traders mentor

Gary Bielfeldt: Yes, They do Trade T-Bonds in Peoria
1. I always try to lean primarily on fundamental analysis. However, since it was very difficult to know all the fundamentals. I thought it was important to have something to fall back in case my fundamental analysis was wrong – technical analysis. I use my own trend-following system primarily as a backup to tell me when to get out of a position.
2. On trend-following systems. – The best thing anyone can do when starting out is to learn how a trend system works. Trading a trend system for a while will teach a new trader the principle of letting profits run and cutting losses shot. I think to be viable, a trend-following system has to be medium to longer term. The more sensitive systems just generate too much commission. I would advise anyone who develops a system to combine it with their own judgment. In other words, they should trade half the money on a system and the other half using their own judgment, just in case the system isn’t working.
3. Key factors in fundamentally evaluating the T-bond market. – the economy is the single most important factor. Four other elements are inflation expectations, the dollar, the trade balance, and the budget deficit.
4. – On elements of good trading. The most important thing is to have a method for staying with your winners and getting ride of your losers.
5. You need to develop a plan of your strategies for various contingencies. That way, you won’t get swayed by every news item that hits the market and causes prices to move up or down.
6. Traits of a successful trader: a. discipline. b. patience. If you have a good trade on, you have to be able to stay with it. c. courage to go into the market, and courage comes from adequate capitalization. d. willingness to lose. e. strong desire to win.
7. On Success: most people will judge success by how well they do in their field. A trader would probably judge success by whether he wins or loses in the market.
8. On analogy between trading and poker: my father taught me the concept of play the percentage hands. You should play the good hands and drop out of the poor hands, forfeiting the ante. If you apply the same principles of poker strategy to trading, it increases your odds of winning significantly. I have always tried to keep the concept of patience in mind by waiting for the right trade, just like you wait for the percentage hand in poker.
Ed Seykota: Everybody Gets What They Want
1. EE from MIT>> developed the first large-scale commercial computerized trend-following trading system. I used an exponential averaging method because it was easier to calculate and computational errors tended to disappear over time.
2. My style is basically trend following, with some special pattern recognition and money management algorithms. The key to long-term survival and prosperity has a lot to do with the money management techniques incorporated into the technical system. In order of importance to me are: a. the long-term trends, b. the current chart pattern, and c. picking a good spot to buy or sell.
Market Wizards Study Notes by Zhipeng Yan
3. Over time, I have become more mechanical, since (1) I have become more trusting of trend trading, and (2) my mechanical programs have factored in more and more “tricks of the trade.”
4. The profitability of trading systems seems to move in cycles.
5. Fundamentals that you read about are typically useless as the market has already discounted the price, and I call them “funny-mentals.” However, if you catch on early, before others believe, then you might have valuable “surprise-a-mentals”
6. If I were buying, my point would be above the market. I try to identify a point at which I expect the market momentum to be strong in the direction of the trade, so as to reduce my probable risk. I don’t try to pick a bottom or top.
7. If I am bullish, I neither buy on a reaction, nor wait for strength; I am already in. I turn bullish at the instant my buy stop is hit, and stay bullish until my sell stop is hit. Being bullish and not being long is illogical.
8. Dramatic trade: pride is a great banana peel, as are hope, fear, and greed. My biggest slip-ups occurred shortly after I got emotionally involved with positions.
9. Elements of good trading: cutting losses, cutting losses and cutting losses. I set protective stops at the same time I enter a trade. I intend to risk below 5% on a trade, allowing for poor executions.
10. On success: my success comes from my love of the markets. I am not a casual trader. It is my life. I have a passion for trading. It is not merely a hobby or even a career choice for me. There is no question that this is what I am supposed to do with my life.
11. Trading rules: a. cut losses; b. ride winners; c. keep bets small; d. follow the rules without question; e. know when to break the rules.
12. Advice for an average trader: he should find a superior trader to do his trading for him, and then go find something he really loves to do.
13. The markets are the same now as they were five to ten years ago because they keep changing – just like they did then. Trading becomes more difficult because it is harder to move large positions without moving the market. It becomes easier because you have more access to competent people to support you.
14. Good traders have a special talent for trading just as good musicians and good athletes have talents for their fields. Great traders are ones who are absorbed the talent. They don’t have the talent – the talent has them.
15. My personal life is integrated with my trading life.
16. – (Jack) I notice there is no quote machine on your desk. – Having a quote machine is like having a slot machine on your desk – you end up feeding it all day long. I get my price data after the close each day.
17. – (Jack) How would you rate the relative importance between psychology and market analysis to successful trading? – Psychology motivates the quality of analysis and puts it to use. Psychology is the driver and analysis is the road map. The winning traders have usually been winning at whatever field they are in for years.
18. On traits to identify the winning trader personality: a. he loves to trade; and b. he loves to win.
19. On success: I don’t judge success. I celebrate it. I think success has to do with finding and following one’s calling regardless of financial gain.



Paul Tudor Jones: The Art of Aggressive Trading
1. Started as a floor clerk for 6 months >> work for Eli Tullis – “the toughest son of a bitch” he ever knew.
2. Tullis taught me about moving volume. When you are trading size, you have to get out when the market lets you out, not when you want to get out. He taught me that if you want to move a large position, you don’t wait until the market is in new high or low ground because very little volume may trade there if it is a turning point. He instilled in me the idea that, to some extent, to be a good trader, you have to be contrarian.
3. Dramatic trade: lost 60-70% of equity in a single trade in 1979 cotton market. I was determined to come back and fight. I decided that I was going to become very disciplined and businesslike about my trading. Now I spend my day trying to   Market Wizards Study Notes by Zhipeng Yan
make myself as happy and relaxed as I can be. If I have positions going against me, I get right out; if they are going for me, I keep them.
4. I become quicker and more defensive. I am always thinking about losing money as opposed to making money. I have a mental stop. If it hits that number, I am out no matter what.
5. My goal is to finish each day with more than I started. Tomorrow morning I will not walk in and say, “I am short the S&P from 264 and it closed at 257 yesterday; therefore, I can stand a rally.” I always think of it in terms of being short from the previous night’s close. Risk control is the most important thing in trading.
6. Trading rules: don’t ever average losers. Decrease your trading volume when you are trading poorly; increase your volume when you are trading well. Never trade in situations where you don’t have control. For example, I don’t risk significant amounts of money in front of key reports, since that is gambling, not trading.
7. ALWAYS THINK OF YOUR ENTRY POINT AS LAST NIGHT’S CLOSE.
8. 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. If you make a good trade, don’t think it is because you have some uncanny foresight. Always maintain your sense of confidence, but keep it in check.
9. I am more scared now that I was at any point since I began trading, because I recognize how ephemeral success can be in this business. I know that to be successful, I have to be frightened. My biggest hits have always come after I have had a great period and I started to think that I knew something.
10. I believe the very best money is to be made at the market turns. Markets trend only about 15% of the time; the rest of the time they move sideways. I attribute a lot of my success to the Elliott Wave approach.
11. One of my strengths is that I view anything that has happened up to the present point in time as history. I really don’t care about the mistake I made three seconds ago in the market. What I care about is what I am going to do from the next moment on. I try to avoid any emotional attachment to a market.
12. I never apologize to anybody, because I don’t get paid unless I win. 85% of my net worth is invested in my own funds, primarily because I believe that is the safest place in the world for it.
13. We have a very good trading system. The basic premise of the system is that markets move sharply when they move. If there is a sudden range expansion in a market that has been trading narrowly, human nature is to try to fade that price move. 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.
14. I always believe that prices move first and fundamentals come second. When I trade, I don’t just use a price stop, I also use a time stop. If I think a market should break, and it doesn’t, I will often get out even if I am not losing any money.
15. Advice: don’t focus on making money; focus on protecting what you have.
16. Trading gives you an incredibly intense feeling of what life is all about. Emotionally, you live on the extremes.
8
7