Paul Tudor Jones

Paul Tudor Jones is one of the greatest traders alive. Starting out in the cotton pits, he quickly became a superstar trader.

He made $100 million on the day of the 1987 crash alone. Can you imagine the urge to close that trade early…!

Now he’s worth about $5 billion and is the Chief Investment Officer at Tudor Group. Every now and then a documentary called 1987 floats around the web before being taken down. If you ever get a chance to watch it, do it…

Anyway, I like him, and whilst he hasn’t written a book, he was featured in the first Market Wizards book and occasionally does interviews.

So, what are PTJ’s best words of wisdom?

#1 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.

You hear it all the time. Literally, ZERO successful traders tell you the opposite.

It’s the only damn thing we all agree on!!

#2 First of all, never play macho man with the market. Second, never overtrade.

Overtrading and ego, ah the old enemies of any trader. Even Paul Tudor Jones got burnt by them. But he learned how to eliminate these from his trading…

Do whatever you can to prevent ego or overtrading from creeping in.

#3 Trading is very competitive and you have to be able to handle getting your butt kicked.

We are playing against the best in the world. It’s like a giant MMA pit with all traders trying to take each other’s money…

The ability to recover from knockdowns, setbacks, and beatings is an essential skill in trading.

#4 You learn more from your losses, than from your gains.

I would add, only if you take time to learn…

Don’t let your losses go to waste, analyse, scrutinise, and extract all the lessons you can.

After all, you’ve already paid the tuition, and may as well get as most from it.

#5 Markets trend only about 15% of the time; the rest of the time they move sideways

A nice market structure observation here.

What does it mean?

Make sure your trading strategy is aligned with market conditions.

Forcing breakouts all the time is a quick path to the poor house.

#6 Sometimes failure is merely chasing you off the wrong road and onto the right one

It’s tough to know when to pivot vs. when to keep grinding.

There’s not an easy answer but listen to your gut.

If a certain trading approach has not been working for you, make a course correction.

Listen to your instinct. Sometimes only small adjustments are needed to find the right path.

#7 You adapt, evolve, compete, or die.

Direct advice here from PTJ.

And 100% true. Play the game to win, stay one step ahead, be flexible, and believe in yourself.