdote and numeric examples to show how percent sizing compounds gains in winning streaks, reduces losses in losing streaks, prevents account blowout, and can dramatically increase returns; he also introduces the Kelly Criterion as a mathematically optimal (but higher-volatility) percent to risk. The video ends with a call-to-action to view more content and subscribe.
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This epic yet incredibly simple hack can easily double or triple your trading profits and make losing your account impossible. It's simple to apply, works with every system on every time frame. And the richest, most successful traders are all doing this. I'm going to show you step by step how to apply it to your trading today. And if you watch to the end, I'll show you an advanced variation that can explode your returns exponentially. My name is James Tilstead. I'm a former bank trader with over 20 years experience in forex and I mentor traders like you to become profitable so far with 100% success. So let's jump in. Years ago, I was on a yacht with a wealthy entrepreneur and I bet him $50,000 I could improve his system with this strategy. He wasn't a professional or full time trader as such, he used to run an online brokerage among many other ventures and had copied this system from one of the successful traders on his platform. So there we were, on a floating palace off the coast of Italy, enjoying the luxuries from his many business successes. I looked through his trading stats, turned to him. I told him he was making a schoolboy error that maximized his losses and minimized his profits. Letting winners learn and cutting losses short is one of the best known concepts in trading. You've probably heard of it. He was cutting his winners short and letting the losers run. What am I talking about? His profit to loss ratio was three to one. Well, he asked the same question, but I'll come back and explain that in a moment. Moment. I knew what I was about to show him would make him millions, so he wouldn't mind parting with some money going to a good cause. So I made a bet that if I could prove in the next five minutes that he was cutting his winners and letting the losers run and show him how to turn that around. To double his returns, he would donate $50,000 to a local children's charity. He agreed and we were on. I knew he occasionally enjoyed going to the casino, so I used Oulet to make the point. When he was at the Fingers Monte Carlo Casino with $1,000 and the minimum bet at the table is $100, he would be risking 10% of his bankroll. But the same size bet gets increasingly bigger proportionally after each loss on the winning side. The bet gets proportionally smaller after each win. Fixed chip values with minimum bets are one of the many tactics casinos use to snap the odds against you in trade in when you use the same lot size for every trade, you're doing the same thing to yourself. If you risk $500 per trade, the losses get bigger due in a losing streak, proportional to the account balance due in a winning streak, your profits are getting proportionally smaller and smaller. Even though his individual trades were correct, the system overall was letting losers run and cutting profits short. The opposite of what traders should be doing. I was halfway to winning my bag. I'd shown him what he was doing wrong. Now I needed to show him the solution. The problem is, the solution is so simple and easy to implement, I was worried he wouldn't take it seriously. And I wanted him to donate $50,000. So I needed to blow his mind. So I went straight to the results. His system made 150% return that year. With one change, it would increase to 346%. If that doesn't impress you much over five years, it's the difference between making 750% or. Or 177,000. That sounds ridiculous, right? Well, look at the dollar amounts. His system would make $75,000 starting with a $10,000 account. Implementing my change would increase that to 17 million. This is the same system, same entry exit, same stop loss and profit targets. But the staggering profits are only half of it. There's something else that's even more impressive, especially for newer traders who are still learning. And I'll come back and explain that in just a moment. First, let me quickly show you what to change. Instead of entering each position with a fixed lot size, you enter with a fixed percentage. So rather than risk $500 per trade, you risk 5%. Look at what this does to your account during a winning streak. Assuming a simple one to one reward to risk ratio, after every wing, the dollar amount won gets bigger and bigger. After just 10 winning trades, you're making an extra $275 per wing compared to the fixed lot size model. After 15 trades, your wings are twice the size, even though the system hasn't changed. This is the definition of maximizing profits during a winning streak. It's compound growth, something Einstein called the eighth wonder of the world. And what can take a $10,000 account to over 17 million in only five years? And this is it at its lowest setting. Before the end of the video, I'm going to show you how another small adjustment will skyrocket the returns. And put this on steroids. But before that, let me show you perhaps the best part about this technique. After every loss, the next dollar amount lost gets smaller and smaller. When using a fixed lot model. In this example, after 20 losses, your account is at zero. But with a percent model, you've still got money to trade. In fact, with a percent model, it's impossible to take your account to zero. You will always have something left because you are never risking everything. That's the difference between ultimate success and failure for traders who are still learning. When you're learning, experience is what builds knowledge and skill. Your account must survive long enough to get through the learning phase. If you want your account out too quickly, you can't stay in the game to gain enough experience. So using the percent model, you guarantee you will always have enough money to keep going for as long as it takes. Showing him these results was enough to win my bet. I'd proven in less than five minutes that by simply using a percent based money management on each position, my wealthy friend, and indeed anyone else, including you, could transform results by reducing losses and increasing profit without making any other changes to the actual system. So he was ready to write a check for $50,000 to a children's charity. But I had one extra thing that I wanted to show him that would take this to the next level. I want to show you the same thing. Now, most traders sensibly risk no more than 1% per trade. If my client had risked 1%, he would take his system from 150% to 346% in a single year. But that's actually very conservative. And if you have a small account you want to push to make as much money as possible as quickly as possible, there is a mathematically optimal position size that will do that while still protecting you from the loss. In my client's case, his optimal position size was 6.5% per trade. If he'd used that number, his account would have gone from 150% to 1.46 million percent. The power of compounding is utterly absurd. I'm not saying that's possible in the long term, because in trading you would reach a plateau for the amount you can trade, both literally in the market as well as psychologically, but nevertheless in the short term, up to a point where this is the mathematically optimal strategy that will give you the absolute biggest returns while still being safe. It's called the Kelly Criterion, and you can search for websites that have the calculator for free. If you know your expectancy per trade, in other words, you know your edge from your win rate and profit to loss ratio, the Kelly formula will tell you the optimum signs to risk per trade for your system. If you go above that level, you will wipe out your account. Even if you have a profitable system, it is possible to over bet and turn a winning system into a loser. But as long as you stay on or below that level, you will remain safe. You will not blow your account. And the closer to the optimal level you get, the bigger your returns will be. You will have a more volatile equity curve with bigger swings from your lows to highs, but it will maximize your profits. I'm not suggesting going to the max is sensible, but I wanted to show you what is possible using a purely mathematical formula. If you were looking for a shortcut and you wanted to be aggressive. So now you know the easiest and one of the most powerful hacks to improve your trading. But there are five critical factors your system must have if you want to make money, and money management is only one of them. If you want to find out what the others are, click the link on the screen now to watch my other video that explains everything. And if you've enjoyed this video, consider subscribing to the channel or visit my website to find out how I can guarantee your profitability and success.
