Table of Contents
Chris Tubby—50+ year market veteran, ex–London Commodity Exchange pit trader, and former market maker—sits down on the Words of Wisdom podcast to unpack a career that once accounted for up to 30% of daily coffee volume. From open-outcry floors to electronic screens, Tubby has traded it all: coffee, cocoa, metals, indices—plus years providing liquidity for banks and exchanges. If you’re a newer trader wondering what real edge looks like when the tape gets fast, this interview is your shortcut to decades of hard-won experience.
You’ll learn how Tubby builds bias with fundamentals, times entries using simple technicals (think daily pivots and clean levels), and manages risk with pre-planned exits, staggered fills, and 2:1 minimum R multiples. He explains why many traders struggle (wrong asset class, scalp-and-hope habits), what “discipline by design” looks like from market-making days, and how to pick instruments that match your personality and pace (FX vs. indices vs. commodities). Expect practical insights on stop placement, trailing protection, scaling out, and reading those “long candle → vacuum back to origin” moves—tactics you can apply on your very next trade.
Chris Tubby Playbook & Strategy: How He Actually Trades
How he frames the job (principles that drive every decision)
Chris Tubby treats trading like a business: keep it simple, define risk in advance, and focus on instruments that suit your pace. He learned this edge as a pit trader, market maker, and later trading his own capital, where “protect capital first, then make money” became a rule, not a slogan.
- Write a one-page plan with two parts: financials (max drawdown %, daily loss stop, weekly stop, size ladder) and process (setups, time windows, review).
- Keep setups simple and repeatable; if it needs a paragraph to explain, it’s too complex.
- Priority order each day: risk limits → bias → setup → execution. If anyone is missing, you don’t trade.
- Default risk: 0.25–0.5R per position until you’ve logged 30+ trades with positive expectancy in that setup.
Instruments & session selection (trade what fits your personality)
He moved through commodities, indices, FX, and options—and emphasizes matching the instrument’s tempo to yours. If you prefer fewer, cleaner rotations, pick major FX or index futures; if you like flow and mean-reversion, short-dated spreads may fit.
- Choose one primary market + one backup (e.g., GBP/USD and S&P futures). No third chart until you’re green for the week.
- Trade your market’s most liquid hours; if you’re a “morning operator,” confine risk to the first 2–3 hours.
- If volatility is dead, stand down or switch to your backup session—edge relies on movement, not screen time.
- Keep a volatility gate (e.g., ATR(14) above its 6-month median) before allowing full size.
Bias building (from big picture to trade idea)
Tubby blends practical fundamentals with simple levels. In commodities, he worked the forward curve; in directional trading, he keeps the structure clean and avoids narrative bias.
- Define a daily bias by: trend on the higher timeframe (D/W), yesterday’s high/low, and today’s pivot/previous value area.
- For macrosensitive days, pre-tag catalyst levels (prior CPI/FOMC anchors or session VWAPs) and only trade around them.
- If your bias is “strong,” allow A-setups only (touch → reject → confirm); if “neutral,” half size or don’t trade.
- Rebuild bias after any state change (data print, trendline break, or value migration through prior day’s mid).
Entry triggers (simple levels, fast decisions)
He favors straightforward triggers—clean levels, pivots, and the behavior around them—over complex indicators. The aim is to participate where pros do business and avoid the chop.
- Primary trigger: retest + rejection at a predefined level (prior high/low, daily pivot, anchored VWAP).
- Confirmation rule: price must leave the level (impulsive 2–3 ticks/pips beyond) before you click.
- If spread/latency widens or liquidity thins, drop size to 0.25R or skip—the edge is in good fills, not heroics.
- Only one limit add-on per trade, and only after +0.5R open profit with structure intact.
Stops & exits (protect first, then earn)
His philosophy: lock in survival, then structure exits for asymmetric outcomes. Scalps come and go; discipline pays the account.
- Initial stop goes beyond the failed idea, not just the line (e.g., behind the swing + average spread).
- Standard target: 2R base; scale 1/3 at +1R, move stop to breakeven only after structure confirms (new lower high in shorts / higher low in longs).
- If a long candle vacuums back to its origin, take the remaining size off into the origin block—don’t let a gift turn red.
- News risk: if a major print is due within 15 minutes, flatten or trail to lock ≥ +0.5R.
Trade management (market-maker habits for retail execution)
Tubby’s market-making background shows up in how he works orders: don’t chase; work around the level, respect the book, and let the market pay you for patience.
- Work the queue: place limits at/near your level and accept the miss; chasing ruins expectancy.
- If slipped on entry by >40% of planned risk, cancel the trade—your R math is broken.
- No average down unless it’s a pre-planned scale with structure support and total risk unchanged.
- If liquidity vanishes, reduce to core and re-enter only after the tape normalizes.
Curve & spreads (for futures/commodities traders)
He literally met each week to set where to be long/short along the coffee forward curve—thinking in structure, not stories. If you trade futures, borrow these mechanics.
- Build a spread book: pick two adjacent expiries and trade the curve’s mean-reversion to seasonal norms.
- Rule of three: enter at ±1.5σ from 90-day mean; add once at ±2σ; flatten on snapback to ±0.5σ.
- Hold spreads days to weeks, but cap per-spread VaR to your daily directional VaR.
- If term structure flips (contango → backwardation), zero out and reassess before new risk.
Position sizing & growth (from small to size)
He started small when trading his own account and scaled over time. That’s the template: size grows only when your process proves itself.
- Begin with 0.25R unit risk until you log 30 trades with positive expectancy; then step to 0.5R, finally 1.0R.
- Weekly loss cap: 3R hard stop; hit it and stop trading until the next session after a review.
- After three consecutive winning days, allow a +25% size bump for the next two A-setups only.
- If you give back >50% of weekly gains, revert to base size immediately.
Daily routine (repeatable structure beats randomness)
When he traded mornings, he kept a consistent rhythm: prep, execute, review. You don’t need his exact hours—just his consistency.
- Pre-market (30–45 min): mark levels, define bias, set alerts, write one sentence on “what would invalidate my idea.”
- Live (2–3 hrs): hunt A-setups only; if two full stop-outs, pause 20 minutes before any new trade.
- Post (15 min): tag each trade with one reason to keep, one to fix; screenshot chart + fills for your log.
- No revenge trading after the session window; your next edge shows up tomorrow, not at 3 p.m.
Psychology & discipline (rules that keep you sane)
He calls salary a “bribe to give up your dreams,” but he also knows freedom comes from structure. Your mindset is encoded in your rules.
- One decision per bar: entry, exit, or do nothing. Multi-decision bars are where discipline dies.
- If heart rate spikes or you feel the urge to “win it back,” flatten everything and walk 10 minutes.
- Language audit: replace “I think” with “If X, then I do Y; else I stand down.”
- Weekly debrief: pick one mistake to eliminate next week; build discipline by subtraction, not slogans.
Anti-stop-hunt defenses (trade where pros trade, not where stops sit)
With a market-maker lens, he’s blunt about how stops get targeted around obvious levels. Your job is to place risk where hunts struggle to reach.
- Place stops past the liquidity pool, not inside it (e.g., beyond the wick cluster + average spread).
- Enter after the sweep: let the level get violated and reclaimed, then trigger with tight risk.
- Use time filters: if a level breaks in the low-liquidity minute, wait one full bar to confirm.
- If you’re trading the first touch of a level, half size, and demand cleaner confirmation.
Size Positions by Volatility, Not Ego: Let ATR Dictate Risk
Chris Tubby reminds traders that position size is a function of market behavior, not how confident you feel. Use Average True Range (ATR) to translate volatility into dollars at risk, then back into units or lots. When ATR expands, size down to keep risk per trade constant; when ATR contracts, allow slightly larger size within your cap.
Start with a fixed fractional risk—say 0.25%–0.5% of equity per idea—and convert that into distance-to-stop using ATR (e.g., 1.5× ATR). If the math says your size is tiny, that’s information: the market is hot and you should protect capital. Tubby’s twist is discipline—no overrides because you “really like” the setup, and no doubling down after a loss. Respect the model, keep sizing mechanical, and let your edge compound without blowups.
Diversify by Underlying, Strategy, and Duration to Smooth Equity Curves
Chris Tubby frames diversification as a risk-engineering tool, not a shopping spree of tickers. Mix uncorrelated underlyings (FX majors vs. index futures vs. softs), pair distinct strategies (trend + mean-reversion + spreads), and vary durations (intraday + swing) so one bad regime doesn’t sink you. Cap risk by bucket—no more than, say, 2R total in any one underlying or strategy at a time. When correlations spike, Tubby cuts gross exposure and lets only the highest-quality signals survive.
He also staggers entries and exits to avoid timing all bets on the same minute. Keep a rolling correlation check; if two positions start moving like twins, treat them as one and reduce size. Don’t over-diversify into noise: three to five well-defined edges beat ten half-baked plays. The goal, as Tubby puts it, is a smoother equity curve that keeps you in the game long enough for your edge to compound and do its work.
Trade Mechanics Over Predictions: Execute Rules, Ignore Forecasting Temptation
Chris Tubby says the market doesn’t pay you for being right about the future; it pays you for executing clean mechanics in the present. Build a simple checklist: bias defined, level marked, trigger seen, risk set, order sent. Use if/then rules to prevent freelancing: “If rejection at the level AND spread normalizes, then enter; else stand down.” Favor limit orders at your level, accept the miss, and measure slippage like a cost of goods sold.
Stops go where the idea is wrong, not where it “feels” safe; targets are pre-planned in R, not vibes. Scale only once structure confirms; never add risk to a losing thesis. Chris Tubby closes the loop with a quick post-trade audit—what worked, what to fix—so the next trade is a process upgrade, not a coin flip.
Prefer Defined Risk Setups; Tame Undefined Risk with Strict Risk Controls
Chris Tubby pushes traders to know exactly what they can lose before they click. Defined-risk trades—clear stop beyond the invalidation point, or option structures with capped downside—keep the account alive when volatility jumps. If the stop is fuzzy, the setup isn’t ready. Price must invalidate the idea decisively, not just tickle a line; stops go beyond the liquidity pool, not inside it.
When you do run undefined risk (e.g., naked futures or spot), Tubby insists on strict guardrails. Pre-set a hard daily loss limit, use position caps by instrument, and auto-cut size when volatility lifts. No averaging down unless total risk stays unchanged and the structure revalidates. If slippage blows out your planned R, abandon the trade—math first, opinions last.
Build a Daily Process: Plan, Trigger, Manage, Review, Then Repeat
Chris Tubby treats each session like a flight plan: brief, fly, debrief. Before the open, he writes a one-line bias, marks the key levels, and sets alerts so decisions are triggered, not chased. He fixes risk limits first, so position size and stop distance are math, not mood. If the prep isn’t done, he doesn’t trade—process is the gatekeeper.
During live action, he waits for the trigger that matches the plan and executes without second-guessing. Trade management is pre-scripted: how to move the stop, when to scale, and when to abandon a thesis if structure changes. After the session, Chris Tubby logs screenshots, the outcome in R, and one improvement he’ll enforce tomorrow. The next day begins by reading yesterday’s note, turning repetition into edge.
In the end, Chris Tubby’s edge is disciplined simplicity: treat trading like a business, write a plan that starts with the financials (how much you can lose), and keep setups so clean they fit on a page. He built that mindset across decades—from the London Commodity Exchange to running size in coffee—where weekly curve meetings forced clarity about bias, risk, and execution. The constant through all regimes is survival first: define your stop where the idea is wrong, translate that distance into size, and only then think about profit targets.
Mechanically, he sizes by the risk to the stop, scales in and out via zones, and demands a minimum 2R payoff so a handful of winners can carry the book. He avoids the obvious stop pools that market makers hunt, waits for rejection and confirmation at key levels, and accepts missed fills over chasing. In high-volatility regimes, he cuts gross exposure and prioritizes capital preservation so he’s alive for the rebound. The takeaway for traders: bias → trigger → risk → execute—repeat it every session, and let the math, not the mood, decide your size and survival.
