030: Tom Basso – The Logic of Trend Following, and How to Improve Your Trader Psychology w/ a Market Wizard

Tom Basso, former president of TrendStat, shares insights on trend following, systematic trading, and the psychology of trading. Basso emphasizes the importance of process engineering, bringing in data, processing it, and shipping information out efficiently. He recounts early trading struggles, losing money for several years before achieving profitability, and highlights a pivotal moment involving the Hunt corner on silver, which led to the development of volatility controls. Basso stresses that psychology is the most critical aspect of trading, even in automated systems, and encourages traders to design strategies that fit their lifestyles, capital, and expertise. He advocates taking responsibility for all aspects of life and trading, viewing life like a movie to remain detached and enjoy the ride.