EP 043: Buying stocks in uptrends, managing risk, and tips for long term survival w/ Jon Boorman

Aaron Fifield Podcast 3 Comments


This week we’re at episode 43 and my guest is Jon Boorman (of Alpha Capture).

Jon has been immersed in the world of trading for over 30 years now, and has spent the majority of this time in the institutional space – he’s been on the buy-side, sell-side, run a trading desk, assistant to a portfolio manager, and has also been a prop trader. But now days Jon trades independently and does also manages assets for others.

His approach to trading is best described as a long-only trend following strategy, which we discuss extensively during this episode. Some of the topics we hit on include; why the simplicity of trend following can be both, a gift and a curse, why Jon trades the long-side only and how this affects him in a full fledged bear market.

Plus, Jon shares a few pointers on position sizing, and his best tips for long term survival. Jon was an interesting guest, and shared a lot of wisdom – I feel like you’re really going to enjoy our discussion.

For your chance to WIN a free 90 minute, one-on-one mentoring session with a genuine, pro trader – click here to enter.

“Stick to the process and the outcome will follow, it’s about having small incremental steps that bring about big change.”

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“I buy stocks in uptrends and manage risk.”

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Lessons learnt in this interview:

  • Jon walks us through his journey on the institutional side of trading – and what it was like to set up a trading desk in London, for one of the firms he worked with during this time.
  • After taking the leap to trade independently, Jon shares the reinvention process he went through and why he began to question his beliefs about markets (and more specifically, the indicators he’d previously relied on).
  • The difference between having passion and enjoyment for trading, verse the want for excitement (which is a red flag). Jon sums this up by saying, “If you really want some kind of excitement or ego gratification, the market is not a good place to find it.”
  • Why the simplicity of trend following can be both, a gift and a curse. Jon explains this as one of the main reasons why traders can find it challenging to stick with the approach.
  • Jon shares an example of how he may use a fundamental theme to influence his decisions to buy into a trend, but ultimately price is the determining factor.
  • Why Jon chooses to trade the long side only, and how this affects him in a full fledged bear market – his outlook on this topic may challenge your own beliefs, and what you’ve previously heard or been taught.
  • Insight to how Jon manages position sizing during times of great performance and poor performance. Plus a few pointers on position sizing for traders with smaller accounts, that need to be highly cautious and aware of transaction costs.
  • Jon’s tips for long term survival, and why you should set goals that are process oriented and not outcome oriented.
  • Plus, much more…

Links and resources mentioned:

  • Enter Giveaway – Enter this giveaway for your chance to WIN a free 90 minute, one-on-one coaching session with a genuine, pro trader. There will be 3 winners, best of luck to you!
  • How to Find a Trading Style That Suits Your Personality – Here’s a link to the blog post on Jon’s site, which he references; reading this will help to identify the trading style that best fits you.
  • The Mental Edge in Trading, by Jason Williams – Jon mentions this book does a fantastic job outlining the importance of your psychological profile, and how it affects your trading.
  • Trade Your Way to Financial Freedom, by Van Tharp – This book helped Jon to discover his ideal timeframe and methodology. And really benefited from the way Van fleshes out components of a trading system, and optimal position sizing.

  • Trend Following, by Michael Covel – Like Jon says, this book is an obvious choice for anyone who is keen to learn more about the in’s and out’s of trend following.
  • Stocks on the Move, by Andreas Cleanow – Another book highly recommend by Jon, this one gives you insight to how you can beat the market with hedge fund momentum strategies.
  • JonBoorman.com – This is Jon’s personal blog where you can find everything he’s written over the last few years (in a very transparent way).
  • Alpha Capture – Jon’s subscription service on Benzinga’s Marketfy; Actionable trade ideas combining trend following and momentum strategies with disciplined risk management and position sizing.
  • @JBoorman – Be sure to follow Jon on Twitter, he’s always happy to answer questions and help out.
  • @JBoorman – And you can also follow him on StockTwits, where he uses the same handle.

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