"I'm always thinking about losing money as opposed to making money. Don't focus on making money, focus on protecting what you have."
"At the end of the day, the most important thing is how good are you at risk control. Ninety-percent of any great trader is going to be the risk control."
"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."
"Don't ever average losers. Decrease your trading volume when you are trading poorly; increase your volume when you are trading well."
"All through time, people have basically acted and reacted the same way in the market as a result of: greed, fear, ignorance, and hope. That is why the numerical formations and patterns recur on a constant basis."
"Limit your size in any position so that fear does not become the prevailing instinct guiding your judgment."
"The human side of every person is the greatest enemy of the average speculator."
"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."
"A prudent speculator never argues with the tape. Markets are never wrong-- opinions often are."
"Cut your losses, let your winners run."
"The game taught me the game. And it didn't spare me rod while teaching."
"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."
"I always say you could publish rules in a newspaper and no one would follow them. The key to successful trading is emotional discipline."
"I'm relaxed at what I am doing because I have a plan. I know what I want to do, and I am really trying to execute it. I think most traders do too much thinking on the spot."
"The market is not your enemy; your mind is."
"Trading is a battle against your own emotions, not the market."
"You don't need to know what is going to happen next in order to make money."
"Be fearful when others are greedy and greedy when others are fearful."
"Price is what you pay. Value is what you get."
"It's not whether you're right or wrong that matters, but how much money you make when you're right and how much you lose when you're wrong."
"The trick is to survive first and make money afterward."
"Earnings don't move the overall market; it's the Federal Reserve Board. Focus on the central banks, and focus on the movement of liquidity."
"You need to be aggressive when you're right and be humble when you're wrong."
"If you're early on in your career and they give you a choice between a great mentor or higher pay, take the mentor every time. It's not even close."
"Don't look for the needle in the haystack. Just buy the haystack!"
"I call investing the greatest business in the world because you never have to swing. You stand at the plate, the pitcher throws you General Motors at 47! U.S. Steel at 39! And nobody calls a strike on you."
"Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn't, pays it."
"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."
"I believe in analysis and not forecasting."
"The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective."
"Markets can remain irrational longer than you can remain solvent."
"The stock market is a device for transferring money from the impatient to the patient."
"Risk comes from not knowing what you're doing."
"I never buy at the bottom and I always sell too soon."
"The key to long-term survival and prosperity has a lot to do with the money management techniques incorporated into the technical system."
"A lot of people would rather understand the market than make 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."
"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."
"Successful traders always follow the line of least resistance. Follow the trend. The trend is your friend."
"When you have a position, you put it on for a reason, and you've got to keep it until the reason no longer exists."
"The best traders not only take the risk, they have also learned to accept and embrace that risk."
"An edge is nothing more than an indication of a higher probability of one thing happening over another."
"The most important thing in making money is not to let your losses run."
"I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful."
"Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves."
"It is not the strongest species that survive, nor the most intelligent, but the most responsive to change."
"History doesn't repeat, but it often rhymes."
"Rule number one: Never lose money. Rule number two: Don't forget rule number one."
"You don't have to swing at every pitch. Wait for your pitch."
"Failing to prepare is preparing to fail."
"Writing down your trades is the best exercise in the world."
"I believe that only short-term price swings can be predicted with any precision. The accuracy of a prediction drops off dramatically, the more distant the forecast time."
"I'm a firm believer in predicting price direction, but not magnitude. I don't set price targets. I get out when the market action tells me it's time to get out."
"I believe my most important skill is an ability to perceive patterns in the market. I think this aptitude for pattern recognition is probably related to my heavy involvement with music."
"I really value the fact that I've learned to trade as a craft. Like any craft, such as piano playing, consistency is achievable if you practice day in and day out."
"You don't have to be a rocket scientist to be a trader. In fact, some of the best traders whom I knew down on the floor were surf bums. Formal education didn't really seem to have much to do with a person's skill as a trader."
"You cannot trade the markets. You trade your beliefs about the markets."
"Position sizing is one of the most important aspects of trading, yet so few people teach it."
"Always bet less than 5 percent of your money on any one idea. That way you can be wrong more than twenty times; it will take you a long time to lose your money."
"The best trades are the ones in which you have all three things going for you: fundamentals, technicals and market tone."
"For most great traders, early failure is more the rule than the exception."
"If you get in trouble on a trade, just get out of the trade and clear your mind. You can get back in later if you want to."
"I know where I'm getting out before I get in."
"Don't get caught in a situation in which you can lose a great deal of money for reasons you don't understand."
"The less explanation there is for a price move occurring, the better it looks."
"Throughout my financial career, I have continually witnessed examples of other people that I have known being ruined by a failure to respect risk."
"Actually, the best traders have no ego. To be a great trader, you have to have confidence in yourself. You cannot let ego get in the way of a trade that is a loser."
"They trade too much. They don't pick their spots selectively enough. So, they end up forcing the trade rather than waiting patiently. Patience is an important trait many people don't have."
"You have to adapt. You need to change your method of buying and selling, because the market is continually changing in subtle ways."
"The goal of a successful trader is to make the best trades. Money is secondary."
"You can only control your behavior. The market does not know you exist. You can do nothing to influence it."
"Successful trading depends on the 3M's - Mind, Method and Money. Every winner needs to master three essential components of trading."
"Amateurs look for challenges; professionals look for easy trades. Losers get high from the action; the pros look for the best odds."
"The secret is cutting down the number of trades you make."
"You have to be willing to make mistakes regularly; there is nothing wrong with it. Making your best judgment, being wrong, making your next best judgment, being wrong, making your third best judgment, and then doubling your money."
"Understand that learning the market can take years. Immerse yourself in the world of trading and give up everything else. Get as close to other successful traders as you can."
"Attitude is how you deal with the inevitable adverse situations that occur in the markets. Attitude is also how you handle the daily grind, the constant 2 steps forward and 2 steps back."
"I truly feel that I could give away all my secrets and it wouldn't make any difference. Most people can't control their emotions or follow a system."
"The markets are unforgiving, and emotional trading always results in losses."
"The three key components of trading are knowledge, courage, and discipline."
"A good trader watches his capital as carefully as a professional scuba diver watches his air supply."
"The secret to successful investing is relatively simple: Figure out the value of something and then pay a lot less."
"I try to buy shares of unpopular companies when they look like road kill and sell them when they've been polished up a bit."
"All my stock picking is 100% based on the concept of a margin of safety."
"The avoidance of loss is the surest way to ensure a profitable outcome."
"Holding cash in the absence of opportunity makes sense."
"Patience is the cheapest form of capital."
"I am the animal at the head of the pack. I either get eaten, or I get the good grass."
"In trading you have to be defensive and aggressive at the same time. If you are not aggressive, you are not going to make any money, and if you are not defensive, you are not going to keep it."
"I believe my most important skill is an ability to perceive patterns in the market."
"You don't have to be a rocket scientist to be a trader. In fact, some of the best traders whom I knew down on the floor were surf bums."
"Always bet less than 5 percent of your money on any one idea. That way you can be wrong more than twenty times."
"The best traders have no ego. To be a great trader, you have to have confidence in yourself."
"When you feel like bragging, it's probably time to sell."
"Always keep your portfolio and your risk at your own individual comfortable sleeping point."
"Patience is a crucial but rare investment commodity."
"I paraphrase Lord Rothschild: 'The time to buy is when there's blood on the streets.'"
"Diversification is a damn poor surrogate for knowledge."
"Free cash flow gives companies the luxury to do good things, whether it's pay dividends, buy back stock, invest in new plant equipment."
"We are trying to look for the straw hats in the winter. In the winter, people don't buy straw hats, so they're on sale."
"I may have been early, but I'm not wrong."
"In investing, what is comfortable is rarely profitable."
"Low price is the ultimate source of margin for error."
"You can't be a good value investor without being an independent thinker – you're seeing valuations that the market is not appreciating."
"I don't believe anything unless I understand it inside out."
"Amateurs want to be right. Professionals want to make money."
"The market is a device for transferring money from the impatient to the patient."
"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."
"The elements of good trading are: (1) cutting losses, (2) cutting losses, and (3) cutting losses."
"The hard cold fact is that only about five percent of traders succeed in the long run."
"An investor without investment objectives is like a traveler without a destination."
"The four most dangerous words in investing are: ‘This time it’s different.’"
"Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble."
"Discipline is the bridge between goals and accomplishment."
"Losers average losers."
"The market can remain irrational longer than you can remain solvent."
"Don’t focus on making money; focus on protecting what you have."
"Every battle is won before it is fought."
"The key to trading success is emotional discipline. If intelligence were the key, there would be a lot more people making money trading."
"The trend is your friend until the end when it bends."
"Profits are made by sitting, not trading."
"If you personalize losses, you can’t trade."
"Markets are never wrong, opinions often are."
"The most important quality for an investor is temperament, not intellect."
"Trend following is the only trading style that works across centuries."
"Never, ever argue with your trading system."
"Do more of what works and less of what doesn’t."
"Do not anticipate and move without market confirmation – being a little late in your trade is your insurance that you are right or wrong."
"Most traders take a good system and destroy it by trying to make it into a perfect system."
"In trading/investing, it’s not about how much you make but rather how much you don’t lose."
"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 personalise losses, you can’t trade."
"Where you want to be is always in control, never wishing, always trading, and always, first and foremost protecting your butt."
"The most important rule of trading is to play great defense, not great offense."
"What is most important isn’t knowing the future — it is knowing how to react appropriately to the information available at each point in time."
"The biggest mistake investors make is to believe that what happened in the recent past is likely to persist. They assume that something that was a good investment in the recent past is still a good investment."
"It’s only when the tide goes out that you learn who has been swimming naked."
"Bull markets are born on pessimism, grow on skepticism, mature on optimism and die of euphoria."
"One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute."
"The main purpose of stock market is to make fools of as many men as possible."
"There are old traders and there are bold traders, but there are very few old, bold traders."
"Entering trades is like a real battle – if you want to win it, you need to be ready and prepare for it. Markets are unpredictable, and you can’t predict every possible scenario, but what you can control is yourself."
"Do not be embarrassed by your failures, learn from them and start again."
"Markets are constantly in a state of uncertainty and flux, and money is made by discounting the obvious and betting on the unexpected."
"An investment in knowledge pays the best interest."
"Bottoms in the investment world don’t end with four‑year lows; they end with 10‑ or 15‑year lows."
"Letting your emotions override your plan or system is the biggest cause of failure."
"Some traders are born with an innate discipline. Most have to learn it the hard way."
"If you can’t deal with emotion, get out of trading."
"When all are bearish, there is cause for prices to rise."
"When all are bullish, there is cause for prices to fall."
"You make most of your money by sitting, not by trading."
"It’s not the will to win that matters — everyone has that. It’s the will to prepare to win that matters."
"Most people can’t accept losses. That’s why they can’t accept trading."
"The market will always test your pain threshold. Winners have simply learned to live with it."
"You don’t have to win often. You just have to lose well."
"Trading is not about finding certainty. It’s about managing uncertainty."
"The edge is not in the setup. The edge is in your ability to execute it consistently without flinching."
"Stop searching for the holy grail system. The grail is you."
"Losers think in terms of money. Winners think in terms of process."
"Fear will always be present. The professional trader simply acts anyway."
"Hope is not a strategy. Cut the loss and move on."
"When you can sit with discomfort, you are already ahead of 90% of traders."
"The only way to win big is to learn how to lose small."
"You will never conquer the market. You must conquer yourself."
"A losing trade doesn’t make you a loser. Quitting does."
"Trading is a mirror. It shows you your strengths and your weaknesses — brutally."
"You don’t need more indicators. You need more discipline."
"Consistency beats brilliance."
"Winners aren’t fearless. They just fear not trying more than they fear losing."
"The amateur reacts. The professional prepares."
"You will always lose trades. The question is whether you lose your head too."
"The market is not against you. It is simply indifferent to you."
"Risk is not the enemy. Mismanaging risk is."
"Stop trying to be right. Start trying to trade well."
"Every trade is just one of the next thousand. Don’t make it bigger than it is."
"If you can’t sit with boredom, you won’t sit with profits."
"There are no mistakes in trading, only tuition fees."
"The market is never wrong; opinions often are."
"It was never my thinking that made the big money for me. It was always my sitting."
"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."
"Win or lose, everybody gets what they want out of the market."
"If you can't take a small loss, sooner or later you will take the mother of all losses."
"You could publish my trading rules in the newspaper and no one would follow them. The key is consistency and discipline."
"Trading was more teachable than I ever imagined. Even though I was skeptical at first, it is a skill that can be taught."
"Novice traders trade 5 to 10 times too big. They are taking 5 to 10 percent risks on a trade when they should be taking 1 to 2 percent risks."
"As long as you stick to your rules, you can make mistakes and still be profitable."
"Every trader has to learn that trading is not about being right. It’s about making money."
"Being a successful trader also takes courage: the courage to try, the courage to fail, the courage to succeed, and the courage to keep on going when the going gets tough."
"Anything can happen in the market."
"You don’t need to know what’s going to happen next in order to make money."
"The consistency you seek is in your mind, not in the markets."
"Trading is not about prediction. It’s about probability and discipline."
"Amateurs think about how much money they can make. Professionals think about how much money they could lose."
"The markets are the same now as they were five to ten years ago because they keep changing—just as they did then."
"You need to be able to survive before you can thrive."
"There are a million ways to make money in the markets. The irony is that they are all very difficult to find."
"One of the most important lessons I learned is that winning traders think in terms of risk and losing traders think in terms of reward."
"Trading gives you the opportunity to find out if you can survive your own emotions."
"The stock market is designed to transfer money from the Active to the Patient."
"Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1."
"Know what you own, and know why you own it."
"In the long run, it’s not just how much money you make that will determine your future prosperity—it’s how much of it you keep."
"The key to making money in stocks is not to get scared out of them."
"I’m only rich because I know when I’m wrong. I basically have survived by recognizing my mistakes."
"The best investors are the ones who know when to cut their losses."
"Never, ever invest in the present. It doesn’t matter what a company is earning, what they have earned. You have to visualize the situation 18 months from now."
"He who lives by the crystal ball will eat shattered glass."
"Pain + Reflection = Progress."
"The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people."
"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."
"It can be very expensive to try to convince the markets you are right."
"Traders lose money because they let losers run, and they cut winners short."
"Good trading is about finding the balance between patience and aggressiveness."
"Scalping is like a high-wire act without a safety net."
"I never think about taking a huge position. I think about playing good defense."
"A mistake is when you don’t follow your rules. A losing trade is not a mistake."
"You do not trade the markets. You trade your beliefs about the markets."
"Position sizing is the key to long-term success."
"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."
"The most important change in my trading career occurred when I learned to divorce my ego from the trade."
"Learn to take losses. The most important thing in making money is not letting your losses get out of hand."
"The market doesn’t care about your opinion, only your discipline."
"Trading is about finding out who you are when money is on the line."
"The markets are the same now as they were a hundred years ago because they keep changing."
"The market is not about prices. It is about psychology."
"The investor’s chief problem—and even his worst enemy—is likely to be himself."
"An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return."
"The essence of investment management is the management of risks, not the management of returns."
"Risk is the most important factor in trading. Control it, and the rest will follow."
"Markets can stay irrational longer than you can stay solvent."
"Successful investing is anticipating the anticipations of others."
"The market can remain illogical longer than you or I can remain solvent."
"The emotions you suppress will come back to control your decisions."
"The key to performance is emotional flexibility."
"Invest in preparedness, not in prediction."
"The markets reward you for how you respond to randomness, not for what you know."
"Missing a train is only painful if you run after it! The market is the same way."
"You can’t predict. You can prepare."
"The biggest investing errors come not from factors that are informational or analytical, but from those that are psychological."
"The hardest work in investing is not intellectual; it’s emotional."
"In this business, if you're good, you're right 6 times out of 10. You're never going to be right 9 times out of 10."
"Successful investing is about managing risk, not avoiding it."
"The stock market is filled with individuals who know the price of everything but the value of nothing."
"The greatest investment returns come from finding outstanding companies and holding them for the long term."
"The market is like a man walking his dog. The man walks slowly in a straight line, the dog runs ahead, falls behind, and occasionally comes back."
"Buy on the cannons, sell on the trumpets."
"If you want to earn money in the market, you must have patience, patience, and patience."
"I made up my mind to buy high and sell higher."
"The only sound reason for buying a stock is because it’s going up."
"I never bought a stock at the low or sold one at the high in my life. That’s only a newspaper fiction."
"The whole secret to winning in the stock market is to lose the least amount possible when you’re not right."
"The market is human nature and crowd psychology on daily display."
"The most successful people in the stock market are those who do their homework."
"If you worry, you don't have to worry. And if you don't worry, you need to worry, because if you worry, you will make sure the thing you worry about doesn't happen."
"Past performance is the best predictor of success."
"We search through historical data looking for anomalous patterns that we would not expect to occur at random."
"If most traders would learn to sit on their hands 50 percent of the time, they would make a lot more money."
"The trick is not to learn to trust your gut feelings, but rather to discipline yourself to ignore them."
"Everyone has the brain power to make money in stocks. Not everyone has the stomach."
"Trading doesn’t just reveal your character; it also builds it if you stay in the game long enough."
"The real key to making money in stocks is not to get scared out of them."
"Achieving success in trading is not a question of intelligence; instead, it is dependent on the trader's ability to be disciplined enough to execute his strategy all the time."
"The most contrarian thing of all is not to oppose the crowd but to think for yourself."
"Predicting the future with certainty is impossible. The focus should be on reacting appropriately to the information available at each moment."
"I've changed my mind about cash as an asset: I no longer think cash is trash. At existing interest rates and with the Fed shrinking the balance sheet, it is now about neutral."
"The list of qualities an investor should have include patience, self-reliance, common sense, a tolerance for pain, open-mindedness, detachment, persistence, humility, flexibility."
"People who succeed in the stock market also accept periodic losses, setbacks, and unexpected occurrences."
"There is time to go long, time to go short, and time to go fishing."
"Money is made by sitting, not trading."
"Whenever I enter a position, I have a predetermined stop. That is the only way I can sleep."
"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."
"Principles are what allow you to live a life consistent with those values."
"The market has no memory. Today's good news is tomorrow's bad news."
"Fundamentalists who say they are not going to pay any attention to the charts are like a doctor who says he's not going to take a patient's temperature."
"When you achieve complete acceptance of the uncertainty of each edge and the uniqueness of each moment, your frustration with trading will end."
"I always say that you could publish trading rules in the newspaper and no one would follow them. The key is consistency and discipline."
"It's ok to be wrong; it's unforgivable to stay wrong."
"Plan your trade and trade your plan."
"90% of losing traders are HOPEFUL when they should be FEARFUL and they're FEARFUL when they should be HOPEFUL."
"There is no 'one way' in trading."
"The good traders are the ones who can hold their ground the majority of the month and participate in that small handful of trades that are windfalls. The real skill is in not LOSING money!"
"Perhaps my number one rule is: Don't try to make a profit on a bad trade, just try to find the best place to get out."
"Speech may be silver but silence is golden. Traders with the golden touch do not talk about their success."
"If you ever have to ask someone else's opinion on a trade, you shouldn't be in it."
"Some of the best trades come when everyone gets very panicky. The crowd can often act very stupidly in the markets. You can picture price fluctuations around an equilibrium level as a rubber band being stretched -- if it gets pulled too far, eventually it will snap back. As a short-term trader, I try to wait until the rubber band is stretched to its extreme point."
"There are too many unpredictable things that can happen within two months. To me, the ideal trade lasts ten days, but I approach every trade as if I'm only going to hold it two or three days."
"I try to wait until things set up just right before I take a trade. Then, when I'm ready to take the trade, I slowly count to ten before I pick up the phone. It's better to have the wrong idea and good timing than the right idea and bad timing."
"If you ever find yourself tempted to seek out someone else's opinion on a trade, that's usually a sure sign that you should get out of your position."
"Imbalance or abnormity is never so dangerous as when it is widely perceived or accepted as being normal. The worst thing you can do is not to try."
"The desire to maximize the number of winning trades (or minimize the number of losing trades) works against the trader. The success rate of trades is the least important performance statistic and may even be inversely related to performance."
"It's much easier to learn what you should do in trading than to do it. Good systems tend to violate normal human tendencies."
"People want to buy cheap and sell dear; this by itself makes them countertrend. But the notion of cheapness or dearness must be anchored to something. People tend to view the prices they’re used to as normal and prices removed from these levels as aberrant. This perpective leads people to trade counter to an emerging trend on the assumption that prices will eventually return to “normal”. Therein lies the path to disaster."
"In many ways, large profits are even more insidious than large losses in terms of emotional destabilization. I think it's important not to be emotionally attached to large profits. I've certainly made some of my worst trades after long periods of winning. When you're on a big winning streak, there's a temptation to think that you're doing something special, which will allow you to continue to propel yourself upward. You start to think that you can afford to make shoddy decisions. You can imagine what happens next. As a general rule, losses make you strong and profits make you weak."
"I haven't seen much correlation between good trading and intelligence. Some outstanding traders are quite intelligent, but a few aren't. Many outstanding intelligent people are horrible traders. Average intelligence is enough. Beyond that, emotional makeup is more important."
"I take the point of view that missing an important trade is a much more serious error than making a bad trade."
"I know of a few multimillionaires who started trading with inherited wealth. In each case, they lost it all because they didn't feel the pain when they were losing. In those formative first few years of trading, they felt they could afford to lose. You're much better off going into the market on a shoestring, feeling that you can't afford to lose. I'd rather bet on somebody starting out with a few thousand dollars than on somebody who came in with millions."
"Don't think about what the market's going to do; you have absolutely no control over that. Think about what you're going to do if it gets there. In particular, you should spend no time at all thinking about those rosy scenarios in which the market goes your way, since in those situations, there's nothing more for you to do. Focus instead on those things you want least to happen and on what your response will be."
"The people who survive avoid snowball scenarios in which bad trades cause them to become emotionally destabilized and make more bad trades. They are also able to feel the pain of losing. If you don't feel the pain of a loss, then you're in the same position as those unfortunate people who have no pain sensors. If they leave their hand on a hot stove, it will burn off. There is no way to survive in the world without pain. Similarly, in the markets, if the losses don't hurt, your financial survival is tenuous."
"The market likes to lull you into the false security of high success rate techniques, which often lose disastrously in the long run. The general idea is that what works most of the time is nearly the opposite of what works in the long run."
"If a betting game among a certain number of participants I played long enough, eventually one player will have all the money. If there is any skill involved, it will accelerate the process of concentrating all the stakes in a few hands. Something like this happens in the market. There is a persistent overall tendency for equity to flow from the many to the few. In the long run, the majority loses. The implication for the trader is that to win you have to act like the minority. If you bring normal human habits and tendencies to trading, you'll gravitate toward the majority and inevitably lose."
"You can be very promiscuous in your research, but not in your trading."
"Investing is a negative game emotionally. If you're playing for the emotional satisfaction, you're bound to lose, because what feels good is often the wrong thing to do. When all the criteria are in balance, do the thing you least want to do."
"One common adage...that is completely wrongheaded is: You can't go broke taking profits. That's precisely how many traders do go broke. While amateurs go broke by taking large losses, professionals go broke by taking small profits."
"You have to minimize your losses and try to preserve capital for those very few instances where you can make a lot in a very short period of time. What you can't afford to do is throw away your capital on suboptimal trades."
"Trading decisions should be made as unemotionally as possible."
"I learned to avoid trying to catch up or double up to recoup losses. I also learned that a certain amount of loss will affect your judgment, so you have to put some time between that loss and the next trade."
"There is another point that I think is as important: You should expect the unexpected in this business; expect the extreme. Don’t think in terms of boundaries that limit what the market might do. If there is any lesson I have learned in the nearly twenty years that I’ve been in this business, it is that the unexpected and the impossible happen every now and then"
"Trade small because thats when you are as bad as you are ever going to be. Learn from your mistakes."
"The market being in a trend is the main thing that eventually gets us in a trade. That is a pretty simple idea. Being consistent and making sure you do that all the time is probably more important than the particular characteristics you use to define the trend. Whatever method you use to enter trades, the most critical thing is that if there is a major trend, your approach should assure that you get in that trend."
"When things aren't going right, don't push, don't press."
"A good trend following system will keep you in the market until there is evidence that the trend has changed."
"You should always have a worst case point. The only choice should be to get out quicker."
"When you are getting beat to death, get your head out of the mixer."
"Trading has taught me not to take the conventional wisdom for granted. What money I made in trading is testimony to the fact that the majority is wrong a lot of the time. The vast majority is wrong even more of the time. I've learned that markets, which are often just mad crowds, are often irrational; when emotionally overwrought, they're almost always wrong."
"I could trade without knowing the name of the market."
"Traders focus almost entirely on where to enter a trade. In reality, the entry size is often more important than the entry price"
"Being wrong is acceptable, but staying wrong is totally unacceptable."
"Good traders liquidate when they are wrong, great traders reverse when they are wrong"
"If you don’t stay with your winners, you are not going to be able to pay for the losers."
"The ability to change one's mind is probably a key characteristic of the successful investor. Dogmatic and rigid personalities rarely, if ever, succeed in the markets. The markets are a dynamic process, and sustained investment success requires the ability to modify and even change strategies as markets evolve."
"You don't have to get in or out of a position all at once. Avoid the temptation of wanting to be completely right."
"One of my favorite patterns is the tendency for the markets to move from relative lows to relative highs and vice versa every two to four days. This pattern is a function of human behavior. It takes several days of a market rallying before it looks really good. That’s when everyone wants to buy it, and that’s the time when the professionals, like myself, are selling. Conversely, when the market has been down for a few days, and everyone is bearish, that’s the time I like to be buying."
"Being a successful investor & winning in the stock market is a matter of skill & discipline and not luck alone"
"Michael Jordan didn’t become a great basketball player because he wanted to do product endorsements. Van Gogh didn’t become a great painter because he dreamed that one day his paintings would sell for $50 million."
"The key to building wealth is to preserve capital and wait patiently for the right opportunity to make the extraordinary gains."
"The key to investment success is emotional discipline. Making money has nothing to do with intelligence. To be a successful investor, you have to be able to admit mistakes. I trained a guy to trade who had a 188 IQ. He was on "Jeopardy" once and answered every question correctly. That same person never made a dime in trading during 5 years!"
"Investing in the market without knowing what stage it is in is like selling life insurance to 20 year olds and 80 year olds at the same premium."
"Most people lose money because of lack of emotional discipline -the ability to keep their emotions removed from investment decisions. Dieting provides an apt analogy. Most people have the necessary knowledge to lose weight-that is they know that in order to lose weight you have to exercise and cut your intake of fats. However, despite this widespread knowledge, the vast majority of people who attempt to lose weight are unsuccessful. Why? Because they lack the emotional discipline."
"Once a price move exceeds its median historical age, any method you use to analyze the market, whether it be fundamental or technical, is likely to be far more accurate. For example, if a chartist interprets a particular pattern as a top formation, but the market is only up 10% from the last low, the odds are high that the projection will be incorrect. However, if the market is up 25% to 30%, then the same type of formation should be given a great deal more weight."
"In my opinion, the greatest misconception about the market is the idea that if you buy and hold stocks for long periods of time, you'll always make money. Let me give you some specific examples. Anyone who bought the stock market at any time between the 1896 low and the 1932 low would have lost money. In other words, there's a 36 year period in which a buy-and-hold strategy would have lost money. As a more modern example, anyone who bought the market at any time between the 1962 low and the 1974 low would have lost money."
"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.'"
"Beginners focus on analysis, but professionals operate in a three dimensional space. They are aware of trading psychology their own feelings and the mass psychology of the markets."
"To be a good trader, you need to trade with your eyes open, recognize real trends and turns, and not waste time or energy on regrets and wishful thinking."
"Remember, your goal is to trade well, not to trade often."
"When a beginner wins he feels brilliant and invincible Then he takes wild risk and loses everything."
"Losers bring money into the market which is necessary for the prosperity of the trading industry."
"Traders lose because the game is hard, or out of ignorance, or lack of discipline or because of both."
"Many traders ride an emotional roller coaster and miss the essential element of winning: the management of their emotions."
"Most private traders on a losing streak keep trying to trade their way out of a hole. A loser thinks a successful trade is just around the corner, and that his luck is about to turn. He keeps putting on more trades and increases his size, all the while digging himself a deeper hole in the ice. The sensible thing to do would be to reduce your trading size and then stop and review your system."
"I don't think you can consistently be a winning trader if you're banking on being right more than 50 percent of the time. You have to figure out how to make money being right only 20 to 30 percent of the time."
"It's very difficult to be different from the rest of the crowd the majority of the time, which by definition is what you're doing if you're a successful trader."
"Always understand the risk/reward of the trade as it now stands, not as it existed when you put the position on. Some people say, "I was only playing with the market's money." That's the most ridiculous thing I ever heard."
"When you're in a losing streak, your ability to properly assimilate and analyze information starts to become distorted because of the impairment of the confidence factor, which is a by-product of a losing streak. You have to work very hard to restore that confidence, and cutting back trading size helps achieve that goal."
"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."
"It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I've known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine--that is, they made no real money out of it. Men who can both be right and sit tight are uncommon."
"The speculators deadly enemies are: Ignorance, greed, fear and hope. All the statute books in the world and all the rules of all the Exchanges on earth cannot eliminate these from the human animal."
"Fear and hope remain the same; therefore the study of the psychology of speculators is as valuable as it ever was. Weapons change, but strategy remains strategy, on the New York Stock Exchange as on the battlefield. I think the clearest summing up of the whole thing was expressed by Thomas F. Woodlock when he declared: “The principles of successful stock speculation are based on the supposition that people will continue in the future to make the mistakes that they have made in the past.”"
"Being broke is a very efficient educational agency."
"It takes a man a long time to learn all the lessons of all of his mistakes. They say there are two sides to everything. But there is only one side to the stock market; and it is not the bull side or the bear side, but the right side. It took me longer to get that general principle fixed firmly in my mind than it did most of the more technical phases of the game of stock speculation."
"One of the most helpful things that any body 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."
"The public always wants to be told."
"The big money in booms is always made first by the public - on paper. And it remains on paper."
"A stock operator has to fight a lot of expensive enemies within himself."
"If a man didn't make mistakes he'd own the world in a month.But if he didn't profit by his mistakes he wouldn't own a blessed thing."
"Nowhere does history indulge in repetitions so often or so uniformly as in Wall Street. When you read contemporary accounts of booms or panics, the one thing that strikes you most forcibly is how little either stock speculation or stock speculators today differ from yesterday. The game does not change and neither does human nature."
"When you find that it fails to respond adequately to your buying you don't need any better tip to sell."
"When it comes to selling stocks, it is plain that nobody can sell unless somebody wants those stocks.If you operate on a large scale you will have to bear that in mind all the time."
"The speculator is not an investor."
"TIPS! How people want tips! They crave not only to get them but to give them."
"That is one trouble about trading on a large scale.You cannot sneak out as you can when you pike along."
"As I have said a thousand times, no manipulation can put stocks down and keep them down."
"A battle goes on in the stock market and the tape is your telescope. You can depend upon it seven out of ten cases."
"There is no question that advertising is an art, and manipulation is the art of advertising through the medium of the tape."
"In fact, of all hoodoos in Wall Street I think the resolve to induce the stock market to act as a fairy godmother is the busiest and most persistent."
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