Ever wondered how to conquer the stock market, make thousands of trades, and cash in millions?
Meet Tom Sosnoff, one of the most successful traders of our time, who’s cracked the code on how to trade like a pro.
Tom Sosnoff Youtube Interviews
As the founder of Thinkorswim and Tastytrade, which he sold for a combined total of $1.8 billion, Tom is a legend in the trading world.
But what’s his secret?
His strategy is about mastering the basics, sticking to probabilities, and always being ready to take risks. But there’s more to it, and in this article, I’m going to share some of his biggest secrets and game-changing insights.
If you’ve ever been curious about how top traders like Tom Sosnoff think, this one’s for you.
Tom Sosnoff Trading Strategies
1. Trading Isn’t About Being Right
Let’s start with a reality check.
Tom flat-out says, “Nobody ever knows anything for sure.” Yep, even the best traders don’t have magical powers. What sets them apart is how they prepare for uncertainty.
The idea is simple: don’t try to outguess the market; just be ready for whatever it throws at you. Tom doesn’t obsess over technical or fundamental analysis but instead focuses on managing probabilities.
He revealed that he trades between 75 and 100 positions daily and makes 18,000 trades a year.
That’s right — while most of us are grappling with a handful of trades, Tom is playing the numbers game. He’s not trying to hit a home run with every trade but ensuring he has enough skin to let probabilities work in his favor.
One of his key methods?
Implied volatility. He builds his trades around it, using 45-day time frames for most of his positions.
This approach allows him to adjust trades frequently and react to changes in market conditions quickly.
2. Size Matters
If you’ve ever wondered how professional traders stay in the game long-term, here’s a crucial tip from Tom: stay small.
“The only thing that kills you in this business is size,” he warns.
While most traders are tempted to go big or go home, Tom advises against it. Instead, he recommends managing position sizes carefully to avoid catastrophic losses.
Tom keeps his positions around 1–3% of his total portfolio, which allows him to make quick adjustments without risking everything on a single bet. This is a key reason he can trade 100+ positions daily without breaking a sweat.
His success isn’t tied to a few big trades but to the consistency of thousands of smaller trades.
This method also gives him the freedom to adjust on the fly. Tom constantly tweaks his trades throughout the day, whether he’s taking profits, cutting losses, or adding new positions.
In fact, he checks his positions every 10 minutes — yes, you read that right. Staying agile is crucial for someone handling hundreds of positions.
3. Buying at All-Time Highs is a Myth
You’ve probably heard that buying at all-time highs is the best way to guarantee long-term profits.
But Tom calls this out as pure nonsense. “That’s the most curve-fit, ridiculous data I’ve ever heard in my life,” he says, laughing at the idea that buying highs leads to outperformance.
According to Tom’s research, this strategy only works in hindsight during bull markets, and no statistical evidence supports it. His think tank, which includes a team of PhDs, mathematicians, and physicists, analyzed this exact topic.
They found zero truth to the idea that buying breakouts or all-time highs increases your chances of success.
Instead, Tom focuses on expected moves and implied volatility to make his trading decisions.
This allows him to avoid the traps of market hype and instead rely on real, actionable data.
4. Diversification: Friend or Foe?
Diversification is often sold as the golden rule of investing — “Concentration builds wealth, diversification protects it,” as the saying goes.
But Tom offers a more nuanced take. For him, diversification can sometimes dilute returns in strong bull markets. This is especially true when a few dominant stocks drive the market, as the tech sector has done in recent years.
For instance, between 2018 and 2023, the tech sector of the S&P 500 grew by 25.9% annually, outperforming most venture funds.
So, if you were diversified away from tech, you missed some serious gains.
However, Tom isn’t entirely against diversification. In flat or down markets, non-correlated positions can be lifesavers.
When the market is volatile, having a portfolio with diverse assets can help cushion the blow. The key is balancing concentration with smart diversification, depending on the market conditions.
5. Trading is Like a Game
One thing that surprised me about Tom is his attitude towards risk. “We rolled the dice with all the money we had for 20 years,” he says, recalling how he built and sold two multi-million-dollar companies.
But this wasn’t reckless gambling — it was calculated risk. Tom believes in knowing where your strengths lie and staying in your lane.
His philosophy is simple: take risks but have fun with it. He doesn’t let the weight of his trades bog him down because he genuinely enjoys the process.
Tom wakes up at 4 AM every day, trades, adjusts, and repeats. His love for trading fuels him, and he sees it as more than just a job — it’s a lifelong passion.
For Tom, the real thrill is the mental challenge of staying ahead in the game. He emphasizes, “Trading makes you think faster; it forces you to make decisions quickly.”
And if there’s one thing Tom is great at, it’s making fast, informed decisions. After all, the most successful entrepreneurs and traders know how to make decisions quickly and confidently.
In the Studio with Tom Sosnoff, CEO of TastyTrade — Interview
Top Tips from Tom Sosnoff’s Playbook:
Know your edge: Don’t try to predict the market. Instead, work with probabilities and data, such as implied volatility and expected moves.
Size matters: Keep your positions small to reduce risk and maintain agility.
Ignore the hype: Avoid popular myths like “buying at all-time highs.” Instead, focus on solid data.
Smart diversification: Use it wisely, but don’t over-diversify and miss out on high-growth opportunities.
Love what you do: Trading is a game — enjoy it, take risks, and keep learning.
With over 40 years of experience and $1.8 billion in exits, he’s proof that success in trading doesn’t come from knowing it all but from being prepared, staying nimble, and having the guts to take risks.
So, take a page from Tom’s playbook and focus on the basics. Because sometimes, the most simple strategies are the most powerful.
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