In October 1987, most of the world's investors suffered heavy losses. However, in the same month, Paul Jones-run futures funds broke through and earned a staggering 62% return. Paul · Jones has consistently performed well and he has maintained triple-digit growth for 5 consecutive years. At the end of 1992, the European Monetary System crisis occurred, Paul Jones made more than a billion dollars in the foreign exchange market for several months.
Paul · Jones started as an agent, started in 1976, and earned more than $1 million in commissions the following year. In 1980 he went to the New York Cotton Exchange as a field trader and made tens of millions of dollars in a few years. In 1984 he left the exchange to create the Tudor Fund, starting from 1.5 million. Every 1 000 USD invested into his fund after 4 years has grown to more than 1 700 USD. By the end of 1992, tudor funds. The total amount has grown to 60 billion dollars. If it weren't for Paul Jones stopped accepting new investments at the end of 1987 and began distributing profits, and $6 billion was absolutely impossible to stop.
Paul · One of Jones's great points is that he uses the theory of opposite movements to buy or sell at a turning point in the market, and at the same time, he sets a stop-loss order for each trade. Therefore, when trying to sell, the following situations usually occur: selling at a high level to swing a stop loss order, the market price hits a new high, stop loss closes, sell short again, stop loss again, and the cycle begins again.
Paul · Jones himself has a strong dual personality. In private, he was very accommodating, but when it came to trading, he gave orders as if he were a fierce and brutal commander. He is portrayed in the public as an arrogant trader, but in private he is an approachable, courteous gentleman, charitable, giving a lot of money, and can be called the modern Robin Hood, willing to rob the rich and help the poor.
Investment strategy and theory: when the trading situation is not good, reduce the amount of operation; when the trader gradually enters a better state, incremental operation. Don't rush into the market when you can't control it.
How to do it: Don't care too much about the timing of the entry, what matters is whether you are long or short on the day, and try to move forward before the close. Paul · Jones will first predict the direction of the market, and then test it in a low-risk manner. If he doesn't succeed, he will change his view of the market.
Opinion on investment tools: Good traders should be able to make more money than computer systems, because the human brain is flexible and adapts more quickly to changes in the market and the differences between different markets.
Quotes and Ideas:
· First, never compete with the market; second, never overtrad.
． Don't be a hero, don't be overconfident, you must always question your trading ability, don't overestimate yourself, otherwise you will die.
· Don't be full of thoughts about making money, and always pay attention to protecting what you already have.
· The most important trading rule is to be defensive, not aggressive.
· Anyone gets an education from their mistakes far more than they learn from success.
Make money at the turn of the momentum
Paul · Jones' trading strategy is different. He is reluctant to follow the trend, rarely follows the trend, and always likes to make money when the trend is turned. He is the greatest opportunist of his own, and when he finds such an opportunity, he enters the field or throws the top. If you are wrong, you will immediately cut the position, and then try again, often after trying several times, you will start to make a lot of money. Many people in the market think that blindly finding the bottom or the top is quite dangerous, and it is best to grasp the middle section of the trend to make money. Jonesb has managed to catch a lot of tops and bottoms over the years. Jones's theory is that if a person who follows the trend wants to make money in the middle, the stop loss order must be set far away, and once forced to cut the position, the loss is very large. Moreover, the market is only strong at 15% of the time, and the rest of the time is sideways. Therefore, he prefers to do two heads.
Paul · Jones felt that the futures market could not be manipulated by anyone. Most people have the illusion that big Wall Street owners can control changes in market prices. Jones said he could go in and make a fuss for a day or two, or even a week. Especially if the timing is right, he will add fuel after entering the market, which may create some kind of illusion, but as soon as he stops buying, the market price will fall, unless the market itself is very strong. He made a vivid analogy: You can open the most beautiful summer clothing store in Alaska, but no one buys it, and you will always go bankrupt. Jones also pays attention to communicating with his peers, especially those who have better records. If he agrees with them, he does more, and if there is a very big disagreement, he waits and sees. Originally, he was optimistic about a certain currency and wanted to buy it, but when he learned that a certain master was throwing, he waited patiently. Wait until there is · The market began to flatten, and the man said, "I think it's time to play." He went in for a big buy. Jones most admired the "Elliott Wave" theory in terms of specific analytical methods. He believes that a considerable part of his success is due to this cycle theory. Elliott Wave Theory is an analytical method that uses the golden section method to calculate the market's ups and downs, and is widely used in the stock and futures markets, and Jones believes that the futures market is no exception. After the Elliott Wave theory is thoroughly eaten, it can help you find many low-risk and high-return opportunities to enter orders.
When it comes to the secret of success, Paul Jones sees his strength as detachment. Anything that has already happened is a thing of the past, and what happened 3 seconds ago doesn't matter, the key is what to do next. Emotionally, it is far away from the market, and the previous view is not correct and must be immediately revised. We must be open-minded and firm in our confidence. Although he himself prefers to do two ends and find a reversal, tudor funds also use several sets of computer trading systems that follow the trend, and the results are also very good. But Jones believes that good traders should be able to make more money than computer systems, because the human brain can be flexible and adapt more quickly to changes in the market and the differences between different markets.
Trading styles are extremely flexible
Paul · Jones believes that trading styles must be resilient. Jones' trading style is: when the trading situation is not good, reduce the amount of operation; when the trading gradually enters the good situation, incremental operation. He stressed: "Don't rush into the market under circumstances that you can't control. For example, I would never go forward in publishing economic indicators, because this is simply gambling, not trading. If the area you hold is losing money, the solution is actually very simple: wait and see. After all, you can enter the market at any time, there is no other way to be more exciting than starting again, don't care too much about the timing of the entry, the desire is whether you are long or short on the day, and try to move forward before the close. ”
Paul · When Jones trades, he hopes that the positions he holds will move in the predicted direction. If the prediction is wrong, he can also retreat.
One day, Paul. Jones scheduled the reporter's interview at 3 p.m., which coincided with the gap between the futures markets that had closed except for the stock price index. Still, reporters are concerned that conducting interviews at this time could be disrupted, as they know that The Temple Stock Index (s & P500) futures are one of Jones' main trading targets. In fact, at the time of reporters' arrival, Jones was trading in Staples stock index futures.
The reporter waited until Jones had placed his order before explaining to Jones that he did not want to disturb Jones' trade. "Maybe we should wait until the market closes." Reporters said. "No problem, let's get started!" Jones replied.
Jones' mentor for his trading, Erie Durris is highly regarded. Perhaps the trait that Durris admires most about Jones is his willpower to control emotions. Jones recalled that Durris was still able to chat quietly with visitors when his assets suffered the worst losses.
Jones himself actually got the true biography of Durris. On the day of his interview, the stock index futures suddenly rose sharply at the close, causing Jones to lose $1 million. However, he still looked at ease, and when the reporter ended the interview, he found that he had suffered a major loss during the interview.
There wasn't enough time for the interview, so two weeks later, the reporter visited Jones for a second interview. In the second interview, one thing worth mentioning is that Jones used to empty a lot in the first interview. But in the second interview, he changed to do more. Apparently because of the original prediction error, he changed his own view of the future of the stock market.
"It's clearly oversold on the market." Jones told reporters in a second interview. Jones' view of the market shifted 180 degrees in just two weeks, highlighting the resilience of Jones' trading style, which was one of the main factors in his success. Not only was Jones able to immediately clear out what he had originally held, but he was also able to decisively turn to the opposite side when it turned out that his original prediction was wrong.
The most important thing about trading is defensive rather than offensive
Paul · Jones thinks he has a strong hunch about the long-term direction of the market. However, for short-term trends, it is difficult to grasp. Therefore, he usually thinks that the market is moving in a certain direction, and then he makes tentative moves in and out of the field. If he doesn't succeed, he will change his view of the market.
Jones' specific trading principle is: not evenly add orders. After a batch of orders enter the market, the market reversal shows that there may be a problem in judging, although the average price of blindly adding a single is slightly better, but if the party asks the wrong question, the newly added single is only wrong and wrong. Conversely, if you believe that Fang Qing is right, but the price is not good enough, then you don't have to worry too much. Jones believes that it does not matter where to enter the order, the key is whether you are bullish or bearish on this day. Newbies love to ask Jones: Do you buy or sell? Jones argues that whether he buys or sells should not influence other people's judgment of the market. Novices also need to think independently. Another question is: Where did you start buying? Jones believes that this also has nothing to do with whether the day is earned or lost, the key is to judge the rise and fall.
Jones believes that the most important thing in trading is defensive rather than offensive. Every day, he assumes that every order he enters is wrong, and sets the stop loss level in advance, so that he has a good idea of how much he will lose at most once. Jones advises all traders not to be reckless and not to be conceited. Keep doubting yourself, doubting your own abilities, and never thinking that you are not up to it, you are doomed as soon as you float. This is not to say that there is no confidence in oneself, confidence must be there, but it is appropriate. Jones said to himself that he was getting more and more afraid of the business, because he knew how hard it was to maintain his grades. Every big loss is often when you feel good after making some beautiful orders in a row.
He believes that if he feels uneasy, he will clear the position in time, and after leaving the scene, he will be sober and ready to redeploy the attack.
Paul. Jones speculative trading is very successful, after years of fighting, the cumulative profit is very impressive, but for the daily trading, still careful handling, do not dare to take it lightly. Paul · Jones understands that speculation is a long-term struggle, not to be a hero, not to be complacent, and to often issue question marks for his own abilities. If you are facing the abyss, if you are walking on thin ice, you are the ultimate combat attitude. As long as you feel a little heroic and full of ethereal feelings, Bu a battle will defeat you. After winning the battle, don't, because your predictions are accurate and you can't be a fool, confidence is important, but you must guard against mistakes due to overconfidence.
To this end, Paul Jones formulated some important buying and selling rules:
1 ． It does not matter at any price level to enter the market, and every day we re-weigh whether we should continue to hold the contract according to the situation at that time.
2 ． The closing price of the above port is regarded as today's entry price.
3 ． Speculative trading should first pay attention to solid defense, first hold steady and then try to attack.
4 ． If the contract held by the opponent every day has been wrong, carefully place a stop loss order, so that the risk can be controlled.
5 ． After the above, after careful deployment, the market will be completely stress-free and you can enjoy life as much as possible.
6 ． Entering the market correctly, of course, you can push the boat along the water. Even if the trading is slightly unsatisfactory, and Shan Yu has a plan to get out, neither of them will cause trouble.
In short, after years of successful experience, Paul Jones still does not step into the trap of overconfidence for speculative trading. He said: "Compared with the time when I first entered the speculative industry, I feel that my courage is getting smaller and smaller, and I know that in the speculative market, it is necessary to fight for a long time with a mood like approaching the abyss and walking on thin ice." ”
Don't be a hero, and don't be overconfident
Paul · Jones' trading career has not been smooth. In 1979, he was brave for a while, and he entered too many orders at a time, and as a result, he encountered a drop and stopped board, and when he closed his position, the loss of funds reached 2/3.
In the cotton market of 1979, Jones had many speculative accounts at the time and held about 400 July cotton futures contracts. The market price was oscillating between 82 and 86 cents, and he entered every time the price fell close to $82 cents.
One day, the market price hit a new low, and then immediately rebounded about 30-40 points. Paul · Jones thought this performance of the market was due to the price touching the stop-loss price. Since the situation of causing a stop loss has been triggered, the market is clearly waiting for a situation. Paul · Jones stood outside the trading floor and asked his agent to take 82 . 90 cents to buy 100 July contracts. This was a big deal at the time. Paul · When Jones placed the order, he had a strong and courageous mentality in his heart, so Paul Jones' agent bid him 82 . 90 USD. An agent from Refco, who happened to pass by him, immediately shouted, "Sell! "The brokerage had most of the cotton inventory that could be delivered in July. By this time Paul Jones knew that the market's shock at 82 to 86 cents was not a consolidation of momentum, but a precursor to spiraling lower.
Paul · Jones watched as the market price plummeted all the way to 78 cents. He really shouldn't have bought the 100 contracts for the sake of being quick.
When the agent shouted "Sell," everyone turned to look at Jones. A guy next to Jones also said to him, "If you're going to the bathroom, you'd better hurry up." He said Jones looked like a ghost. Jones remembers turning around, walking out for a glass of water, and then coming back and telling his agent, "Throw as much as you can." After 60 seconds, the market price fell to a halt, and Paul Jones sold only 22 contracts. The next day, the market opened down 100 points, while Paul Jones tried his best to throw from the opening. As a result, when the market price fell to a halt, he only sold about it! 50 contracts. By the close, some of Jones' contracts were selling at prices that were only 4 cents lower than when he first found the market was not right.
The biggest problem with this deal wasn't that he lost so much, but that he traded far more than he could afford in his account. As a result, the trade alone cost him 60%-70% of his funds. Paul · Jones couldn't help but ask himself, "Stupid, why make a desperate bet and seek your own bitter fruit?" "
However, Jones is also determined to learn self-discipline and money management. This painful lesson made him doubt his ability to be a trader, but he did not give up, he wanted to make a comeback, and to be a very disciplined and professional trader.
Paul · "Anyone who learns from their mistakes far more than they learn from their successes," Jones said. "Through this failure, Paul Jones summed up the lessons: First, never compete with the market: Second, never overtrad.
He stressed that don't be a hero, don't be overconfident, you must always question your trading ability, don't overestimate yourself, otherwise you will die. The most prominent speculator in the American history of the dagger, Jesse Levenmo once said: "In the long run, no one can beat the market." That's why his trading philosophy tends to be defensive. If you make a standout deal, don't think it's because you had the foresight. It's good to maintain a high level of confidence often, but you still have to keep a glimpse.
Control risk and ensure success
Paul · It was only after a bitter lesson that Jones learned the importance of controlling risk. Since that reckless cotton trade in 1979, Jones has minimized his risk to ensure a profitable trade. Controlling risk is a feature of Jones' trading style and is key to ensuring its trading success. He never thought about how much money he could make for each trade, but he was always thinking about the losses he might suffer. Not only is he concerned about the risk of each part of himself, but he also pays close attention to the performance of his portfolio. If his asset is reduced by I% -2% as a result of a trade, he may resolutely throw out all of his positions to reduce risk. "It's always easier to get in than out." He said. If Jones' trades start out very poorly, he will continue to shrink his holdings. In this way, even if the transaction is in trouble, he only buys and sells in the smallest part. Jones automatically narrows the risks that may arise from his holdings to ensure that his monthly losses do not exceed two digits. In addition, if his trading is profitable, he will also remind himself not to be overwhelmed and overconfident.
Simply put, Jones has more than a dozen different ways to control trading risk, and this is exactly what he puts it: "The most important trading rule is to be defensive, not aggressive." ”
Jones buys and sells every day as a new starting point, what was earned yesterday becomes a thing of the past, and today it starts from scratch. Losses cannot exceed 10% per month. By the way, Jones was able to keep money out for ten months in a row, and triple-digit annual growth rates were commonplace for him. Due to the proper control of risk, the funds controlled by Jones can still make profits in the event of an error in analysis and judgment. In early 1992, Jones believed that the US interest rate cut had come to an end, that Interest Rates in Europe would fall, and that the narrowing of interest rate differentials between Europe and the Us would reverse the weakness of the DOLLAR. Tudor funds thus entered the market to buy a large number of dollars. At first, it was relatively smooth, and the dollar did strengthen by a few hundred points. But soon the news of the U.S. economic downturn was rife, and the dollar fell sharply against European currencies until it reached an all-time low. Jones cleared his position in time after realizing that the trend was not right, avoiding a bigger loss, and he patiently waited for the opportunity to recover the loss. At the end of the year, the European monetary system crisis, the pound sterling, Italian lira and other currencies fell sharply, Jones entered the market in time to sell foreign currencies, making hundreds of millions of dollars in one month.