Tom Basso, Wizard of Serenity

Tom Basso interview

Tom Basso was another trader interviewed by Jack Schwager in his book The New Market Wizards.

This interview was an unexpected one but ended up being Schwager´s favorite.

Basso was not the typical Wall Street guy who had worked in the pit, but a retail trader from home who lost money his first five years of trading, before becoming profitable.

Tom Basso Market Wizard

He said some interesting things like:

I realized that every time I had a loss, I needed to learn something from the experience and view the loss as tuition at the College of Trading. As long as you learn something from the experience and view the loss as tuition at the College of Trading.

That is true. It does not matter how many trading courses you do. It does not matter if you spend 20.000 € on a master about financial markets. Until you bet and lose in the markets, you do not learn.

I did some market “master” by losing big time, and they were very good lessons. Well, it does not mean that everybody has to lose a lot of money to learn. On the contrary, you should learn and invest little when you start so when you lose you will lose small.

If you start and lose 70 or 100 % of your capital is worse than losing 10 %.

It is a matter of both having confidence and being comfortable in the approach you are using. For example, if I gave you my exact system, I am sure that within a month you would be making changes to fit your own ideas.

Human nature is so creative that despite being master of copying others we are so different that two of us will tend to do different solutions.

Some people using the same system will finally have various results.

Only those who buy systems or signals and apply them in the same manner than the rest will have the same result. But, buying trading signals is something a bit dangerous sometimes.

Actually, I briefly toyed with the idea of retirement several years ago. My wife asked, “What would you do if you retired?”

“Well, I would set up my computers and quote screen at the house,” I answered. “I would do some trading and spend most of the time on research developing new systems.”

..My wife listened patiently and said, “That sounds exactly like what you are doing right now”

When someone reaches that point in life, it is impossible to not think about trading. By that time, you do trading because you like to do it, and because you like action.

My intuitive feelings about the markets are probably right more often than they are wrong. However having observed myself as I do, I notice that sometimes the trading signals that I am intuitively most nervous about turn out to be the best trades.

Well, once we have a reliable system or our own system (maybe we think it is reliable, but it is no), we should not break the rules and trade according to them. If we break those rules, we will most probably regret. Do not let emotions affect you.

The most important factor for Basso was psychology; that is why he is so concerned about his serene and emotionless approach.