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Paul Tudor Jones: The Importance of Risk Control in Trading

“The most important rule is to play great defense, not great offense.”

– Paul Tudor Jones

Play Great Defense, Not Great Offense: Paul Tudor Jones’s first and foremost rule in trading is to prioritize risk control over chasing extravagant profits. Instead of focusing solely on making money, he emphasizes the significance of protecting one’s capital. In other words, preserving the funds you have is crucial before even thinking about potential gains.

“Every day I assume every position I have is wrong.”

– Paul Tudor Jones

Assume Every Position is Wrong: Jones’ approach to trading is grounded in humility. He acknowledges that the markets are unpredictable and that even the most well-researched positions can turn against him. By adopting a mindset that assumes he could be wrong, he becomes more prepared to react swiftly and decisively when necessary.

“If I have positions going against me, I get right out; if they are going for me, I keep them.”

– Paul Tudor Jones

“Don’t ever average losers. Decrease your trading volume when you are trading poorly; increase your volume when you are trading well.”

– Paul Tudor Jones

“At the end of the day, the most important thing is how good are you at risk control.”

– Paul Tudor Jones