Trading Quotes

I believe that to be a good trader it’s very important to be rational and have your emotions under control. I’ve been trying for years to get rid of anger completely when I completely lose money, and I’ve come to the conclusion that it is impossible. I can work towards that goal, but until the day I die, I don’t think I’m ever going to be able to look a big loss in the face and not get angry. - MONROE TROUT

Managing risks is in many ways the foundation of the entire process. Managing risk comes down to two things. First is how you are going to place your stops. That goes back to cutting your losses short. Consider trading as a business venture. Managing risk means recognizing what the costs of trading are. Make a comprehensive plan. Winning traders always treat their trading like a game, but they also look at the whole thing as a money-making business. - GLEN RING

Being wrong is acceptable. But staying wrong is totally unacceptable. Being wrong isn’t a choice, but staying wrong is. To play any game successfully, you have to have some skill, an edge, but beyond that it is money management. Good traders manage the downside; they don’t worry the upside. - MARK MINNERVINI

A major misconception people have about stock market is that they tend to confuse short-term volatility with long-term risk. The longer the time period, the lower the risk of holding equities. People focus too much on the short-term day-to-day, - week-to-week and month-to-month price changes - and they don’t pay enough attention to the long-term potential. They look at all movement as negative, whereas I look at movement as a constructive element. For many investors, the lack of sufficient exposure to high-returning, more volatile assets is their greatest risk. In my opinion, investment vehicles that provide the least short-term volatility often embody the greatest long-term risk. Without significant price movement, you cannot achieve superior gains. - RICHARD DRIEUHAS

My basic philosophy is that price follows growth and that the key to superb performance in the stock market is picking the companies with the best potential earnings growth. Everything else is secondary. Interestingly, the high growth stocks that meet my criteria often sell at extremely high P/E ratios. The so-called prudent approach of buying only stocks with average to below-average P/Es will automatically eliminate many of the best performers. The stocks that I tend to buy are also often companies that are not followed by, or only lightly followed by industry analysts, a characteristic that I believe lead to greater inefficiencies and hence greater opportunities. - RICHARD DRIEUHAS

To be a successful trader, you have to be able to admit mistakes. People who are very bright don’t make very many mistakes. In a sense, they generally are correct. In trading, however, the person who can easily admit to being wrong is the one who walks away a winner. Besides trading, there is probably no other profession where you have to admit you’re wrong. In trading, you can’t hide your failures. Your equity provides a daily reflection of your performance. The trader who tries to blame his losses on external events will never learn from his mistakes. For a trader, rationalization is a guaranteed road to ultimate failure. - VICTOR SPERANDEO

I think paper trading is the worst thing you can do. If you are a beginner, trade with an amount of money that is small enough so that you can afford to lose it, but large enough so that you will feel the pain if you do. Otherwise, you are fooling yourself. If you go from paper trading to real trading, you’re going to make totally different decisions because you’re not used to being subjected to the emotional pressure. Nothing is the same. It’s like shadowboxing and then getting in the ring with a professional boxer. What do you think is going to happen? You’re going to crawl up into a turtle position and get the crap beat out of you because you’re not used to really getting hit. The most important thing to becoming a good trader is to trade.

Most of traders lose because they don’t have a winning strategy. Apart from this even among those traders who do, many don’t follow their strategy. Trading puts pressure on weaker human traits and seems to seek out each individual’s Achilles’ heel. - GILL BLAKE

One common adage about trading is that is completely wrongheaded is : You can’t go broke trading 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. The problem in a nutshell is that human nature does not operate to maximize gain but rather to maximize the chances of gain. 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. - WILLIAM ECKHARDT

The ability to change one’s mind is probably a key characteristic of successful traders. Dogmatic and rigid personalities rarely succeed in markets. The markets are a dynamic process and sustained trading success requires the ability to modify and even change strategies as markets evolve. Successful traders have the ability to adapt to the changing dynamics of the market and in the process maintain their consistency of performance. - GILL BLAKE

Since most small to moderate profits tend to vanish, the market teaches you to cash them in before they get away. Since the market spends more time in consolidations than in trends, it teaches you to buy dips and sell rallies. Since the market trades through the same prices again and again and seems, if only you wait long enough to return to prices it has visited before, it teaches you to hold on to bad trades. The market likes to lull you into 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. - WILLIAM ECKHARDT

The most important advice is to never let a loser get out of hand. You want to be sure that you can be wrong twenty or thirty times in a row and still have money in your account. When I trade, I’ll risk perhaps 5 to 10 percent of the money in my account. If I lose on that trade, no matter how strongly I feel, on my next trade I’ll risk no more than about 4 percent of my account. If I lose again, I’ll drop the trading size down to about 2 percent. I’ll keep on reducing my trading size as long as I’m losing. I’ve gone from trading as many as three thousand contracts per trade to as few as ten. - RANDY McKAY

Each trading failure is a sign that you are doing something wrong; it is not necessarily a good predictor of ultimate potential failure or success.

The trick is not being contrarian but being contrarian at the right time.

When you’re trading at your biggest, you should be making money instantaneously.

Don’t get caught in a situation in which you can lose a great deal of money for reasons you don’t understand.

NEVER LET YOUR MARKET DECISIONS BE RESTRICTED OR INFLUENCED BY CONCERN OVER WHAT OTHERS MIGHT THINK.

Do your own thing (independence) and do the right thing (discipline)

All traders make mistakes, great traders, however, limit the damage.

Don’t worry about what the markets are going to do, worry about what you are going to do in response to the markets.

Life isn't worth living unless you're willing to take some big chances and go for broke.-- Eliot Wiggington

Do independent research before buying a stock. People do more research when buying a Television then they do before buying a stock

Successful speculation implies taking risks when the odds are in your favour

Don’t force trades. Do not attempt to create an opportunity where one does not exist. Be patient.

The fruits of your trading or investment success will be in direct ratio to the honesty and sincerity of your own effort in keeping your own records, doing your own thinking, and reaching your own conclusions. You cannot wisely read a book on ‘ how to keep fit’ and leave the physical exercise to another. - Jesse Livermore

Never let your market decisions be restricted or influenced by concern over what others might think. Don’t worry about looking stupid.