Dec 09, 2022 17:36
1. The game taught me the game. And it didn’t spare me the rod while teaching.
2. The goal of a successful trader is to make the best trades. Money is secondary.
3. In investing what is comfortable is rarely profitable.
4. Amateurs think about how much money they can make. Professionals think about how much money they could lose.
5. The price of a commodity will never go to zero. When you invest in commodities futures, you are not buying a piece of paper that says you own an intangible of the company that can go bankrupt.
6. Are you willing to lose money on a trade? If not, then don't take it. You can only win if you're not afraid to lose. And you can only do that if you truly accept the risks in front of you.
7. 99%+ of traders don't care about Ferraris and yachts. They just want to pay their bills, save a little extra money, and sleep well at night. The only way to do that is to bat 70% or more. Anything less, and these goals are nothing more than fantasy.
8. 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.
9. All the math you need in the stock market you get in the fourth grade.
10. There is no single market secret to discover, no single correct way to trade the markets. Those seeking the one true answer to the markets haven’t even gotten as far as asking the right question, let alone getting the right answer.
11. Once you find the system that works for your style/personality and confidence is gained, wash, rinse, repeat over and over again.
12. 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.
13. You’re going to learn a million things, then you need to forget them all and focus on one.
14. In investing, what is comfortable is rarely profitable.
15. The key is to develop a case where the probabilities of the market going in your favour is greater than it going against you.
16. A peak performance trader is totally committed to being the best and doing whatever it takes to be the best. He feels totally responsible for whatever happens and thus can learn from mistakes. These people typically have a working business plan for trading because they treat trading as a business.
17. The hard work in trading comes in the preparation. The actual process of trading, however, should be effortless.
18. We don't care about 'why'. Real traders only have the time and interest to care about 'what' and 'when' and 'if' and 'then'. 'Why' is for pretenders.
19. Losers average losers.
20. Trading is not for the dabblers, the dreamers, or the desperate. It requires, above all, one steadfast trait of dedication. So if you are going to trade, trade like you mean it.
21. If most traders would learn to sit on their hands 50 percent of the time, they would make a lot more money.
22. My attitude is that I always want to be better prepared than someone I’m competing against. The way I prepare myself is by doing my work each night.
23. I'm only rich because I know when I'm wrong. I basically have survived by recognizing my mistakes.
24. Risk comes from not knowing what you’re doing.
25. The biggest risk is not taking a risk. In a world that's changing really quickly, the only strategy that is guaranteed to fail is not taking risks.
26. We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.
27. 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.
28. In trading/investing, it’s not about how much you make but rather how much you don’t lose.
29. You have to identify your weaknesses and work to change. Keep a trading diary – write down your reasons for entering and exiting every trade. Look for repetitive patterns of success and failure.
30. 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.
31. Where you want to be is always in control, never wishing, always trading, and always, first and foremost protecting your butt.
32. 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.
33. It is always the best discretion to let the market show us where it is going and just simply follow (this would be prudent), rather than predict where the market is going and place a position (this would be gambling).
34. The market can stay irrational longer than you can stay solvent.
35. 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.
36. 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.
37. It is not the strongest or the most intelligent who will survive but those who can best manage change.
38. The purpose of trading is not being right, the purpose is to make money, and I think that's my number-one rule. Don't get hung up on your current positions.
39. What seems too high and risky to the majority generally goes higher and what seems low and cheap generally goes lower.
40. Every trader has strengths and weaknesses. Some are good holders of winners but may hold their losers a little too long. Others may cut their winners a little short but are quick to take their losses. As long as you stick to your own style, you get the good and bad in your own approach.
41. Time is your friend; impulse is your enemy.
42. Stock price movements actually begin to reflect new developments before it is generally recognized that they have taken place.
43. In the short run, the market is a voting machine, but in the long run it is a weighing machine.
44. 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.
45. The fundamental law of investing is the uncertainty of the future.
46. You don’t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ.
47. If a trader is motivated by the money, then it is the wrong reason. A truly successful trader has got to be involved and into the trading, the money is the side issue… The principal motivation is not the trappings of success. It’s usually the by-product – simply stated, “the game’s the thing”.
48. There is a time to go long, a time to go short and a time to go fishing.
49. Do not anticipate and move without market confirmation - being a little late in your trade is your insurance that you are right or wrong.
50. Win or lose, everybody gets what they want from the market. Some people seem to like to lose, so they win by losing money.
51. When in doubt, get out and get a good night’s sleep. I’ve done that lots of times and the next day everything was clear… While you are in [the position], you can’t think. When you get out, then you can think clearly again.
52. 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 behavior.
53. I don’t think you can get to be a really good investor over a broad range without doing a massive amount of reading. I don’t think any one book will do it for you.
54. Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway.
55. 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?
56. 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.
57. Timing, perseverance, and ten years of trying will eventually make you look like an overnight success.
58. If you're in the luckiest 1% of humanity, you owe it to the rest of humanity to think about the other 99%.
59. 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.
60. Losses are necessary, as long as they are associated with a technique to help you learn from them.
61. Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years.
62. Money is just something you need in case you do not die tomorrow. Let this is a reminder for you not to obsess over profits and losses. In whatever you do, strive for enjoyment, focus, contentment, humility, openness… Paradoxically (and as an unintended consequence) your trading performance will improve significantly.
63. The desire for constant action irrespective of underlying conditions is responsible for many losses in 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.
64. Most people dont understand the process. They get frustrated by it. Dont Be Focus.
65. Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down.
66. Confidence is not “I will profit on this trade.” Confidence is “I will be fine if I don’t profit from this trade.
67. I learned 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.
68. Before I enter a trade, I set stops at a point which the chart sours.
69. I set protective stops at the same time I enter a trade. I normally move these stops to lock in a profit as the trend continues.
70. The difference between successful people and really successful people is that really successful person say no to almost everything.
71. You don’t need to trade often. If you can catch one or two moves to the targets during the day with good size, you can make a good living and keep trading costs down.
72. Why do you think unsuccessful traders are obsessed with market analysis? They crave the sense of certainty that analysis appears to give them. Although few would admit it, the truth is that the typical trader wants to be right on every single trade. He is desperately trying to create certainty where it just doesn’t exist.
73. Pyramiding instructions appear on dollar bills. Add smaller and smaller amounts on the way up.
74. It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.
75. Don’t blindly follow someone, follow market and try to hear what it is telling you.
76. If you can learn to create a state of mind that is not affected by the market’s behaviour, the struggle will cease to exist.
77. Risk no more that you can afford to lose, and also risk enough so that a win is meaningful.
78. Success in investing doesn't correlate with IQ. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people in trouble investing.
79. Losses are necessary, as long as they are associated with a technique to help you learn from them.
80. Dangers of watching every tick are twofold: overtrading and increased chances of prematurely liquidating good positions.
81. There are old traders and there are bold traders, but there are very few old, bold traders.
82. The goal of a successful trader is to make the best trades. Money is secondary.
83. 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.
84. I don’t think you can get to be a really good investor over a broad range without doing a massive amount of reading. I don’t think anyone book will do it for you.
85. You don’t make money by trading, you make it by sitting. It takes patience to wait for the trade to develop, for the opportunity to present itself. Let the market come to you, instead of chasing the market. Chart patterns are very accurate. They have proven their accuracy and predictability time and time again, but you have to wait for them to develop.
86. Spend each day trying to be a little wiser than you were when you woke up.
87. It’s not what we do once in a while that shapes our lives. It’s what we do consistently.
88. Short term volatility is greatest at turning points and diminishes as a trend becomes established.
89. Compound interest is the eighth wonder of the world. He who understands it earns it. He who doesn't pay it.
90. When everything seems to be going against you, remember that the airplane takes off against the wind, not with it.