Episode 003 – Tom Basso

Make Money In All Markets

In this exclusive podcast interview, Leo sits down with legendary trader Tom Basso, known as “Mr. Serenity” for his unique approach to risk management. Discover how Tom started trading, his journey from chemical engineer to hedge fund manager, and the importance of understanding risk, diversification, and customizing trading strategies to achieve success in the markets.

Key Takeaways

  1. Attack risk – Risk will find you. Have a plan in place before it does.
  2. Markets getting faster – You need to increase your risk accordingly.
  3. Be all weather – Have a diverse set of strategies, each with its own objective.
  4. Fill the potholes – Create strategies to attack your drawdowns.
  5. Overlay futures on equity – Cover an equal amount of futures with your equity value.
  6. Move towards simplicity – Unfetter yourself from degrees of restriction.

Time Stamps

  • [0:00] Introduction
  • [1:10] How Tom got started
  • [3:16] Broaden your definition of risk
  • [8:28] How are the markets changing?
  • [15:00] Thoughts on discretionary vs. systematic trading
  • [21:00] Evolution to an all-weather trader
  • [30:11] Getting started in futures trading
  • [35:20] Tom’s trading timeframes
  • [41:12] Free yourself from degrees of restriction
  • [45:23] Tom on his latest book: The All-Weather Trader


I started thinking about risk in terms of there are lots of different forms of it, I can’t hide from it because it’ll find me just like it found my dad, but wouldn’t it make more sense to attack the risk? [3:23]

Tom Basso [3:23]

 I always say the buy and hold investors are still traders. They still end up buying and selling, they just do it over lots of years. And the same principles in trading apply to whether you’re day trading, doing it over six weeks, three months, it’s the same thing – you still to buy, you still have to sell, you have to manage your risk, size your position, analyze how the position affects your portfolio … 

Tom Basso [6:22]

You’ve got to design what you’re doing around you.

Tom Basso [40:20]


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