In trading highly liquid markets, it couldn’t hurt to learn from someone like Bruce Kovner. He has been trading since the 1970s and has amassed himself a net worth of about $5.3B. The following three quotes are from Bruce Kovner’s interview in Jack Schwager’s Market Wizards.
“Tight congestions in which a breakout occurs for reasons that nobody understands are usually good risk/reward trades”
“The more a price pattern is observed by speculators, the more prone you are to have false signals. The more a market is the product of non speculative activity, the greater the significance of technical breakouts.”
“Whenever I enter a position, I have a predetermined stop. That is the only way I can sleep. I know where I’m getting out before I get in. The position size on the trade is determined by the stop, and the stop is determined on a technical basis. For example, if the market is in the midst of a trading range, it makes no sense to put your stop within that range, since you are likely to be taken out. I always place my stops beyond some technical barrier.”
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