What you can learn from the greatest trader of all time?

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Guest article written for AllAboutAlpha. At a macro-level, the long-standing efficient market hypothesis would make it notionally impossible for any trading strategy to be effective as it asserts a level of information efficiency in the market. The past quarter century however, has seen a gradual move away from the efficient hypothesis to greater considerations of information asymmetry and behavioural biases driving inefficiencies opportunities in the market.

So faced with this complexity, how do some traders generate such astonishing success? Jack Schwager is a recognized industry expert in futures and hedge funds and the author of a number of widely acclaimed financial books.

He is also an advisor to Marketopperan India-based best futures traders of all time trading firm, supervising best futures traders of all time major project that will adapt their trading best futures traders of all time to trade a global futures portfolio. Schwager was a partner in the Fortune Groupa London-based hedge fund advisory firm, which specialized in creating customized hedge fund portfolios for institutional clients.

Schwager has written extensively on the futures industry and great traders in all financial markets. He is perhaps best known for his best-selling series of interviews with the greatest hedge fund managers of the last two decades: Those people looking for a single unified strategy are not asking the right question. Even when looking at differences between asset classes we see that every market can be traded using different strategies be they fundamental, technical, or a mixture.

If we take equity markets we see that traders can use strategies including fundamental, best futures traders of all time, extreme long term, and day. If you want a microcosm that proves diversity, there it is! This is a great analogy as the key to successful trading really is the space between trades!

I use one specific example in my book which I think highlights this really well, and that is a fellow called Kevin Daley manager of the Five Corners Fund. There are two elements… Firstly, he is a very good stock best futures traders of all time.

When opportunities are not good, he simply does not invest! Instead of losing money, he treads-water. Any approach will give you instances of winning or losing. If you have an effective approach, you will hopefully make more money than you lose. If you take a trade that follows your process exactly whatever that process may be… fundamental, technical or otherwiseand if that trade loses money, that was not a bad trade. People have to differentiate between trades that are consistent with a winning strategy, and trades that are inconsistent.

You have to ask the question: If the answer is yes, then it was not a bad trade. Too often, people fail to differentiate wins that come from the market and wins that come from skill.

Somewhere along the line, risk and volatility have become synonymous. I suspect this is because the measure of volatility- the standard deviation- has nice mathematical properties that allow portfolio managers and financial academics to neatly define precise ways of allocating that seem comfortable.

More money has been lost on the mismeasurement of risk than not having risk management at all. The battle is not won through being attuned to risk control. If your measurement of risk best futures traders of all time completely wrong, it could be worse than having nothing in place.

Imagine you have an odometer in a car that you thought was working correctly but was, in fact, giving you speed readings 30mph too low… that would be a lot worse than if it was stuck and you knew it was broken. People find track-records of managers that have low volatility and make the conclusion that low volatility means low risk.

Low volatility may indicate low risk, but it does not make that a certainty. There are many instances where low volatility was evidence of high risk. There are many strategies that make moderate money most of the time, giving low volatility track records.

Once in a while, these strategies are prone to huge losses- they are highly left-skewed. A lot of the hedge fund world best futures traders of all time engaged in strategies that have this property. They make money most of the time, but once in a while can lose best futures traders of all time lot. These are strategies which are explicitly or implicitly short volatility and are long illiquidity and short credit. Imagine you have to walk through a field that has a few land mines scattered through it.

If you walk through it and nothing happens, it seems there is no danger. You meet people who are painfully shy, overly extroverted, egocentric, academic, athletic and more. There are however, some successful traits. Regardless of their personality, they will have flexibility.

Discipline is also important. People who are successful will do things because they have to be done. If they go on vacation, they will probably check-in… getting up in the middle of the night often.

Markets are always different and part of the process is adapting and maintaining traits that allow you to win in any environment. The past 25 years has seen an increase in the diversity of strategies.

Jack has shown us that markets are complex and constantly evolving entities. The true measure of skill is developing a strategy that best futures traders of all time around your own skill and information, considers the real left-tail risks in the marketplace, and is run with a spirit of responsiveness.

We are faced with the reality that many of our attitudes towards trading are built on antiquated precepts. Half a century ago, when markets were simpler and slower there is no doubt that a few successful strategies could be applied repeatedly to generate success. Now however, things are very different. Some exchanges such as CME group are handling over a quadrillion dollars of trade every year. Markets this large will require new attitudes to risk, and new methods of generating best futures traders of all time. They are faster, more comfortable, and they get you where you are going better.

But the crashes are much more spectacular…. Is there a strategy or style which best futures traders of all time most effective at generating return? What is the relationship between risk and volatility? Do successful traders share any behavioural or personality characteristics? Have success methodologies changed much in the last 25 years? How has the financial crisis impacted trading strategies? What does this mean for Investors? The Failures of Our Economic System. Like many of his peers Vincent has immersed himself in playing football and being the best on the pitch- but perhaps most interestingly, he has also taken a deep We promise not to SPAM.

Vikas Shah Interviews the world's leading thinkers, and the people shaping the century.

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I know many traders and I have worked with many traders around the world. However, one trader who is, by far, the best trader I have ever known. He is an unbelievable trader. He is very consistent and he makes an incredible amount of money trading every day. You may have heard of him, he has been interviewed in trading books, and he often speaks at trading groups and trading seminars. I still remember the day that I had come to realize just how successful my Millionaire Trader Friend was at trading.

Today I must admit it does not seem as impressive as I have been able to see and meet successful traders from all around the world, but I do know that he is an impressive trader and I still hold him in high regard.

I have been luck to know my Millionaire Trader Friend and I have reaped many benefits from incorporating the lessons I have learned from him into my own trading. It is my hope that you too will benefit from what he has taught me. Click here to order your copy of The VXX Trend Following Strategy today and be one of the very first traders to utilize these unique strategies.

This guidebook will make you a better, more powerful trader. These are the nine things I have learned from my Millionaire Trader Friend: Do One Thing, and Do It Well If there is one simple thing that I have learned from my Millionaire Trader Friend, the best trader I have ever known, it is this — to make money trading you only have to become an expert at one type of trade.

There is no need to run several different trading systems. You may simply concentrate on one trading system, and if you trade it well you can become a very successful trader. You may not even need to concentrate on many different markets, you may find that simply concentrating on one currency pair is enough for you to find many profitable trade setups.

You Can Have An Extremely High Win Rate There has been a lot written about win rates what percentage of your trades are profitable trades , but what some traders do not seem to understand is that it is possible to have an exceptional win rate. This I have learned from my Millionaire Trader Friend — he has an incredibly high win rate, and I do too now because I have learned so much from him.

My Millionaire Trader Friend is continually improving as a trader. He is constantly figuring out ways to get better at what he does. He uses every loss as an educational experience — that is how he sees them. Every loss is a lesson that the market has handed him.

I would not say that he embraces losing trades, but he does learn from them. Patience is Rewarded Another thing that I have learned from my Millionaire Trader Friend is that it pays to be patient. Profitable traders like my Millionaire Trader Friend wait for the perfect trade setup. Many traders who do not consistently make money trade for the sake of trading, I used to do this too. The Best Time for A Trade is When Everyone Else Disagrees If you think about it, it makes sense — the very best time to buy something is when everyone is convinced that the price is going to fall lower, and the very best time to sell something is when everyone is convinced the price is going to shoot to the moon.

My Millionaire Trader Friend has taught me the importance of trading against the crowd. The crowd is reacting to the market, and my trading partner has taught me to react to the crowd , this simple change in mindset can produce incredible profits if you are willing to look like a fool in the eyes of others. Being Wrong is Not a Bad Thing My Millionaire Trader Friend has taught me that even the best traders, like him, are sometimes caught on the wrong side of the market.

There is no need to panic when this happens, but once it does a very good thing to do is to simply get out. Once you realize that your trade was not a good idea, there is no need to wait for your stoploss to get hit, when you know you have made the wrong move you can simply get out of the market and wait for the next trade. This is what I have learned from my Millionaire Trader Friend — if you are absolutely certain that you made the wrong move, sometimes the best thing to do is to exit the market and then place a trade in the opposite direction.

This can be extremely difficult to do, particularly if you have put a lot of time and effort into analyzing the trade.

Let the Trades Come To You If there is one thing I have noticed about how my Millionaire Trader Friend trades and this is not a unique characteristic, many of the very best traders I have ever traded with also have this characteristic it is this he does not go looking for trades, he waits for them to jump out at him. This may seem like a weird way to trade, but it is precisely how he takes so many profitable trades.

He waits and watches, and when the market gives him an opportunity to jump in to a good situation he enters the trade. He never trades simply because the market is open, and he sometimes sits in front of his charts for hours and never trades. When these setups come along I know it because I feel like I must take advantage of the opportunity the market is offering. It is not important that you trade precisely as other successful traders do, but it is important that your style of trading makes sense to you, because this will ensure that you stick with the trading strategy over the long haul.

My Millionaire Trader Friend has a completely unique trading strategy that he has created over time, by exposing himself to many different ideas and many different traders. His system is unique because it is his, and it makes sense to him. This is important because it means that he is better able to maintain confidence through the drawdowns that will inevitably occur. He learns from some of the best institutions and research centers around the world because he has a constant thirst for knowledge.

The fact that he is open to new ideas and the fact that he is an exceptional trader is probably not a coincidence. I think that many successful traders are open to new ideas. This is not that interesting to me, but what is interesting to me is the way that he deals with these unlucky streaks.

He does not lose confidence, he continues to take the next trade setups, as they occur, and he does not question his trading strategy. He knows that in the long run he will make up the lost money and then some, so there is no need to panic. Walter Peters, PhD is a professional forex trader and money manager for a private forex fund.

In addition, Walter is the co-founder of Fxjake. Walter loves to hear from other traders, he can be reached by email at walter fxjake. At Connors Research, we are using it as an overlay to many of our best strategies to make them even better -- now you can, too. The Connors Group, Inc.