- Jesse Livermore is known for both colossal gains and losses. He made $million in 1929, and by 1934 he had lost all of it (an example that confirms the huge risk involved in stock trading).
- George Soros is one of history’s most successful stock and forex traders. He gained the nickname “the man who broke the bank of England” when he made $1 billion profit from selling $10 billion worth of pounds. He is the chairman of Soros Fund Management.
- Richard Dennis is a successful commodity trader based in Chicago. He made an estimated $200 million over a period of ten years from market speculating.
- Paul Tudor Jones became famous after the market crash of 1987 to make a whopping $100 million from shorting stocks. He is the founder of Tudor Investment Corporation.
- William Delbert Gann is known for developing technical indicators like Gann Angles and the Square of 9. He was a trader who used market forecasting techniques based on astrology, geometry, and mathematics.
- Bill Lipschutz turned $12000 investment in the stock market to $25000 in a few months but lost all of it. He then moved to forex trading, where he has made over $300 million.
- John R. Taylor Jr started as a political analyst for a chemical bank before becoming their forex analyst. He is the owner of FX Concepts, which is a currency managing firm.
- Stanley Druckenmiller is a successful trader who started as an oil analyst for the Pittsburgh National Bank. He was a part of a deal while working at George Soros that raked in $1 billion.
- Andrew Krieger is one of the best trader in the world. He sold kiwi, a New Zealand currency, a trade valued more than the total currency supply. He got revenue of $300 million from the trade.
- Michael Marcus is one of the best and most successful forex traders in the world. Legend Ed Seykota trained him. During the presidency of Ronald Reagan, Marcus held positions of almost $300 million in German marks.
Archives of “paul tudor jones” tag
rssPaul 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…)
Paul Tudor Jones is one of the great macro traders of all time but he’s ‘a slave to the tape’
How does Paul Tudor Jones see the world now?
Paul Tudor Jones is one of the great investors of all time and he’s renowned for macro calls. His latest market outlook highlights the coming waves of direct debt monetization that will reshape the economies and financial markets of the world.
“There will be many assets that will move as a result of this money creation. So what is an investor to do? Traditional hedges like gold have done well, and we expect investors to continue to seek refuge in this safe asset. One thing I have learned over time is the best thing to do is let market price action guide your decision-making and then try to understand the fundamentals as they become more evident and comprehensible,” he writes in a note with Lorenzo Giorgianni.
That’s an odd thing for one of the great macro traders of all time to say, but if you look back over his (rare) public comments, it’s a familiar theme. Here’s what he said back in 2009:
Traders :It’s OK To Be Emotional
Read any book or blog about trading and you’ll be told controlling one’s emotions is a key skill needed to trade well. On the surface, this sounds like good advice. After all, greed and fear are killers at a trading desk right?
But the evidence doesn’t back up such a notion.
These writers are saying you must be very calm and not get too excited. You must keep an even keel and not ride an emotional roller coaster – as if to imply emotional restraint is a desired state.
I’ve never completely agreed with this concept because I know from casual observation most successful people are very emotional.
SOME EXAMPLES
- Michael Jordan, Tiger Woods – very intense, very emotional!
- Bobby Knight, Coach K – love them or hate them, they’re extremely emotional and extremely successful.
- Muhammad Ali – intensity, passion, showmanship and yes, emotion.
- Paul Tudor Jones – if you can get your hands on a copy of the PTJ 60-minute documentary the subject supposedly bought up, you’d learn he has off-the-charts competitiveness, intensity and is very emotional.
THE TRADING TEMPERAMENT
Yet it’s a rarity to meet a calm trader, who doesn’t seem to be overly intense or competitive, become successful. This doesn’t mean you have to hurl your keyboard out the window every time you lose money.It’s just means you aren’t likely to succeed if you don’t have a little fire in your gut.
Trading is tough. It takes years of study and practice. Without a strong emotional drive, it’s unlikely a newbie would be willing to put in the time necessary to get good. (more…)
Paul Tudor Jones Trader • Trade it Don't Date it
Losers Average Losers
There are so many concepts about the stock market that are taught in the classrooms, promoted throughout the media, and passed along from generation to generation but, unfortunately, most of them are FLAT OUT WRONG!
I decided to write a 5-part series (this is part 2 of 5) on the common misconceptions that really need to stop being promoted. Keep in mind, these are all my humble opinions, but after 16 years of trading and studying market history, one really begins to notice what works and what doesn’t.
Common Misconception #2 – Dollar Cost Averaging
Paul Tudor Jones is one of the greatest traders in market history. Why? Because he’s consistently profitable. The best “anything” in the world are the best because they perform at a consistent, superior level for long periods of time. Michael Jordan isn’t considered the best basketball player ever because he scored 30 points ONCE in a game. It’s because he averaged 30 points per game over his ENTIRE career. (more…)
Paul Tudor Jones 10 Trading Principles
Paul Tudor Jones is one of the greatest traders that’s ever lived. He has the long term record to prove it.
Here are 10 principles that made him a successful and profitable trader.
Trading wisdom and strategies
Trading System – According to Howard Abell: The trading system gives the trader the ability to control his or her emotional states rather than allowing them to control him. A system is a disciplined method for organizing dynamic, ever-changing market phenomena.
Risk Control – According to Paul Tudor Jones: If I have positions going against me, I get right out; if they are going for me, I keep them… Risk control is the most important thing in trading. If you have a losing position that is making you uncomfortable, the solution is very simple: Get out, because you can always get back in.
Psychological Makeup – According to Leo Melamed: You learn to distinguish the good traders from the bad, the successful techniques from the unsuccessful, and the good habits from the faulty. You also learn to distinguish the lover from the fighter, the winners from the losers, the serious from the frivolous, the cerebral from the superficial, and the friend from the foe. But above all, you learn that the psychological makeup of the trader is the single most critical element of success.
The Easy Middle – According to Randy McKay: The beginning of a price move is usually hard to trade because you are not sure whether you are right about the direction of the trend. The end is hard because people start taking profits and the market gets very choppy. The middle of the move is what I call the easy part.
Cut Back Trading Size When Losing – According to Bill Lipschutz: When you are in a losing streak, your ability to properly assimilate and analyze information starts to become distorted because of the impairment of the confidence factor, which is a by-product of a losing streak. You have to work very hard to restore that confidence, and cutting back trading helps achieve that goal.
Have A Predetermined Stop – According to Bruce Kovner: Whenever I enter a position, I have a predetermined stop. That is the only way I can sleep. I know where I am getting out before I get in. The position size on a trade is determined by the stop, and the stop is determined on a technical basis.
Accept the Risk – According to Mark Douglas: To whatever degree you haven’t accepted the risk, is the same degree to which you will avoid the risk. Trying to avoid something that is unavoidable will have disastrous effects on your ability to trade successfully.
Making Mistakes Is Part of Business – According to Bruce Kovner: Michael Marcus [another top trader] taught me one other thing that is absolutely critical: You have to be willing to make mistakes regularly; there is nothing wrong with it. Michael taught me about making your best judgement, being wrong, making your next best judgement, being wrong, making your third best judgement, and then doubling your money.
Techniques to Control risk and Increase Safety
- Before taking a position, know the amount you are willing to lose. -Marty Schwartz
- If a stock drops 7% below my purchase price, I will automatically sell at the market–no second guessing, no hesitation. -William O’Neil
- You should always have a worst case point. The only choice should be to get out quicker. -Richard Dennis
- I have a mental stop. If it hits that number, I am out no matter what. -Paul Tudor Jones
- Combine that long-term objective with a protective stop that you move as the position goes your way. -Gary Bielfeldt
- I set protective stops at the same time I enter a trade. I normally move these stops to lock in a profit as the trend continues. -Ed Seykota
- Risk management is the most important thing to be well understood. Under-trade, under-trade, under-trade is my second piece of advice. Whatever you think your position ought to be, cut it at least in half. My experience with novice traders is that they trade three to five times too big. -Bruce Kovner
- Why risk everything on one trade? why not make your life a pursuit of happiness rather than a pursuit of pain? -Paul Tudor Jones
- Never risk more than 1% of your total equity on any one trade. By risking 1% I am indifferent to any individual trade. Keeping your risk small and constant is absolutely critical. -Larry Hite
- The key is to lose the least amount of money when you are wrong. -William O’Neil
- You have to minimize your losses and try to preserve capital for those few instances where you can make a lot in a very short period of time. What you can’t afford to do is throw away your capital on suboptimal trades. -Richard Dennis
- Most traders have a tendency to take risks that are too large at the beginning. They tend not to be selective enough when they take risks. – Gary Bielfeldt
- The object is always to minimize your risk. -Tom Baldwin
- No matter what happens, I know my worst case. My loss is always limited. -Tony Saliba
- You might have a low-risk trade, but if you are afraid, you probably will not take it.
Wisdom from Legendary Traders
“I absolutely believe that price movement patterns are being repeated; they are recurring patterns that appear over and over. This is because the stocks were being driven by humans- and human nature never changes”. -Richard Dennis (Turned 400 dollars into a fortune of at least 200 million dollars by using his remarkable trading skills). |