Paul Tudor Jones Trading Rules

Dos
1. Always be with the predominant trend. My metric for everything is the 200- day moving average.
2. The better you can make decisions ahead of time, the better your results will be.
3. To be good trader, you have to be contrarian.
4. Find something where you skew reward risk so greatly that you can take small investments with minimum drawdown pain and maximum upside opportunities.
5. Decrease your trading volume when trading poorly; increase when trading well.
6. Every day I assume every position I have is wrong. I know where my stop risk points are going to be so I can define my maximum drawdown.
7. View anything that has happened up to the present point in time as history. Care about what going to do from the next moment on.
8. To do the job right requires such an enormous amount of concentration. It’s physically and emotionally mandatory that you find some time to relax.
9. Always liquidate half positions below new highs or lows and the remaining half beyond that point.
10. If I have positions going against me, I get right out; if they are going for me, I keep them. I have a mental stop. If it hits that number, I am out no matter what.

Don’ts
1. If you don’t see anything, you don’t trade. You take risk only when you see an opportunity.
2. Never play a macho man with the market. Don’t be a hero. Don’t have an ego. Always maintain your sense of confidence, but keep it in check. Always question yourself and your ability.
3. Never over-trade.
4. Never trade in situations where you don’t have control.
5. Don’t risk significant money in front of key reports, since that is gambling not trading.
6. Don’t be too concerned about where you go into a position. The only relevant question is whether you are bullish or bearish on the position that day.
7. Try to avoid any emotional attachment to a market.
8. Don’t just use a price stop, 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.
9. Don’t ever average losers.
10. The most important rule of trading is to play great defense, not great offense. Don’t focus on making money; focus on protecting what you have.