In Jack D. Schwager's book "Market Wizards," there is a trader who transitioned from a meatpacking company product manager to a trader. After years of hard work, he became the largest individual trader in long-term Treasury futures with a daily trading volume of $2 billion.

His name is Tom Baldwin!

From a Meatpacking Company Manager to the Largest Individual Trader in Long-Term Treasury Bonds

Baldwin had been interested in trading from an early age and had taken some courses related to commodity trading in college. He always wanted to engage in trading, but he lacked the capital to buy a seat on the exchange. After graduation, he went to work at a meatpacking company.

In 1982, when he discovered that he could actually rent a seat for trading, he took on the role of a product manager at the meatpacking company and rented a seat on the Chicago Mercantile Exchange, starting his career in floor trading. Baldwin, who was new to the market, had no trading experience at that time, and his principal was only $25,000. He also had to pay a monthly rent of $2,000 for renting the exchange seat, in addition to at least $1,000 for living expenses each month.

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Despite this, Baldwin was not a cautious trader. His proactive and adventurous trading style was one of the key elements of his trading success. Initially, Baldwin learned and accumulated experience by observing every trade in the market. "I would stand in the trading hall all day, observing market dynamics and developing my own views on the market. If my views were later confirmed to be correct, it was worth it even if I didn't engage in trading. At the same time, when trading, I could decide my next move based on the current market behavior and past observations."

Baldwin believes that market behavior is both the market trend and the trading techniques of traders - "Market trends will repeat themselves, and market players will also repeat the same actions."

Through continuous learning and effort, Baldwin made a profit in the early stage of floor trading. Before the first year of floor trading was over, he became a millionaire through trading, and through years of successful trading, Baldwin made a profit of over $30 million.

At his peak, Baldwin often traded contracts worth up to $200 million in a single transaction, and he usually traded about $2 billion in government bonds a day, making him the largest individual trader in the long-term Treasury futures market, with a trading scale that could compete with the main institutional players in the market.Tom Baldwin's Trading Philosophy

1. Minimize Risk as Much as Possible

Baldwin demands to take as much as he can in each trade. The difference between each buy and sell might be just a little, or even only one tick, but he does not insist on it. In his view, it is necessary to judge according to the market conditions. If you have a good position in hand, you should try to maximize its potential. For larger positions, Baldwin will take profit after four ticks between each buy and sell. He insists on keeping the holding time of each position as short as possible. - Sometimes it is only a few seconds.

The purpose of doing this is to minimize risk as much as possible.

2. Never Suffer from Anxiety and Fear of Loss

Among those who have been engaged in pit trading for 5 years, only about 20% have not been eliminated, and among them, only about 1% can earn more than 1 million US dollars.

Baldwin believes that the difference between this 1% of pit traders and the other 99% is mainly whether they work hard or not, that is, whether their willpower is strong enough.

In addition, in this industry, you must put aside concerns about money, which means you cannot trade for the sake of money.

Not suffering from anxiety and fear of loss is the key to Baldwin's success, and this is also one of the main conditions he thinks he can succeed. At the same time, he believes that if you want to achieve success, you need to be diligent and persistent enough, and losers are definitely not working hard enough.

3. Wait Patiently for the Right Time to ExitFacing losses, Baldwin chooses to step back and observe more often. He is always waiting for the most appropriate time to exit. This is one of the main features of his trading style. "Do not lightly give up on any trade. Many traders, when faced with losses, rush to exit because their initial training is to stop losses as soon as possible. However, if they endure a little longer, even just a few minutes, perhaps the position that could only be sold at $7 can be sold at $10."

If people are willing to endure the pain of losses a bit longer, the results may actually be better, but some people always give up too quickly. In some trades, if you persist a little longer, the scale of losses will be reduced as a result.

This is a viewpoint put forward by Baldwin, which seems to go against tradition on the surface. He points out: when trading at a loss, do not rush to exit, be patient, wait a little longer, and choose the most advantageous time to exit.

4. Stay sober when trading

The main reason why some traders cannot succeed is that their self-esteem is too strong and they are unwilling to accept the opinions of others. Baldwin's success is due to the fact that he is not too self-centered or arrogant.

For Baldwin, whether a trader is successful or not, staying sober in mind is essential when handling each trade.