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Paul Tudor Jones

Feb 14, 2017 06:15 PM

Dear Traders,

Paul Tudor Jones is one of the most famous traders nowadays. Born in 1954 in Memphis, he is also known as a businessman, philanthropist and 345th richest man in the world.

After graduating from the University of Virginia in 1976, Paul Tudor Jones started to work as a clerk on the trading floors and later on became a broker for E.F. Hutton & Co. These years can be easily considered as a part of his financial education and prepared him for the journey on his own. 2 years later he applied to Harvard Business School, but never went there, because: “For what I'm doing here, they're not going to teach me anything. This skill set is not something that they teach in business school”.

Shortly after that, Paul Tudor Jones started to work with Eli Tullis in trading cotton features at the New York Stock Exchange. These years have not been easy for him, but it was a great school of emotional control: “No matter how you cut it, there are enormous emotional ups and downs involved in trading”.

In 1980 Tudor Investment Corporation was founded, which currently works on such investment strategies as a discretionary global macro, quantitative global macro (managed futures), discretionary equity long/short, quantitative equity market neutral and growth equity. In 1987 was one of the very few people, who noticed the similar features between 1929 market and the current one and could predict the Black Monday with tripling his funds.

Jones’ trading style is mostly based on technical analysis and current market situation. There are 10 trading rules, which he tends to follow:

  • Contrarian investment strategy - find mispriced and undervalued investments and buy it.

  • Market opportunism - when you develop an investing idea, don’t give up on it: keep checking it out until you are proven wrong or change your view on it.

  • Swing trading - the best money is made at the market turns.

  • Get out of a losing position that is making your feel uncomfortable. The key is to play great defense, not great offense.

  • Decrease your trading size when you’re doing poorly, increase when all is well.

  • Start making mental stops. If price hits that number, go out no matter what.

  • Keep a sharp eye on risks involved in your trades.

  • Check the prices moves first, not fundamentals

  • Do not get stuck on your previous mistakes, concentrate on the future.

  • Don't be a hero. Don't have an ego. Always question yourself and your ability.

Learn how to trade like Paul Tudor Jones II with Ayrex!

Sincerely yours,

Ayrex Team.