Diary Of A Trader Podcast

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 Life00:00:39 - Guest Introduction: Tom's Background00:01:08 - Tom's Early Analytical Interests00:02:03 - College and Early Career00:02:14 - Economic Realities and Financial Planning00:02:46 - Minimalist Lifestyle and Early Investments00:03:19 - Introduction to Stock Market00:03:42 - Realization About Price Action00:04:45 - Becoming a Trend Follower00:05:08 - Technical Analysis and Charting00:05:25 - Using Charts Over Tape00:05:56 - Profound Realization About Charts00:07:10 - Trend Following Philosophy00:08:05 - Importance of Catching Big Moves00:09:42 - Missing a Big Trade00:10:23 - Commitment to Never Missing a Trade00:12:06 - Support from Family00:12:24 - Wife's Role in Supporting Trading00:14:22 - Transition to Futures Trading00:14:47 - Risks in Stock Market vs. Futures00:15:53 - Tax Advantages of Futures00:17:06 - Tax Straddles and IRS Rules00:18:02 - Margin and Leverage in Futures00:19:08 - Shorting Stocks vs. Futures00:20:00 - Learning Curve in Futures Trading00:20:21 - Diversification in Futures Markets00:21:05 - Benefits of Diversification00:23:07 - Advertisement Break00:24:10 - Focus on S&P 500 Futures00:24:42 - Challenges and Learning in Trading00:25:05 - Struggles in Early Trading Years00:26:08 - Learning from Losses00:26:40 - Influence of Larry Height00:27:02 - Importance of Bet Size00:28:05 - Risk Management and Position Sizing00:29:20 - Finding the Optimal Bet Size00:30:23 - Book on Position Sizing00:31:02 - Book Details and Availability00:32:18 - Automation in Trading00:32:29 - Leveraging Time with Technology00:33:23 - Automating Trading Processes00:34:06 - Example of Manual Data Entry00:35:56 - TrendsStat Overview00:36:07 - Success and Retirement00:37:08 - Memorable Trades00:37:22 - Japanese Yen Trade00:38:38 - Importance of Catching Every Trade00:39:36 - 80-20 Principle in Trading00:39:47 - Mindset and Routine00:40:14 - Balanced and Agnostic Approach00:41:09 - Observing Market Movements00:42:03 - Developing and Executing Strategies00:43:12 - Emotional Detachment in Trading00:44:10 - Importance of Flawless Execution00:44:58 - Ideal Bet Sizing00:45:15 - Variability in Bet Sizing00:46:09 - Personal Bet Sizing Strategy00:47:02 - Client Risk Tolerance00:48:18 - Stability in Client Portfolios00:48:45 - Contrarian Trading During COVID00:49:06 - Shorting Crude Oil During COVID