Background
Paul Tudor Jones is one of the most successful macro traders in history. He predicted and profited massively from the 1987 stock market crash, turning $1.5 million into $100 million in that year alone. His fund, Tudor Investment Corp, has produced an estimated 19.5% annualized return since 1986. He's known for his 200-day moving average rule and his macro approach to identifying inflection points.
Core Methodology
Tudor Jones combines global macro analysis (economic cycles, central bank policy, cross-asset correlations) with technical timing, most famously using the 200-day moving average as his primary risk management tool. His approach: develop a macro thesis for the next 6-12 months, find the best expression of that thesis across global markets, and use technical levels for timing and risk management.
Key Trading Rules
- The 200-day moving average rule: if a market breaks below its 200-day MA, reduce exposure significantly
- Never average down into a losing position — 'Losers average losers'
- The most important rule is playing defense, not offense — protect capital first
- Look for asymmetric risk/reward: 5:1 or better on macro themes
- Use multiple markets to express the same theme — diversifies the execution risk
- When a market starts behaving irrationally relative to fundamentals, it's signalling something — pay attention
Key Concepts
Books & Resources
The documentary 'Trader' (1987, largely suppressed by Tudor Jones). Market Wizards interview by Jack Schwager. Tudor Investment Corp's track record.