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James Whelan—investment manager at VFS Group in Sydney—sits down for a candid, real-world chat about how a global-macro pro actually trades. It’s recorded on a hectic Fed morning, and James is refreshingly blunt about why some days the best move is doing nothing. He walks through his path from junior stockbroker to running managed discretionary accounts, why capital preservation is page one, line one, and how he uses equities, options, a touch of futures/FX, and big-picture sentiment to drive decisions.
In this piece, you’ll learn the guts of James Whelan’s approach: how he builds equity positions and then wraps them with protective puts and covered calls; when he’ll sit patiently for a macro shift instead of forcing trades; and why aligning with the flow of institutional money beats guessing tops and bottoms. You’ll also pick up practical rules you can apply today—why he avoids buying on Fridays, how he filters information (hint: Twitter done right), and the mindset habits that keep him sharp without trading angrily.
James Whelan Playbook & Strategy: How He Actually Trades
Core macro lens first, trades second.
Before pushing buttons, James reads the big picture: growth, inflation, policy, liquidity, and positioning. The goal is to define the market’s “weather” so entries line up with tailwinds instead of guesswork.
- Define the current regime each week: “expansion,” “slowdown,” “inflation shock,” or “policy pivot.”
- If growth is cooling and policy is tightening, cut gross exposure and shorten trade horizons.
- If liquidity is expanding and risk appetite is rising, allow bigger risk budgets and hold winners longer.
- Only take trades that make sense in the regime you’ve labeled—no orphan positions that fight the backdrop.
Idea generation with a clear funnel
He runs a simple funnel: macro theme → sectors/indices → single names or ETFs → options overlay. This keeps the book coherent and avoids random trades that don’t serve the thesis.
- Write one sentence per active theme (e.g., “USD strength favors exporters; long X, avoid Y”).
- Map themes to liquid proxies first (index/sector ETFs) before cherry-picking single names.
- Track 10–20 liquid tickers that express your themes; purge tickers that stall the thesis.
- If an idea doesn’t trace back to a macro sentence, it doesn’t make the book.
Position sizing that survives bad days
Capital preservation is the first job. Size is set so the portfolio can take punches without knocking you out of the game.
- Risk 0.25–0.75% of equity per trade; cap aggregate daily loss at 1–1.5%.
- Use ATR or recent range to set stops beyond normal noise (e.g., 1.5–2.5× ATR).
- When adding exposure, stagger entries in thirds; never “all-in” on a single timestamp.
- Hard rule: if two uncorrelated trades both fail, halve the size on the next new trade.
Entries that respect momentum and levels
Even macro trades need timing. He waits for the price to confirm the idea instead of predicting the turn.
- Longs: buy higher highs after a pullback to a rising 20–50-day zone; avoid knife-catching.
- Shorts/hedges: enter on lower highs into a falling 20–50-day zone or failed retests of resistance.
- Require confluence: level + trend + volume/relative strength vs. peers or sector.
- If an entry doesn’t trigger within your pre-set window (e.g., 3–5 sessions), stand down.
Defined exits, no drama
Exits are planned up front: where you’re wrong, where you’ll take profits, and how you’ll trail.
- Put stops in when you enter; move to break-even only after 1R is banked.
- Scale out in halves: take 50% near 1.5–2R, let the rest run with a trailing stop under higher lows.
- If a breakout fails back into the range, exit; don’t turn momentum trades into investments.
- Weekly rule: close any position that hasn’t advanced your thesis in two weeks.
Options overlay for protection and income
He uses options to define risk, cushion volatility, and monetize time when the tape is sideways.
- In uncertain macro regimes, pair equity longs with protective puts 1–3 months out, 5–10% OTM.
- In quiet uptrends, sell covered calls 1–2 months out against core holdings; roll if trend strengthens.
- For tactical bearish views, prefer put spreads over naked shorts to cap risk and margin.
- When implied volatility spikes, harvest premium with spreads rather than chasing direction.
Portfolio structure and correlation control
Books blow up from correlation, not one bad ticker. Keep the whole portfolio’s behavior in check.
- Limit any single theme to ~30% gross; cap any single name at 5–7% of equity.
- Avoid stacking positions that all die on the same move (e.g., three “long USD” proxies).
- Maintain a default hedge bucket (e.g., 10–20% via cash, puts, or inverse ETFs) in hostile regimes.
- If portfolio beta exceeds your target, trim winners before adding new names.
Playbook by market regime
Different weather, different plays. Predefine what you’ll do before conditions change.
- Trending up: buy pullbacks to rising MAs, trail aggressively, finance with covered calls on partials.
- Range/chop: reduce size, shorten holding periods, favor premium selling, and mean-revert levels.
- Risk-off/panic: raise cash, switch to put spreads or index hedges, only trade A+ levels.
- Policy pivot: wait for the second move (post-whipsaw) before scaling exposure.
News, events, and calendar risk
Macro traders live around calendars. Know when to press and when to step aside.
- Pre-event (CPI, FOMC, jobs): halve fresh risk 24 hours before; avoid new positions within 2 hours of release.
- Post-event: trade only if direction + breadth confirm for at least 30–60 minutes.
- Earnings: if you’re not playing the print, be flat or fully hedged; surprises beat opinions.
- Weekly: review upcoming catalysts every Sunday; annotate each position with event risk.
Trade review that compounds the edge
The edge grows in the post-trade journal. Measure what actually works and cut what doesn’t.
- Tag every trade by regime, setup type, and option overlay; review win rate and expectancy monthly.
- Kill one setup each quarter (lowest expectancy) and double down on the top one.
- Snapshot entry/exit charts and write a 3-line post-mortem: thesis, execution, fix.
- Keep a “do more” list of behaviors that made money (e.g., “wait for retest”) and repeat them deliberately.
Daily and weekly routine that keeps you sane
Consistency beats brilliance. A simple, repeatable routine removes decision fatigue.
- AM: mark futures, DXY, yields, breadth; confirm regime; set three A-setups or stand down.
- Midday: no impulsive changes—adjust only on signals defined at the open.
- PM: update stops, note what worked/failed, and queue tomorrow’s alerts.
- Sunday: reset themes, refresh watchlist, and pre-write if/then plans for catalysts.
Risk “circuit breakers”
When emotions spike, rules step in. Use hard brakes to guard your worst self.
- If equity down ≥2% on the day, stop new risk and review—no “revenge adds.”
- Two consecutive stop-outs in one session: take a break; next trade must be smaller and A+ only.
- Hit monthly max drawdown (e.g., 5–7%): cut gross in half for the rest of the month and trade only core setups.
- After any breach, write a one-page debrief before resuming normal size.
Practical checklist to run the book
Turn process into muscle memory. This keeps you aligned with the framework under pressure.
- Regime labeled? Themes written in one sentence each?
- Correlation under control? Hedge bucket active if needed?
- Entries backed by level + trend + relative strength?
- Stops, targets, and option overlay set at entry?
- Catalyst calendar reviewed and alarms set?
- Journal updated and setups graded at the close?
Size positions to survive volatility, then scale only on confirmation
James Whelan is blunt about the first rule: your size decides whether you live to trade tomorrow. Start with a risk small enough that a string of losers stings but doesn’t sink you, then anchor stops beyond normal noise so routine wiggles don’t eject you. He’d rather take a modest initial bite than an ego-filled full plate, especially when markets are jumpy. The point is to be around for the next good setup, not to prove you’re right on this one.
Only add when the market proves you right, not when you hope it will. For James Whelan, that means scaling after a clear confirmation—higher highs after a pullback, strong relative strength versus peers, or a catalyst that actually sticks. Each add is smaller than the last and comes with a tightened exit plan, so one reversal can’t erase the whole idea. If confirmation fades or momentum stalls, he stops adding and lets the initial risk framework do its job.
Wrap core equity with protective puts and covered calls strategically.
James Whelan keeps core equity exposure but makes the downside a known number with protective puts. When macro is shaky or catalysts loom, he buys puts one to three months out, typically 5–10% out of the money, so a shock doesn’t become a portfolio wound. He sizes the hedge so a worst-case day is survivable rather than catastrophic, treating the premium as “insurance expense,” not a bet. If the thesis strengthens and volatility crushes, he’ll take profits on the put and re-arm later rather than letting insurance decay to zero. When confirmation never arrives, those puts let him exit calmly instead of panic-selling.
In quieter uptrends, James Whelan writes covered calls against a portion of his winners to harvest time decay without giving up the core trend. He prefers 1–2 month expiries on liquid names or ETFs, and he rolls early if momentum re-accelerates and the calls get too tight. He avoids call overlays ahead of binary events or when relative strength is exploding, because insurance shouldn’t cap the best trades. The goal is simple: define risk in storms, rent out upside in calm seas, and keep the equity engine compounding.
Build themes first, choose liquid proxies, avoid orphan trade, and fight mac. ro
James Whelan starts with a short list of big-picture themes before he even opens a chart. Each theme is a one-liner—what’s driving markets and how he plans to express it—so every trade has a clear parent. He then chooses liquid proxies first, usually broad indices or sector ETFs, to capture the theme without single-name noise. Once the theme is working in the proxy, he graduates to best-in-breed names that show superior relative strength. This flow keeps the book coherent and reduces the urge to chase shiny objects.
He refuses “orphan trades” that don’t map back to a stated theme, because they often fight the macro and drain attention. James Whelan prunes his watchlist ruthlessly, dropping tickers that stop reflecting the theme or add correlation without improving edge. If the backdrop changes, he rewrites the theme sentence and realigns positions rather than forcing the old view. The result is a portfolio that moves with the tide instead of trying to out-stare it.
Predefine exits, trail winners, and cut laggards that stall your thesis
James Whelan plans exits before he clicks buy or sell. He sets a hard stop where the thesis is invalid, not where it merely hurts. Targets are staged: partial at 1.5–2R, second tranche left to run. Once the price reaches 1R, he moves risk to break-even only if the structure still supports the trade.
For winners, James Whelan trails below higher lows or a rising 20–50 day zone instead of guessing tops. If momentum fades or relative strength turns negative, he trims first and asks questions later. Any position that goes sideways for two weeks without advancing the thesis gets closed and recycled into stronger ideas. He bans “hope holds”: if the exit is hit, he’s out immediately, no negotiations.
Control correlation: cap single names, maintain hedges, diversify by strategy
James Whelan treats portfolio risk as a team sport—positions win or lose together when correlation runs hot. He caps any single name to a modest slice of equity, so one headline can’t torpedo the month. When multiple ideas are secretly the same macro bet, he trims the extras and keeps the cleanest proxy. He also keeps a standing hedge—cash, index puts, or a defensive ETF—so shocks become dents, not disasters.
Diversification isn’t a pile of tickers; it’s a mix of return drivers. James Whelan spreads exposure across underlying assets, timeframes, and tactics—trend entries for momentum, mean reversion for chop, and options overlays to smooth the ride. If portfolio beta creeps above target, he reduces gross via winners first, not the stuff already bleeding. And when correlations spike around major events, he narrows to the highest-conviction plays and lets the hedge do the heavy lifting until the tape calms down.
James Whelan’s edge isn’t a magic indicator—it’s disciplined alignment with the tape. He starts by naming the market’s regime, writes one-line themes, and only deploys capital where price action agrees. Size stays small enough to survive volatility, entries wait for confirmation, and exits are decided before the first share is bought. Protective puts cap the worst days, covered calls rent out time in quiet trends, and he trims positions that stall instead of debating them. Correlation is managed like a hawk, so one macro swing can’t knock the whole book off balance.
What stands out is how repeatable the process is. James Whelan treats a calendar like risk hardware—lighter before big prints, heavier only after the market proves its direction. Winners are scaled with purpose, losers are cut without ceremony, and the journal decides what stays in the playbook next month. It’s a blueprint any trader can adopt: define the weather, pick liquid expressions, protect the downside, and let strength earn more room. If you keep those pieces tight, the results compound without needing to guess tops or bottoms.
