Friday, June 7, 2013

Advice to Traders from Paul Tudor Jones

It is encouraging to see that many readers have also figured out and are helping us all in keeping a close watch on the important patterns that are in the making. (Keep contributing!)

While recognizing patterns at the right time is crucial for our success in trading, there is something more that we need in order to reap the true benefits of the same. In that reference, I was reading about Paul Tudor Jones, one of the most successful traders of America, who shone during hard times.

So I felt like sharing some of his tips, most of which we would be aware of, but would act as reminders & could benefit us all - young as well as experienced traders/investors:
  • Don’t be a hero, don’t have an ego. Always question yourself & your ability. Don’t ever feel that you are very good. The second you do, you are dead!
  • Play great defense.
  • Don’t ever average losses
  • Never trade in situations where you don’t have control. I don’t trade in front of key reports.
  • If you have a losing position, get out. Coz you can always get back in. There is nothing better than to have a fresh start.
  • I don’t really care about the mistake I made 3 seconds ago in the markets. What I care about is what I am going to do from the next moment on. I try to avoid any emotional attachment to the markets
  • Never think on what you might make on a given trade, but only what you could lose.

Whenever Paul realized that he was trading poorly, he would continually reduce his position size until he was on track again. That way, when he was trading his worst, he was also trading his smallest.

Fascinating, isn't it?

1 comment:

Dinesh said...

Dear Sir,
I like it especially 'do not have ego'. We must understand that not all trades would work in our favor and not all trades would deliver huge profits. So, if a trade is not working as per our expectations, the best thing is to get out and look for another opportunity.
I would also like to add that although one must have a system and adhere to that but at the same time one must be open to learn new techniques/concepts and refine the system to see whether it can give better results.