Paul Tudor Jones is an investor and a hedge fund manager. He is the founder of Tudor Investment Corporation, a hedge fund. In 2013, Forbes magazine listed him as one of the highest earning hedge fund managers.
Paul Tudor Jones is known for global macro trading style which is based primarily on technical analysis as opposed to value investing on fundamentals. He predicted the Black Monday of 1987, when stock markets around the world crashed and lost huge value in very short time.
His quotes on investment and trading will give you insights on trading psychology and how to trade and invest in stocks using the strategies of technical analysis.
1. The most important rule is to play great defense, not great offense. Everyday I assume every position I have is wrong. I know where my stop risk points are going to be. I do that so I can define my maximum drawdown. Hopefully, I spend the rest of the day enjoying positions that are going in my direction. If they are going against me, then I have a game plan for getting out.
2. 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.
3. I believe the very best money is made at the market turns. Everyone says you get killed trying to pick tops and bottoms and you make all your money by playing the trend in the middle. Well for twelve years I have been missing the meat in the middle but I have made a lot of money at tops and bottoms.
4. I always believe that prices move first and fundamentals come second.
5. The secret to being successful from a trading perspective is to have an indefatigable and an undying and unquenchable thirst for information and knowledge.
6. Fundamentals might be good for the first third or first 50 or 60 percent of a move, but the last third of a great bull market is typically a blow-off, whereas the mania runs wild and prices go parabolic... There is no training, classroom or otherwise, that can prepare for trading the last third of a move, whether it's the end of a bull market or the end of a bear market.
7. When you get a range expansion, the market is sending you a very loud, clear signal that the market is getting ready to move in the direction of that expansion.
8. The concept of paying one-hundred-and-something times earnings for any company for me is just anathema. Having said that, at the end of the day, your job is to buy what goes up and to sell what goes down so really who gives a damn about PE's?
9. You can not have significance in this life if it is all about you. You get your significance, you find your joy in life through service and sacrifice - it's pure and simple.
10. Trading gives you an incredibly intense feeling of what life is all about.