Archive for September, 2010

Paul Tudor Jones Trading Notes

September 28th, 2010 No comments

Here are some notes on how Paul Tudor Jones trades from Sebastian Mallaby’s great book “More Money than God“:

-Write a script. If the market follows it surf the wave, if not get out. He understood the importance of how investors were positioned and market psychology
-If you understand the other players in the market, you can identify trades with hugely attractive risk-to-reward. Identifying an illogical price anomaly was only the start of a trader’s thought process. The next step was to identify the trigger, a reason why the anomaly might correct; since otherwise it might persist indefinitely. The trigger could be an upcoming election, a psychological tipping point identified in the charts, or some factor that would change the behavior of large institutional investors. Whether consciously or otherwise, the great discretionary traders were acting on signal from this blend of inputs
-Always look for a trending market. Investors frequently react to information gradually. Once a move become overextended he is looking to profit from its reversal

Remember also to read my first blog post on Tudor: Lessons from Paul Tudor Jones

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