Paul Tudor Jones's 10 Investing Principles
Updated: May 29, 2022
TA 101: Use these principles when trading and investing to build long term wealth!
Thanks for taking the time to read today's blog post where we look at rules implemented by a world famous trader and Hedge Fund Manager that are going to vastly improve your day trading and investing game!
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Let's kick your trading game up a notch and dive in!
PTJ, as many on Wall Street call him, or Paul Tudor Jones (born September 28, 1954) is an American billionaire hedge fund manager, conservationist and philanthropist. In 1980, he founded his hedge fund, Tudor Investment Corporation, an asset management firm headquartered in Stamford, Connecticut. Below we are going to talk about the 10 Principles he utilized to become a billionaire!
PTJ's 10 Trading Principles
PTJ has a strong work ethic based on a passion for the business.
"The secret to being successful from a trading perspective is to have an indefatigable (relentless), undying, and unquenchable thirst for information and knowledge."
Following price action and not fundamental valuations.
"At then end of the day, your job is to buy what goes up and to sell what goes down."
Stay humble and stay flexible. Always be ready to admit you're wrong and exit any trade.
"Every day I assume every position I have is wrong"
PTJ did not believe in adding to a losing trade.
"Losers average losers."
PTJ adapted, evolved, and was a competitor in his trading.
"You adapt, evolve, compete, or die."
PTJ learned the lessons of early failure instead of quitting or reputing the failures.
"Failure was a key element to my life's journey."
PTJ was a risk manger first and a trader second.
"At the end of the day, the most important thing is how good you are at risk control."
PTJ cut losses quickly instead of holding them and wishing they would come back. This saved a lot of mental pain and stress along the way.
"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."
PTJ traded smaller during losing streaks.
"When I am trading poorly, I keep reducing my position size. That way, I will be trading my smallest position size when my trading is worst."
PTJ looked only for the very best risk/reward trading opportunities.
"I look for opportunities with tremendously skewed risk-reward opportunities. Don't ever let them get into your pocket - that means there's no reason to leverage substantially. There's no reason to take substantial amounts of financial risk ever, because you should always be able to find something that you can take a variety of small investments with great risk/reward opportunities that should give you the minimum draw down pain and maximum upside opportunities."
PRINT these out and keep them by your side everyday if your trading. You will start to realize not only are these beneficial to trading, your personality will change with it and your decision making will be more consistent and you'll achieve your goals faster!
Miguel Ferreira (@wizdaytrader)