Table of Contents
James Whelan is a Sydney-based investment manager who runs a global macro mandate and advises clients at VFS Group. In this YouTube sit-down, James breaks down how he actually operates: picking big, durable themes (food, value, quality), expressing them with ETFs and select stocks, and keeping portfolios aligned with client risk and objectives. He’s candid about timing (not his “superpower”), the realities of running money post-COVID, and why being wrong is human—but staying wrong is fatal.
You’ll learn James’s practical playbook: how to let the “weight of money” confirm your idea before sizing up, when to use conviction vs. a tight “profitable stop,” why quarterly re-weights keep winners from hijacking risk, and how he frames crypto exposure (waiting for spot ETFs, avoiding futures roll drag). He also shares a simple mindset reset for drawdowns and a seasonal mental model for why markets often wobble into U.S. autumn—useful context for any trader trying to stay objective when the screens get noisy.
James Whelan Playbook & Strategy: How He Actually Trades
Core Philosophy: Macro First, Positions Second
James Whelan builds from big, durable themes, then finds the cleanest way to express them. He’s not trying to pick every turn; he wants the “weight of money” behind him and risk defined before he sizes up. Read this like a checklist you can apply whether you run a small account or client money.
- Define a macro thesis in one sentence before any chart work (e.g., “global food inflation persists; favor pricing power”).
- Only trade themes you can explain to a non-trader in 30 seconds.
- If the idea requires three or more “ifs” to work, pass, and find a cleaner theme.
- Express themes with the simplest vehicle available (broad ETF first, single stock second).
- Revisit each thesis weekly; keep or kill—no “maybe” bucket.
Finding Trades: Themes, Triggers, Confirmation
He filters the world into a few investable buckets—value, quality, food, energy, cash-flow compounding—and then waits for market confirmation. You’re not paid for being early; you’re paid for being positioned when the crowd arrives.
- Start with a 5-bucket watchlist: value, quality, commodities/real assets, defensives, and growth.
- For each bucket, track 1–3 liquid ETFs plus 3–5 leader names.
- Require a trigger: 20D high or 50D MA reclaim after a base; no trigger, no trade.
- Add only when relative strength vs. the broad market is positive for 2 consecutive weeks.
- Cut candidates that fail to make new swing highs within 15 trading days of your entry.
Timing: Let the Market Prove You Right
James openly admits timing isn’t his “superpower,” so he lets structure and price action do the heavy lifting. The rule is simple: let price confirm; then act decisively.
- Enter on closing breakouts, not intraday pokes (reduce head-fakes).
- Use “first slice” entries: 50% the intended size on the signal, 50% after a constructive retest.
- If a breakout reverses and closes back inside the range within 3 sessions, exit—no debate.
- Never widen stops after entry; if volatility is too high for your stop, you’re too big.
- Avoid new swing entries into major macro prints (CPI, FOMC) unless already positioned.
Risk & Sizing: Profitable Stops and Position Tiers
He favors what he calls a “profitable stop”—move risk to breakeven or better once the market shows you’re right. Positions graduate through tiers as evidence builds.
- Risk is a fixed fraction per idea (e.g., 0.50%–0.75% of equity).
- Tier 1 (probe): 0.5R size with a tight structural stop under the base.
- Tier 2 (confirmation): add 0.5R when price holds above breakout for 3 closes.
- Shift stop to entry (or better) after +1R; never allow a winner to turn red after this point.
- Cap aggregate theme risk at 3R across all tickers tied to the same macro idea.
Portfolio Construction: Keep Winners from Hijacking Risk
Performance can get dominated by one runaway winner—great for P&L, terrible for drawdown control. James re-weights on a schedule so position risk stays intentional.
- Rebalance quarterly on a fixed date; sell down to target weights, don’t “let it ride.”
- Max single-name weight: 8% for diversified books; 4% if trading a single-factor theme.
- Max theme weight: 25% (e.g., all “food & pricing power” holdings combined).
- Hold a residual cash buffer (10% typical) to attack dislocations without forced selling.
- If portfolio VaR rises above your comfort band, trim winners first, not losers.
Instruments: ETFs First, Singles When the Edge Is Obvious
He often expresses macro with ETFs for liquidity and clarity, then layers singles when the story and numbers are undeniable. Keep it scalable and low-maintenance.
- Default to the most liquid ETF that cleanly tracks your theme.
- Add a single stock only when it beats the ETF on margins, pricing power, and trend stability.
- Avoid exotic leveraged or synthetic structures unless hedging is the goal.
- Check spread and depth—if you can’t enter/exit within 5 bps on normal size, skip it.
- For country/sector tilts, blend 2–3 ETFs to avoid single-index quirks.
Crypto Approach: Structure Over Hype
His stance is pragmatic: prefer spot vehicles and clean custody over futures roll drag or operational headaches. Treat it like any other risk bucket—thesis, trigger, risk cap.
- Use spot vehicles when available; avoid perpetual roll costs where possible.
- Limit crypto theme weight to a pre-set cap (e.g., 5% of portfolio).
- Only add after reclaim of a 200D MA with rising 20D average volume.
- Use hard daily close stops; no “hope” trades overnight.
- If volatility doubles vs. your backtest baseline, halve position size until it normalizes.
Drawdowns: Reset Fast, Protect Confidence
James keeps a simple mental reset to stay objective. The job isn’t to be perfect; it’s to cut the wrong bets fast and redeploy where the weight of money flows.
- Institute a -3R rolling stop on yourself: if hit across any 10 trading days, reduce size by 50% for the next 10.
- During reset weeks, trade only ETFs and A-setups; no new single-stock experiments.
- Audit losers by category (thesis wrong, timing wrong, execution sloppy) and record one fix.
- Rebuild with smaller winners; do not chase the old leader to “get it back.”
Seasonality & Tape Context: Respect the Calendar
He watches periods where liquidity and sentiment wobble, especially late Q3 into U.S. autumn. Seasonality isn’t a system; it’s a context overlay for risk.
- Cut gross and net exposure by 20% heading into historically choppy windows.
- Demand higher-quality bases (longer, tighter) before new ads during these weeks.
- Use wider but fully pre-defined stops sized to the prevailing volatility, not your hopes.
- Rotate more capital into defensives/quality if cyclicals lose relative strength.
Playbook for Weekly Maintenance: Keep the Edge Boring
The edge is mostly maintenance: prune, top-up, or dump—repeat. James keeps the routine tight so decisions aren’t made in panic.
- Every Friday: mark each position green/yellow/red based on trend health; act Monday open.
- Green: consider a 10% add-on if RS and volume improve week over week.
- Yellow: no adds; tighten stops or move to ETF equivalent.
- Red: exit into strength on first bounce; recycle capital to better themes.
- Once a quarter: rewrite each thesis in one sentence; if you can’t, you don’t own it anymore.
Metrics That Matter: Evidence Over Opinions
He tracks a few numbers that actually change behavior. Keep it simple, repeatable, and hard to game.
- Hit rate per theme (not per ticker) to see which macro ideas really pay.
- Average R per winner and per loser—winners must be at least 1.5× losers.
- Percent of trades promoted from Tier 1 to Tier 2; low promotion = poor timing or thesis.
- Portfolio turnover vs. plan—if you’re churning, your theses are too loose.
- Max drawdown rolling 12 months; if it exceeds plan, cut gross and simplify the book.
Size Risk First: Tier Positions, Promote Winners, Cut Fast Without Drama
James Whelan starts with risk, not charts, because position size decides whether a decent idea becomes a portfolio problem. He tiers entries so the first slice is small, letting the market prove the thesis before he commits real capital. When price confirms, he promotes the position to the next tier; when it falters, he cuts without hesitation and looks for a cleaner setup. That simple ladder—probe, confirm, scale—keeps losers cheap and winners funded.
Whelan also uses clear lines in the sand so there’s no “maybe” zone where emotions take over. Stops never widen, and once a trade is up meaningfully, the stop goes to breakeven or better to protect mental capital as much as money. If a theme begins to dominate risk, he trims the leader rather than hoping the laggards catch up. The result is a book that breathes with the tape while staying disciplined when it matters most.
Let Price Confirm: Enter on Breakouts, Add on Retests, Never Widen Stops
James Whelan waits for the market to prove his idea before he risks real size. He prefers closing breakouts over intraday pokes because end-of-day prints reflect commitment, not noise. When price clears a well-defined range on a close, he initiates with a measured slice rather than chasing a full position. This keeps him aligned with momentum while avoiding the “early, expensive” trap.
On strength, Whelan looks for a clean retest to add—the old ceiling acting as a new floor—so his second entry has structure to lean against. If the breakout fails and price closes back inside the range within a few sessions, he’s out; no justifications, no averaging down. Stops never widen, ever, because changing risk mid-trade is how discipline erodes. He sizes the stop to volatility upfront, knowing that if the stop feels too tight, the position is simply too big. That way, confirmation drives entries, structure guides adds, and rules—not hope—decide exits.
Build Portfolios by Themes: ETF Core, Select Leaders, Quarterly Rebalance Discipline
James Whelan organizes his book around a few durable themes—value, quality, food/energy, defensives—then chooses the cleanest vehicle for each. The core is usually a liquid ETF that maps neatly to the theme, so exposure is broad, scalable, and easy to adjust. Around that, he layers one or two hand-picked leaders only when they clearly outperform the ETF on trend strength and fundamentals. This mix keeps the thesis front and center while avoiding stock-picking drift.
Rebalancing is scheduled, not emotional: quarterly trims return positions to target weights so a runaway winner doesn’t hijack portfolio risk. Whelan caps total exposure per theme and will cut the leader first when risk concentration creeps up, preferring intentional allocations over accidental bets. He keeps a small cash buffer to pounce on dislocations without forced selling. The result is a portfolio that stays aligned with the macro story while remaining nimble when the tape shifts.
Volatility Sets Size: Use Profitable Stops, Cap Theme Exposure, Respect Drawdowns
James Whelan sizes trades to volatility so the stop makes sense before any chart looks “tempting.” If the required stop is wider than his comfort per idea, he simply cuts position size or skips the trade—discipline beats excitement. He shifts to a “profitable stop” once a position is up meaningfully, locking in at breakeven or better, so winners can fund the next idea. That habit protects mental capital and keeps him from letting green trades bleed back to red.
Whelan also caps exposure by theme to prevent one macro idea from dominating the book when volatility spikes. When aggregate risk swells, he trims leaders first and reduces gross until the portfolio drawdown sits back inside the plan. During rough tapes, he enforces a personal reset—smaller size, ETF-only adds, and stricter triggers—so recovery is controlled rather than heroic. Volatility becomes a sizing signal, not a surprise.
Mechanics Over Prediction: Simple Triggers, Relative Strength Filters, Seasonality Context
James Whelan puts mechanics above clever forecasts, because rules scale while hunches don’t. He anchors entries to simple, testable triggers—range breakouts on a closing basis, moving-average reclaims, or fresh 20-day highs—so there’s no debate when to act. Relative strength is the gatekeeper: if a candidate isn’t beating the broad market for a couple of weeks, it doesn’t get capital. That way, he rides flows, not opinions.
Seasonality sits in the background as context, nudging risk rather than dictating trades. When calendars say “chop,” Whelan demands cleaner bases and trims gross exposure instead of trying to outsmart the tape. He reviews setups weekly and promotes only the ones that continue to print higher highs and higher lows. The philosophy is simple: codify the plan, let price confirm, and keep prediction in the cheap seats.
James Whelan’s edge isn’t a magic indicator—it’s the way he stitches simple, durable ideas into a portfolio that breathes with the tape. He starts at the macro level, narrows to a handful of investable themes (value, quality, food/energy, defensives), and defaults to liquid ETFs for clean exposure before layering in one or two standout leaders. Position sizes are set by volatility and confirmed by price action; breakouts must close, relative strength must persist, and any trade that slips back into its range gets the hook. Quarterly rebalances stop a single winner from hijacking risk, while hard caps at the theme level keep the book intentional rather than accidental.
The risk process is deliberately boring—and that’s the point. Whelan uses tiered entries so the market has to prove him right before he scales, shifts to a profitable stop once a position is working, and trims leaders first when aggregate risk swells. When conditions get choppy, he dials down gross, tightens the trigger set, and leans more on ETFs until the trend cleans up. Even with satellite exposures like crypto, he prioritizes structure, liquidity, and spot vehicles over complexity or cleverness.
If you boil it down, the lesson set is brutally practical: build from themes you can explain in one sentence, let price do the admitting, and keep risk small until evidence shows up. Codify promotion rules for winners, kill laggards quickly, and schedule your reweights so discipline isn’t optional. That’s how James Whelan turns big-picture views into a repeatable trading process—one that favors mechanics over prediction and keeps capital ready for the next clear opportunity.
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