22 Things I learned From the Paul Tudor Jones Interview “The Trader”

16 May
May 16, 2013

Paul Tudor Jones famous interview and documentary “The Trader” is a classic among market participants. It is one of the few places you can actually see a true Market Wizard and the young  money manager that would become a billionaire in live action. After watching it a few times over the years here are the lessons I have gleaned from watching the master in action.

  1. It is possible to see that a market is dramatically overbought and to prepare for and then capture huge gains after the sell off.

  2. Risk small amounts of losses to make large amounts in profits.

  3. Bet against times when numerous leaders must agree.

  4. Long hours and a strong work ethic are keys to being a successful trader.

  5. While it is good to trade any market that will turn a profit, specializing in a market can lead to great success.

  6. The markets go down faster than they go up.

  7. If the market will not go down during bad news it will likely go higher.

  8. The stock market moves in patterns and in cycles. Past price patterns repeat themselves due to human emotions.

  9. Many times traders think a big position order size means that a whale knows something, most times they do not. 

  10. It is okay to skip a trade if you can’t get your entry price.

  11. A momentum move does not just stop, it takes time to roll over.

  12. It is possible to trade successfully by gaming the actions of other traders.

  13. Be aggressive at high probability moments.

  14. Always stay in control of your trading and manage risk.

  15. Focus on risk management as the #1 priority in trading.

  16. Having the right mindset during a big loss that it is just temporary is the key to coming back and being successful.

  17. Letting profits run is a great plan at times.

  18. Being long at all time highs in the indexes is a great strategy.

  19. Great money managers trade with passion.

  20. Even Market Wizards are never sure if they will win when entering a trade. 

  21. When the top in a market is hit,  there is a lot of money to be  made shorting as panic selling sets in. 

  22. Guys from Tennessee can trade! (Sorry, I couldn’t help myself).