"The biggest lie in trading is that your competition is Goldman Sachs or Citadel or some PhD team at a hedge fund. Your real competition is yourself, your discipline, your psychology, your process."

Ryan Scott (Horse) on X: "You Can Make a Fortune Trading - Don't Let Anyone Tell You Otherwise" / X


There's this pervasive narrative in trading circles that retail discretionary traders are dead. The quants will tell you you're fighting against PhDs with infinite compute power, HFT firms with sub-millisecond execution, and market makers with information asymmetry you'll never overcome. They'll say the game is rigged, the edge is gone, and you're just donating money to smarter players.

It's complete nonsense.

Let me tell you about Takashi Kotegaw, but first let me start with a line from a movie called “The Edge” with Anthony Hopkins and Alec Baldwin
- "What one man can do, another can do"

In 2000, Kotegawa was a 27-year-old working at a temp agency in Japan. He took 1.6 million yen (roughly $13,600) and started day trading Japanese small-cap stocks from his bedroom. No institutional backing, no proprietary data feeds, no team of analysts. Just him, a computer, and a willingness to put in the work.
By 2008, he had turned that $13,600 into $153 million.

Not through some magic algorithm. Not through insider information. Through pattern recognition, risk management, and relentless focus on execution. He traded the same markets everyone else had access to. He just did it better.

His most famous trade: In 2005, during a massive market selloff triggered by an erroneous sell order (the "Mizuho Securities incident"), while everyone else was panicking, Kotegawa bought aggressively. He made $20 million in a single day. The same opportunity was available to every other trader in Japan. He was the one who took it.

The Quant Argument is a Cop-Out

Yes, markets are more efficient than they were 20 years ago. Yes, algorithmic trading has changed market structure. Yes, you're competing against sophisticated players.

So what?

The idea that because smart people with resources exist, you can't win, is intellectual laziness. It's the same logic that says you shouldn't start a business because corporations exist, or you shouldn't compete in sports because professionals exist.

Here's what the quants won't tell you: Edge isn't monolithic. You're not competing on the same timeframe as a market maker hedging inventory every 100 milliseconds. You're not trying to stat-arb the same relationships a Renaissance Technologies algorithm is exploiting. You do not need to play the same games There was an analogy given a few weeks ago comparing retail traders to a pee wee football player trying to compete in the NFL. The author probably thought this was a slam dunk argument. It's not.

Here's why it falls apart: In football, you're on the same field, at the same time, competing for the same ball, against opponents who are bigger, faster, stronger, and more experienced than you in every measurable way. The pee wee player has zero advantages. They're just going to get destroyed.

Trading isn't like that at all.

You're not on the same field as DRW. You're not competing for the same opportunities. A market maker scalping bid-ask s p r e a d s every 50 milliseconds isn't taking all your trades. A stat-arb fund exploiting micro-inefficiencies in derivatives pricing isn't your competition. A macro hedge fund deploying $500 million into a currency position over three months isn't fighting you for your entry.

You're all in the same market, but you're playing completely different games.

The pee wee player trying to tackle an NFL linebacker has no advantages. But you, the retail trader? You actually have structural advantages that institutions would kill for:
* You can enter and exit positions without moving the market. A fund deploying $50 million can't touch half the opportunities you can. Your $50k position is invisible. Theirs shows up on every screen on every desk.
* You can change your mind in five minutes. They need committee meetings, risk approvals, and compliance sign-offs. You see something not working? You're out. They're stuck in bureaucracy.
* You can trade crypto at 2am, pivot to small-cap momentum stocks at open, and swing trade a tech name into earnings, all in the same week. Try getting that past an institutional risk manager.
* You can put 20% of your book into a single high-conviction idea. They're diversifying across 150 positions because their mandate requires it, even when 140 of those positions are mediocre.

The football analogy assumes direct physical competition where size and strength dominate. Trading is pattern recognition, risk management, and execution. A 150-pound person can be a world-class surgeon, poker player, or chess champion because those games don't require physicality. Trading is the same.

You're not trying to out-muscle institutions. You're finding inefficiencies at your scale that they can't or won't exploit, and you're executing on them with advantages they don't have.

The pee wee football player has no path to victory. You do. The analogy is lazy thinking from people who don't understand the actual dynamics of market structure.
The game isn't "can retail beat institutions at their own game." The game is "can you find edges that exist at your scale and execute them consistently."
Success Requires Being in the Top %, That's Not a Bug. It's a Feature.

Of course most traders fail. Most people fail at anything worth doing.
Most restaurants fail. Most startups fail. Most aspiring professional athletes don't make it. Most musicians never make a living from their craft. Success in any competitive field requires being in the top percentage of participants. That's not unique to trading, that's how reality works.

The path being hard is a given. If it were easy, the edge would be arbitraged away instantly.

But "hard" doesn't mean impossible. It means you need to be better than most, not better than everyone. You need to develop skills others won't, put in time others won't, and maintain discipline others won't.

Kotegawa didn't succeed because he had superhuman abilities. He succeeded because he was willing to do what others weren't. He studied price action obsessively. He managed risk religiously. He stayed focused when others were distracted. He took the trade when others were scared. Do you know how many other examples there are of people who did the same? Fucking countless. Naturally, some responses to this will be “Sure, survivorship!” – Yeah no shit, aren’t we somewhat responsible for our own survival? Or is luck everything? Come on.

The Reality: You're Competing Against Yourself

The biggest lie in trading is that your competition is Goldman Sachs or Citadel or some PhD team at a hedge fund. Your real competition is yourself, your discipline, your psychology, your process.

Can you follow your rules when you're down? Can you cut losers quickly? Can you let winners run? Can you stay patient during drawdowns? Can you avoid revenge trading? Can you size positions correctly?

These aren't algorithmic problems. These are human problems. And humans have been solving them for decades.

The opportunities still exist. They're just in different places than they used to be. Market dislocations still happen. Momentum still exists. Mean reversion still works. Volatility expansion and contraction still creates edges. News still moves markets inefficiently.

The game hasn't changed as much as people claim. What's changed is that lazy strategies don't work anymore. But thoughtful, disciplined, well-executed strategies? They work just fine.

Bottom Line

If someone tells you retail traders can't make it, ask them why Takashi Kotegawa exists. Ask them why dozens of documented cases of discretionary traders building eight-figure accounts from five-figure starting points exist.

The path is hard. It should be hard. That's what keeps the lazy and undisciplined out.

But don't confuse "hard" with "impossible." Don't let people who've never done it tell you it can't be done. And definitely don't let someone who failed convince you that you will too.

The opportunities are there. The question is whether you're willing to develop the skills, put in the time, and maintain the discipline required to capture them.
Most people aren't. That's why most people fail.

Be in the percentage that doesn't.