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In this interview, futures trader Michael Toma sits down on the Desire To Trade podcast to break down the part of trading most people skip: real, usable risk management. Michael’s known for treating trading like a project manager—build the plan, execute the plan, measure the results—and for using market profile to simplify decisions. If you’ve been drowning in screens, indicators, or second-guessing, his “less noise, more execution” approach is a reset button.
You’ll learn how Michael sizes risk with discipline, tracks compliance (not just P&L), and uses market profile concepts like value areas and points of control to set entries, targets, and stops without staring at charts all day. He also shows how to document a development plan, scale size gradually, keep execution simple—even mobile when needed—and why his 2017 mantra still pays today: patience, patience, patience.
Michael Toma Playbook & Strategy: How He Actually Trades
Core philosophy: run trading like a project, not a pastime
Michael Toma treats the job like project management: build a plan, execute the plan, measure outcomes, and iterate. That mindset cuts through noise and keeps you focused on the next right action instead of the next shiny indicator.
- Write a one-page trading plan that defines setups, risk per trade, entries/exits, and review cadence—no fluff.
- Define “done” for each setup (e.g., value area break + retest + order-flow confirmation) so you know exactly when to act.
- Separate roles: strategy designer (after hours) vs. executor (during session). No designing while trading.
- Block distractions: only the charts and metrics required by the plan are allowed on your screen during execution.
- After each session, score yourself on execution (compliance %), not P&L.
Risk discipline: size small, cap drawdowns, track compliance
He frames improvement around compliance—did you follow the plan?—and uses data to identify habits that help or hurt performance. Treat risk rules as non-negotiable guardrails, then let P&L be the by-product.
- Risk a fixed fraction per trade (e.g., 0.25%–0.5% of account); reduce to half-size after two consecutive losses.
- Daily loss limit = 1× average green day; hit it and you’re done for the session.
- Weekly max drawdown (e.g., −3R to −5R) triggers auto-de-risking to micro-size for five trades.
- Maintain a compliance score: (# plan-perfect trades ÷ total trades). Trade size increases only when 20-trade compliance ≥80%.
- Journal the “why” behind any rule breach and prescribe a fix before the next session.
Market Profile execution: trade around value, not guesses
Michael uses Market Profile to anchor decisions around value areas and points of control (POC), avoiding random entries. The goal: locate imbalance, wait for acceptance/rejection, then execute clean risk placements.
- Trend-day play: buy the first pullback that holds above the prior value area high; stop just beyond the opposite side of the value.
- Rotation-day play: fade tests of value area extremes that reject; target POC; scratch if price accepts beyond value.
- If the opening drive lands inside prior value and stalls at POC, stand down until value migrates or a range breaks.
- Never chase outside value without a retest; require one fresh structure signal (e.g., single prints filled or a VWAP reclaim).
- Move stop to breakeven only after the first target at POC/value edge prints—no earlier.
Development plan: document, analyze, and fix the real problem
He’s big on documenting behaviors, spotting patterns with basic analytics, and addressing the human element behind mistakes. Keep the tools simple; the key is consistent, searchable data.
- Track triggers for losses (e.g., revenge sequence after a stop-out, FOMO entries near highs).
- Add a “what changed?” field when switching timeframes, products, or execution platforms.
- Review 20-trade blocks: cut the bottom 10% of behaviors contributing to the most negative R.
- Build a pre-mortem checklist for each setup: “What would make this trade fail?” If present, pass.
- Every Sunday, choose one habit to improve and define the micro-rule you’ll execute all week.
Position scaling: earn size with proof, not hope
As contracts or share count rise, emotions spike and rules wobble. Scale deliberately so the psychology stays stable and the process remains repeatable.
- Increase size only after two consecutive 20-trade blocks with ≥80% compliance and positive expectancy.
- When moving up in size, keep the same setups and targets; change only quantity.
- If your behavior changes at a higher size (early profit-taking, tight stops), drop back one tier for 10 trades.
- Define hard caps per instrument (e.g., max 4 MES/1 ES) and per correlation group to avoid stealth over-risking.
- Treat scaling down as a strength: micro-size is the default after any rule breach cluster.
Lifestyle & optionality: use options writing to smooth equity swings
Michael complements futures trading with options writing for flexibility—useful when traveling or when screen time is limited. The aim is a steadier equity curve without abandoning core futures plays.
- Focus on high-liquidity underlyings; sell cash-secured puts or covered calls 30–45 DTE with 15–25 delta.
- Target a modest monthly income %; never force trades to hit a number during low-vol regimes.
- Manage winners at 50% of max profit or when the technical context flips against the short strike.
- Avoid over-adjusting losers; roll only if it reduces risk and keeps total credit ≥1.5× initial.
- Keep options risk siloed: separate logs, limits, and review blocks from your futures book.
Patience protocol: time is an edge
His mantra is simple: “patience, patience, patience.” Let trades work; the market doesn’t care about your clock. Build rules that institutionalize waiting.
- Minimum wait rule: after an alert, require a full candle close and confirmation (e.g., acceptance back into value) before entry.
- If the first target doesn’t hit within your planned structure (e.g., two rotations to POC), exit at market—no wishful holding.
- Use a “three-strike” filter: skip a setup after three consecutive violations of structure in the same session.
- Enforce a 2-minute pause after any stop-out before taking a new risk.
- Add a time-in-trade KPI to reviews and investigate early exits without rule-based reasons.
Daily workflow: a simple loop you can repeat forever
Keep the day boring and the rules exciting. Use the same prep, the same checks, and the same post-trade routine to compound skill.
- Pre-market (15–20 min): mark prior value area, POC, overnight extremes; write your A/B scenarios and the exact invalidations.
- Session: execute only tagged A-setups; log compliance in real time; stop after daily loss limit or two A-setup wins.
- Post-market (10–15 min): export trades, label rule adherence, compute expectancy and compliance; pick one micro-improvement for tomorrow.
- Weekly: archive charts of the top 3 best-executed and worst-executed trades; rewrite any fuzzy rule for clarity.
- Monthly: re-balance risk across products; confirm max drawdown, VAR proxies, and position-limit caps still fit your equity curve.
When to step aside: guardrails that preserve capital
Knowing when not to trade is part of the edge. Define mechanical “no-go” conditions so you don’t negotiate with yourself mid-session.
- Stand down after two plan breaches in a session; journal, then sim only for the next five trades.
- No trades during major news if your setup requires stable rotations; resume after range re-establishes around value.
- Skip any product with widening spreads/slippage beyond your plan’s tolerance.
- If your compliance score drops below 60% in a 20-trade block, cut size to a minimum and run a focused rehab week.
- Take a day off after hitting the weekly drawdown stop; return with micro-size and one setup only.
Size risk first, trade second: fixed R and daily loss caps
Michael Toma starts every decision with risk, not setup glamour. He picks a fixed R per trade, so outcome math stays stable whether the trade wins or loses. That fixed R makes it easy to avoid impulse sizing and keeps emotions from creeping into quantity decisions. Before the open, he also sets a hard daily loss cap so one bad morning can’t hijack the entire week.
When the cap is hit, he stops trading and protects the equity curve, period. If two losses land back-to-back, he halves in size and focuses on clean execution over comeback fantasies. He restores size only after a stretch of rule-perfect trades, letting discipline—not hope—earn the throttle. This simple hierarchy—risk first, trade second—turns the day from a gamble into a controlled project.
Let volatility guide position size, targets, and stop placement.
Michael Toma frames every trade around current volatility, so risk is proportional to the market’s mood. When the range expands, he cuts position size and widens stops to keep R constant; when the range contracts, he does the opposite. He prefers ATR, recent rotation size, or implied volatility as practical yardsticks—not guesses. This keeps his trades alive during noisy swings and prevents over-sizing during quiet periods.
Targets flex with the same logic: if volatility is high, first targets sit farther; if it’s low, he banks closer and faster. Michael Toma also times entries to avoid getting chopped when volatility is compressing into news or midday lulls. If realized volatility collapses after entry, he tightens risk or exits rather than hoping conditions change. By letting volatility dictate size, stops, and targets, he preserves expectancy while staying emotionally steady.
Trade mechanics over predictions: value areas, POC, acceptance, rejection
Michael Toma puts mechanics in charge and prediction in the back seat. He maps value areas and the point of control, then waits to see if the price accepts or rejects those zones before acting. No “I think it goes up”; only “did value hold or fail?” That simple filter keeps him aligned with actual order flow, not opinions.
Entries come on retests: if the value area high breaks and holds, Michael Toma buys the pullback; if it rejects, he fades back toward POC. Stops live beyond the opposite side of value, so normal rotations don’t knock him out. First target is the nearest structural magnet—usually POC or the other edge of value—then he lets the rest run only if acceptance continues. He never chases outside value without a clean retest, and he scratches fast if acceptance flips against the trade.
Diversify by instrument, setup, and duration to smooth equity swing.s
Michael Toma spreads exposure so no single product or idea can dictate his month. He trades a small basket—think index futures plus one or two uncorrelated markets—so drawdowns in one lane don’t swamp the whole book. Setups are diversified too: a trend-day continuation lives alongside a rotation-day fade to keep opportunity consistent. Duration varies from quick rotations to swing holds, giving him multiple ways to harvest edge across regimes.
He treats risk limits separately for each bucket, so size doesn’t accidentally stack through correlation. When volatility clusters in one product, Michael Toma reduces the size there and looks for cleaner risk in another instrument rather than forcing trades. Review days focus on which combination of instrument + setup + duration pulled the equity curve forward, and he dials up only those with proven expectancy. The result is steadier compounding and fewer emotional whipsaws when any single edge goes cold.
Build process discipline: plan, execute, score compliance, iterate weekly.
Michael Toma treats discipline as a measurable workflow, not a personality trait. He writes a one-page plan that spells out setups, risk per trade, entries, exits, and invalidations in plain language. During the session, he only executes what’s on that page, logging each trade’s rule adherence in real time. P&L is noted, but the scoreboard that matters is compliance.
At the end of the day, Michael Toma reviews execution before outcomes, tagging breaches and prescribing a fix for tomorrow. Each week, he rolls up the notes, calculates compliance over a 20-trade block, and either maintains size or dials it back. Any fuzzy rule gets rewritten so the next decision is binary, not debatable. That tight loop—plan, execute, score, iterate—turns consistency into a habit and keeps improvement compounding.
Michael Toma’s core message is deceptively simple: treat trading like a project and let patience do heavy lifting. Build a plan, execute the plan, and grade yourself on compliance before you ever look at P&L. He hammers the “patience, patience, patience” mantra because the market doesn’t run on your clock—give trades time to work and you’ll avoid cutting winners and amplifying noise.
Mechanically, he anchors execution to Market Profile levels—value areas and the point of control—so entries, targets, and invalidations are objective. You wait for acceptance or rejection at those zones, buy pullbacks that hold value on trend days, and fade rejections on rotation days; targets naturally gravitate to POC or the opposite value edge. This turns “I think” into “the structure says,” reducing wiggle-room for impulse decisions.
Risk and lifestyle fit round out the edge. Size small, cap drawdowns, and earn any size increase with proven compliance—especially as contract count rises and psychology shifts. He intentionally diversifies time and income by increasing options-writing to a larger share of his results, keeping flexibility for travel while still trading futures he loves. Stitch it together and you get a durable loop: document the rules, execute with structure, review for compliance, and let patience compound the edge.
Related posts:
- Michael Toma Trader Strategy: Risk Management That Actually Scales
- Michael Toma Trader Strategy: Risk Management That Keeps You in the Game
- Michael Toma Trader Strategy: Risk Rules That Actually Pay
- Michael Toma Trader Strategy: How a Risk Manager Scales Capital Without Losing Freedom
- Riz Sardar Trader Strategy: Why Purpose Drives Profits
- Trader Strategy Deep-Dive: How Michael Toma & Alejandro Perez Actually Trade
- Michael Toma Trader Strategy: Managing Other People’s Money Without Losing Your Edge
- Michael Toma Trader Strategy: The Simple SWOT Method That Fixes Your Trading Fast
- Michael Toma Trader Strategy: Get Funded, Stay Funded, and Trade for the Long Run
- Hardianto Sunoto Trader Strategy: Elliott Waves, Swing Timing, Risk-First Profits
- Raul’s Trader Strategy: From Prop Payouts to Real Risk Management
- Andrew Menaker’s Trader Strategy: Mastering Mindset and Risk Management
