Fear(less) log Nr 7 - Tom Basso.

TOM BASSO. (April 21, 2023)

Hi Everyone

New format!

The Fear(less) log is evolving.

I believe the last 6 Episodes of the Fear(less) log provided a solid base on the questions of why we experience fear, where it comes from, and what to do about it. We even went that far to answer the question of why some traders are thinking about death when putting on a trade…

Anyway, from now on we are planning to publish a series of short interviews (based on a questionnaire) with hand-selected, successful traders to show how THEY deal with fear while trading. 

Think of it as something along the lines of Jack Schwager's Market Wizards, but with a super-zoomed focus on FEAR.

This will give the readers a first-hand account of the professionals and their struggle, something we all should be able to learn from.

Mr. Serenity

Tom Basso

And let's just dive right into it with none other than Tom Basso, named and featured as Mr. Serenity in Jack Schwager's New Market Wizards book. He also just released a book that will keep you turning the pages on trading and his All-Weather Strategy.  Amazon link for his book is here.

To prevent any misunderstanding of what Tom said, I have copied and pasted his responses to our questions 1:1.

My honest (unbiased) view about this exercise? I think we are lucky to have experienced traders like Tom to tell their part of the story. In short, I think It is pure gold 🧈🧈🧈

👇👇👇

When did you first become aware of fear while trading? Was there a particular trade or situation that triggered it?

“My first corn trade. I had no idea what I was doing or how I quickly lost 600 dollars on a $2,000 account. I was afraid of losing more than the $2,000 and wasn't sure how to understand what had happened. I set out to understand all the math, set stops losses, manage risk and by default push fear away from trading.”

What specific fears did you experience while trading? How did they manifest? The most common fears include fear of losing money, fear of being wrong, fear of losing out on the dream, fear of not being respected, fear of keeping up with expectations, or just fear of losing.

“Mine was fear of losing money and not being able to continue. I have no problem with being “wrong”, because, the way I look at it, it is a statistical game we play as traders, so a percent are going to be losers and others will be gainers, so over the next 1,000 trades, there will be some of both. I have no expectations in trading, so no fear there either.”

How did you initially deal with those fears? Did you try any specific techniques or methods?

“I worked hard to understand the math better surrounding futures and made sure I had it under control, then I computerized that math.”

Did you seek out mentoring or support to help you deal with your fears? If so, what kind of support did you receive?

"No, in the 70's there weren't "mentors" floating around out there in the trading industry."

Were there any resources (books, courses, etc.) that helped you better understand and cope with your fears while trading? If so, which ones?

“Mark Douglas had a few great books that I read early on. Van K Tharp had some courses that target the psychology of trading as well.”

Have you ever paid attention to your body signals, such as heart rate, while trading? If so, how did you use this information to manage your fear?

"I have noticed that when stressed, I get tension in my fingers. by keeping my fingers loose and flexible, I change mental states and become less stressed."

Are you now fear-free while trading, or do you still experience fear from time to time? If you still experience fear, how do you manage it? Does it motivate you, or do you try to eliminate it altogether?

"After these many years of trading, putting on one more trade is as easy as taking one more breath. Now fear-free."

What advice would you give to someone who is experiencing fear while trading? Is there anything you wish you had known when you first started dealing with fear in trading?

"Concentrate on the process and let the results be what they may."

Did we miss anything? Use this space for anything you think would be important but hasn't been addressed by the questions above. If there is nothing left to say just leave it blank :) Thank you!

"Fear is just one aspect of psychology issues that might affect traders. Greed, excitement, stress, impulsiveness and other conditions can easily throw a trader off track."

Final Word

Many things to take from here, from getting to understand the math and probability behind trading, to the re-occurring Mark Douglas theme, concentrating on the process and being aware of other impulses that can throw you off. 

What stuck with me is that for Tom, taking one more trade is as easy as taking one more breath. Once you are at that level, trading is indeed a fearless exercise…something we @ Traderistic want to help with.

Thanks again to Tom for sharing his insights. He can be found on Twitter @basso_tom and on his site https://enjoytherideworld.odoo.com/

Have no fear!

Chris