JadeCap on scaling up risk and reinvesting his prop firm payouts

0:0080% of retail traders are probably putting all of their liquidity into trading and that increases the level of pressure that you have. So by the time I got to the CFD proper space, I was already making really good money and I was focusing on my career because that was the one thing that was paying the bills. So over time I started making more and more. Um and I I was in a comfortable position enough to take the risk on prop firms. Um but again I still didn't have the capital.

0:25So when I looked at CFD prop firms, it was leverage. That's what I was looking for. I was looking for the leverage. I was looking for the capped downside. So if I lost an account, it wasn't like I was losing $20,000. But at the time, I was buying 200k FTO accounts and you had a 10% draw down. So when I saw that, you know, my eyes lit up.

0:44I was like, this is like the jump start that I really needed. So because I had already had 10 years of experience going into the space, I was able to manage the risk effectively because I had already been through so many ups and downs in my trading career that I had the basic foundations. So there are different ways that you get into the space.

1:03Either you're brand new and you don't know how to trade and you go into the prop space and you're using it as an educational tool or you have a skill set where you can, you know, leverage that in the prop space. Uh, I think both are beneficial, but where it gets really hard for people is that they're spending money that they can't afford to lose, and that's a dangerous side of the trading space. Um, so, you know, all that experience had led up to some really big payouts.

1:30And I think delayed gratification is a big reason why I'm in the position I am today, because I wasn't just going out and spending the first large payout that I got. You know, I wasn't buying a watch. I didn't uh have a nice fancy car. I took all that money and just kept reinvesting it into my trading business and reinvesting it into my trading business until I got to the point where, okay, I have way more than I need. You know, I I can buy things three, four times over.

1:56Now, I can enjoy the money a little bit. So, I know that there's a lot of young guys that are getting into the training space right now. And the first thing they do, you I see it so many times. I see a young kid going out and buying the supercar when I know they probably didn't get financing for that because the supercar game when you're trying to buy something like that, you don't have any history.

2:15Like that's your first car, you're going to have to put down 50 to 75%. Okay, even for me, I have good credit. I have multiple properties. Like my first supercar purchase that I had, I had a hard time with financing because they were like, "This is the biggest auto loan that you've had." Right? So my previous auto loan was 80K. I'm trying to get financed for 200k. I have to put down a lot more. And as a young person, as uh somebody that's trying to build a wealth and not just be like a flash in the pan success, you have to take that money and be be wise with it because you don't want to just pay for things that you can't afford.

2:51Your trading performance goes down the drain and then all of a sudden you're in a tough position where you can't make it work. So that's kind of been my whole journey is I've always put off buying something or doing something with the money and just focused on trading, right? and use the payouts to roll into more accounts and get more funding and more capital and build up my emergency fund so I can afford to buy more more accounts and take the risk that's kind of required to hit some of those big payouts because I'll be honest the the run at Apex a lot of people won't be able to do that because they see the money and they're like you know they they're kind of like a deer in headlights they can't fathom or they can't they don't have the threshold the risk threshold the comfortability with large amounts to risk.

3:27So, when they see that money, even though it's not in your account yet, they're panicking. So, you have to build your way up. I didn't just get here overnight, right? Like, I wasn't comfortable risking $20,000, $40,000 a a trade instantly. I started out with 10 bucks, you know, five, 15, $25 per trade. And I'm sure you probably started out the same way. Yeah. I I always like to think of risk management. I I use a lot of analogies and compare trading to health and fitness because I think they have a lot of overlap.

4:05You can't rush the process and either of you go to the gym, you can't squat 300 pounds if you've never squatted before. 100%. Right. I So, I use the same thing. I talk about it in terms of bench press. I say if your goal is to bench press 100 kg and you've never done it before, most people are better off just bench pressing the bar. Yeah. 100%. 100%. Or squatting with the bar. Air squats. You get make sure you get good depth. Yeah. like you know take it as slow as possible.

4:30The thing that I like about that idea is that even after 3 6 12 months in the game you may have perfect form you may have increased in weight that what you were lifting before but it doesn't mean you can instantly then go from you know 50 kg to 100 kg you still have to have that progressive overload I went through those problems because I was the trader that tried to scale up too fast. I tried I was going from $50 positions and I'd have a big win like $300, $500 and then instantly go to $250 risk without realizing I don't have the mental edge to be seeing the P&L fluctuate that much.

5:05And it's that comfort zone that you're always pushing as a trader. You know, when you hit a certain level, you know, look at a guy like Umar Ashro. Do you think he got there overnight risking that size? It doesn't happen overnight. And you have to like slowly or at least plan a way to scale up. So, you know, if you're trading at a specific size, say, I'm going to trade one micro contract for the next 3 months.

5:31And if I can't stick with the to that specific size, then I have a discipline issue, which I really had to do that. I really had to work on that because my position sizing was inconsistent. And that is a big part of trading is knowing how to position properly, knowing what size to take uh when your A+ setup appears, and knowing when to back off when you don't feel as confident.

5:52Yeah, I I often find that some of the most difficult advice to give to a trader, which is you're risking too much. You need to size down. And I always get the same response back, which is, well, if I size down, then when I win, I'm not going to make as much money as I would like. And the question I always say is, are you making as much money as you would like now?

6:10Because you make some and then you give it back and you end up in the same cycle all over again. Yeah. Well, trading is not, you know, and it's a it really is a paradox. Trading is not about money. Trading is about following a prop pro process. So, if you can't follow a process on the smallest size, you are not going to be able to follow that process on a larger size.

6:27And that's just point blank period. If if you can't manage thousand dollars in your bank account, what makes you think you're going to be able to manage 10,000 or h 100,000 and I've had to learn that along my journey as well because I was never good with money. I was when I was younger, I was spending my money as soon as I got it like buying clothes, going out and just I don't know doing stupid things with it. Um you have to learn how to manage it properly and that takes time as well and some people's relationship with money is just poor.

6:53Yeah. One one thing that you said on the topic of managing money is you talked a lot about delayed gratification. Yeah. Is that something that you feel like you always had or was that something that you had to forcefully instill into yourself? I had to forcefully instill it. I think it was it was probably my mid to late 20s. Um right around the same time I got engaged. Uh I really had to try and learn how to save money and not go out and spend.

7:23So I think one of the biggest things was I wasn't traveling internationally. like a lot of my friends, I could I would see them go on vacations and everything and I basically just stayed home to try and save for my wedding and save for a down payment on a house. And uh I had to learn how to budget properly because yeah, I think when I was younger going back to me spending all my money very quickly is because I wanted instant gratification.

7:45So it was always instant gratification, instant gratification. But it was hurting me long term and that was just, you know, instant gratification is just it's a short-term mindset. Instagram reels, YouTube shorts, instant gratification. Yeah. Trading in general, people want instant gratification, right? They want they want the strategy that's going to make them profitable tomorrow, right? Not 3 months from now, not a year from now.

8:11They want something that works right now. Yeah. And everybody was, you know, even for for me, I was searching for the light bulb moment. And you know, everybody always comes up to me and asks me, "When was it when your trading clicked?" And I would say, "I can't tell you." And most traders can't tell you because it's a gradual process. It's like you unlock one door and there's another door. Yeah. Right. So you you learn something about yourself or your strategy, your system, and you're like, "Ah, that's an aha moment."

8:39And then there's another door that's has another secret behind it. I I resonate with this a lot because I think especially in my first few years where I never took this game seriously, I had that feeling as well. I thought that at some point it would get easy. I would understand the market and then the market would just become this kind of ATM that you could just print money whenever you like. And I I think the hardest part is understanding that, you know, sometimes you're going to do everything right and you're still going to suck.

9:06Exactly. That can last for periods of time. And it's it's difficult to explain to someone, especially people that are maybe don't have too much experience in the game or don't understand trading entirely, but when they ask for that moment where it's like, where did it click or when did you become profitable? And I I try and explain like it's not a switch you flick. Like even when you're profitable, you'll still go through patches where you lose money. Exactly. So, it's like how do you differentiate between the two?

9:31Like, how do you figure out this is a profitable trader that's just going through a streak of losing money and this is someone that is not making any money at all? Yeah. How how would you split the difference between those two? Well, I think you kind of just just said it like the seasoned veteran traders know that there's that trading is streaky.

9:49They know that they go through rough patches. And the interesting thing is being around some of these more seasoned guys. And I still hear that they have tilt days. I still hear that they're struggling and I still hear that they are trying to, you know, I think trading you learn something new about yourself almost every single day. Yeah. And that's kind of what the um I would say the facade of trading is on social media.

10:13It's like everybody gets lured into it, right, for the easy fast money and they don't realize like how hard and difficult it is at times. And it's not like it goes away. It doesn't go away. You go through a rough pit. Like right now the markets are chopping sideways on me and it's very very frustrating. Like I I take the trades that I know I'm supposed to take and they just don't work.

10:33M but I think it's okay, right? It's still frustrating. I'm doing what I'm supposed to be doing. I'm following my plan, but I still get I still lose money. That is what you have to deal with as a professional trader is that you go through streaks. It's not it's not, you know, everything's fine and dandy all the time. Um, and I think most traders when they first come into the game, they have this unrealistic expectation that again like what what you mentioned that there's this switch that they can just flip on and off and you can't do