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Mastering Futures: Insights From A 50-year Trading Veteran
Manage episode 466494645 series 3561204
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In this episode, host Dan sits down with Tom, a former chemical engineer turned $600m futures trader, to discuss his unique journey into the world of finance. Tom shares insights from his early life, highlighting his analytical background and passion for math and science. He reflects on his hardworking upbringing, which included delivering newspapers and investing in mutual funds at a young age. After earning his degree in chemical engineering from Clarkson University, Tom navigated the realities of the economy and eventually transitioned into trading. Tune in to hear Tom's story and gain valuable perspectives on how an analytical mindset can influence success in the trading world.
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00:00:00 - Introduction and Early Life 00:00:39 - Guest Introduction: Tom's Background 00:01:08 - Tom's Early Analytical Interests 00:02:03 - College and Early Career 00:02:14 - Economic Realities and Financial Planning 00:02:46 - Minimalist Lifestyle and Early Investments 00:03:19 - Introduction to Stock Market 00:03:42 - Realization About Price Action 00:04:45 - Becoming a Trend Follower 00:05:08 - Technical Analysis and Charting 00:05:25 - Using Charts Over Tape 00:05:56 - Profound Realization About Charts 00:07:10 - Trend Following Philosophy 00:08:05 - Importance of Catching Big Moves 00:09:42 - Missing a Big Trade 00:10:23 - Commitment to Never Missing a Trade 00:12:06 - Support from Family 00:12:24 - Wife's Role in Supporting Trading 00:14:22 - Transition to Futures Trading 00:14:47 - Risks in Stock Market vs. Futures 00:15:53 - Tax Advantages of Futures 00:17:06 - Tax Straddles and IRS Rules 00:18:02 - Margin and Leverage in Futures 00:19:08 - Shorting Stocks vs. Futures 00:20:00 - Learning Curve in Futures Trading 00:20:21 - Diversification in Futures Markets 00:21:05 - Benefits of Diversification 00:23:07 - Advertisement Break 00:24:10 - Focus on S&P 500 Futures 00:24:42 - Challenges and Learning in Trading 00:25:05 - Struggles in Early Trading Years 00:26:08 - Learning from Losses 00:26:40 - Influence of Larry Height 00:27:02 - Importance of Bet Size 00:28:05 - Risk Management and Position Sizing 00:29:20 - Finding the Optimal Bet Size 00:30:23 - Book on Position Sizing 00:31:02 - Book Details and Availability 00:32:18 - Automation in Trading 00:32:29 - Leveraging Time with Technology 00:33:23 - Automating Trading Processes 00:34:06 - Example of Manual Data Entry 00:35:56 - TrendsStat Overview 00:36:07 - Success and Retirement 00:37:08 - Memorable Trades 00:37:22 - Japanese Yen Trade 00:38:38 - Importance of Catching Every Trade 00:39:36 - 80-20 Principle in Trading 00:39:47 - Mindset and Routine 00:40:14 - Balanced and Agnostic Approach 00:41:09 - Observing Market Movements 00:42:03 - Developing and Executing Strategies 00:43:12 - Emotional Detachment in Trading 00:44:10 - Importance of Flawless Execution 00:44:58 - Ideal Bet Sizing 00:45:15 - Variability in Bet Sizing 00:46:09 - Personal Bet Sizing Strategy 00:47:02 - Client Risk Tolerance 00:48:18 - Stability in Client Portfolios 00:48:45 - Contrarian Trading During COVID 00:49:06 - Shorting Crude Oil During COVID
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