Tom Basso: Learn from a Market Wizard

Get ready to dive into the thrilling world of the legendary trader and American hedge fund manager Tom Basso, A.K.A. Mr. Serenity! As the founder and president of Trendstat Capital Management, Basso has earned his place among the “Market Wizards” in Jack Schwager’s iconic interviews. With multiple books under his belt and an admirable attitude about trading, Basso’s story is a must-know for anyone looking to level up their trading game.

In this post, we’ll explore Tom Basso’s life, trading strategies, and outstanding contributions to the industry. First, we’ll delve into Basso’s background and awe-inspiring accomplishments, giving you a taste of what propelled him to become an esteemed hedge fund manager. Then, we’ll unravel his innovative trading strategies, arming you with insights to sharpen your trading prowess.

So, prepare to learn from one of the best and watch your trading skills soar to new heights!

Early Life and Education

From humble beginnings to renowned trader, Tom Basso’s journey is nothing short of inspiring. Raised in a family that cherished education and hard work, Tom’s father instilled a deep love for math and statistics. As a young boy, Tom was captivated by the power of numbers to solve problems and make predictions.

At just 12 years old, Tom Basso worked as a paper boy and started investing his earnings into a mutual fund- talk about a responsible kid!

Tom’s passion for math flourished in high school, where he discovered a budding interest in investing. His math teacher recognized Tom’s talent and urged him to delve into the finance world. Under this teacher’s guidance, Tom learned about stocks, bonds, and other investment vehicles, igniting a fire within him to harness his mathematical prowess for building wealth.

Eager to expand his knowledge, Tom Basso attended Clarkson University, studying chemical engineering and business. Here, he met Dr. Van K. Tharp, a professor who would profoundly impact his life and career. Dr. Tharp introduced Tom to the exciting world of trading and the crucial concept of risk management. This revelation transformed Tom’s perspective, realizing that trading wasn’t just about making money but also about managing risk and preserving capital.

Career and Achievements

From Engineer to Trading Wizard: The Early Career of Tom Basso

After graduating, Basso embarked on a career as a chemical engineer for Monsanto Company. Initially, trading was just a hobby for Tom Basso!

He only dabbled in making trades part-time while engineering, but his market success quickly revealed his natural talent. Eventually, he took the audacious leap to leave his chemical engineering job and chase his trading dreams full-time.

In 1980, Basso became a registered investment advisor to teach traders about the stock market and how to manage their own portfolios. Then, in 1984, Tom Basso elevated his trading obsession to new heights when he founded Trendstat Capital Management—this pivotal moment in his career allowed him to zero in on developing his trading strategies and managing money for clients.

Over the years, Basso sharpened his skills and gained a reputation for his unwavering discipline in trading, which propelled him to achieve consistent returns for himself and others.

The Growth Story: From Zero to $600 Million

So what is Trendstat Capital Management? Trendstat Capital Management was an advisory firm specializing in futures and options trading. According to interviews, Basso always viewed Trendstat as more of a data processing company than a traditional trading firm.

Trendstat Capital Management’s meteoric rise to success was no overnight sensation. It took years of relentless dedication, tireless effort, and a never-ending appetite for learning to propel Basso’s firm to greatness. The company was unique for its time, as it automated long-term trend following strategies.

At its zenith, Trendstat Capital Management boasted a staggering $600 million in assets under management, cementing its status as one of the most triumphant trading firms of its era. This awe-inspiring growth can be traced back to Basso’s unwavering devotion to his clients and insatiable quest for trading mastery.

So, are you ready to unlock the trading wisdom of a true market legend and find out how he did it? Let’s dive into Tom Basso’s powerful trading philosophy that has made him so successful!

Ride the Waves of Market Trends

Tom Basso firmly believes in harnessing the power of market trends to achieve consistent profits. He knows that markets ebb and flow in cycles, and by identifying and riding these trends, you can dramatically boost your chances of success.

In an interview on the Chat with Traders YouTube Channel, Basso reveals that trend-following has always appealed to him due to its long-term nature and mathematical basis.

Diversify Like a Pro

Basso stresses the crucial role of diversification in trading. He masterfully spreads his trades across various markets and time frames to minimize risk and maximize returns. This savvy approach helps him avoid putting all his eggs in one basket, ensuring a resilient portfolio.

Systematic Trading for Unwavering Discipline

Basso’s trading approach is fiercely systematic when analyzing market conditions, following a strict set of rules and guidelines for every trade. This unwavering discipline helps him sidestep impulsive decisions driven by emotions, which often spell disaster for traders.

Risk Management Mastery

Risk management sits at the heart of Basso’s trading philosophy. He employs volatility-adjusted position sizing to expertly manage risk. By adjusting the size of his trades based on market volatility, he avoids unnecessary risk exposure, keeping his portfolio safe and sound.

Get Your Trading Psychology in Check

Tom Basso knows that the right mindset and ironclad discipline are the secret ingredients for consistent trading returns. He continuously evaluates and fine-tunes his trading and investment strategy to stay ahead of market trends, ensuring his success endures.

In fact, Basso tells traders to view trading (and life!) as a movie, allowing you to stay emotionally detached and better adapt to unexpected changes. 

But what truly sets Tom Basso apart is his ability to maintain a balanced life. A voracious reader, Tom’s interests span from psychology to history. He also enjoys making his own wine and engaging in sports like golf, tennis, and skiing.

This equilibrium has allowed Tom to keep a clear and focused mind, undoubtedly contributing to his positive attitude and success in trading. In fact, Basso tells traders to design their trading approaches to fit their lifestyles rather than letting trading dictate their lives. You won’t become too emotionally attached to the markets if you have a balanced lifestyle with multiple interests.

Major Achievements and Recognitions

It’s no shocker that Tom Basso has garnered accolades for his trading endeavors!

His achievements even caught the eye of the legendary Jack Schwager, a celebrated author in the trading realm. Schwager featured Basso in his must-read book, “The New Market Wizards,” where he interviewed the cream of the crop in trading to spill their secrets and strategies. But Schwager reveals it wasn’t just Basso’s solid track record that grabbed his attention; Basso’s infectious enthusiasm and upbeat attitude about trading sealed the deal.

But the recognition doesn’t stop there – Tom Basso was also elected to the board of the prestigious National Futures Association (NFA), a self-regulatory powerhouse for the U.S. derivatives industry. As a board member, Tom Basso played a pivotal role in shaping the future of trading, crafting rules and regulations that would change the game.

And the praise keeps on coming! Futures Magazine recognized Basso’s extraordinary trading chops and dubbed him one of the top 100 traders of the century. This elite list features trading legends like Paul Tudor Jones, George Soros, and Richard Dennis. Joining this exclusive club is a testament to Basso’s undeniable trading talent and industry clout.

But wait, there’s more! Basso’s achievements have also earned him a well-deserved spot in the Trader Hall of Fame, as recognized by Trader Monthly magazine. This honor is reserved for the crème de la crème in the trading world. Basso’s induction is a crystal-clear indication of his remarkable success and lasting impact on the industry.

Contributions and Legacy

Tom Basso has generously shared his vast knowledge and hard-won experience with aspiring traders for years.

The Trading Whisperer: How Tom Basso Shares His Knowledge with Traders

Tom Basso has penned several must-read books for traders, including “Panic-Proof Investing,” “Why and How Successful Traders Size Their Positions,” and “The All-Weather Trader.” These literary gems tackle essential trader education topics like trading psychology, risk management, self-improvement, performance evaluation, and system development.

But that’s not all! Tom Basso has also shared his trading insights through engaging podcasts and interviews. For instance, in a candid conversation with Jack Schwager, Basso reveals that he sees every loss as a golden opportunity to learn and grow. He stresses the importance of evaluating your trading performance regularly and setting realistic goals to level up your skills.

Tom has also authored numerous articles on trading, offering deep insights and top-notch advice to new and experienced traders. In many of his pieces, Basso emphasizes the critical role that mindset plays in trading success. He advises traders to cultivate a resilient mental attitude and to focus on the process rather than obsessing over outcomes.

Last but not least, Tom Basso is a social media maestro, using platforms like Twitter to share his thoughts, insights, and advice with the trading community. Though Basso is now retired from being a money manager, he continues to make trades and engage with other traders, answering questions and offering guidance on various topics.

If you’re interested in staying up-to-date with Tom Basso’s trading insights, you can find him on Twitter by searching for his handle, @basso_tom, or at Tom’s Website, EnjoytheRide.World.

Tom Basso: A Humble, Honest Influence on Traders

Tom Basso has inspired and influenced countless traders with his humble, honest, and generous attitude. His approach to trading and life has resonated with many, earning him the nickname Mr. Serenity and turning him into a role model and mentor for traders worldwide.

In fact, some of the most well-known and successful traders have openly acknowledged Tom Basso as a significant influence on their careers. These traders include:

  • Ed Seykota: A pioneer in systematic trading, Seykota has credited Basso for his insights and wisdom in the trading world.
  • Van Tharp: A renowned trading coach and author, Tharp has often mentioned Tom Basso as a source of inspiration for his work.
  • Michael Covel: The author of “Trend Following” and host of the Trend Following podcast, Covel has interviewed Basso multiple times and considers him a mentor.
  • Meb Faber: A successful quantitative investor and author, Faber has praised Basso’s approach to trading and life on his podcast, “The Meb Faber Show.”
  • Jerry Parker: A trend-following trader and former student of Richard Dennis, Parker has expressed admiration for Basso’s humility and generosity.

Quite a list if I do say so myself.


In conclusion, Tom Basso is a true market wizard whose success in trading is a testament to his positive attitude and systematic approach. Throughout his career, Basso has remained steadfast in his commitment to trend-following, risk control, and psychology, enabling him to achieve remarkable market results.

We hope that our discussion of Basso’s background and trading philosophies has been informative and inspiring and has given you a deeper appreciation of the art of trading.

If you’re eager to absorb more wisdom from Tom Basso, we wholeheartedly recommend delving into his books, tuning in to his podcasts, and following him on social media. Basso’s treasure trove of knowledge and experience is invaluable, and we’re confident that anyone with a passion for trading can reap the rewards of his insights.

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