Chapter 5
Seasons of Success
In some seasons, trend following is good; in others, reversing is good. The problem is how to differentiate the two seasons in advance.
—Victor Niederhoffer, The Education of a Speculator1
Traders employ various methods to identify trades. Peter Brandt trades breakouts from recognizable chart patterns, while Paul Tudor Jones looks for contrarian turning points based on historical cycles and fundamentals. Some rely on experience and intuition while others employ more mechanical systems to rationalize trades. Nearly all the traders interviewed by Jack D. Schwager, however, attribute their long-term success not to some specific technique for identifying trades, but to wise money management. In his book Diary of a Professional ...
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