How to Build a Trend Following System | Interview with Tom Basso | Hedge Fund Manager

Welcome Back to the Market Chat Podcast. For this episode we have a very special guest Tom Basso. Tom is an extremely experienced trader with decades worth of trades under his belt. He was featured in New Market Wizards by Jack Schwager and Trend Following Mindset by Michael Covel.

He was the founder and President of Trendstat Capital Management where he developed effective trend following systems which produced extremely consistent returns over many market cycles.

In this interview we cover many different topics including mindset, how to build a trend following system, position sizing, and his methods for trading multiple markets.

Enjoy!

-Richard

►Connect with Tom

►Book Recommendations

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Timestamps:

0:00 Introduction
0:30 Tom's background, Learning to Trade, Running the Trendstat Fund
0:34 How to you develop a trend-following system
4:14 Early mistakes Tom made during his career
10:16 Position Sizing Tips.
12:00 Advice for traders who struggle mentally with with taking losses
19:00 What is it like trading so many different markets
23:04 How does Tom handle Market Corrections
29:07 Why Tom focuses on Price action above all else
42:50 How to make sure a strategy is not biased to a particular time period
49:35 Performance Metrics Tom's uses when back-testing a Strategy
1:03:15 Tom's Daily Trading Routine
1:05:10 Tom's Recommended Books for New Traders
1:07:15 Advice for New Traders
1:10:45 How To reach out to Tom

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Disclaimer
The content of this video is for educational purposes only and should not be taken as a suggestion to buy or sell anything

[shaunsam]

Brilliant interveiw. What a humble man. Could listen to him all day

[andrewlau]

his point about the 10MA/50MA crossing as a simple strategy that mathematically works was eye opening. never thought about it that way

[RichardMoglen]

Welcome back! For this episode we have a very special guest Tom Basso. Tom is an extremely experienced trader with decades worth of trades under his belt. He was featured in New Market Wizards by Jack Schwager and Trend Following Mindset by Michael Covel.

He was the founder and President of Trendstat Capital Management where he developed effective trend following systems which produced extremely consistent returns over many market cycles.

In this interview we cover many different topics including mindset, how to build a trend following system, position sizing, and his methods for trading multiple markets.

Enjoy!

[RichardMoglen]

Timestamps:

0:00 Introduction
0:30 Tom's background, Learning to Trade, Running the Trendstat Fund
0:34 How to you develop a trend-following system
4:14 Early mistakes Tom made during his career
10:16 Position Sizing Tips.
12:00 Advice for traders who struggle mentally with with taking losses
19:00 What is it like trading so many different markets
23:04 How does Tom handle Market Corrections
29:07 Why Tom focuses on Price action above all else
42:50 How to make sure a strategy is not biased to a particular time period
49:35 Performance Metrics Tom's uses when back-testing a Strategy
1:03:15 Tom's Daily Trading Routine
1:05:10 Tom's Recommended Books for New Traders
1:07:15 Advice for New Traders
1:10:45 How To reach out to Tom

[J_International]

Tom is OG. Such an incredible depth of knowledge that stands the test of time. I really like what he said about the Sortino Ratio and asymmetric risk. I have a saying: People are picky about what price they pay (for stocks) but will sell at any price. It's true downside volatility is not the same as upside -- thus many indicators don't give you the whole picture.

It's amazing even with so much evolution in markets and technology how much of what he said applies. I love how relaxed he is at this point in his life. That is the end game all traders should seek. Not thrills or being blued to a screen all day, but a life of low stress and time to do what you want without really any worry about the markets at all. Thank you again for these incredible interviews.

[gsingh]

Thank you Tom and Richard for sharing some gold with us! Look forward to seeing and hearing Tom at the MTP 2021. Have a good weekend all and enjoy the fight 🥊

[gkrishna]

Getting to listen to these market wizards wisdom is very difficult. You make it very simple... So, thanks a lot for that.. keep doing it Richard....!🎉❤❤❤❤❤

[neildonaldson]

Great work Richard and crew. Great to feel part of an enlightened investment community.

[ahmad-hzpp]

One of the best interviews about trading

[falconsooner]

Richard....you are the gift that keeps on giving! I love the different styles of traders you have on your show. Your channel has reenergized my trading

[ranger]

Great interview. Laurens Bensdorp's 2nd book "Automated Stock Trading Systems" is a real gem towards truly understanding benefits from diversification of trading system approaches. Some excellent graphical illustrations. Tom Basso's books are a very good also.

[NorwayRedMaple]

FYI - Automated Stock Trading Systems: A Systematic Approach for Traders to Make Money in Bull, Bear and Sideways Markets by Laurens Bensdorp. Richard, I too am an engineer and I love your interviews! Always insightful.

[ankurperiwal]

There is so much to learn just from these traders experiences. Thanks for the great content! :)

[VictorVelez-pe]

One of my favorite interviews you’ve done so far Richard. I do like your interviews Richard, a lot. They are so helpful.

[buildusrs]

Thank you, Richard. Of the countless YouTube videos I have watched I would rate this one at the top. Your questions were great, the links you have posted are very helpful and overall this was a great and very much appreciated video. I am looking forward to watching other interviews you have done and hopefully will be doing. THANKS!

[GregsExploring]

Richard: You have a skill for extracting very valuable information from the extremly accomplished traders you interview...thank you, I am responsible for at least half a dozen of the views of each of your videos.

[Least_Resistance]

Richard, just want to say thank you for the great interview! You are the nowadays Jack Schwager. As a guy attracted by macro and discretionary trading, I find this fascinating and eye-opening.

[riccardoronco]

Always a pleasure to listen from you, Tom

[bimalthakkar]

Best interview so far, Richard! You have great ability to adapt to the personality of the guest. Keep up the good work!

[realpristinecap]

One of my favorite interviews you’ve done so far Richard👊