Tom Basso - Investing Is A Mental Game More Than It Is Having The Perfect Indicator Or…Even The Perfect Position Sizing | #244
In episode 244 we welcome our guest, long time trader and trend follower, Tom Basso. In today’s episode, we’re talking trend following and trading. We start with some of Tom’s early trades, cutting his teeth on corn futures, and, as a disciplined trend follower, going through hell before a silver futures trade was in the books for a nice gain. We discuss power laws and outliers, and his finding that it sometimes came down to a handful of trades that made the difference between profit and breaking even, or even losing money for the year.
Key Points
- Investors often focus on buy and sell decisions, but position sizing is a critical component of trading that can significantly impact overall performance and risk management.
- Trend following strategies can capture large market moves and are robust over time, with a few key trades often making the difference between profit and breaking even, or even losing money for the year.
- Diversifying not only across assets but also across multiple trading strategies can create a more stable and resilient investment portfolio, akin to the pistons in an engine working together to propel a car forward.
Resources: The New Market Wizards: Conversations with America’s Top Traders (Schwager) Successful Traders Size Their Positions – Why and How? (Basso) The Capitalism Distribution (Longboard) Option Selling Funds (Faber) Panic-Proof Investing: Lessons in Profitable Investing from a Market Wizard (Basso) Rob Arnott on The Meb Faber Show in September 2016 Automated Stock Trading Systems: A Systematic Approach for Traders to Make Money in Bull, Bear and Sideways Markets (Bensdorp)
Chapters
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| 33:09 | |
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| 44:44 | |
| 51:34 | |
| 58:13 | |
| 1:01:06 |
Transcript
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