Paul Tudor Jones: 13 Insights

13 Insights From Paul Tudor Jones

1. Markets have consistently experienced “100-year events” every five years. While I spend a significant amount of my time on analytics and collecting fundamental information, at the end of the day, I am a slave to the tape (and proud of it).

2. Younger generation are hampered by the need to understand (and rationalize) why something should go up or down. By the time that it becomes self-evident, the move is over.

3. When I got into the business, there was so little information on fundamentals, and what little information one could get was largely imperfect. We learned just to go with the chart. (Why work when Mr. Market can do it for you?)

4. There are many more deep intellectuals in the business today. That, plus the explosion of information on the Internet, creates an illusion that there is an explanation for everything. Hence, the thinking goes, your primary task is to find that explanation.

As a result of this poor approach, technical analysis is at the bottom of the study list for many of the younger generation, particularly since the skill often requires them to close their eyes and trust price action. The pain of gain is just too overwhelming to bear. (more…)

Here’s a BTC opinion – Bitcoin could surge to $300,000 then drop 90%

Comments from Bobby Lee, co-founder and former CEO of crypto exchange BTCC to CNBC Monday afternoon US time.

  • could soar as high as $300,000 in the current bull market based on its historical patterns
  • (he does add that he was not sure if history would repeat itself)
  • “Bitcoin bull market cycles come every four years and this is a big one”
  • “I think it could really go up to over $100,000 this summer.”
  • warned the bubble will burst after peaking
  • a “bitcoin winter” that could last for years … following its bull run
  • Investors should be aware that bitcoin’s value could fall as much as 80% to 90% of its value from the all-time peak
BTC has dropped in past hours, maybe traders didn’t see the 300K forecast before the 90% drop bit?
Comments from Bobby Lee, co-founder and former CEO of crypto exchange BTCC to CNBC Monday afternoon US time.

Reminiscences of a Stock Operator by Edwin Lefevre -My favorite 15 quotes


1/ The desire for constant action irrespective of underlying conditions is responsible for many losses in Wall Street even among the professional.

2/ In this business a man has to think of both theory and practice. A speculator must not be merely a student, he must be both a student and a speculator.

3/ When you know what not to do in order not to lose money, you begin to learn what to do in order to win.

4/ Not even a world war can keep the stock market from being a bull market when conditions are bullish, or a bear market when conditions are bearish. And all a man needs to know to make money is to appraise conditions.

5/ They say you never grow poor taking profits. No, you don’t. But neither do you grow rich taking a four-point profit in a bull market.

6/ When you are as old as I am and you’ve been through as many booms and panics as I have, you’ll know that to lose your position is something nobody can afford.

7/ The big money was not in the individual fluctuations but in the main movements— that is, not in reading the tape but in sizing up the entire market and its trend. It never was my thinking that made the big money for me. It always was my sitting.

8/ One of the most helpful things that anybody can learn is to give up trying to catch the last eighth—or the first. These two are the most expensive eighths in the world.

9/ The average man doesn’t wish to be told that it is a bull or a bear market. What he desires is to be told specifically which particular stock to buy or sell. He wants to get something for nothing. He does not wish to work. He doesn’t even wish to have to think.

10/ I don’t buy long stock on a scale down, I buy on a scale-up. Remember that stocks are never too high for you to begin buying or too low to begin selling.

11/ When I am long of stocks it is because my reading of conditions has made me bullish. But you find many people, reputed to be intelligent, who are bullish because they have stocks. I do not allow my possessions—or my prepossessions either—to do any thinking for me

12/ The trend has been established before the news is published, and in bull markets bear items are ignored and bull news exaggerated, and vice versa.

13/ A speculator must concern himself with making money out of the market and not with insisting that the tape must agree with him.

14/ A man can excuse his mistakes only by capitalizing them to his subsequent profit.

15/ Of all speculative blunders, there are few greater than trying to average a losing game. Always sell what shows you a loss and keep what shows you a profit.

Traps and Pitfalls:

  1. Bad Markets – A good pattern won’t bail you out of a bad market, so move to the sidelines when conflict and indecision take hold of the tape. Your long-term survival depends on effective trade management. The bottom line: don’t trade when you can’t measure your risk, and stand aside when you can’t find your edge.
  2. Bad Timing – It’s easy to be right but still lose money. Financial instruments are forced to negotiate a minefield of conflicting trends, each dependent on different time frames. Your positions need to align with the majority of these cycles in order to capture the profits visualized in your trade analysis.
  3. Bad Trades – There are a lot of stinkers out there, vying for your attention, so look for perfect convergence before risking capital on a questionable play, and then get out at the first sign of danger. It’s easy to go brain dead and step into a weak-handed position that makes absolutely no sense, whether it moves in your favor or not. The bottom line: it’s never too late to get out of a stupid trade.
  4. Bad Stops – Poor stops will shake you out of good positions. Stops do their best work when placed outside the market noise, while keeping risk to a minimum. Many traders believe professionals hit their stops because they have inside knowledge, but the truth is less mysterious. Most of us stick them in the same old places.
  5. Bad Action – Modern markets try to burn everyone before they launch definable trends. These shakeouts occur because most traders play popular strategies that have been deconstructed by market professionals. In a sense, the buy and sell signals found in TA books are turned against the naïve folks using them.


Number 10 - Free Picture of the Number Ten1.  Follow the Rule of Three.  The rule of three simply states that a trade will not be made unless you can carefully articulate three reasons for doing so.  This eliminates trading from an indicator alone.

2.  Keep Losses Small.  It is vitally important to keep losses small as most all of large losses began as small ones, and large losses can put an end to your trading career.

3.  Adjust Stops.  When a trade is working move your stop loss up in order to lock in gains.

4.  Keep Commissions Low.  There is a cost to trading but there is no reason to overpay brokerage fees.  A discount brokerage is just as good as a premium brand name one.

5.  Amateurs at the Open, Pros at the Close.  The best time to enter trades are after lunch when the professionals are looking to get in at a better price than one provided in the morning.

6.  Know the General Market Trend.  When trading individual stocks make sure you trade with the general market trend or condition, not against it.

7.  Write Down Every Trade.  Doing this will allow you to learn what is working and what is not.  It will also help you determine what types of trades work best for your personality.

8.  Never Average Down a Losing Position.  It is a loser’s game when you add to a loser.  You add to winning positions because they are winners and are proving themselves to be such.

9.  Never Overtrade.  Overtrading is a direct result of not following a well thought out plan, deciding it is best to trade off emotion instead.  This will do nothing but cause frustration and a loss of money.

10.  Give 10 Percent Away.  Money works the fastest when it is divided.  When we share we prime the economic pump of the universe.

Trading is a game of rules.  We either make the decision to abide by them or we break them.  We do the latter at our own peril.

S&P index leads the way. NASDAQ lags but closes higher for the 2nd straight day

S&P index closes just below breakeven level for 2020

The US stocks are ending the session with gains across the board. The gains are led by the S&P index which rose by 0.91%. The NASDAQ index lagged, but still gained 0.59%.

For the S&P index, it toyed with closing above the breakeven level for the year for the 1st time since February 25. However, that quest failed. The index is ending the day 0.13% from that breakeven level (2019 closes at 3230.78 while the close today is at 3226.56).

This week there has been a rotation out of the high flying tech stocks vs. the broader/industrial stocks. For the last 5 trading days the Dow industrial average is up 3.08% and the S&P index is up 1.79%, while the tech heavy NASDAQ index is up only 0.55%.
Nevertheless both the NASDAQ and the S&P index are up for 2 consecutive days. The Dow is riding a 4 day win streak.
The final numbers are showing:
  • S&P index +29.03 points or 0.91% at 3226.55
  • NASDAQ index up 61.915 points or 0.59% at 10550.49
  • Dow up 227.51 points or 0.85% at 26870.10.
Will tomorrow be the day for the S&P index to close the black? Maybe, but going forward headline news from more earnings releases, coronavirus cases, vaccines and therapeutics will continue to exert their influences. Each of which could upset the apple cart in a bullish or bearish direction.

NASDAQ tumbles over 2% after reaching all time

California rolling back reopening and the outside the lower close pressure tech talks

The US stocks are ending the session with mixed/negative results. The Dow industrial average actually close marginally higher on the day. The S&P index and NASDAQ, however, reversed earlier gains and fell sharply. Contributing to the declines was the news that California was rolling back some of the reopenings

  • The S&P index fell -29.77 points or -0.93% at 3155.27. The S&P index turned briefly positive for the year above 3230.78% intraday with the high price reaching 3235.32. That is the 2nd time since February 25 that the price briefly extended above the close from 2019 only to fail in the same trading day. Bearish
  • NASDAQ index -226.59 points or -2.13% at 10390.84. The index had a outside day lower close, after trading to a new all time high of 10824.78. Bearish
  • The Dow industrial average close up 10.7 points or 0.04% 26086.00
All the major indices closed near the lows for the day, after giving up some hefty gains.
  • The S&P index was up 1.58% before closing down -0.94%
  • the NASDAQ index is up 1.95%, before reversing lower in closing down -2.13%
  • the Dow industrial average was up +2.13% before reversing and closing near unchanged at +0.04%.

Good Traders & Bad Traders

Good Traders

  1. The good traders that I have met are generous with their time and knowledge.
  2. Good traders are flexible in their trades and opinions they follow where the market takes them.
  3. The majority of good traders have simple charts that focus on price action. They focus on the simplicity of what works.
  4. A good trader will admit a loss and share what happened.
  5. Good traders are first and foremost traders, any service or product they offer is secondary.
  6. Good traders are humble and respect the market and the reality of trading.
  7. Good traders at times will call real trades and post entries and exits.
  8. Good traders are on social media not for show but for teaching and friendships and having fun.
  9. Good traders go with the current market trend.
  10. Those who make a comfortable living trading are playful, joking and happy .

 Bad Traders

  1. Many bad traders try to tear down others to make themselves feel superior. Good traders have no need to do this they have highly self esteems already. (more…)

Trading Lessons

  • Don’t sacrifice your position for fluctuations.
  • Don’t expect the market to end in a blaze of glory. Look out for warnings.
  • Don’t expect the tape to be a lecturer. It’s enough to see that something is wrong.
  • Never try to sell at the top. It isn’t wise. Sell after a reaction if there is no rally.
  • Don’t imagine that a market that has once sold at 150 must be cheap at 130.
  • Don’t buck the market trend.
  • Don’t look for the breaks. Look out for warnings.
  • Don’t try to make an average from a losing game.
  • Never keep goods that show a loss, and sell those that show a profit. Get out with the least loss, and sit tight for greater profits.

  • Fear: fearful of profit and one acts too soon.
  • Hope: hope for a change in the forces against one.
  • Lack of confidence in ones own judgment.
  • Never cease to do your own thinking.
  • A man must not swear eternal allegiance to either the bear or bull side.
  • The individual fails to stick to facts!
  • People believe what it pleases them to believe.
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