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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