Paul Tudor Jones
Paul Tudor Jones

Paul Tudor Jones is one of the greatest traders that’s ever lived. He has the long term record to prove it.

Here are 10 principles that made him a successful and profitable trader.

#1 He has a strong work ethic based on passion for the business.

“The secret to being successful from a trading perspective is to have an indefatigable and an undying and unquenchable thirst for information and knowledge.”

#2 He followed price action not fundamental valuations.

“At the end of the day, your job is to buy what goes up and to sell what goes down.”

#3 He was able to stay humble and stay flexible. He was always ready to admit he was wrong and exit any trade.

“Every day I assume every position I have is wrong.”

#4 He did not believe in adding to a losing trade.

“Losers average losers.”

#5 Mr. Jones adapted, evolved, and was a competitor in his trading.

“You adapt, evolve, compete or die.”

#6 He learned the lessons of early failure instead of quitting or repeating the failures.

“Failure was a key element to my life’s journey.”

#7 Paul Tudor Jones was a risk manager first and a trader second.

“At the end of the day, the most important thing is how good are you at risk control.”

#8 He cut losses quickly instead of holding them and wishing they would come back. He saved a lot of mental pain and stress that 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.”

#9 Paul Tudor Jones 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.

#10 He looked for only the very best risk/reward trading opportunities.

“I look for opportunities with tremendously skewed reward-risk 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 where you can skew the reward risk relationship so greatly in your favor that you can take a variety of small investments with great reward risk opportunities that should give you minimum draw down pain and maximum upside opportunities”

By Steve Burns

After a lifelong fascination with financial markets, Steve began investing in 1993 and trading his accounts in 1995. It was love at first trade. After more than 30 successful years in the markets, Steve now dedicates his time to helping traders improve their psychology and profitability. New Trader U offers an extensive blog resource with more than 4,000 original articles, online courses, and best-selling books covering various topics.