Research Summary

The article provides an in-depth analysis of Randy McKay’s trading strategy. McKay, a legendary investor, started trading currency futures in 1970 and has since made hundreds of millions of dollars from the market. The article discusses McKay’s first major trade, his approach to profiting from a market trend, and his views on risk control and position sizing. It also compares his strategy with that of other successful traders like Paul Tudor Jones and Bill Lipschutz.

Actionable Insights

  • Seize rare opportunities: When a rare opportunity presents itself in the market, it’s crucial to take full advantage of it, as McKay did with his first big trade.
  • Profit from the middle of a trend: McKay prefers to profit from the middle of a trend, rather than the beginning or the end. This approach contrasts with that of Paul Tudor Jones, who focuses on catching a lot of bottoms and tops.
  • Practice risk control and position sizing: McKay emphasizes the importance of getting out of losing trades immediately and reducing trading size when losing. He also highlights the need to be mindful of one’s emotional state during drawdowns to avoid making impulsive decisions.

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