I forgot who sent me this. It’s been sitting on my desktop, waiting for me to post it to the site. I really like it. It’s apparently some of the rules / philosophies of Paul Tudor Jones, the famous swing trader and hedge fund manager.
I really like the second one. I really set boundaries on my emotional energy. Have a read through it. There are many gems in this deceivingly simple list. I am sure some will resonate with you.
Paul Tudor Jones – Swing Trader Rules
- Swing trader, the best money is made at the market turns. Has missed a lot of meat in the middle, but catches a lot of tops and bottoms
- Spends his day making himself happy and relaxed. Gets out of a losing position that is making him uncomfortable. Nothing’s better than a fresh start. Key is to play great defense, not great offense.
- Never average loses. Decreases his trading size when he is doing poorly, increase when he is trading well.
- He has mental stops. If it hits that number, he is out no matter what. He uses not only price stops, but time stops.
- Monitors the whole portfolio equity (risk) in real time.
- He believes prices move first and fundamentals come second.
- He doesn’t care about mistakes made three seconds ago, but what he is going to do from the next moment on.
- Don’t be a hero. Don’t have an ego. Always question yourself and your ability. Don’t ever feel that you are very good. The second you do, you are dead.
I met up with a friend the other day who was asking me how do I do my positions sizing when I trade. I have always told him for years that I will risk 1-5% of my capital per trade, depending on the nuances of the trade. However my words have fallen on deaf ears, as he always asks me what risk do I take per trade – the answer has always been the same (for absolute beginners I recommend to start with 1% maximum). He always asks how I position size my trade etc.. ever since stumbling upon the Easy Order MT4 Script, whoever asks me about positions sizing, my answer is a straight up use position sizing with the Easy Order MT4 Script.
It’s one of the easiest things to do ever. Let’s call my friend, XYZ. XYZ has always been using fixed lot sizes to trade. He thinks it is rocket science to calculate your position size and allocate a percent % risk of your capital per trade. If you are trading, use a position size that is allocated with a percent % risk of your capital per trade. Ideally keep it between 1-2% to begin with, and as you gain more confidence you can increase / decrease as per your individual trade rules. It couldn’t be anymore simpler and there are now an array of position size calculators out there, and the majority of them are for free! =D
Sangmane has done a wonderful job at offering an automatically calculated position size trade calculate for free. Thank you again, sir. You can download it here (Easy Order MT4 Script) and find the instructions as well.