3 Lessons After the Greatest Trade Ever

Posted by TopstepTrader on May 22, 2018

Yesterday, we talked about hedge fund manager John Paulson, who made what was called The Greatest Trade Ever. And just as that trade had three important lessons, so does John Paulson’s performance a decade after it was made.

While Paulson’s firm made money for a bit, some of his top funds have not done well in the meantime. For instance, Paulson’s Advantage Fund was down double digits for three years. The Paulson Partners Enhanced fund fell 35% in 2017.

In total, Paulson may have lost more of his investor’s capital since 2008 than he made in his $15 billion run. That’s because money poured in and his performance changed. Here are three lessons you can learn from his reversal of fortunes.

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Topics: Trading Basics, Trading Lessons, Market Wizards, Forex, Futures, John Paulson

3 Lessons from the “Greatest Trade Ever”

Posted by TopstepTrader on May 21, 2018

One series of trades — $15 billion in profits. That’s what Wall Street Journal reporter Gregory Zuckerman dubbed The Greatest Trade Ever.

If you don’t know the reference, we’re talking about when Hedge Fund Manager John Paulson made a series of calculated bets against the subprime mortgage market starting in 2006. The bets took his hedge fund from relative obscurity to household name, earning himself and his investors windfall profits.

To put it in context, there were single days where Paulson made $1 billion in profits. Here are three tactical lessons that you can learn from Paulson’s execution of the Greatest Trade Ever.

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Topics: Trading Basics, Trading Lessons, Market Wizards, Forex, Futures, John Paulson

5 Steps to Trading Your Way to Financial Freedom

Posted by TopstepTrader on May 18, 2018

TopstepTrader’s mission is to empower anyone to earn the financial freedom to pursue their dreams. That’s a lofty goal – but it’s about providing opportunity. It's up to individual traders to earn the results. 

As we’ve said 1,000,000 times, trading is about money management. If you are looking for a vault of gold or to ditch your full-time job within months, you are (probably) looking in the wrong industry. Instead, if you are looking to regain some of your freedom and to spend your day doing something you are more passionate about, then you have the right attitude to succeed.

Work hard and take these five steps towards trading your way to financial freedom.

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Topics: TopstepTrader Funded Traders, Trading Basics, Forex, Futures

5 Ways to Know When You're Ready to Trade Live Capital

Posted by TopstepTrader on May 17, 2018

We recently discussed how sim trading is the secret to trading success. But you can’t stay in the virtual world forever — not if you hope to make money as a trader. So how can you know it’s time to start trading for real?

The key is consistency. In simulated trading, you get the practice you need to turn your actions into routine. The more your actions become routine, the better chance you have of responding to pressure in a positive way.
It’s a lot like what an elite athlete does. Take, for example, LeBron James hitting a last-second shot to win a playoff game. He makes the basket as easily as if he’s in his backyard.

You’re not working on your three pointer when you’re sim trading, but you are practicing the habits of a successful trader. Here are the five key habits you have to develop before you trade live capital.

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Topics: TopstepTrader Funded Traders, Trading Basics, Forex, Futures

Why Traders Set Unrealistic Expectations... and How to Improve

Posted by TopstepTrader on May 16, 2018

"Trading is the hardest way to make easy money." — Michael Patak

Have you set a goal to make $1,000 trading? Because of leverage in futures, many traders have made four-figures in a single trading day. But averaging four figures — the equivalent of $250,000 annual salary — is another story. 

When TopstepTrader's Founder and CVO Michael Patak started trading, his goal was to make $1 million a year. That year, he lost $30,000. It was only after he reset his expectations, found out how much he had to make to sustain a living as a trader ($100 per day), and focused on small gains that he became successful.

As he says in this episode of Trader Behavior, "I decided that if I can't make $65,000 trading, then I have no business doing this every day." 

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Topics: Trader Behavior, Performance Coaching, Trading Basics, Forex, Futures

The Making of a Risk-Minded Trader

Posted by TopstepTrader on May 15, 2018

Being hyper focused on risk is not something that comes easy to a trader — even an experienced one. It's a skill that every trader, if they hope to be successful over the long term, has to develop. That's why this conversation with trader and risk manager Mick Ieronimo is so interesting. 

Mick got his start trading as a clerk in the grains pits on the floor before trading with a proprietary trading group and then handling execution for "Market Wizard" Linda Bradford Raschke's hedge fund.  

In this interview, Mick gives insight into how he first became interested in trading, what it was like working for Raschke and how he developed into a risk-minded trader. 

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Topics: Trading Basics, Limit Up!, Forex, Futures, Mick Ieronimo

How to Make Profits Scalping Volatile Nasdaq Futures

Posted by TopstepTrader on May 14, 2018

Nasdaq futures ($NQ) are one of the more volatile trading instruments. In fact, many traders might think that keeping a sub-10 point stop in them would be a challenge not worth taking. Yet, as we know, more risk does not equal more reward. And Z.S., one of TopstepTrader’s more than 170 active funded traders, proves it. Looking to make just 10 points as his target, he has to keep his stop lower, set at just six points. 

That doesn't leave him much room for error, which means that he has to be very choosy with his entries. And he has been, averaging more than $100 in profits on every trading day — winning and losing days included. 

While Z.S. points out that he still has a lot to learn, he also has seen success. A look at his approach may help new traders fine tune their own.

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Topics: TopstepTrader Funded Traders, Trading Basics, Futures, Nasdaq

Your Weekend Curriculum: Profits are About Process

Posted by TopstepTrader on May 12, 2018

What are you doing in the next 48 hours to trade better next week? 

This week, we compiled three resources that you have to check out. If you do, we promise you'll be in a better place when markets reopen. 

Don't just take our word for it; listen to hedge fund manager and billionaire Paul Tudor Jones, who said"The secret to being successful from a trading perspective is to have an indefatigable and an undying and unquenchable thirst for information and knowledge."

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Topics: Trading Basics, Jesse Livermore, Futures, Trading Setups, Weekend Curriculum, Mike Bellafiore, Michael Marcus

How can the Trading Combine Help You Become Consistently Profitable

Posted by TopstepTrader on May 04, 2018

Why is the Trading Combine® important? And how can it help your trading?

You may know that the Trading Combine started when Michael Patak lost $90,000 in three separate trading accounts. It was only after he put rules around his trading and learned to execute a strategy in a simulated trading environment that he became successful. 

Those rules became the basics of the Trading Combine. In this week's Coach's Playbook, the coaches talk about why the Trading Combine is important to develop consistently profitable traders and how it can help your trading

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Topics: Performance Coaching, Trading Combine, Coach's Playbook, Forex, Futures

How to Dig Yourself Out of a Trading Hole: Jon F. in Arkansas

Posted by TopstepTrader on May 01, 2018

Imagine this: you earn a Funded Account™, and in your first five trading days, you lose $3,127.66. You have a losing percentage of 80% and you are now just $1,372.34 to your Trailing Maximum Drawdown.

What do you do? Do you stick to your strategy or start taking long shots to dig yourself out of the hole?

That's the situation that Jon F. in Hot Springs, Arkansas found himself in. In fact, at his lowest point, Jon got just $620.88 away from his maximum loss before turning his account around.

He was able to stay in the game, and dig himself out of that hole.

On April 4, more than 25 days into his Funded Account, he gained $5,236.80, taking his equity balance to a new high. Two weeks later, he made $4,391.56 on April 24. Now, his account is sitting pretty. Here's how he did it.

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Topics: TopstepTrader Funded Traders, Trading Basics, Futures

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