7 Trading Wisdom of Paul Tudor Jones

paultudorDon’t ever average losers.”

When a trade is going against you it means you are wrong. Adding to a loser just usually makes it bigger and your stress overwhelming.

“Never trade in situations where you don’t have control.”

Getting into a trade that you can’t easily get out of is a dangerous trade in itself. Liquidity risk, headline risk, and volatility can be dangerous when you are at their mercy.

“If you have a losing position that is making you uncomfortable, the solution is very simple, Get out.”

Many times exiting a trade is the easiest way to stop a losing trade from getting worse, managing stress, or freeing up capital for other uses. You can always get back in.

“Don’t be too concerned about where you got into a position.”

All that matters about your current positions is what you should do now based on the current price action not your cost basis or entry level. Continue reading »

Market Wizard’s 25 Trading Clichés and Axioms to Follow, Memorize and Practice

  1. THE MARKET ITSELF IS THE ULTIMATE WEILDER OF JUSTICE. JUDGE, JURY AND PROSECUTOR.
  2. RECIPE TO LOSE FOR SURE: OVER-ANALYZE, PROCRASTINATE, HESITATE.
  3. LEARN TO SWEAT OUT, HANG ON TO AND SCALE OUT OF YOUR WINNERS.
  4. HIT SINGLES AND DOUBLES, NOT HOMERUNS. THE HOMERUNS ARE USUALLY THE RESULT OF GOOD TRADING AFTER A PROFITABLE TRADE HAS STARTED TO MAKE ITS MOVE
  5. A BIG LOSS CAN DESTROY YOU. IS RISK WORTH TOTAL DESTRUCTION?
  6. LOVE TO LOSE MONEY. NOT BECAUSE YOU’RE AN IDIOT, BUT BECAUSE LOSING MONEY IS AN IMMEDIATE FEEDBACK MECHANISM. EMBRACE THE SIGNAL AND DITCH THE TRADE.
  7. NEWS IS HISTORY. THIS IS THE MOST IMPORTANT AND LEAST OBSERVED RULE. DAYTRADING ARCADES UP AND DOWN WALL STREET HAVE DOZENS AND DOZENS OF LCD’S TUNED TO ONE STATION, CNBC. BY THE TIME THEY PUKE IT OUT, IT’S ABOUT 7 TO 12 HOURS OLD. THERE IS NO SUCH THING AS “BREAKING NEWS” ANYMORE. SOME TRADERS TELL ME THEY TUNE IT OUT. YOU CAN’T. IT GETS INTO YOUR SUBCONSCIOUS AND AFFECTS YOUR TRADING. PUT YOURSELF ON A TOTAL NEWS BLACKOUT FOR A WHILE AND SEE WHAT HAPPENS TO YOUR RESULTS. LOSE TOUCH WITH THE REST OF THE WORLD. ISOLATE YOURSELF TO YOUR ALGORITHMS, DATA, CHARTS AND MASTERING YOUR TRADING PLATFORM. AND IF YOU WORK FOR A FIRM WITH DOZENS OF LCD’S TUNED TO CNBC, MAINLY SO THAT THEIR “GUY” WHO IS ON ONCE A WEEK IS SEEN AND HEARD BY EVERYONE AT THE FIRM. THIS PERSON RARELY KNOWS HOW TO TRADE. I KNOW OF A FEW FIRMS OUT THERE LIKE THIS.
  8. THE FIRST LOSS IS THE BEST LOSS BECAUSE IT HURTS THE MOST. LEARNING TO LOSE IS IMPORTANT. LEARNING TO LOSE AS LITTLE AS POSSIBLE IS THE MARKET’S PAVLOVIAN WAY OF TEACHING YOU HOW TO TRADE PROFESSIONALLY AND PROFITABLY
  9. EARN THE RIGHT TO TRADE BIGGER. YOU’LL KNOW WHEN YOU’RE READY. DON’T RUSH IT. THE BIGGER YOU GET, THE MORE IMPORTANT EXECUTION STRATEGY BECOMES. YOU DON’T WANT TO BE SLOPPY, LIKE MOST PEOPLE I’VE MET, EVEN THOSE THAT WERE SO CALLED MENTORS TO ME, OR WHO I CALLED “MAESTRO”. SLOPPIEST TRADER IN THE WORLD. TINY ORDERS LEAVING ELEPHANT FOOTPRINTS WHILE SMART TRADERS TAKE MAMMOTH ORDERS AND DON’T MAKE A RIPPLE
  10. BE YOURSELF. DON’T TRY TO BE SOMEONE ELSE. FIND THE STRATEGY THAT WORKS FOR YOUR PSYCHE. IT TAKES WORK, READING, TESTING, AND INNER-REFLECTION. YOUR CHARACTER HAS THE CORRECT STRATEGY OUT THERE. YOU HAVE TO FIND IT. DON’T TRADE WHAT SOME SCHMUCK WANNABE HEAD TRADER AT A SHADY FIRM TELLS YOU TO TRADE, OR USE A STRATEGY TAUGHT BY A FIRM THAT LETS YOU ONLY TRADE THAT STRATEGY. GET OUT OF THESE FIRMS. Continue reading »

Why Trend Followers Mint Money ?

The reason trend traders make money in the long term is because due to supply and demand and the flow of capital equities, currencies, commodities, and future contracts tend to trend in one direction or the other in different time frames, trend traders and trend followers are there to capitalize on those trends by letting the market action determine their buy and sell decisions seeking to be on the right side of the market’s trend the majority of the time.
Here is why it works:

  1. Bear markets have no supports, they keep falling until a new support level is found.
  2. Bull markets have no resistance, they keep keep going up until a new resistance level is found.
  3. The world’s capital is always flowing and seeking to find returns; this flow causes trends to emerge.
  4. Monster stocks can double due to earnings growth expectations.
  5. Currencies can plunge based on fear of a nations solvency.
  6. Commodities can run to absurd levels based on supply expectations.
  7. Fear can bring markets down far below what any one thinks is rational.
  8. Greed can inflate markets up far above any reasonable valuations.
  9. Trend traders are not predicting price action they are simply following it. They let reality guide them not opinions.
  10. Markets tend to trend and systems that are able to capture trends and minimize losses in choppy environments are robust in the long term.

OBSERVATIONS ON POLITICIANS

  • “Giving money and power to the government is like giving car keys and whisky to teenage boys.” “When politics are used to allocate resources, the resources all end up being allocated to politics.”
    “Politics is the business of getting power and privilege without possessing merit.  A politician is anyone who asks individuals to surrender part of their liberty — their power and privilege — to State, Masses, Mankind, Planet Earth, or whatever.  This state, those masses, that mankind, and the planet will then be run by … politicians.”
    “God has no role to play in politics except to make sure politicians go where they belong.  To hell.”
    “Politicians are interested in people.  Not that this is always a virtue.  Fleas are interested in dogs.”

“The difference between a politician and a pickpocket is that a pickpocket doesn’t always get indignant when you tell him to keep his hands to himself.” 
“Politicians never accuse you of  ‘greed’ for wanting other people’s money — only for wanting to keep your own money.”
“Politics is the conspiracy of the unproductive but organized against the productive but unorganized.”
Continue reading »

Crude to Bust Through on Supply Concerns

Shutdown – Canadian Upgrader

First, there was a fire on Jan. 6 at an oil sands upgrader (that’s where bitumen is converted to synthetic crude oil), which forced Canadian Natural Resources Ltd. to shut production at its 110,000 barrels per day ((bpd)) Horizon oil sands project.

Canada is the top region where the United States gets its crude oil and petroleum product imports. This 110,000 bpd capacity is almost 6% of the U.S. daily import volume from Canada.

Shutdown – Alaska Pipeline

Then, the Trans Alaska Pipeline, which is owned by BP, ConocoPhilips (COP), Exxon Mobil Corp (XOM), Chevron Corp (CVX) and Koch Industries Inc., had to shut down on Saturday Jan. 8, after a leak was discovered at Prudhoe Bay. (Talk about how BP just can’t get a break.)

The 800-mile pipeline carries about 15% of U.S. oil production. Oil producers reportedly are in the process of cutting 95% of output, which is normally around 630,000 bpd. So far, there’s no estimate as to how long the shutdown will last.

Worse Than Hurrican Ivan

These two outages could potentially cut the U.S. crude supply by up to 709,000 barrels per day. That’s about 8% of the U.S. crude import, and around 3.6% of U.S. consumption.

To put it in perspective, this 709,000 bpd volume is more than the disruption caused by Hurricane Ivan. When Ivan hit the U.S. Gulf in 2004, it took down about one third of the oil output in the region, which is around 1.6 million bpd.

OPEC Eyeing $110 a Barrel

Last but not least, several OPEC members are increasinly talking about how the Cartel would not act unless crude crosses $110 a barrel.

This new tightened supply picture, couple with OPEC talks, will most likely turn crude oil to move on its own momentum. As such, there will be new money coming into the market, more upward pressure, and lots of short covering.

Breaking Above $93 on Supply Concerns

From a technical standpoint, there’s a high probability that crude could easily top $91 a barrel as early as Monday, Jan 10, from the current $88.41 price point, before busting through $93 a barrel levels by end of the week on supply concerns. Also look for WTI to outperform Brent during the week.

Shirpur Gold :Traders just watch 250.25 level

In just 10 weeks from 137 to 249 level.

From last 10 days ,Every 2nd person is talking and writing about this stock.

-Market Rumours are :Refinery to start in week’s time

-Zee Group holds 72%.

-Monthly target 375+ June target 700 and 2 year target 3000+

(If this is way to predict /Forecast then nobody will remain poor in India )

-It means people should sell their Gold holding and should buy this stock ?

Now ,Let’s see -What chart indicates ?

-Above is the Monthly chart .

-Triangle was broken last week.

-Triangle Target Rs.290

Weekly/Monthly chart indicates :Three Consecutive close above 221 will take to 291-314 level.

-Thursday was first day it closed above 221.

Thirty Traders ,On Thursday it closed at  234 level.Now just watch 250.25 level.

-Crossover with volumes will take to 266-271-287-292 level in hrs only.

Trade with open eyes and always remember levels.

Updated at 6:10/05th April/Baroda