Paul Tudor Jones, Lessons of Trading, Futures Market Seer
- 7 years ago
Jones made most of his money with technical analysis, which
relies on historical patterns in price and volume data in the belief they have some predictive value. A simple technique that Jones uses is called a moving average, which averages a stock’s data over different time periods and has the benefit of smoothing out erratic data. A stock trading above its moving average is considered bullish, while a stock trading below its moving average is considered bearish.
>> Jones uses the 200-day moving average of closing prices. By
keeping an eye on the 200-day moving average, an investor can
sell quickly if the trend is down. Jones advises never averaging
losers. In other words, if a position starts losing money, either sell
or wait for the trade to be profitable before adding more capital.
relies on historical patterns in price and volume data in the belief they have some predictive value. A simple technique that Jones uses is called a moving average, which averages a stock’s data over different time periods and has the benefit of smoothing out erratic data. A stock trading above its moving average is considered bullish, while a stock trading below its moving average is considered bearish.
>> Jones uses the 200-day moving average of closing prices. By
keeping an eye on the 200-day moving average, an investor can
sell quickly if the trend is down. Jones advises never averaging
losers. In other words, if a position starts losing money, either sell
or wait for the trade to be profitable before adding more capital.