PaulTudorJones - the present master No.2

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forex life now alive among traders, CNBC ranked PaulTudorJones at No.2, No.1 is George Soros, Eastforexcashback 1992, when Sorosmade$ The record of $1billioninasingledaybybettingagainsttheBritishpoundisfearedto be unbroken. Jones was a maverick trader with an unusual trading style forexcashbackcalculator a performance cashbackforexbtc was unmatched by his peers, but perhaps most importantly, he did what others could never have imagined: five consecutive years of triple-digit annual returns. East forex cashbackn the fall of 1980, Jones entered the New York Cotton Exchange as a floor trader, and in the years that followed, he earned hundreds of dollars more. His most impressive achievement was not that he was profitable, but that he was consistently profitable; in his three-and-a-half years as a floor trader, he lost only one month.  In 1984, partly because he was tired of his job as a floor trader, and partly because he was worried that his job as a floor trader would eventually make him lose his voice, Jones gave up the job to start his own new career in money management. In fact, Jones should have managed more than that, but he stopped accepting investments in October 1987 and started lending money. Jones had a strong dual personality. His public image was that of an arrogant trader, but in private he was an easy-going, humble gentleman, and the mass media tended to focus on his extravagant lifestyle: his Ghesapeake Bay mansion, his 300-acre private wildlife sanctuary, his beauty, his food, but he also had a side business of helping the poor.  Jones followed the example of New York businessman Eugene Lang. Jones not only donates money, but also meets regularly with students receiving relief on a weekly basis. He recently set up the Robin Hood Foundation, which so far has a total of $5 million. Jones scheduled my interview for 3:15 p.m., just after the futures cashback forexs had closed, except for the stock index. I waited until Jones had placed his order before explaining to him that I didnt want to interrupt his trading "Maybe we should wait until after the market closes" and I said "No problem, lets do it!" He replied Jones to his trading mentor Ely Dulis (EIiTullis) respected Dulis most Jones admired trait, perhaps his willpower to control his emotions Jones recalled that Dulis in his assets suffered the most severe losses, but still able to talk with visitors to the South and the North without moving Jones himself has actually received Duliss true transmission in the day he was interviewed. On the day of his interview, the stock index futures suddenly rose sharply towards the end of the day, causing Jones to lose $1 million, but he remained calm and collected, and I realized at the end of the interview that he had suffered significant losses during the interview. He apparently changed his view of the stock market because his original prediction was wrong, and "the market is clearly oversold," he told me categorically on his second visit. Jones trading style is extremely resilient, a trait that has been one of the main factors in his success Jones is not only able to liquidate his positions immediately, but also to turn to the opposite side when his original predictions prove wrong.    Q: When did you first become interested in trading?  A: When I was in college, I read an article by Richard Dennis that impressed me. I thought Dennis was doing the perfect job in the world. He told me, "Erik is the best trader I know," so I went to Erik and he introduced me to the New York Cotton Exchange, where I was a mentor and a friend. What was your job then?  A: I was just a floor clerk, in fact, we all started from this job, but, at that time, I also do a lot of analytical work, observe the market, and guess the market after I stayed in the New York Cotton Exchange for six months, then went to New Orleans to work for Darius Q: You learned a lot from Darius?  A: Of course, it was a rare experience to work with Dulles. He could trade 300 contracts in a market with only 30,000 open positions, and his trading volume exceeded all other trades.  A: He was a standard speculative trader, but because he had an exclusive broker on the exchange, everyone always knew his holdings and he was easy to pin. the parts of the game?  A: Thats correct Q: But the situation obviously didnt hurt him?  A: Yes, Q: Wasnt there something unusual about Duris? Did you also not hide your trading positions?  A: I tried to hide it, but frankly, those who have worked on the trading floor for five to ten years, as soon as they see an order placed, they will know that I did it I learned one thing from Ely: the market will definitely move in the direction it should Q: So you think its not very important to hide your holdings A: No I think you should at least try for example, in the past my orders were very easy to identify because For example, in the past, my orders were very easy to identify because I was always in and out in multiples of 300 contracts, but now Im spreading out my orders, so I might place 116 contracts with one broker and 184 contracts with another broker I have at least four brokers on each trading floor who go with the flow - anti-market psychology Q: What else did you learn from Duris?  A: Hes the toughest guy I know. He taught me that trading is a highly competitive business and that you have to learn how to face defeat Q: This is just the basic concept of indoctrination.  He told me that if youre going in and out of a large position, you cant wait until the market hits a new high or bottom, because if thats the turning point, the volume is probably going to be low. If the market is currently trading at 56.70 buy and 56.75 sell, the market is likely to have a lot of sell orders and trigger stop orders. I later combined this with the skills that Ely taught me, and if I were to close a position in this situation, I would I always sell half of my positions before the market hits a new high or low, and keep the other half until after it hits a new high or low Q: What else did you learn from Dulles?  A: I also learned that when the market is good and makes consecutive new highs, it is usually the time to sell I learned from Duris that to be a successful trader you have to go against the market Q: You have tens of thousands of trading experience, which one is the most impressive?  A: It was the cotton market in 1979. Anyone can learn more from mistakes than from successes. I had many speculative accounts at the time and held about 400 July cotton futures contracts. I thought at the time that the market was behaving in this way because the price had hit the stop-loss price, and since the stop-loss situation had been triggered, the market was clearly struggling to get going. My broker offered me $82.90, and a broker from Refco, who happened to be passing by him, immediately shouted, "Sell! This brokerage firm at the time had most of the cotton inventory available for delivery in July. It was only then that I realized that the market fluctuation from 82 cents to 86 cents was not a consolidation waiting to happen, but rather a precursor to a circling move lower.  A: Yes I watched the market slide all the way down to 78 cents I really should not have bought the 100 contracts for the sake of the moment Q: So you understand that you should be shorted quickly A: No, I learned that I should be shorted quickly Q: How fast did you move?  A: Almost immediately when the broker yelled "sell," everyone turned to look at me and a guy next to me said to me, "If you need to go to the bathroom, you better go now," and he said I was as white as a ghost. I remember turning around, going out to get a glass of water, and then coming back and telling my broker, "Sell as much as you can," and 60 seconds later, the market was down, and I had only sold 22 contracts.  A: The next day, the market opened 100 points lower, and I tried to sell from the opening bell, but by the time the market stopped, I had only sold about 150 contracts in total. What did you learn from the trade?  A: First, never fight the market and second, never overtrade. The biggest problem with this trade was not that I lost a lot of money, but that I traded much more than I could afford to lose in my account.  A: Yes, I was so upset and frustrated that I considered quitting Q: How long had you been trading commodities at that time?  A: About three and a half years Q: How were you doing before that trade?  A: Pretty good most of my clients were making money and I was one of the main sources of money for my company Q: If someone invested $10,000 in you at that time, after 3.5 years, how much did his amount grow to?  A: About three times as much. Q: So, those investors who joined your account from the beginning, even though they experienced this failure, still made money overall?  A: Yes, but I was under a lot of pressure during that period, and my goodwill was almost ruined by the deal.  However, I was also determined to learn self-discipline and money management This painful lesson made me doubt my ability to be a trader, but I will never give up, I want to make a comeback and rise again I want to be a very self-disciplined and professional trader Q: Has your trading style changed as a result?  A: Yes, now I try to relax if I hold the part against me, I will get out, to my advantage, I will hold long, it is that simple Q: I think you not only began to operate in small amounts, but also to speed up the action A: Yes, not only quickly, but also defensively My mentality now is how to reduce losses, not how to make more money However, I was in that cotton trade, all I could think about was How to make more money on this trade, did not even think about the risk of loss Q: When engaged in trading, you do not set the timing of the exit in advance?  A: I will set a stop-loss point, and when the price reaches that level, I will definitely exit Q: How much risk are you willing to take on each trade?  A: I dont calculate risk on a per-trade basis, but on an overall basis, I calculate the value of my assets every morning, and my goal is to close each day with the value of my assets higher than the opening level. I want to make sure that my monthly losses do not exceed two digits Q: What are the trading rules you follow?  A: When the market is not doing well, reduce the volume; when the market is getting better, increase the volume. Never enter a trade when you have no control over it. Dont care too much about the timing of the entry, what matters is whether you are long or short that day, and try to enter the market before the closing bell Also, the most important rule of trading is to be defensive, not aggressive I always trade under the assumption that my holdings are wrong I will set a stop-loss point, while hoping that my holdings will move in the direction predicted If the prediction is wrong Dont be a hero, dont be overconfident, you must always question your trading ability, dont overestimate yourself, or youre dead. If you make a great trade, dont think its because you had the foresight to do it. Its good to maintain a high level of confidence, but you still have to be vigilant in trying to get in and out - to take advantage of opportunities.  A: Whenever I start a trade, Im on edge because I know that in this business, success comes and goes quickly and every time I get hit, its always when Im complacent Q: My impression is that you often enter the market when its close to turning.  A: I have a very strong sense of the long-term trend of the market but I can not grasp the short-term trend, so I often enter the market when I think the market is moving in a certain direction, to test the entry and exit Q: Does this mean that you will make a series of test entry and exit until you do grasp the turning point?  A: Yes, I will first predict the direction of the market, and then test it in a low-risk way. If it never works, I will change my view of the market Q: What is the most important misconception of the general public about the market?  A: The idea that the market can be manipulated by human forces, such as the idea that there are groups on Wall Street that can control the winning price. Perhaps in the most deserted areas to open a high-end clothing store, but if no customers come to the door, you are bound to close only one way to the past has been carried out - the future can catch up Q: What other misconceptions of the general public?  A: People always think that Wall Street sources will know the inside information Q: You often discuss market trends with your peers, however, if their views are different from yours, what will you do? For example, you are currently bearish on the market, but 75% of your peers are bearish, what do you do? A: I would wait and see for a while. Let me give you an example: until last Wednesday, I was still bearish on the crude oil market, but because the most brilliant crude oil trader I knew was long, I didnt go short, and then the oil market stalled. Q: Few traders can have the same achievements as you, what are your greatest strengths?  A: I think my greatest strength is to consider anything that has happened before this moment as history I dont care if I made a mistake three seconds ago, I care about how I should act in the next second I try to avoid having my judgment influenced by the opinions of others Q: Never hold on to your positions, obviously an important factor in your success?  A: Yes, because thats why you can judge the market objectively. This element can help you make accurate predictions without fear Q: The money you manage is growing fast, but is it twice as difficult to achieve the same level of profitability?  A: Yes, it does. Q: Do you often think that if I had less money under management, my profitability would be much higher than it is now?  A: Yes, I did stop letting my money grow. Q: You used to work as a broker, what do you think are the pros and cons between brokers and fund managers?  A: I gave up the broker job because I felt there was a conflict of interest. As a broker, I could still collect commissions from my clients even if they lost money, but in the fund manager business, I dont get paid because my clients lose money, so it seems to be more honest to my conscience.  A: The money I put into my own fund is about 85% of my personal net worth. I think it is the safest place for my money and I am confident that I will do my best to keep it.  A: The week of the stock market crash was one of the most exciting and stressful experiences Ive ever had. We expected a stock market crash as early as mid-1986, so we devised several strategies to deal with it, and when Monday, October 19, 1987 came, we knew the stock market would crash that day Q: Why were you so sure?  A: Because the stock market fell on Friday, October 16, and trading volume increased, exactly as it did two days before the stock market crash in 1929, and at the same time, U.S. Treasury Secretary Baker stated in his weekend talk that the U.S. would no longer support the U.S. dollar because of the failure to reach an agreement with West Germany, which was the kiss of death for the stock market Q: You were short then, and then when did you cover?  A: Actually, I covered before the stock market closed on October 19, and I even held a number of long positions Q: Did all the profits you made in October 1987 come from shorting stock index futures?  A: No. I also made a lot of money in bonds. On the day of the stock market crash, I had the largest bond position I had ever held. I guessed that the Federal Reserve Board would increase the money supply significantly to maintain the prosperity of the market, but since the performance of the bonds was really bad, I didnt dare to hold a lot of long positions. Do you think October 1987 was a warning of a bumpy market?  A: I think October 19 was a do-or-die moment for the financial industry, especially Wall Street, but they were so shocked that they didnt understand the dangers. "I was so shocked that I didnt realize the severity of the situation until I saw the look on my friends face, and I realized I was seriously hurt. Reagan helped to convince us that the U.S. economy would remain prosperous during his presidency, but there was a price to pay for that. I have come to the conclusion from studying history that credit problems can destroy any society. Growth and Financial Order Q: Do you blame Reagans economic policies for the current economic situation in the United States?  A: I think Reagan made us believe that the United States is a great country, which is a very good feeling, but from an economic point of view, he brought the biggest disaster in the history of the U.S. economy. What do you think is the best way to solve the current economic problems in the U.S. so that the U.S. economy does not slow down or even go into a depression?  A: Thats what really worries me, because until now, I havent seen a real solution to help the U.S. out of this mess. I think were going to have a tough time and were going to relearn financial order and discipline Q: Have you ever used a trading system to trade?  A: We have tested a variety of trading systems and found a good one, but this is a trade secret, not to disclose Q: What type of trading system is this system, is it reverse, or trend following?  A: Its trend following. The basic premise of this trading system is that when the market moves, it must move sharply. Suppose after a period of narrow fluctuations in the market, the range of fluctuations suddenly expands, which is obviously a pre-determination that the market will move in the direction of increased volatility Q: Are some of your funds currently operating under this trading system?  A: We just started using this trading system six months ago, and its working pretty well Q: Do you think a good trading system is worth a good trader?  A: A good trading system, because of its unlimited computing power, so you can engage in trading, however, a brilliant trading, but also can only specialize in a certain market After all, any trading decision is the process of problem solving and problem solving, may be by personal power, may be by other methods, due to the interaction between the market, and the market changes are too complex Q: You were short two weeks ago, what made you change your mind?  A: Because the market did not fall as I had expected. I believe that the market fundamentals will change only after the market price changes.  A: Duris taught me the importance of timing. When I trade, I use not only price stops but also time stops. If I think the market should move, but it doesnt, I usually get out immediately, even if I dont lose money. I think the reason the stock market is moving differently now than it did in 1929 is that credit is much easier today than it was then. I think the stock market will still follow the pattern of 1929, but the credit is so easy that the stock market has been delayed in following through. What was your motivation for doing so?  A: When I was 21 years old, I had a senior who taught me a lot and thats what I miss most in my life and I feel I have an obligation to do the same for my juniors.  A: After numerous interviews there were a lot of applicants Q: How many did you accept in total?  A: About 25 Q: How did they do?  A: Some of them were really good but, overall, they were pretty poor Q: Do you think its because to be a good trader, you have to have a little bit of talent?  A: I never thought about it before, but I do now think that one of my biggest weaknesses is that I am too optimistic and always think that everyone can be a successful trader Q: What is the most important advice you can give to the next generation?  A: Dont just think about making money, but always be careful to protect what you already have Q: Do you see yourself as a trader in 10 or 15 years?  A: I have no choice Q: Do winning and losing have the same emotional intensity?  A: Of course losing is the most frustrating thing, I get so depressed that I cant even hold my head up. Since his risky cotton trade in 1979, Jones has tried to minimize his risk to ensure that each trade is profitable. If his assets are down 1 to 2 percent on a trade, he may be determined to dump all of his positions to reduce his risk "Its easier to get in than to get out," he says. So that, even if the trade is in trouble, he only trades with the smallest parts Jones automatically reduces the risk of his holdings to ensure that his monthly losses do not exceed double digits Also, if his trades are profitable, he reminds himself not to get carried away and overconfident In short, Jones has more than a dozen different ways to control trading risk, and this is exactly what he says "The most important rule of trading is to be defensive, not aggressive."

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