Mastering the Long Game: The Art & Wisdom of Position Trading
The Legendary Position Trader: Jesse Livermore
“I can’t tell you how it came to take me so many years to learn that instead of placing piking bets on what the next few quotations were going to be, my game was to anticipate what was going to happen in a big way.”
“I was a lot less active in my trading than people thought I was. In my later life I was only interested in the “essential move”
“there are only a few times a year, possibly four or five, when you should allow yourself to make any commitment at all. In the interims you are letting the market shape itself for the next big movement”
“The game of speculation is not for the impatient. The big moves take time to develop.”
The Hedge Fund Position Traders: Druckenmiller/O’shea
“How big a problem is the budget deficit? As a practitioner, it’s something I can’t be obsessed with on a three to six month basis”
– Stanley Druckenmiller
“If most traders would learn to sit on their hands 50% of the time, they would make a lot more money.” – Bill Lipschutz
“Maintaining the same long-term view doesn’t mean i kept the same positions, My typical time horizon for trades is one to three months. When prices change the risk/reward on positions change.”
– Colm O’Shea (Hedge Fund Market Wizards)
The Modern Day Position Traders: Qullamaggie/Dan Zanger
“A good setup should be obvious. You are looking at it and you are like WOW, that is an INSANE setup.”
– Qullamaggie
“The big money is in the waiting, that’s the key. Waiting for those good setups, waiting for those great stocks to trigger.”
– Qullamaggie
Our main job is not to trade. Our main job is to wait.” – Kristjan Kullamägi
“The big money is made in the big swing. I really have found that the market may have 2 big moves during the year and they may last 6-8-10-12 weeks. Other than that, it’s choppy and sloppy.”
– Dan Zanger
The Position Trading Analyst: Leon Tuey
“As mentioned on numerous occasions, short-term market moves are dictated by technical and sentiment factors. If the market is overbought and bullish sentiment is widespread, the market will correct. Conversely, when the market is grossly oversold and bearish sentiment reaches an extreme, the market will rally. Period. Everything else is noise.”
Leon Tuey
“The market’s long-term trend, bull or bear, is determined by the monetary, economic, valuation, sentiment, supply/demand, and momentum factors.”
– Leon Tuey
“I do absolutely nothing here. I watch the stock market all day long, just as I do at home in Vancouver. I get absolute peace and quiet here. A lot of people say, ‘Aren’t you lonely?’ And I say this is exactly what I seek: solitude, so I can think better.”
– Leon Tuey
The Mythical Position Trader: Man in the Mountain
Many years ago I heard of a remarkably successful speculator who lived in the Californian mountains and received quotations three days old. Two or three times a year he would call on his San Francisco broker and begin writing orders to buy or sell, depending upon his market position. A friend of mine, who spent time in the broker’s office, became curious and made inquiries. His astonishment mounted when he learned of the man’s extreme detachment from market facilities, his rare visits, and, on occasions, his tremendous volume of trade. Finally he was introduced, and in the course of conversation inquired of this man from the mountains how he could keep track of the stock market at such an isolated distance.
“Well,” the man replied, “I make speculation a business. I would be a failure if I were in the confusion of things and let myself be distracted by minor changes. You see, I keep a record of what has happened, after it has happened, and it gives me a rather clear picture of what markets are doing. Real movements do not end the day they start. It takes time to complete the end of a genuine movement. By being up in the mountains I am in a position to give these movements all the time they need. But a day comes when I get some prices out of the paper and put them down in my records. I notice the prices are not conforming to the same pattern of movements that has been apparent for some time.
“Right then I make up my mind. I go to town and get busy!” That happened many years ago. Consistently, the man from the mountains, over a long period of time, drew funds abundantly from the stock market. He was something of an inspiration to me.