The most important rule of trading is to play great defense, not great offense.

It is fascinating to read Market Wizards: Interviews With Top Traders published in 1989 again and see how much the portfolio management strategy of another ole boy from Tennessee is nearly identical to my own. I read the book the first time in the early 1990’s so it may have had an impact on me as a young tactical trader as I evolved over time.

“The most important rule of trading is to play great defense, not great offense. Every day 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 possible 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.”

Paul Tudor Jones in Market Wizards: Interviews With Top Traders (p. 123). Wiley. Kindle Edition. Schwager, Jack D..

 

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s

%d bloggers like this: