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10 Trading Rules From Paul Tudor Jones

1:

Don’t average down on losers.

2:

If you have a position making you uncomfortable, get out.

3:

Don’t be too concerned about where you entered a position. The real question is, are you still bullish or bearish.

4:

The most important rule is defense, not offense.

5:

Don’t be a hero, don’t have an ego.

6:

Always question yourself and your abilities. Don’t ever feel that you are very good, the second you do, you are dead.

7:

Don’t focus on making money; focus on protecting what you have.

8:

Never be macho in the market.

9:

Never overtrade.

10:

Risk control is the most important thing in trading.

Fix Your Eyes Forward and Not In The Past

Some of the greatest successes have been accomplished not long after a person had reached the end of their rope.

They had been beat down so much they had their backs to the wall and were ready to quit. but they did not.

Trading can easily cause us to get to this point unless we decide that when we hit the most difficult times in our trading is the exact time when we can emerge with more power and passion than every before.

Give yourself a push and decide what you truly want to accomplish and then forget about any past difficulties or disasters and fix your eyes forward to what you can do to become better.

10 Quotes For Traders

 The difference between winners and losers isn’t so much native ability as it is discipline exercised in avoiding mistakes.10-RULES

Speech may be silver but silence is golden. Traders with the golden touch do not talk about their success.

 Have you taken a loss? Forget it quickly. Have you taken a profit? Forget it even quicker! Don’t let ego and greed inhibit clear thinking and hard work.

 Never volunteer advice and never brag of your winnings.

 Standing aside is a position.

 If you don’t know who you are, the markets are an expensive place to find out.
 In the world of money, which is a world shaped by human behavior, nobody has the foggiest notion of what will happen in the future. Mark that word – Nobody! Thus the successful trader does not base moves on what supposedly will happen but reacts instead to what does happen.
 Except in unusual circumstances, get in the habit of taking your profit too soon. Don’t torment yourself if a trade continues winning without you. Chances are it won’t continue long. If it does, console yourself by thinking of all the times when liquidating early reserved gains that you would have otherwise lost.

 When the ship starts to sink, don’t pray – jump!
 Lose your opinion – not your money.

Fifteen truths about options trading

  1. I believe that successful options trading requires a different mindset from the traditional “rules of success” for most directional traders in stocks and futures products.
  2. First and foremost, I believe you need to take profits early and often. We’ve all been hit over the head ad nausem about the old maxim “cut your losers short and let your winners run.” This is a truth I believe holds true for most directional traders, but I don’t believe it holds any currency with consistently successful options traders.
  3. Speaking of direction, I believe nobody knows the next direction the instrument you trade will move. Nobody. Plenty have ideas and hunches, and often they’ll be right. But the truth is, a coin flip has nearly identical odds. This is why I trade options positions that either don’t require me to guess a direction, or provide me with plenty of opportunity to make money even when I’m leaning in the wrong direction.
  4. Immediately contradicting the item above, I believe in fading moves (especially, violent down moves). The best traders and investors are willing to put on positions the majority of market participants find hard to put on due to fear. Since the majority of market participants are net losers, I’ve got to find more opportunities to join the minority.
  5. I believe in contradictions. I believe in breaking the rules. Rules are guidelines, nothing more. Nobody got ahead in this world by following the rulebook and not daring to make mistakes or look like an ass from time to time.
  6. I believe in getting paid to wait. Time is money. Wherever possible, I want to have positive theta on my side. The odds are with me whenever this is the case.
  7. Speaking of odds, I believe in frequent trading. Common wisdom wants you to believe that “over-trading” is the common cause of death for most retail trading accounts as commissions steadily drain your account. In many cases this is true (especially if your commission rate is obnoxious). But for me, I’m putting on trades with the probabilities in my favor. The more instances of opportunity I can get myself into, the more the law of large numbers and favorable probabilities will materialize to my bottom line.
  8. In order to trade frequently, I believe in trading incredibly small so that I can spread my opportunity across as many instruments as possible, diversifying my risk. Call me “One-lot Seany.” I’ll proudly wear that name tag.
  9. I believe that volatility retraces from spikes or reverts to the mean much quicker and predictably than most would have you believe. Thus, I believe in selling fear. Fear subsides.
  10. I don’t believe in stop losses. I believe in adjustments. Options trading gives you, um…. options. When positions go against me, all is not lost. Often times, there will be plenty of opportunity to roll strikes to collect additional credit which improves my odds of success, or roll positions out in time to in effect “buy myself more time” for the trade to play out.
  11. The reason adjustments work: I seek to enter credit spreads when volatility is elevated (see #9 above). Therefore, if my position is getting tested on the upside, volatility will likely be shrinking which further aids my short volatility position. If I’m getting tested on the downside, volatility is likely remaining high (or increasing!) which gives me more juicy premium to sell into, which then results in collecting more cash and effectively lowers my breakeven points on the downside, thus improving my odds of success.
  12. I believe in net market neutral exposure for my portfolio.
  13. To help achieve neutral exposure, I believe I should always have a short delta (but positive theta — paid to wait) position in the general indexes. Since the majority of my individual positions will be short volatility and benefit from a stable or slowly rising market, I need to have short index positions which will benefit when markets are receding and volatilities are rising.
  14. I believe in making stocks and markets work to beat me. They will win from time to time, but they will have to earn it with outsized moves. If the stock or market is too lazy to come get me, I’ll gladly collect its coin and move on to the next trade.
  15. I believe the only true edge in any marketplace is Buying Power.*

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Truly Successful Traders Are Insanely Focused on the Game

  • If a trader is motivated by the money, then it is the wrong reason. A truly successful trader has got to be involved and into the trading, the money is the side issue… The principal motivation is not the trappings of success. It’s usually the by-product – simply stated ‘the game’s the thing’.
  • Most of the top traders have a child-like fascination with the game. Whether it’s the psychological elements of the game, the technical elements of the game, whether it’s the nameless, faceless aspect of a market, or them as single individuals against the market, or beating their brains against everyone else’s.
  • There’s a kind of almost insane focus you must have to achieve trading excellence… I think people in our own industry do not understand the importance of this type of focus. You will always get people who will look at a trader and think, “God, he’s up at 5.30am every morning, always working at the weekends. He has no life. I’m outta here. I’m taking my vacation. I’m going to Switzerland for three weeks.” Now I am not saying people should not take vacations, but the thing is, the very best traders don’t take a lot of time off. They don’t want to.
  • The price of phenomenal success is not one many are prepared to pay. For others, a lack of talent means they do not have the currency with which to pay the price in any event. For those with insane focus, there is virtually no price to pay – they love what they are doing.

Just follow Trend and Mint Unexpected Money

No one can predict a market trend, you can only react to them! Trend following never anticipates the beginning or end of a trend. It only acts when the trend changes. However, there is no need to figure out ‘why’ a market is trending — just follow it. You don’t need to understand electricity to use it.

Just Think :How many of u Bought or Traded in Reliance with levels ?

-Stock never broke :960 & Nifty Future support was 4898-4882 (Before Budget ,I had written)

Always Remember ,Writing/Saying and doing Bla Bla is very easy.Giving comments on Blogs…..(Those who are not earning or Failures will write comment with using Bad Words)But our AIM is to Mint Money from Market.End result should be your Balance Sheet on Plus side.

Updated at 7:27/22nd March/Baroda