The fastest way to get your trading career off to a successful start is by learning from the Masters who have, over so many years, come before you.
You don’t need to reinvent the wheel with trading, stick to what works and learn as much as you can from crystallised wisdom of Master experienced, professional traders.
We suggest to you to change, update and align your trading Method, Money Management and Mind Management along the lines below.
__________
Adam Grimes
“You can lose your opinion or you can lose your money.”
Alexander Elder
“The goal of a successful trader is to make the best trades. Money is secondary.”
Andrew Carniege
"The difference between success and mediocrity, between winners and losers, is often times just a 1% difference.
You don’t need to know many things to succeed and get rich, IF you know the few things that are important.
After it is all said and done, success is just a series of simple things most people won’t do, don’t like to do, or can’t find the time to do.
And by not doing these things, success won’t happen.
It really IS that simple. You don’t need to be a genius to become wealthy or successful, you just have to commit to doing a few, simple things on a consistent basis.
It’s the 1% difference. And it’s the difference between a life of GREATNESS and one of constant struggle and mediocrity."
"The difference between success and mediocrity, between winners and losers, is often times just a 1% difference.
You don’t need to know many things to succeed and get rich, IF you know the few things that are important.
After it is all said and done, success is just a series of simple things most people won’t do, don’t like to do, or can’t find the time to do.
And by not doing these things, success won’t happen.
It really IS that simple. You don’t need to be a genius to become wealthy or successful, you just have to commit to doing a few, simple things on a consistent basis.
It’s the 1% difference. And it’s the difference between a life of GREATNESS and one of constant struggle and mediocrity."
Anonymous
“A rising tide lifts all boats over the wall of worry and exposes bears swimming naked.”
“All we can control is risk… don't expect to control price.”
“Better money missed than money lost… don't think about missed opportunities too much; rather focus on new ones.”
“Bulls make money, bears make money, pigs get slaughtered.”
“In trading, everything works sometimes and nothing works always.”
“Let it centre, before you enter… allow the market to make a pullback before entering.”
"Offence sells tickets but Defence wins championships."
“Once you find the system that works for your style/personality and confidence is gained, wash, rinse, repeat over and over again.”
"Offence sells tickets but Defence wins championships."
“Once you find the system that works for your style/personality and confidence is gained, wash, rinse, repeat over and over again.”
“One day does not make a trend.”
“Plan the trade, trade the plan… think before trading, but act during trading.”
“Price is the ultimate indicator… realise that price is king and it will go where it wants to.”
“Sometimes the best trade is no trade.”
“The bull comes up by the stairs and the bear goes out the window… a bull market will rise slowly. but when it crashes, the market is like a bear going out the window.”
“The market will always be there… don't worry about missed opportunities.”
“Trend-following hedge fund strategies lead performance in 2016… Computer-driven hedge funds renowned for “trend-following” are beating their highly paid human counterparts so far this year... Source: Financial Times”
“You’re going to learn a million things, then you need to forget them all and focus on one.”
Art Williams
Bernard Baruch
"In trading/investing, it's not about how much you make but rather how much you don't lose."
Bill Williams
“As experienced traders know, it is imperative to remain centered in the present during their trading day.”
“Consistent winners have mastered the art of dancing with the market. Remember that in order to dance well and find joy in dancing, we must allow ourselves to be moved by the music and go with the tune rather than follow a rigid agenda.”
“Cooperate with the market. When we cooperate with the market, we allow it to show us where it is going. Realise that when you are in disagreement with the market, then you are in disagreement with reality.”
“Emotional Management is the most difficult barrier to profitable trading. If we can get our emotions out of the way and overlook the interference, we can follow the signals and become more profitable traders.”
“I am a good trader. You only need one affirmation and this is it. Read these words every day until you don’t have to read them anymore.”
“If you are expecting perfection, you are setting yourself up for disappointment. Having the correct personal attitude in all your trades is more important than being correct in every trade.”
“Know when to say yes or no. Just as you learn the rules of driving a vehicle on the road, we can learn to effectively navigate the markets by only following the signals on a chart.”
“Let go and grow in the market. Let go and give the market room to breathe. The market is going to do what it is going to do regardless of what you do.”
“Most Traders lose because they are lost. They are either using the wrong maps, using the wrong trading paradigm, or stuck in the wrong thinking.”
“Move from thinking about the market to thinking with the market. All that we need from the market is to provide us with signals so we can take appropriate action. We do not need to be consumed with it to be in tune with it.”
“Quieten your trading mind. The vast majority of thinking is detrimental to personal peace and profits in the market. The goal is to unthink.”
“Simplify your trading. When we find ourselves struggling in our trading, we do not need a new indicator or a new strategy. We need a new outlook.”
“Stick with your strategy. If you are going to implement a trading strategy based on a specific set of rules, then follow through with it.”
“Successful trading comes by letting go. In any endeavour, holding onto the outcome creates an energy blockage. When we are on the edge of a cliff, the best thing to do is to enjoy the view. When we are trading on the edge, we must trust our indicators and let go.”
“The ego is our biggest enemy in the market. Losing does not mean you are wrong and winning does not mean you are right. There will be losing trades and there will be winning trades. Both are equally important to all traders.”
“The market is what you think it is. To some traders, the market is a dangerous and threatening place, full of unseen traps. To others, the market is a bountiful garden where you reap the rewards of your decisions to play it cool and go with the flow.”
“The market is your teacher. Every day is an opportunity to learn from the market. It is necessary to keep an open mind, as every trade will teach you something about your operating system if you pay attention to the lesson being offered.”
“The number one obstacle for traders around the world: our own thoughts!”
“There are no bad markets. The markets are neutral so they cannot be bad or good. The markets are either tradeable or not tradeable based on market conditions, our own account value, risk tolerance, and individual trading style.”
“To be a winning trader, you must be okay with losing. If you can’t afford to lose, you can’t afford to win. You are going to have losing days just as you are going to have winning days.”
“Trading is not a race. There are unlimited opportunities for profit in the markets. Let go of the feeling of being in a hurry and the market will provide the opportunity.”
“Walk away from trading the 'How' to trading the 'Now'. A proficient trader no longer thinks of the process of trading or questions their methodology. They simply place trades based on indicators displayed on charts.”
“Want what the market wants. When we want what the market wants, we allow it to be exactly where it is now. This idea is the Holy Grail of trading and is the vehicle to get us to the place of oneness with the market that we are all seeking to experience.”
“When you are operating with the proper mindset in the markets, you will not only improve your relationship with the markets, but also with your business associates, your friends and family, and bring more peace and prosperity to your trading life.”
No one really trades the markets. We all trade our belief systems. When we place our trades, we bring these beliefs with us into the markets. The opportunity for profit exists because we all have different beliefs about what is happening in the world.”
Williams PhD, Bill M.. Traders Troubleshooting Tools: A Collection Of Aphorisms, Quotes And Trading Trips By Bill M. Williams Phd (Kindle Locations 142-145). BookBaby. Kindle Edition.
Bramesh
“If you consistently trade according to your strategy (don’t over-trade), consistently manage your risk properly and consistently maintain your composure after every trade, winner or loser, you will give yourself the best possible chance of making consistent money in the market.
However, if you choose to behave erratically by straying from your strategy (over-trading), risking too much and generally gambling your money in the market, you will develop account-destroying trading habits.
The good news is that YOU have the power to control what you do and what you focus on. You have the power to decide if you want to keep behaving inconsistently in the market, or you can decide to try and harness the power of consistency and use it to develop profitable trading habits. Consistently trading an effective trading method with discipline, will eventually turn into proper trading habits which will then turn into making money consistently in the markets.”
Brett Steenbarger
“The core problem, however, is the need to fit markets into a style of trading rather than finding ways to trade that fit with market behaviour.”
Brian Lund
"There is no wrong way to make money in the market. But I’ve found that it is a lot easier to keep the money you have than to make more money. Offence sells tickets but Defence wins championships, is how I learnt it. Remember we can always get back in. Getting stopped and still being right on the direction is part of the deal we make with the risk management gods. It’s part of finding that balance between not enough risk and too much risk. It’s a personal decision."
Bruce Kovner
“[Michael Marcus – another top trader] taught me one other thing that is absolutely critical: You have to be willing to make mistakes regularly; there is nothing wrong with it. Michael taught me about making your best judgement, being wrong, making your next best judgement, being wrong, making your third best judgement, and then doubling your money.”
“If you personalise losses, you can’t trade.”
“Novice Traders trade 5 to 10 times too big. They are taking 5 to 10 percent risk on a trade; they should be taking 1 to 2 percent risk on."
“Whenever I enter a position, I have a predetermined stop. That is the only way I can sleep. I know where I’m getting out before I get in. The position size on a trade is determined by the stop, and the stop is determined on a technical basis.”
“When you are really involved, the screen almost reaches out and grabs you. The way the quotes are made changes: They get wider, they get wilder. I have contacts all over the world in each of these markets and I know what is going on. It is a tremendously exciting game.
Charles Faulkner
“The people that I know who are the most successful at trading are passionate about it. They fulfil what I think is the first requirement: developing intuitions about something they care about deeply, in this case, trading... They develop a deep knowledge of whatever form of analysis they use. Out of that passion and knowledge, their trading ideas, insights, and intuitions emerge.”
Chuck D.
“Never let a win go to your head, or a loss to your heart.”
Colm O’Shea
"You should place a stop at a level that disproves your trade premise, as opposed to placing a stop based on your pain level. The market doesn’t care about your pain threshold!”
Doug Gregory
“Trade What’s Happening, Not What You Think Is Gonna Happen.”
Ed Seykota
“A losing trader can do little to transform himself into a winning trader. A losing trader is not going to want to transform himself. That’s the kind of thing winning traders do.”
“Acting out this drama could be exciting. However, it also seems terribly expensive. One alternative is to keep bets small and then to systematically keep reducing risk during equity drawdowns. That way you have a gentle financial and emotional touchdown.” (On losing streaks and over-trading)
“Be sensitive to subtle differences between ‘intuition’ and ‘into wishing’.”
“Before I enter a trade, I set stops at a point at which the chart sours.”
“Cut your losses. Cut your losses. Cut your losses. Then may be you have a chance.”
“Dramatic and emotional trading experiences tend to be negative. Pride is a great banana peel, as are hope, fear, and greed. My biggest slip-ups occurred shortly after I got emotionally involved with positions.”
“Embrace trading losses.” (That means accepting)
“Experienced traders can be very supportive just by being there for sharing joys and sorrows.”
“Fundamentalists and anticipators may have difficulties with risk control because a trade keeps looking better the more it goes against them.”
“Fundamentalists figure things out and anticipate change. Trend followers join the trend of the moment. Fundamentalists try to solve their feelings. Trend followers join their feelings and observe them evolve and dis-solve.”
“Fundamentals that you read about are typically useless as the market has already discounted the price, and I call them “funny-mentals”. However, if you catch on early, before others believe, you might have valuable “surprise-a-mentals”.”
“Having a quote machine is like having a slot machine at your desk – you end up feeding it all day long. I get my price data after the close each day.”
“I am primarily a trend trader with touches of hunches based on about twenty years of experience. In order of importance to me are: (1) the long-term trend, (2) the current chart pattern, and (3) picking a good spot to buy or sell. Those are the three primary component of my trading. Way down in a very distant fourth place are my fundamental ideas and, quite likely, on balance, they have cost me money.”
“I don’t judge success, I celebrate it. I think success has to do with finding and following one’s calling regardless of financial gain.”
“I don’t predict a non-existing future.”
“I don’t think traders can follow rules for very long unless they reflect their own trading style. Eventually, a breaking point is reached and the trader has to quit or change or find a new set of rules he can follow. This seems to be part of the process of evolution and growth of a trader.”
“I feel my success comes from my love of the markets. I am not a casual trader. It is my life. I have a passion for trading. It is not merely a hobby or even a career choice for me. There is no question that this is what I am supposed to do with my life.”
“I intend to risk below 5 percent on a trade, allowing for poor executions.”
“I prefer not to dwell on past situations. I tend to cut bad trades as soon as possible, forget them, and then move on to new opportunities.”
“I set protective stops at the same time I enter a trade. I normally move these stops in to lock in a profit as the trend continues. Sometimes, I take profits when a market gets wild. This usually doesn’t get me out any better than waiting for my stops to close in, but it does cut down on the volatility of the portfolio, which helps calm my nerves. Losing a position is aggravating, whereas losing your nerve is devastating.”
“I think that if people look deeply enough into their trading patterns, they find that, on balance, including all their goals, they are really getting what they want, even though they may not understand it or want to admit it.”
“I usually ignore advice from other traders, especially the ones who believe they are on to a “sure thing”. The old timers, who talk about “maybe there is a chance of so and so,” are often right and early.”
“I would add that I consider myself and how I do things as a kind of system which, by definition, I always follow.”
“If I am bullish, I neither buy on a reaction, nor wait for strength; I am already in. I turn bullish at the instant my buy stop is hit, and stay bullish until my sell stop is hit. Being bullish and not being long is illogical.”
“If you can’t measure it, you probably can’t manage it… Things you measure tend to improve.”
“If you can’t take a small loss, sooner or later you will take the mother of all losses.” (Either learn to handle small losses or risk blowing your entire account)
“If you want to know everything about the market, go to the beach. Push and pull your hands with the waves. Some are bigger waves, some are smaller. But if you try to push the wave out when it’s coming in, it’ll never happen. The market is always right”
“In order of importance to me are: 1) the long term trend, 2) the current chart pattern, and 3) picking a good spot to buy or sell.”
“It can be very expensive to try to convince the markets you are right.”
“It is a happy circumstance that when nature gives us true burning desires, she also gives us the means to satisfy them. Those who want to win and lack skill can get someone with skill to help them.”
“Losing a position is aggravating, whereas losing your nerve is devastating.” (The best way to ensure you never lose your nerve is to cut losses early)
“Luck plays an enormous role in trading success. Some people were lucky enough to be born smart, while others were even smarter and got born lucky.”
“Markets are fundamentally volatile. No way around it. Your problem is not in the math. There is no math to get you out of having to experience uncertainty.”
“Our work is not so much to treat or to cure feelings, as to accept and celebrate them. This is a critical difference.”
“Pyramiding instructions appear on dollar bills. Add smaller and smaller amounts on the way up. Keep your eye open at the top”
“Risk no more than you can afford to lose, and also risk enough so that a win is meaningful.”
“Sometimes I trade entirely off the mechanical part, sometimes I override the signals based on strong feelings, and sometimes I just quit altogether. If I didn’t allow myself the freedom to discharge my creative side, it might build up to some kind of blowout. Striking a workable ecology seems to promote trading longevity, which is one key to success.”
“Speculate with less than 10% of your liquid net worth. Risk less than 1% of your speculative account on a trade. This tends to keep the fluctuations in the trading account small, relative to net worth. This is essential as large fluctuations can engage {emotions} and lead to feeling-justifying drama.” (This allows you to endure losing streaks without losing your account or your nerves)
“Systems don’t need to be changed. The trick is for a trader to develop a system with which he is compatible”
“Systems trading is ultimately discretionary. The manager still has to decide how much risk to accept, which markets to play, and how aggressively to increase and decrease the trading base as a function of equity change.”
“The aha! process lies at the heart of price change. For instance, consider the series: OTTFFSSE. What is the next letter? This puzzle creates tension – until you see the first letters of the ordinal numbers – one, two. Aha! you say. A lot happens during an aha. The puzzle dies and the tension dissipates. A societal aha! drives price. Read the newspapers and the news magazines during a major move. At first, no one gets why the move is happening. There’s a lot of confusion. Part of the move’s way up, some people get it. At the end, everybody gets it. The tension is resolved and the move ends.”
“The elements of good trading are: (1) cutting losses, (2) cutting losses, and (3) cutting losses. If you can follow these three rules, you may have a chance.”
“The elements of good trading are: 1, cutting losses. 2, cutting losses. And 3, cutting losses. If you can follow these three rules, you may have a chance.”
“The feelings we accept and enjoy rarely interfere with trading.”
“The key to long-term survival and prosperity has a lot to do with the money management techniques incorporated into the technical system.”
“The key to long-term survival and prosperity has a lot to do with the money management techniques incorporated into the technical system. There are old traders and there are bold traders, but there are very few old, bold traders.”
“The markets are the same now as they were five to ten years ago because they keep changing – just like they did then.”
“The positive intention of fear is risk control.”
“The trading rules I live by are: 1. Cut losses. 2. Ride winners. 3. Keep bets small. 4. Follow the rules without question. 5. Know when to break the rules.”
“The trend is your friend until the end when it bends.”
“There are old traders and there are bold traders, but there are very few old, bold traders.”
“To avoid whipsaw losses, stop trading”
“Trading requires skill at reading the markets and at managing your own anxieties.”
“Trend following is an exercise in observing and responding to the ever-present moment of now.”
“Trying to trade during a losing streak is emotionally devastating. Trying to play “catch up” is lethal.”
“Until you master the basic literature and spend some time with successful traders, you might consider confining your trading to the supermarket.”
“Win or lose, everybody gets what they want out of the market. Some people seem to like to lose, so they win by losing money.”
Ed Thorp
"Anyone who’s actually traded knows the Efficient Market Hypothesis is bogus. It’s a poor mental model used by lazy academics. Thorp has a much better take:
When people talk about efficient markets, they think it’s a property of the market. But I think that’s not the way to look at it. The market is a process that goes on. And we have, depending on who we are, different degrees of knowledge about different parts of that process.
. . . market inefficiency depends on the observer’s knowledge. Most market participants have no demonstrable advantage. For them, just as the cards in blackjack or the numbers at roulette seem to appear at random, the market appears to be completely efficient.
Markets aren’t actually random. They only appear random to those without expertise. The right knowledge transforms the market from a sequence of random numbers into a predictable process."
"Don’t trade unless you’re sure you have an edge that’ll create better than random outcomes."
"To beat the market, focus on investments well within your knowledge and ability to evaluate, your “circle of competence.”
George Soros
"Being so critical, I am often considered a contrarian. But I am very cautious about going against the herd; I am liable to be trampled on… Most of the time, I am a trend follower, but all the time I am aware that I am a member of the herd and I am on the lookout for inflection points."
"If investing is entertaining, if you're having fun, you're probably not making any money. Systematic and profitable trading based on math and probabilities is usually not exciting and fun. Good trading / investing is boring in almost all instances." Soros on enjoyable investing.
"If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring."
"I’m not better than the next trader, just quicker at admitting my mistakes and moving on to the next opportunity."
"I’m only rich because I know when I’m wrong…I basically have survived by recognising my mistakes."
"It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right, and how much you lose when you’re wrong."
"I’m only rich because I know when I’m wrong…I basically have survived by recognising my mistakes."
"It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right, and how much you lose when you’re wrong."
"Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected." Soros on bucking the herd mentality of the markets."
"Most of the time, we are punished if we go against the trend. Only at inflection points are we rewarded."
"Short term volatility is greatest at turning points and diminishes as a trend becomes established. By the time all the participants have adjusted, the rules of the game will change again."
"Stock market bubbles don't grow out of thin air. They have a solid basis in reality, but reality as distorted by a misconception." Soros on the psychology of stock market bubbles.
"The financial markets generally are unpredictable.... The idea that you can actually predict what's going to happen contradicts my way of looking at the market." Soros on how his reflexivity principle affects the way he looks at markets.
"The reality is that financial markets are self-destabilising; occasionally they tend toward disequilibrium, not equilibrium." Soros on why no one philosophy, outlook or analysis on the markets suffices for very long.
"The worse a situation becomes, the less it takes to turn it around, and the bigger the upside." Soros on the attractiveness of investing in distressed situations."
"The whole thrust of my approach is that the course of events is indeterminate."
"The whole thrust of my approach is that the course of events is indeterminate."
Gerald M. Loeb
“Accepting losses is the most important single investment device to ensure safety of capital.”
Henri M Simoes
“In trading, the impossible happens about twice a year.”
Jack Schwager
“Amateurs think about how much money they can make. Professionals think about how much money they could lose.”
“Dangers of watching every tick are twofold: over-trading and increased chances of prematurely liquidating good positions”
“Trading provides one of the last great frontiers of opportunity in our economy. It is one of the very few ways in which an individual can start with a relatively small bankroll and actually become a multi-millionaire.”
"The larger the position, the greater the danger that trading decisions will be driven by fear rather than by judgement and experience."
Jason Klatt
“Sheer will or determination, is no substitute for something that actually works.”
Jason Zweig
“It is human tendency to estimate probabilities not on the basis of long-term experience but rather on a handful of the latest outcomes - in Your Money and Your Brain"
Jeffrey Kennedy
“A knife in the hands of a skilled surgeon can save lives; A knife in the hands of a lunatic can take lives. Similarly, the Elliott Wave Principle is a tool in your hands to be utilised by you appropriately”.
“Always ask: Is there a pattern that I recognise?”
“Always know the difference between what is possible and what is probable.”
“Don’t push it. Take advantage of the opportunities that the markets present. However, make sure that you’re not seeing something that’s not there just because you feel like you have to have a trade on.”
“I'm not a big fan of driving at night, and especially driving at night in the rain. I much prefer driving during the day when it's sunny and clear and there's not much traffic. The reason why has to do with clarity and vision. I can see things more clearly during the day.
Well, that kind of logic can aid us from an Elliott wave perspective, and also a trading perspective; namely: Why go through the work and hassle of trying to decipher a complicated price chart when there are plenty of charts out there that exhibit idealised and extremely clear wave patterns.
In other words, why drive at night in the rain when you don't have to?"
“I do not want to be the first to the party but want to get out before the cops come in.”
“In a society that seems obsessed with instant gratification, it’s easy to get frustrated when things don’t immediately work out. The markets have something called market time, which takes a while to get used too.”
“In fact, in my early days as a trader, I would always start the process of trading by figuring out how much money I would make. Thankfully, I’ve made a 180-degree turn in my thinking. The first thing I do now is to calculate how much money I can lose if I’m wrong. In other words, do the math on the downside first before you start counting your winnings.
We’re never going to always be right as analysts or traders. By acknowledging and embracing this fact, we can more fully prepare for the inevitable — being wrong. This is where risk management comes into play. A losing trade should never be a devastating experience. At best, losing on a trade should be nothing more than a minor inconvenience or annoyance. If not, then you’re trading too big.”
“Let the market commit to you before you commit to the market. ”
“My best advice to you as you look for a trading opportunity is to start your search by asking the question, “Do I see a wave pattern I recognise?” You should look for one of the five core Elliott wave patterns: impulse wave, ending diagonal, zigzag, flat, or triangle. These forms will become the basis of all your trade setups once you learn to identify them quickly and with confidence.
An even simpler question to ask is, “Do I see either a motive wave or a corrective wave?” Motive waves define the direction of the trend. There are two kinds of motive waves: impulse waves and ending diagonals.
Corrective waves travel against the larger trend. The three kinds of corrective waves are zigzags, flats, and triangles. If all you do is identify a motive wave versus a corrective wave correctly, you can still identify some useful trade setups.”
“Regardless of how credible a forecast is, something can always go wrong. This tidbit of wisdom comes from years of trading.”
“Skilled analysis is a mastery of observation, while successful trading is a mastery of self.”
“Stops have 3 primary uses (i) to define risk (ii) to reduce/eliminate risk (iii) to protect profits.”
“Teaching, trading, and technical analysis are my passions. However, when it comes to trading, there is a drawback that I must always guard against — over-trading.”
“The hardest thing about doing a good job is that you have to do it every day. From a trading perspective, the hardest thing about being a good trader is that you must practice the habits of good traders every day. For example, you must manage risk appropriately every day…not just every now and then.”
“What is the best way to eat an elephant? Ans: Bit by Bit.”
“When it comes to trading, patience is not a virtue, it’s a necessity.”
Let’s say you’re looking at a price chart and you see a wave pattern you recognize. Perhaps you decide to wait on taking a position or perhaps you decide to take a different trade in another issue. The next time you look at the chart, the stock is trading 60% higher. Great, you just missed the one trade that would have made your entire year and then some.
You’re determined not to let that happen again, so on the next few trades you decide to get in a bit early. Without confirming price action, most of those early trades are losers. Now you’re looking to make up lost ground, so you increase your trade size on the next sure thing. Big mistake, that trade turns into another loser as well.
If you find yourself in a hole — STOP DIGGING! Rather than trading well, it’s all too easy for your emotions to hijack your trading approach or a well-thought-out trading plan. When this occurs, take a step back and put yourself in timeout. This might be just a few days or a few months. For me, what helps is to refocus, recommit, and get back to basics. In other words, focusing on small consistent profits versus homerun or get-rich-quick type trades."
Jesse Livermore
“A critical part to what he’s saying is to wait for the path of least resistance to present itself. Attempting to anticipate trend changes is a costly and foolish endeavour.
‘One of the most helpful things that anybody can learn is to give up trying to catch the last eighth — or the first. These two are the most expensive eighths in the world. They have cost stock traders, in the aggregate, enough millions of dollars to build a concrete highway across the continent.’
Trend reversals are a process, not an event.
“A market does not culminate in one grand blaze of glory. Neither does it end with a sudden reversal of form. A market can and does often cease to be a bull market long before prices generally begin to break.”
The trend is your friend and there are separate trends on different time intervals. The more trends that line up on each interval, the lesser resistance on the trade’s path. ”
__________
__________
“After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: it never was my thinking that made the big money for me. It was always my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. I’ve known many [traders] who were right at exactly the right time, and began buying or selling stocks when prices were at the very level that should show the greatest profit. And their experience invariably matched mine; that is, they made no real money out of it. [Traders] who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make the big money.”
“Don’t take action with a trade until the market, itself, confirms your opinion. Being a little late in a trade is insurance that your opinion is correct. In other words, don’t be an impatient trader.”
“I study because my business is to trade. The moment the tape told me that I was on the right track my business duty was to increase my line. I did. That is all there is to it.”
“I was doing better than breaking even and that is why I didn't think there was any need to deprive myself of the good things in life. The market was always there to supply them. I was acquiring the confidence that comes to a man from a professionally dispassionate attitude toward his own method of providing bread and butter for himself.”
“I learnt early that there is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again. I’ve never forgotten that.”
“Instead of hoping he must fear and instead of fearing he must hope. He must fear that his loss may develop into a much bigger loss, and hope that his profit may become a big profit.”
“It would not be so difficult to make money if a trader always stuck to his speculative guns — that is, waited for the line of least resistance to define itself and began buying only when the tape said up or selling only when it said down.”
“For years I had been the victim of an unfortunate combination of inexperience, youth and insufficient capital. But now I felt the elation of a discoverer.”
“Losing money is the least of my troubles. A loss never bothers me after I take it. I forget it overnight. But being wrong — not taking the loss — that is what does damage to the pocketbook and to the soul.”
“Money is made by sitting, not trading.”
“Of all speculative blunders, there are few worse than trying to average a losing game. My cotton deal proved it to the hilt a little later. Always sell what shows you a loss and keep what shows you a profit. That was so obviously the wise thing to do and was so well known to me that even now I marvel at myself for doing the reverse.
Livermore’s occasional failure to follow this rule is what led to the multiple blowups he experienced throughout his career. He lost when he failed to follow his advice that it’s “foolhardy to make a second trade, if your first trade shows you a loss. Never average losses. Let this thought be written indelibly upon your mind.””
“Only The Game, Can Teach You The Game.”
“That was the day I remember most vividly of all the days of my life as a stock operator. It was the day when my winnings exceeded one million dollars.”
“The human side of every person is the greatest enemy of the average investor or speculator. Fear keeps you from making as much money as you ought to. Wishful thinking must be banished.”
“There is what I call the behaviour of a stock, actions that enable you to judge whether or not it is going to proceed in accordance with the precedents that your observation has noted. If a stock doesn't act right don't touch it; because, being unable to tell precisely what is wrong, you cannot tell which way it is going. No diagnosis, no prognosis. No prognosis, no profit.”
__________
__________
The Importance of Understanding General Conditions
“I still had much to learn but I knew what to do. No more floundering, no more half-right methods. Tape reading was an important part of the game; so was beginning at the right time; so was sticking to your position. But my greatest discovery was that a man must study general conditions, to size them so as to be able to anticipate probabilities. “
Not many people realise this, but Livermore was the original “global macro” guy. His “greatest discovery” was the importance of macro — or what he called “general conditions”.
He had the same realisation that hedge fund manager Steve Cohen had decades later, which is “that 40 percent of a stock’s price movement is due to the market, 30 percent to the sector, and only 30 percent to the stock itself.” After Livermore made this discovery he said “I began to think of basic conditions instead of individual stocks. I promoted myself to a higher grade in the hard school of speculation. It was a long and difficult step to take.”
This revelation completely changed the way he approached markets and trading. While everybody was piking around, losing money playing the “stock picking” game, Livermore was studying general conditions. He now understood the simple fundamental truth that you want to be long in a bull market and short in a bear market.
“I think it was a long step forward in my trading education when I realised at last that when old Mr. Partridge kept on telling the other customers, 'Well, you know this is a bull market!' he really meant to tell them that the big money was not in the individual fluctuations but in the main movements — that is, not in reading the tape but in sizing up the entire market and its trend.”
“Disregarding the big swing and trying to jump in and out was fatal to me. Nobody can catch all the fluctuations. In a bull market your game is to buy and hold until you believe that the bull market is near its end. To do this you must study general conditions and not tips or special factors affecting individual stocks.”
It’s when Livermore started playing the macro game that he really started making the big money.
“I cleared about three million dollars in 1916 by being bullish as long as the bull market lasted and then by being bearish when the bear market started. As I said before, a man does not have to marry one side of the market till death do them part.”
“But I can tell you after the market began to go my way I felt for the first time in my life that I had allies — the strongest and truest in the world: underlying conditions. They were helping me with all their might. Perhaps they were a trifle slow at times in bringing up the reserves, but they were dependable, provided I did not get too impatient.”
General conditions (macro) continue to be — BY FAR — the biggest potential source for alpha in trading. That’s because most market participants are still focused on the stock picking game and remain completely ignorant of the most significant driver of their stock’s price action. Learning to read the underlying conditions is like swinging the trading equivalent of Thor’s Hammer… it makes that much of a difference.
__________
“The desire for constant action irrespective of underlying conditions is responsible for many losses on Wall Street even among the professionals, who feel that they must take home some money every day, as though they were working for regular wages. Remember this: When you are doing nothing, those speculators who feel they must trade day in and day out, are laying the foundation for your next venture. You will reap benefits from their mistakes.”
“The desire for constant action irrespective of underlying conditions is responsible for many losses on Wall Street even among the professionals, who feel that they must take home some money every day, as though they were working for regular wages. Remember this: When you are doing nothing, those speculators who feel they must trade day in and day out, are laying the foundation for your next venture. You will reap benefits from their mistakes.”
“The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance, or the get-rich-quick adventurer. They will die poor.”
“The obvious rarely happens, the unexpected constantly occurs.”
“There is the plain fool, who does the wrong thing at all times everywhere, but there is the Wall Street fool, who thinks he must trade all the time. No man can always have adequate reasons for buying or selling stocks daily – or sufficient knowledge to make his play an intelligent play.”
“Well, I was worth over one million after the close of business that day. But my biggest winnings were not in dollars but in the intangibles: I had been right, I had looked ahead and followed a clear-cut plan. I had learnt what a man must do in order to make big money; I was permanently out of the gambler class; I had, at last, learnt to trade intelligently in a big way. It was a day of days for me.”
Jim Cramer
“Hope is a bogus emotion that only costs you money.”
Jim Martins
“I make my money by counting 3s and 5s all day long”
Explanation: Elliott Impulse Waves have 5 wave sub-structure; Elliott Corrective Waves have 3 wave sub-structure; hence the above Quote by Jim Martins.
Jim Rogers
“I just wait until there is money lying in the corner, and all I have to do is go over there and pick it up. I do nothing in the meantime.
Even people who lose money in the market say, “I just lost my money, now I have to do something to make it back.” No, you don’t. You should sit there until you find something.”
“One of the best rules anybody can learn about investing is to do nothing, absolutely nothing, unless there is something to do. Most people – not that I’m better than most people – always have to be playing; they always have to be doing something. They make a big play and say, “Boy, am I smart, I just tripled my money.” Then they rush out and have to do something else with that money. They can’t just sit there and wait for something new to develop.”
J.J. Evans
“Take your profits or someone else will take them for you.”
John Bogle
“Time is your friend; impulse is your enemy."
John Maynard Keynes
“The market can stay irrational longer than you can stay solvent.”
Justin Bennett
“Always use percentages when measuring your progress. Don’t make the mistake of focusing on the amount of money you make. If your account is relatively small, this type of misdirection can lead to excessive risk in an attempt to make more money.”
“First and foremost, you need a strong enough why and it must include a passion for trading.”
“One trick is to add an extra zero or two to the dollar amounts. So if you have a $1,000 account, write it as $100,000. If you made $50, write it down as $5,000.
Remember that the money made or lost is irrelevant. All else being equal, the skill needed to make 5% profit in a month is the same regardless of whether your account is $1,000 or $100,000.
Of course, the actual amount in your account won’t change, but it may help ease some of the anxiety you feel about needing to make more money.”
“Overtrading is one of the most common and costly bad habits experienced by Forex traders. It’s easy to assume that the more you trade, the more you stand to make.
However, the opposite is true. Trading is a game of patience. Those who wait for quality setups and do nothing in the meantime are the ones who succeed.
If you want to succeed in this business, you have to start thinking long-term. Don’t stress over one loss, or even a losing week. Instead, stay focused on how you perform over the coming months and years.
A long-term perspective will allow you to see the power of a ‘less is more’ approach.”
“Trading is never about knowing whether the market is about to move higher or lower. Instead, it’s a game of probabilities which means a degree of randomness is always present.
With that in mind, it’s important to account for all scenarios. Your plan for each trade idea should include every possible outcome. That way you know that you’re reacting to the technicals and not your emotions.
By knowing that there are no guarantees, you’ll be less likely to over-leverage your account. If every trade has a degree of randomness, you won’t want to risk 10% or 20% because there’s a chance you may lose it all.
Using probabilities to craft your trade ideas is much less stressful than trying to know what will happen next. It’s far easier to accept, and move on from, losses when you know that every outcome has a degree of randomness.”
Justin Mamis
“Stocks are bought not in fear but in hope. They are typically sold out of fear.”
Laila Ali
“Impossible is just a big word thrown around by small men who find it easier to live in the world they have been given than to explore the power they have to change it.”
Larry Hite
“Frankly, I don’t see markets; I see risks, rewards, and money.”
“I have two basic rules about winning in trading as well as in life: 1. If you don’t bet, you can’t win. 2. If you lose all your chips, you can’t bet.”
“If you don’t respect risk, eventually they’ll carry you out.”
“Throughout my financial career, I have continually witnessed examples of other people that I have known being ruined by a failure to respect risk. If you don’t take a hard look at risk, it will take you.”
Les Brown
You don’t have to be great to get started, but you have to get started to be great.
Linda Raschke
“All you need is one pattern to make a living.”
Mark Douglas, Trading In the Zone
“95% of the trading errors you are likely to make will stem from your attitudes about being wrong, losing money, missing out, and leaving money on the table – the four trading fears.”
“The less I cared about whether or not I was wrong, the clearer things became, making it much easier to move in and out of positions, cutting my losses short to make myself mentally available to take the next opportunity.”
__________
"A winning trader has the mental skills to realise, understand and utilise the FACT that any particular trade he or she takes has basically a random outcome. That is to say, they cannot possibly know the outcome of that trade until it is over. The winning trader knows this and they also know that they must trade in-line with this belief over a large series of trades and ignore all the temptations and feelings that get kicked up on each trade they take. They are able to do this because they keep their eyes on the bigger picture. That bigger picture is the fact that IF they execute their method flawlessly, over and over, over a long enough period of time / series of trades, they will come out profitable."
"Even if your method is a high-probability method, it’s the proper execution of that method that you need proper mental skills for. If you don’t have those mental skills, even a winning strategy will lose.
Mental skills are things like; staying focused on the process, on your method, and not worrying about the consequences if this trade goes wrong. If you don’t have the proper mental skills to stay positively focused on the process of trading; on doing exactly what you need to do when you need to do it without reservation, hesitation or fear, you will not make money in the market."
"If you don’t integrate the randomness principle, you will find trading is the most frustrating endeavour you can undertake. You can only generate consistent returns by understanding that each trade is random and unique, and then taking that information and using it to control yourself after each trade. Do not get hung up on your last trade. Instead, focus on consistently trading your method over and over.
Frustration comes from expecting something our method can’t do. Technical methods find and identify patterns in collective human behaviour, the problem is, the outcomes don’t always correspond with the pattern on a trade by trade basis. There doesn’t have to be a relationship with the outcome and pattern. There is no guarantee that this trade will be the exact same result as the last one, even if they look the same. Rather, the method only tells us that IF we use it consistently, then over a series of trades, we should be profitable."
"Traders who learn to think in probabilities do not experience the mental ‘trauma’ like those traders who haven’t learnt to think in probabilities because they are not ‘expecting’ a winner on any given trade like those who don’t think in probabilities. Learning to think in probabilities releases your expectations from trades because you are focused on the results of the overall series of trades, not on the result of any given trade.
If you have a weighted coin that will be heads 70% of the time, you still don’t know the sequence of heads and tails, all you know is OVER TIME 70% of the flips will be heads."
"To execute trades without making mental errors you have to be free of thinking that “this trade will be a winner”. The typical trader expects “this trade” to be a winner, or why would they take it, right? But, you can’t think this way if you want to make consistent money. Once you start expecting each trade to win, you become emotionally attached to it, when as you should know by now, it is not any ONE trade that matters, but the overall series of trades and your ability to remain disciplined over that series that matters."
"It’s not about being right or wrong, it’s about the odds. A trade signal doesn’t tell you if you will be right or wrong, it is simply a pattern that means the odds are in your favour. But you cannot start thinking you will be right or a whole host of problems will occur.
By not thinking about being right or wrong, you will eliminate the potential for the market to disappoint you."
Mark Minervini (U.S.Investing Champion)
“For me, the greatest success came when I finally decided to forget about the money and concentrate on being the best trader I could be. Then the money followed.”
“Perhaps the single most important factor was that I had a great passion for the game. I think almost anyone can be net profitable in the stock market given enough time and effort, but to be a great trader, you have to have a passion for it. You have to love trading.”
“Those who think it is not possible to achieve super performance in stocks say so only because they never achieved themselves, and so it is hard for them to imagine. Ignore any discouragement you may encounter and pay attention instead to the empowering principles.”
“People would first say you can’t do it. The same people will later ask the question “How did you do it?”
“Right now, somewhere out in the world, someone is tirelessly preparing for success. If you fail to prepare, that somebody will make big money while you only dream about what could have been and should have done.”
“The difference between interest and commitment is the will not to give up. When you truly commit to something, you have no alternative but success.”
Martin Zweig
“Big money is made in the stock market by being on the right side of the major moves. The idea is to get in harmony with the market. It’s suicidal to fight trends. They have a higher probability of continuing than not.”
“It’s OK to be wrong; it’s unforgivable to stay wrong.”
Marty Schwartz
“By living the philosophy that my winners are always in front of me, it is not so painful to take a loss.”
“Confidence is every part of trading. If you're not convinced that you can win, you should never climb into the ring.”
“I always laugh at people who say, “I’ve never met a rich technician.” I love that! It’s such an arrogant, nonsensical response. I used fundamentals for nine years and got rich as a technician.”
“I always try to encourage people that are thinking of going into this business for themselves. I tell them, 'Think that you might become more successful than you ever dreamt, because that's what happened to me.'”
“I have learnt through the years that after a good run of profits in the markets, it`s very important to take a few days off as a reward. The natural tendency is to keep pushing until the streak ends. But experience has taught me that a rest in the middle of the streak can often extend it.”
“Learn to take losses. The most important thing in making money is not letting your losses get out of hand. Also, don’t increase your position size until you have doubled or tripled your capital. Most people make the mistake of increasing their bets as soon as they start making money. That is a quick way to get wiped out.”
“When I became a winner, I said, ‘I figured it out, but if I’m wrong, I’m getting the hell out, because I want to save my money and go on to the next trade.”
Michael Covel
“Money isn’t everything. It’s the process that matters, not the prize. It is much more satisfying to pursue objectives for the pure joy of pursuing them, regardless of how much money you can make. Winning traders are motivated by the inherent rewards of trading rather than profits. It’s common to hear traders say, “I love trading so much that I would do it for free if I had to.” They find trading personally meaningful. The markets fascinate them. Market action is intrinsically interesting. It is a rewarding intellectual challenge to devise innovative new trading strategies, and seeing how well your ideas pan out is exciting and enjoyable, regardless of whether you win or lose. Viewing trading from this perspective can act as powerful motivators. Individuals who pursue trading in this way are more likely to feel satisfied and can more easily manage the extreme stress the market is infamous for producing. When you aren’t focused on the profits, it’s easier to stay calm and focused. The money is either secondary or not an issue at all. Successful traders love the challenges the markets offer and view their work as meaningful. But many novice traders focus on competing with others, beating them out of profits, and winning bragging rights. Such an approach may satisfy a trader initially, but over time, it’s unlikely to be sufficient. Pursuing trading as a passion is a healthier, more satisfying way to approach trading. It’s more useful to focus on pursuing goals that are intrinsically interesting and personally meaningful.”
Now of course, the goal of trading is to make money. No money and you will not be around long. But this excerpt is a reminder that great traders don’t wake up each day stressed that they must make money. He wakes up and says he is going to follow his process — which leads to money. Also for many of the great traders, money is a way to keep score, not a means to buying “stuff”.]
Michael Steinhardt
“Good investing is a peculiar balance between the conviction to follow your ideas and the flexibility to recognise when you have made a mistake.”
Monroe Trout
“Some people make shoes. Some people make houses. We make money, and people are willing to pay us a lot to make money for them.”
Nial Fuller
“A lot of people seem to be unaware of the fact that they are trading with a mindset that is inhibiting them from making money in the markets. Instead, they think that if they just find the right indicator or system they will magically start printing money from their computer. Trading success is the end result of developing the proper trading habits, and habits are the end result of having the proper trading psychology.”
“Don’t be fooled by the modern day snake oil salesman approach to trading the Forex market; there’s no easy way to make money as a trader, and indeed I might be one of the few trading educators who will tell you that, but it’s the truth. The ‘easiest’ way to make money is by learning a sound and logical trading method that is either purely or mostly dependent on reading the price action in the market, proper trading psychology and proper money management practices.”
“It may sound cliché, but stop losses truly do make or break a trader. A trader who puts more time into his or her stop loss placement than their trade entries is likely to be a much more profitable trader than those who just briefly consider stop loss placement. A good rule of thumb regarding risk management and stop loss placement is: When in doubt (whether it’s about a trade entry or where to place a stop or position size) elect for LESS contracts and WIDER STOP.”
“It’s critical for the crocodile to understand its prey and to know where to look for it and remain calm and patient until it arrives. As traders, we have to know what our trading edge looks like and where to look for it and then control ourselves enough to not over-trade before it arrives.”
“Once you begin to realise that any given trade has an equal chance of being a winner or loser, you will stop giving too much emotional and financial importance to any one trade. Once you do this, it opens up the pathway to carefree trading and allows you to truly induce the proper trading mindset.”
__________
"If you stuck to your plan, whether it was a win or loss, you are on the right track. Re-read that last sentence again."
"You need to understand that one trade simply doesn’t matter. So, don’t make it matter! If you are managing risk properly on every trade and sticking to your trading plan, you should not be surprised or overly-emotional about the results of your last trade, win or lose. And, as we will get into next, you must remember that any one trade, looked at individually, is essentially a random event. Your trading edge that gives you a better than 50% chance of winning, is ONLY realised over a large enough series of trades. Thus, looking at the results of ONE trade within a chain of say 20 to 40 trades, is completely pointless.
The only thing you should be worried about regarding your last trade, is IF it was consistent with your trading plan or not. The results of your last trade mean nothing and should mean nothing, otherwise you’re doing something wrong. Drill that into your head if you want to permanently overcome recency bias."
"Your last trade needs to be irrelevant to you, so that you can truly let your trading edge play out over the series of trades it needs to MAKE YOU MONEY.
As the late great Mark Douglas teaches, there is a random distribution of wins and losses for any given trading edge, and this is THEE reason why your last trade is and SHOULD BE irrelevant. You need to continuously remind yourself of the random distribution between wins and losses so that you remember why your last trade shouldn’t matter, and so that you don’t let it negatively influence your next trade."
"If you are trading with discipline and managing your risk properly on every trade as well as not taking stupid trades, this will go a long way to eliminating much of the negative feelings traders experience after a win or loss. After all, if you know you stuck to your plan, even if the trade was a loss, you have nothing to be ashamed of or mad it, you just chalk it up to a losing occurrence of your edge (one in large series of trades) and move on; let time go by and stick to your plan. Once you start trading as if every trade is independent of the next (because it is), you will naturally start to interact with the market in a way that leads to trading success."
"Your last trade is a microcosm of your overall trading performance and mental trading state. If a trader is successful over the long-term, I could look at their last trade at any time of the year and it would make sense with his trading plan and it would reflect a disciplined, consistent approach, win or loss. This is because the professional traders know that the very things that lead to successful trading like, consistency, discipline and patience are the same things that help to ‘vaccinate’ them against the ‘plague’ of their last trade’s results infecting their minds to influence their next trading decision."
Norman Hallett
"The single most important trading skill is PATIENCE. Patience to wait for your trading formation to complete before pulling the trigger on taking a trade or taking a profit or loss. Patience not to try to ‘get ahead’ of a trade by pulling the trigger a few seconds early just to get a few extra ticks. Patience to allow a trading plan to work in the long term by accepting losses in the short term. Having patience pays huge dividends."
Norman Hallett
"The single most important trading skill is PATIENCE. Patience to wait for your trading formation to complete before pulling the trigger on taking a trade or taking a profit or loss. Patience not to try to ‘get ahead’ of a trade by pulling the trigger a few seconds early just to get a few extra ticks. Patience to allow a trading plan to work in the long term by accepting losses in the short term. Having patience pays huge dividends."
Paul Simon
“One man’s ceiling is another man’s floor.”
“You’ve got to learn how to fall, before you learn to fly.”
Paul Tudor Jones
“5:1 risk:reward ratio allows you to have a hit rate of 20%. I can actually be a complete imbecile. I can be wrong 80% of time and still not lose.”
“Don’t be a hero. Don’t have an ego. Always question yourself and your ability. Don’t ever feel that you are very good. The second you do, you are dead. My biggest hits have always come after I have had a great period and I started to think that I knew something.”
“Everyday I assume every position I have is wrong.”
“I’m always thinking about losing money as opposed to making money. Don’t focus on making money, focus on protecting what you have”
“If I have positions going against me, I get right out; if they are going for me, I keep them… Risk control is the most important thing in trading. If you have a losing position that is making you uncomfortable, the solution is very simple: Get out, because you can always get back in.”
“Losers average losers.” (Sign in Paul Tudor Jones office).
“That cotton trade was almost the deal breaker for me. It was at that point that I said, ‘Mr. Stupid, why risk everything on one trade? Why not make your life a pursuit of happiness rather than pain?”
“The most important rule of trading is to play great defence, not great offence. Every day I assume every position I have is wrong. I know where my stop risk points are going to be. I do that so I can define my maximum possible draw-down. Hopefully, I spend the rest of the day enjoying positions that are going my direction. If they are going against me, then I have a game plan for getting out.”
“There is nothing worse than a really bad trading day. You feel so low that it is difficult to hold your head up. But, if I knew that I could also have a similar experience in the exhilaration of winning, I would take the combination of winning and losing days any time because you feel that much more alive. Trading gives you an incredibly intense feeling of what life is all about.”
“Where you want to be is always in control, never wishing, always trading, and always first and foremost protecting your butt.”
Peter Borish
“We want to perceive ourselves as winners, but successful traders are always focusing on their losses".
Peter Lynch
“In this business if you’re good, you’re right six times out of ten. You’re never going to be right nine times out of ten.”
“All the math you need in the stock market you get in the fourth grade.”
Rakesh Jhunjhunwala
“Be an optimist! The necessary quality for investing success.”
“Be disciplined. Have a game plan.”
“Be flexible. For investing is always in the realms of possibilities.”
“Caveat emptor. Never forget this four letter word : R-I-S-K.”
“Contrarian investing. Not a rule, not ruled out.”
“Expect a realistic return. Balance fear and greed.”
“Have conviction. Be patient. Your patience may be tested, but your conviction will be rewarded.”
“Invest on broad parameters and the larger picture. Make it an act of wisdom not intelligence.”
“It is important what you buy. It is more important at what price you buy.”
“Make exit an independent decision, not driven by profit or loss.”
Randy McKay
“I’ll keep reducing my trading size as long as I’m losing… My money management techniques are extremely conservative. I never risk anything approaching the total amount of money in my account, let alone my total funds.”
“When I get hurt in the market, I get the hell out. It doesn’t matter at all where the market is trading. I just get out, because I believe that once you’re hurt in the market, your decisions are going to be far less objective than they are when you’re doing well… If you stick around when the market is severely against you, sooner or later they are going to carry you out.”
Richard Dennis (co-founder of Turtle Traders experiment)
“On any individual trade it is almost all luck. It is just a matter of statistics. If you take something that has a 53 percent chance of working each time, over the long run there is a 100 percent chance of it working. If I review the results of two different traders, looking at anything less than one year doesn’t make any sense. It might be a couple of years before you can determine if one is better than the other.”
“I don’t think trading strategies are as vulnerable to not working if people know about them, as most traders believe. If what you are doing is right, it will work even if people have a general idea about it. I always say you could publish rules in a newspaper and no one would follow them. The key is consistency and discipline.”
“The key is consistency and discipline. Almost anybody can make up a list of rules that are 80 percent as good as what we taught our people. What they couldn’t do is give them the confidence to stick to those rules even when things are going bad.”
Richard Donchian (known as Father of Trend Following)
[Like all of the other great trend followers, the importance of price was critical for Donchian. This excerpt from William Baldwin from a March, 1982 edition of Forbes says much:
“He didn’t predict price movements, he just followed them. His explanation for his success was simple and as old as the “Dow Theory” itself: “Trends persist.” “A lot of people say things like: Gold has got to come down. It went up too fast. That’s why 85 percent of commodities investors lose money,” he says. He was never distracted from his system. “The fundamentals are supposed to be bullish in copper,” he says. “But I’m on the short side now because the trend is down.””]
“Beware of acting immediately on a widespread public opinion. Even if correct, it will usually delay the move.”
“Buy strong-acting, strong-background commodities and sell weak ones, subject to all other rules.”
“From a period of dullness and inactivity, watch for and prepare to follow a move in the direction in which volume increases.”
“In a market in which upswings are likely to equal or exceed downswings, heavier position should be taken for the upswings for percentage reasons a decline from 50 to 25 will net only 50 percent profit, whereas an advance from 25 to 50 will net 100 percent profit.”
“In taking a position, price orders are allowable. In closing a position, use market orders.”
“It doesn’t matter if you’re trading stocks or soybeans. Trading is trading, and the name of the game is increasing your wealth. A traders job description is stunningly simple: Don’t lose money. This is of utmost importance to new traders, who are often told do your research. This is good advice, but should be considered carefully. Research alone won't ensure a profit, and at the end of the day, your main goal should be to make money, not to get an A in How to Read a Balance Sheet.”
“Judicious use of stop orders is a valuable aid to profitable trading. Stops may be used to protect profits, to limit losses, and from certain formations such as triangular foci to take positions. Stop orders are apt to be more valuable and less treacherous if used in proper relation to the chart formation.”
“Light commitments are advisable when market position is not certain. Clearly defined moves are signalled frequently enough to make life interesting and concentration on these moves will prevent unprofitable whip-sawing.”
“Limit losses and ride profits, irrespective of all other rules.”
Robert Arnott
“In investing, what is comfortable is rarely profitable.”
Robert Kiyosaki (on trading, investing and financial intelligence)
“A mistake is a signal that it is time to learn something new, something you didn’t know before.”
“A plan is a bridge to your dreams. Your job is to make the plan or bridge real, so that your dreams will become real. If all you do is stand on the side of the bank and dream of the other side, your dreams will forever be just dreams.
“A winning strategy must include losing.”
“Afraid of change? Then fail.”
“As I said, I wish I could say it was easy. It wasn’t, but it wasn’t hard either. But without a strong reason or purpose, anything in life is hard. ”
“Before you can transform your wallet from poor to rich, you’ve got to transform your spirit from poor to rich.”
“Being an entrepreneur is simply going from one mistake to the next. You must have the fortitude to continue on.”
“Broke is temporary, poor is eternal.”
“Business and investing are team sports.”
“Business is like a wheel barrow. Nothing happens until you start pushing.”
“Change your focus from making money, to serving more people. Serving more people makes the money come in.”
“Complaining about your current position in life is worthless. Have a spine and do something about it instead.”
“Confidence comes from discipline and training.”
“Do today what you want for your tomorrows.”
“Don’t be addicted to money. Work to learn. don’t work for money. Work for knowledge.”
“Don’t let the fear of losing, be greater than the excitement of winning.”
“Don’t waste a good mistake, learn from it.”
“Don’t work for money; make it work for you.”
“Dreamers dream dreams and rich people create plans and build bridges to their dreams.”
“Education is cheap; experience is expensive.”
“Emotions are what make us human. Make us real. The word ’emotion’ stands for energy in motion. Be truthful about your emotions, and use your mind and emotions in your favour, not against yourself.”
“Every successful person in life began by pursuing a passion, usually against all odds.”
“Every time you think you can’t do something, someone else thinks they can.”
“Everyone can tell you the risk. An entrepreneur can see the reward.”
“Excuses cost a dime and that’s why the poor could afford a lot of it.”
“F.O.C.U.S – Follow One Course Until Successful”
“Face your fears and doubts, and new worlds will open to you.”
“Fail harder. You cannot be successful without failure.”
“Failure defeats losers, failure inspires winners.”
“Financial struggle is often the direct result of people working all their lives for someone else.”
“Find out where you are at, where you are going and build a plan to get there.”
“Find the game where you can win, and then commit your life to playing it; and play to win.”
“Getting rich begins with the right mindset, the right words and the right plan.”
“Hoping drains your energy. Action creates energy.”
“How can I afford this? Change your words; Change your life.”
“I am concerned that too many people are focused too much on money and not on their greatest wealth, which is their education. If people are prepared to be flexible, keep an open mind and learn, they will grow richer and richer through the changes. If they think money will solve the problems, I am afraid those people will have a rough ride.”
“I find so many people struggling, often working harder, simply because they cling to old ideas. They want things to be the way they were; they resist change. Old ideas are their biggest liability. It is a liability simply because they fail to realise that while that idea or way of doing something was an asset yesterday, yesterday is gone.”
“I keep hearing ‘I’d rather be happy then be rich.’ Why not be both.”
“I’d rather welcome change than cling to the past.”
“If you don’t understand something, you should be studying it. There’s no excuse for not learning something. Ignorance is not bliss. You can miss out on some big opportunities by living with blinders on.”
“If you realise that you’re the problem, then you can change yourself, learn something and grow wiser. Don’t blame other people for your problems.”
“If you want to be financially-free, you need to become a different person than you are today and let go of whatever has held you back in the past.”
“If you want to be rich the rule of thumb is to teach others how to be rich.”
“If you want to be rich, be friends with people who have the same mindset as you, or who at least won’t try to change your mindset to be more like theirs. Life is too short to spend time with people who don’t help you move forward.”
“If you want to be rich, don’t allow yourself the luxury of excuses.”
“If you want to be rich, simply serve more people.”
“If you want to be rich, think big, think differently.”
“If you want to be rich, you need to develop your vision. You must be standing on the edge of time gazing into the future.”
“If you want to go somewhere, it is best to find someone who has already been there.”
“If you’re going to be a winner in life, you have to constantly go beyond your best.”
“If you’re still doing what mommy and daddy said for you to do (go to school, get a job, and save money), you’re losing.”
“If you’re the kind of person who has no guts, you just give up every time life pushes you. If you’re that kind of person, you’ll live all your life playing it safe, doing the right things, saving yourself for something that never happens. Then, you die a boring old person.”
“If you’ve failed, that means you’re doing something. If you’re doing something, you have a chance.”
“In school we learn that mistakes are bad, and we are punished for making them. Yet, if you look at the way humans are designed to learn, we learn by making mistakes. We learn to walk by falling down. If we never fell down, we would never walk.”
“In the real world, the smartest people are people who make mistakes and learn. In school, the smartest people don’t make mistakes.”
“In today’s rapidly changing world, the people who are not taking risk are the risk takers.”
“Inside each of us is a David and a Goliath.”
“Inside of every problem lies an opportunity.”
“Intelligence solves problems and produces money. Money without financial intelligence is money soon gone.”
“It does not take money to make money.”
“It is easy to stay the same but it is not easy to change. Most people choose to stay the same all their lives.”
“It’s easier to stand on the side-lines, criticise, and say why you shouldn’t do something. The side-lines are crowded. Get in the game.”
“It’s more important to grow your income than cut your expenses. It’s more important to grow your spirit that cut your dreams.”
“It’s not what you say out of your mouth that determines your life, it’s what you whisper to yourself that has the most power!”
“Knowing you need to make a change isn’t enough. You’ve got to find the guts to do it.”
“Listen to the advice from the one who’s already achieved your goal.”
“Losers are people who are afraid of losing.”
“Losers quit when they fail, winners fail until they succeed.”
“Making mistakes isn’t enough to become great. You must also admit the mistake, and then learn how to turn that mistake into an advantage.”
“Money is really just an idea.”
“Money only magnifies who you really are.”
“Money will never make you happy if you are an unhappy person.”
“Money is not the goal. Money has no value. The value comes from the dreams money helps achieve.”
“Most people never get wealthy simply because they are not trained to recognise opportunities right in front of them.”
“Most people want everyone else in the world to change themselves. Let me tell you, it’s easier to change yourself than everyone else.”
“Never say you cannot afford something. That is a poor man’s attitude. Ask HOW to afford it.”
“Nice guys do not finish last. Last place is for cowards and those too full of fear to take action.”
“Often, the more money you make the more money you spend; that’s why more money doesn’t make you rich – assets make you rich.”
“One of the great things about being willing to try new things and make mistakes is that making mistakes keeps you humble. People who are humble learn more than people who are arrogant.”
“One of the most stupid things to do is to pretend you are smart. When you pretend to be smart, you are at the height of stupidity.”
“One of the primary reasons why people struggle financially is because they cannot control their emotion of fear.”
“One of the reasons many people are not rich is because they are greedy.”
“Passion is the beginning of success.”
“People need to wake up and realise that life doesn’t wait for you. If you want something, get up and go after it.”
“People who dream small dreams continue to live as small people.”
“People without financial knowledge, who take advice from financial experts are like lemmings simply following their leader. They race for the cliff and leap into the ocean of financial uncertainty, hoping to swim to the other side.”
“Remember, your mind is your greatest asset, so be careful what you put into it.”
“Rich people buy luxuries last, while the poor and middle class tend to buy luxuries first.”
“Sight is what you see with your eyes, vision is what you see with your mind.”
“Skills make you rich, not theories.”
“Sometimes you win, sometimes you learn.”
“Sometimes, what is right for you at the beginning of your life is not the right thing for you at the end of your life.”
“Start small and dream big.”
“Starting a business is like jumping out of an airplane without a parachute. In mid-air, the entrepreneur begins building a parachute and hopes it opens before hitting the ground.”
“Success is a poor teacher. We learn the most about ourselves when we fail, so don’t be afraid of failing. Failing is part of the process of success. You cannot have success without failure.”
“Successful people ask questions. They seek new teachers. They’re always learning.”
“Successful people don’t fear failure. But understand that it’s necessary to learn and grow from.”
“Successful people take big risks knowing that they might fall hard, but they might succeed more than they ever dreamt too.”
“Talk is cheap. Learn to listen with your eyes. Actions do speak louder than words. Watch what a person does more than what he says.”
“The ability to sell is the number one skill in business. If you cannot sell, don’t bother thinking about becoming a business owner.”
“The biggest challenge you have is to challenge your own self-doubt and your laziness. It is your self-doubt and your laziness that defines and limit who you are.”
“The difference between the rich and the poor is how they use their time.”
“The fear of being different prevents most people from seeking new ways to solve their problems.”
“The hardest part of change is going through the unknown.”
“The key to life is to be happy with or without money.
“The love of money is not the root of all evil. The lack of money is the root of all evil.”
“The moment you make passive income and portfolio income a part of your life, your life will change. Those words will become flesh.”
“The more a person seeks security, the more that person gives up control over his life.”
“The more I risk being rejected, the better my chances are of being accepted.”
“The most life-destroying word of all is the word tomorrow.”
“The most successful people are mavericks who aren’t afraid to ask why, especially when everyone thinks it’s obvious.”
“The most successful people in life are the ones who ask questions. They’re always learning. They’re always growing. They’re always pushing.”
“The only difference between a rich person and poor person is how they use their time”
“The philosophy of the rich and poor is this: The rich invest their money and spend what is left. The poor spend their money and invest what is left.”
“The poor, the unsuccessful, the unhappy, the unhealthy are the ones who use the word tomorrow the most.”
“The power of “can’t”: The word “can’t” makes strong people weak, blinds people who can see, saddens happy people, turns brave people into cowards, robs a genius of their brilliance, causes rich people to think poorly, and limits the achievements of that great person living inside us all.”
“The primary difference between rich people and poor people is how they handle fear.”
“The problem with having a job is that it gets in the way of getting rich.”
“The problem with this world is not enough problem solvers. So, if you become a problem solver, you become rich.”
“The richest people in the world build networks. Everyone else is trained to look for work.”
“The side-lines are crowded. Get in the game.”
“The single most powerful asset we all have is our mind. If it is trained well, it can create enormous wealth in what seems to be an instant.”
“The size of your success is measured by the strength of your desire; the size of your dream; and how you handle disappointment along the way.”
“The thing I always say to people is this: If you avoid failure, you also avoid success.”
“The trouble with school is they give you the answer, then they give you the exam. That’s not life.”
“The wealthy buy luxuries last, while the poor and middle-class tend to buy luxuries first. Why? Emotional discipline.”
“The world is full of smart poor people.”
“There are no bad business and investment opportunities, but there are bad entrepreneurs and investors.”
“There are no mistakes in life, just learning opportunities.”
“There are those who make things happen, there are those who watch things happen and there are those who say ‘what happened?”
“To be a successful business owner and investor, you have to be emotionally neutral to winning and losing. Winning and losing are just part of the game.”
“Today is the word for winners and tomorrow is the word for losers.”
“Tomorrows only exist in the minds of dreamers and losers”
“Too many people are too lazy to think. Instead of learning something new, they think the same thought day in day out.”
“Watch what the idiots are doing, and do the opposite.”
“We all have tremendous potential, and we all are blessed with gifts. Yet, the one thing that holds all of us back is some degree of self-doubt. It is not so much the lack of technical information that holds us back, but more the lack of self-confidence.”
“When I started my last business, I didn’t receive a paycheck for 13 months. The average person can’t handle that pressure.”
“When people are lame, they love to blame.”
“When times are bad is when the real entrepreneurs emerge.”
“When you are forced to think, you expand your mental capacity. When you expand your mental capacity, your wealth increases.”
“When you are young, work to learn, not to earn.”
“When you come to the boundaries of what you know, it is time to make some mistakes.”
“When you create wealth, it’s your responsibility to return it to society.”
“When you know you’re right, you’re not afraid of fighting back.”
“Winners are not afraid of losing. But losers are. Failure is part of the process of success. People who avoid failure also avoid success.”
“Workers work hard enough to not be fired, and owners pay just enough so that workers won’t quit.”
“You get one life. Live it in a way that it inspires someone.”
“You’ll often find that it’s not mom or dad, husband or wife, or the kids that’s stopping you. It’s you. Get out of your own way.”
“You’re only poor if you give up. The most important thing is that you did something. Most people only talk and dream of getting rich. You’ve done something.”
“Your choices decide your fate. Take the time to make the right ones. If you make a mistake, that’s fine; learn from it & don’t make it again.”
“Your future is created by what you do today, not tomorrow”
“Your mentors in life are important, so choose them wisely.”
”You will make some mistakes but, if you learn from those mistakes, those mistakes will become wisdom and wisdom is essential to becoming wealthy.”
Scott Phillips
“My job as a trader is not to predict the future, but to place rational bets where the odds are in my favour.”
Scott Redler
“Trade the market in front of you, not the one you want!”
Stanley Druckenmiller
“I’ve learnt many things from him [George Soros], but perhaps the most significant is that it’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.”
Steve Burns
“There is a huge difference between a good trade and good trading.”
Sun Tzu
“He who knows when he can fight and when he cannot, will be victorious.”
Tom Basso
“I think investment psychology is by far the more important element, followed by risk control, with the least important consideration being the question of where you buy and sell.”
Tom Dante
“If you want to be a ledge, find your edge”
Tony Saliba
“I always define my risk, and I don’t have to worry about it.”
Victor Sperandeo
“The key to trading success is emotional discipline. If intelligence were the key, there would be a lot more people making money trading… I know this will sound like a cliché, but the single most important reason that people lose money in the financial markets is that they don’t cut their losses short.”
Vijay Kumar
“Control the controllables in trading.”
“Control your Trading. Let Trading not control you.”
“Every trader should embrace: I don’t know what will happen next; and then create a trading plan to deal with uncertainty. ”
“In trading, exams are taken before lessons are learnt.”
“It is always the Investor who has to grow first before his investments can grow.”
“It is best to not have rigid expectations from the market. The market will do whatever it has to do and we have no control over it. What we can, at best, control/decide is (i) what will be our clear buy signals (ii) how many stocks would we trade (iii) what will be our clear exit signals. Doing these three well, will keep us in sync and flowing with market trends.”
“Know the difference between Risk and Risky. Your investments shall have Risk but don’t make Risky investments.”
“Leave your ego at the door of your trading room.”
“Make your trading Pattern-Centric and not Stock-Centric. Hence the Stock name will not matter to your trading except merely to place the order with your broker.”
“Master Traders are Master Risk Managers.”
“Often I know (through study of Elliott Wave patterns) the market is likely to go down, hence I start almost expecting some bad news which often comes too. Hence, I trade the wave pattern and never the news.”
“Once you have launched a risk-managed trade, rest of the journey till exit is primarily psychological only.”
“Price follows Momentum; Momentum follows Volume; Volume follows Crowd Psychology.”
“Reading Price Action is good. It is even better if you can read Price Action along with Momentum.”
“Think and plan at macro level; work and execute at micro level.”
“Traders have one paramount duty : to Manage Risk. Never fail to perform this duty in a mechanical emotionless manner.
They also have one paramount right : Right to be wrong. Never fail to exercise this right in a mechanical emotionless manner.”
“Try to first make a living instead of making a killing.”
“Use the power of mathematics (through computers, of course) for trading. Mathematics does not lie.”
“You do not have to trade all the time. Wait for trades and look to Trade the Best and Leave the Rest”
“Your belief in your tested and settled Trading System, will help you deal appropriately with markets.”
“Your choice is to either wait more (for good trades to and stay therein) or else work more (in traditional occupations), to make money?”
“You will be able to detach yourself from your ongoing trades and emotionlessly cut losses and book profits, if you know that your tested and settled Trading System will go on frequently springing up new high probability trade opportunities so that your money will always be working in one trade or another.”
“With deliberate practice, anything can be learnt including good trading.”
Warren Buffett
“Both our operating and investment experience cause us to conclude that turnarounds seldom turn, and that the same energies and talent are much better employed in a good business purchased at a fair price than in a poor business purchased at a bargain price."
“It takes 20 years to build a reputation and 5 minutes to ruin it. If you think about that, you’ll do things differently.”
“Look at market fluctuations as your friend rather than your enemy."
“Opportunities come infrequently. When it rains gold put out a bucket not a thimble.”
"Profit from folly, rather than participate in it."
“Someone is sitting in the shade today because someone planted a tree long time ago.”
“The market is a device for transferring money from the impatient to the patient.”
"We don’t have to be smarter than the rest, we have to be more disciplined than the rest."
W.D.Gann
“Always use stop-loss orders.”
“Avoid getting in and out of the market too often.”
“Avoid getting in wrong and out wrong; or getting in right and out wrong. This is making a double mistake.”
“Avoid taking small profits and large losses.”
“Avoid trading after long periods of success or failure.”
“Be willing to make money from both sides of the market.”
“Don‘t enter a trade if you are unsure of the trend. Never buck the trend.”
“Don’t close trades without a good reason.”
“Don’t follow a blind man’s advice.”
“Don’t try to guess tops or bottoms.”
“Face it, not every trade will be a winner. You still need to know when to cut your losses.”
“Goal of Risk Management - Losses should remain an annoyance and not be a devastation.”
“Learning to manage your emotions is the single most important key to making money in the stock market... and keeping it!”
“Leverage is one way that a smart set-up can turn into a bad trade as small moves in the market which doesn’t affect the overall trend can hurt the account of the overleveraged / underfunded trader.”
“Never average a loss.”
“Never buy or sell just because the price is low or high”
“Never cancel a stop loss after you have placed the trade.”
“Never change your position without a good reason.”
“Never get out of the market because you have lost patience or get in because you are anxious from waiting.”
“Never over-trade.”
“Only trade active markets.”
“Pyramiding should be accomplished once it has crossed resistance levels and broken zones of distribution.”
“Reduce trading after the first loss; never increase.”
“When in doubt, get out, and don’t get in when in doubt.”
William Eckhardt (co-founder of Turtle Traders experiment)
“Either a trade is good enough to take, in which case it should be implemented at full size, or it’s not worth bothering with at all.”
“I haven’t seen much correlation between good trading and intelligence. Some outstanding traders are quite intelligent, but a few aren’t. Many outstandingly intelligent people are horrible traders. Average intelligence is enough. Beyond that, emotional makeup is more important.”
William O’Neil
“Letting losses run is the most serious mistake made by most investors.”
“What seems too high and risky to the majority generally goes higher and what seems low and cheap generally goes lower.
Best wishes.
Best wishes.
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