How Common Sense Helped One Trader Retire in 10 Years

Posted by TopstepTrader on December 12, 2017

By all accounts, Jim Rogers’ career is legendary. He started trading stocks in 1968 with just $600. In 1973, he co-founded Quantum Funds with George Soros, which went on to generate 4,200% returns over 10 years. (The S&P 500 only gained 47% during the same period.) By the time the 1980s rolled around, Rogers had earned enough money to retire from full-time trading.

But it’s not his reported $360 million net worth that makes him exceptional. At least, it’s not the only thing. What really makes Rogers a standout is his common-sense approach to the markets.

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Topics: Trading Basics, Trading Lessons, Market Wizards, Jim Rogers

These 4 Money Management Tips Helped This Trader Build a $5.4 Billion Fortune

Posted by TopstepTrader on December 04, 2017

All trading careers have defining moments. For Bruce Kovner, retired CEO of global macro hedge fund Caxton Associates, it was his third trade that shaped his legendary career.

Kovner started his career as a spread trader - trading the same product across different contract months. Typically, the far month contract trades as a higher price than the front month. But Kovner discovered more forward contracts start trading at near-zero levels, so he bet the difference in price between the two contracts would widen over time. His first trade was textbook and the market reacted how he expected. And while he lost money on his second, it was only because he got in too early.

The third trade shaped how he managed risk forever - and became a reason he’s worth an estimated $5.2 billion today.

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Topics: Trading Basics, Trading Lessons, Market Wizards

Forget P&L and Focus on Good Decisions: 4 Questions with a Funded Trader

Posted by TopstepTrader on November 27, 2017

Like most of our traders, TopstepTrader wasn't the first place that David C. in Valle del Cauca, Colombia came to trade futures. In fact, in a recent interview, he said that he has been trading for a year, but only entered the Trading Combine® after blowing up his second brokerage account. 

Since joining TopstepTrader, David has shown an ability to learn from those losses, demonstrating that he can profit and manage risk well.

In two months as a funded trader, David has withdrawn $7,715 in profits - gains racked up while demonstrating incredible risk management. In 38 trading days, David was profitable on 25. But David also minimized his losing days. His largest daily loss was $306.82, while on the average losing day, he lost just $167.69. Comparatively, on his average winning day, he made $395.81 with a largest gain of $1,263.79. 

We recently connected with David to talk about his journey trading and what advice he might have for other traders. 

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Topics: TopstepTrader Funded Traders, Monthly Highlights, Trading Lessons

23 Invaluable Lessons from the World's Greatest Traders

Posted by TopstepTrader on November 14, 2017

Jack Schwager did every aspiring trader a service when he wrote his Market Wizards series of books. For those unfamiliar, the series is one-on-one interviews of legendary traders like Paul Tudor Jones, Michael Marcus, and Tony Saliba where they share about their challenges in becoming the traders they are today. 

Thanks to Barry Ritholz at The Big Picture, we came across this synopsis of the 23 trading lessons from Simply Options Trading. It's a quick read, so enjoy.

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Topics: Trading Basics, Trading Lessons, Market Wizards

So You Broke a Rule. Now What?

Posted by TopstepTrader on November 08, 2017

We all make mistakes - some more painful than others. But if you've just broke one of TopstepTrader's rules (or even your own rules), you may be feeling a bit down. Don't. Nearly every billionaire hedge fund manager has blown up a trading account. Trading isn't an innate skill you're born with. It's something you develop with practice. 

At TopstepTrader, we get it. That's why we tackled how to handle breaking a rule in our latest episode of Coach's Playbook. Check it out and leave any feedback in the comments.

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Topics: Performance Coaching, Trading Combine, Coach's Playbook, Trading Lessons

Building $12,000 to $250,000 Over 4 Years, Then Losing It All in 3 Days

Posted by TopstepTrader on November 06, 2017

Like many of us, Bill Lipschutz got his start trading on a small account - just $12,000. Lipschutz had an innate ability and was successful trading from the start, taking four years to build that account to $250,000, compounded growth of 115% annually. 

Then, Lipschutz lost it all. Lipschutz was short equities at the time and had been pyramiding into a substantial position according to New Market Wizards. Then came the Granville Reversal. Joe Granville was a perma-bear and newsletter writer, who put out a call for a stock market crash in 1982. Then in a single session, the Dow went from down 30 points to up 20 points. And just like that the bottom was in and the bear market ended.

In three days, Lipschutz was wiped out.

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Topics: Trading Basics, Trading Lessons, Market Wizards

Billionaire Hedge Fund Manager: What I Look for in My Traders

Posted by TopstepTrader on October 31, 2017

Michael Platt is worth $4.5 billion according to Forbes - gains the result of a successful trading career and starting and running a hedge fund for more than 15 years. During that time, Platt's BlueCrest Capital Management grew to $35 billion in assets under management. 

The key to Platt's billions - his traders' asymmetrical returns.

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Topics: Trading Basics, Trading Lessons, Market Wizards

Major Futures Market Player: These are the 5 Traits of a Successful Trader

Posted by TopstepTrader on October 23, 2017

This week, in our series of insights from Jack Schwager's Market Wizards, we look at Gary Bielfeldt, a trader that built a fortune and became one of the largest players in the U.S. Treasury futures market. (Read our last post about Tony Saliba's streak of 70 consecutive months with more than $100,000 in gains)

Gary Bielfeldt was one of the largest players in futures markets, honing a specific niche in U.S. Treasury Bonds. But his trading career started the same way many normal futures traders do: with a $1,000 investment in a brokerage account. At the core to Bielfeldt's success is the fact that he "does not believe in diversification," according to Jack Schwager's Market Wizards.

That is becoming a common theme as many of TopstepTrader's funded traders have found success by trading in one or two products. But, Bielfeldt's best advice came on the subject of the traits of a successful trader. 

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Topics: Trading Basics, Trading Lessons, Market Wizards

Blair Hull: The Man Who Stopped the Crash of 1987

Posted by TopstepTrader on October 19, 2017

On October 19, 1987, the equity market experienced its largest one-day decline ever. The Dow Jones Industrial Average fell 22%, setting off a chain of events that took global equity markets lower. 

This isn't the story of the Crash of 1987. This is the story of Blair Hull - the man who may have single-handedly steadied the market and in the process made 50% return on capital in a month.

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Topics: Trading Basics, Trading Lessons, Market Wizards

Are Great Traders Born or Made? $150 Million in Trading Profits Gives Us the Answer

Posted by TopstepTrader on October 18, 2017

Is great trading a learned skill or an innate ability?

If this sounds like a question that could be at the heart of a movie, that's because it was. In Trading Places, two brothers that ran a commodities trading firm made a $1 bet on whether they could simultaneously turn a scam artist and criminal into a successful trader and a successful trader into a criminal. (If you haven't watched it, you should!)

But the question of whether great traders are born or made was also the subject of a real-life experiment by Richard Dennis, a Chicago trading legend, and his partner, William Eckhardt. 

Dennis - who had made hundreds of millions trading - believed that great trading was a result of a disciplined approach; a trader just needed to be taught rules and given risk management parameters. Eckhardt believed that traders like Dennis had an innate ability and underlying talent that allowed them to be successful. 

In the end, Dennis was proven right - and he added $150 million to his firm's bankroll in the process. Here's how. 

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Topics: Trading Basics, Trading Lessons, Market Wizards

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