To make great sums of money you first have to learn how to lose much smaller sums of it when you are wrong.
If you want to make money, listen to what the market is telling you right now.
In trading one should follow one simple rule - Do more of what is working and less of what isn’t.
Sometimes the best trades are not the winning ones that put money in your pocket; sometimes they are the ones that get you out of the market at the right time.
When markets do too much up and down, it pays to stay out.
Markets are efficient and random. This is false statement
Buy when there is blood on the street, even if that blood is yours.
Invest when the fear factor is maximum. But it’s scary to buy when others are selling. But that's how fortunes are made.
If the crowd seems confused, stand aside and wait for the market to make up its mind. Don’t participate and add to the confusion.
There is a saying about mid-caps - "The smaller they are, the harder they fall."
Mutual funds are like French fries. They may fill you up, but they aren't good for you in the long run.
It is the eyes that make the money and not the ears. (Cut the noise and trust your eyes more than ears)
Trading is a lonely job, and it is best done that way.
Don’t be judgmental; there are literally thousands of ways to make money in the market. Choose yours, and respect others.
Diversification is a hedge for ignorance. There is no point in owning too many stocks.
Liquidity is a coward, when you need her most she runs away and hides.
Scared and Sacred money should never be invested in the market.
You know market is risky when there is no punishment for taking excessive risk.
It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price
It’s hard to make money when everyone agrees on something. It's much more profitable and takes some courage to go against the herd.
Stock prices have strong memory. This is the reason why traders keep talking about support and resistance lines.
Most of your big failures will come from three things: 1) when you abandon your rules, 2) you become overconfident, and 3) trade in despair when unsuccessful
A trader must respect a market that’s not doing what it’s supposed to be doing.
The idea that you can actually predict whats going to happen contradicts my way of looking at the market.
Any stock that forms fresh lows should be avoided because it only invites large scale liquidation and not bargain hunters.
One simple Trading Rule = Never, Ever, Ever, Under Any Circumstance, Add to a Losing Position
The difference between professionals and amateurs is the ability to sell, the ability to walk away and the ability to take monetary loss without loss of real confidence.
Bulls live above 200 dma and Bears live below it. When a stock breaks down 200 dma, one should jump and not pray.
Trading Losses = Cost of doing business
If you think the stock market is fair, quit immediately.
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.
“Wall Street never changes, the pockets change, the stocks change, but Wall Street never changes, because human nature never changes” – Jesse Livermore
Whether you invest or trade, you need to do so like a carpenter. That means, measure twice (or perhaps three times) and cut ONCE
There is a simple trading rule - Prices move first, and talk comes later. When it becomes reverse i.e. talk precedes price move - be careful.
One simple suggestion - Never make a trade on a market that just completed a major move if the only reason for making the trade is that you just saw a major move and missed it.
When you are in the hole, stop digging. (When you are in deep loss – stop averaging.)
Remain disciplined and prepare for the unexpected. The fact that one outcome seems unlikely doesn’t mean it won’t happen
The markets are designed to take money from the many and distribute it to the few
The traders are not subject matter experts on politics, economy or sector, but they are very well informed. They rarely get unpleasant surprises.
A great exercise investors should do regularly is to ask you: What's the one thing that nobody expects to happen? In the answer to that question lie your greatest investment opportunities. The reason is obvious — things that everybody expects are already fully priced into stocks. The unexpected is not.
Remember, Markets don’t give the luxury of evidence before moving up/down. Good markets don’t peak out on bad news. Most of the bullish markets generally top out on good news.
In Financial markets, one should always anticipate what may happen and one should also be ready with the plan but one should never jump before hand. Remember, lots of times - dark clouds gather but result in no rain.
Just when you think you are smart, the market will show you just how really dumb you are.
Markets will do everything to throw out the greedy and non disciplined players out of the system. Patience and discipline will see you through.
Trading Success comes from screen time and experience. It takes time to learn what works and what does not.
There is no such thing as perfect trade. Trading is a business of being approximately right than be precisely wrong.
In trading, sometimes not being in the game is the part of the game.
In trading, you don’t need enemies. You can be your own worst enemy.
Never be a slave to the data - they are no substitutes for astute observation of the big picture
When all the experts and forecasts agree - something else is going to happen
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
Always do business as if the person you're doing business with is trying to screw you, because he probably is. And if he's not, you can be pleasantly surprised.
If you can't spot the sucker in the first half hour at the table, then you are the sucker.
You play for a living, it's like any other job. You don't gamble, you grind it out. Your goal is to win one big bet an hour. That's it. Get your money in when you have the best of it, protect it when you don't. Don't give anything away.
Always leave yourself outs. Applies to a player's life away from the game same as it does at the table.
You can't lose what you don't put in the middle... but you can't win much, either.
Why do you think the same 5 guys are at the finals of the world series of poker EVERY year? They're the luckiest guys in Vegas?
There is really only one guarantee in trading, and that is if you trade, you will have losing trades.
It’s important to watch for danger and be cautious in one’s perspective, particularly when dealing with money. There’s nothing wrong with prudence. The same goes for any daily activity really. When you are driving a car and come to an intersection it makes sense to look both ways before proceeding, right? That’s prudent. What is not prudent is never leaving your house and never driving because of what might happen. Being paralyzed by fear over what might occur leads to inaction. In an investment strategy, inaction gets you nowhere
A bull market makes you feel smarter than you are the same way a bear market makes you feel dumber than you are.
In sideways market - Market can make anyone look idiot at any point of time.
Confidence when losing, humility when winning: a formula for long-term success in markets.
There is no substitute to screen hours….no trading seminars….no books. It is the experience of sitting in front of the screen that counts.
The cardinal sin in trading is trying to talk your book.
Trade what you SEE! Not what you THINK! Traders never use the words, "I want", "I hope" or "I need". Traders trade. I've never met a profitable emotional trader in my life.
In markets, waiting for an opportunity is also an activity. For making investment, one should not wait for a bottom, but one should wait for stability. Problems do not get resolved overnight and hence one will get ample opportunity on the way.
No matter how sensational your analysis is, sometimes you will simply be on the wrong side of the market
The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.
Rule number one of street fighting - stand your ground and never walk backwards, unless you’re preparing a counter-strike. Rule number two - never put your head down. Rule number three - always get crazier than the other guy. Rule number four - always keep something in reserve.
A trader’s first goal must be long-term survival; second goal, a steady growth of capital; and your third goal, making high profits. Unfortunately, many traders come to the market with third point as first goal.
Market is one place where it pays to shut off your brain when it makes excessive noise. Market is dead against Intellectual arrogance.
If your money is not on line…it does not matter what you think.
Trading is all about perception and leveraging probability. Regardless of whether a trader utilizes technical analysis, fundamental analysis, or the newspaper-dart method - there has to be method behind madness.
In trading, time is actually more important than price.
Myth: The more you trade, the more you make. Reality: The less you trade, the more you make.
A trader should be like a surgeon who tries to operate with as few incisions as possible.
A fool and his money are lucky enough to get together in the first place.
It's not a question of enough, pal. It's a zero sum game, somebody wins, somebody loses. Money itself isn't lost or made; it's simply transferred from one perception to another.
What's worth doing is worth doing for money.
It's all about bucks, kid. The rest is conversation.
The main thing about money is that it makes you do things you don't want to do.
Market timing is not about catching tops and bottoms.
Joining the party after it’s already started - and then riding along as the trend strengthens and plays out - is a lot safer than being hopeful your mere presence will attract a crowd.
When a market goes up or down for no apparent reason, it tends to go a lot further in that direction than people can imagine.
Keep your technical systems simple. Complicated systems breed confusion; simplicity breeds elegance.
Be patient with winning trades. Be enormously impatient with losing trades.
In trading, you have to decide the amount of money you are willing to lose and let the market decide the amount of money you are going to make.
To rely totally on old experience would be foolish because new experiences are made every day, and sometimes the market has a way of treating traders as though it were their first day of trading.
One of the most difficult things to do in markets — and in life — is to admit defeat. As many psychological studies have shown, the “emotional price” of losing is much greater than the “emotional reward” of winning.
The greatest advantage to investing in stocks is the extraordinary reward for being right.
There are bold traders and old traders but no bold, old traders.
Trading Futures is the capitalism best kept secret. You can be free. You can live and work anywhere in the world. Trading Futures is very risky. You can be bankrupt in pretty much no time and lose everything you have. This is NO SECRET
Every trader should read this line everyday - The market moves wherever it wants to go. It does not care about you or me. It does not play favorites. It does not discriminate. It does not intentionally harm any one individual. The market is always right.
Trading is not a job where you get paid by the hour. You get paid for doing the right thing. Unfortunately, you know it only after you do it.
Most traders take a good system and destroy it by trying to make it into a perfect system. Perfection is a BAD idea in trading.
There is no such thing as ‘can’t’ in the stock market. A stock can do anything.
Smart trading demands good timing, and good timing often requires patience.
The passion, the profession, the intricate know-how, sets apart the scientific trader from the racetrack sucker who uses a broker in place of a bookie.
Never add money to your trading account . . . Writing a second check to a broker is an admission of defeat.
I could teach any one of you how to remove an appendix in just 10-minutes. But to teach you what to do if something went wrong would take four years.
A golden lesson I learned as a young trader was: never be the engine of a trade, always be a bogie. That way the impact is much less in the event of a collision.
The worst thing that can happen to a beginner trader is to have a successful first trade.
Success in trading is related to the ability to stay consistent and plan-driven.
Top and bottom pickers become cotton pickers
If you ever catch yourself smiling after a trade, it might be already too late to get out.
Indecision and hesitation are luxuries that traders can ill-afford. Timing is everything.
An asset is something that puts money in your pocket. A liability is something that takes money out of your pocket.
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.
While thinking about a loss in the market, think of this: Lungs lose air about half the time. Thats the reason you are alive.
All you need in this life is ignorance and confidence; then success is sure.” - Mark Twain. This is so true in trading…the more you look at various sources of information..the more doubtful you become of market
Every trader has strengths and weaknesses. As long as you stick to your own style, you get the good and the bad in your own approach. When you try to incorporate someone else’s style, you often wind up with the worst of both styles
In a game where there are no rules that you must follow, you must establish your own rules. The trading environment has no rules telling you when to enter, when to exit, or how many contracts to trade in.
It’s more important to want to make money than to want to be “right.” People who want to be right all the time are afraid to make decisions. People who want to make money are willing to change their decisions to take what the market will give them.
Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway - Warren Buffet
Why should I buy real estate when the stock market is so easy? - Warren Buffet
It’s an old principle. You don’t have to make it back the way you lost it - Warren Buffet
Diversification is a protection against ignorance. It makes very little sense for those who know what they’re doing. A lot of great fortunes in the world have been made by owning a single wonderful business. If you understand the business, you don’t need to own very many of them - Warren Buffet
One of the things that attracted me to working with securities was the fact that you could live your own life. You don’t have to dress for success - Warren Buffett
Go with the trend. To swim a fast 100 meters, it’s better to swim with the tide than to work on your stroke.
Long ago, Sir Isaac Newton gave us three laws of motion, which were the work of genius. But Isaac’s talents didn’t extend to investing. He lost a bundle in the South Sea Bubble, explaining later, ‘I can calculate the movement of the stars, but not the madness of men.’ If he had not been traumatized by the loss, Sir Isaac might well have gone on to discover the Fourth Law of Motion: For investors as a whole, returns decrease as motion increases - Warren Buffett
If you torture the data long enough, it will confess.
It is incredible how rich you can get by not being perfect
If you risk little, you win little. If you risk too much, you eventually run to ruin.
Success in this game is often more dependent on the use of brakes than the accelerator pedal.
The frequency of correctness does not matter; it is the magnitude of correctness that matters.
Don’t try to buy at the bottom and sell at the top. It can’t be done except by liars.
All traders make mistakes, great traders, however, limit the damage.
The basis for all successful trading can be summed up in these four core principles. Trade with an edge, manage risk, be consistent, and keep it simple.
It may surprise some people that Rich thought he could teach a group of traders in only two weeks. What surprises me now is that he thought it would take that long - Curtis Faith.
Trading with an edge is what separates the professionals from the amateurs. Ignore this and you will be eaten by those who don’t.
Being first helps in the short run. Being a little more right than the masses ultimately pays off in the long run. Being last is the worst of all three.
It doesn't matter how often you are right or wrong - it only matters how much you make when you are right, versus how much you lose when you are wrong - Geroge Soros.
The whole secret to winning in the stock market is to lose the least amount possible when you're not right
When I'm trading, you see, I don't stop to pat myself on the back. Because when I pat myself on the back, the next sensation is usually a sharp kick lower down. And it isn't so pleasant.
Those who say don't know, and those who know don't say
Revenge Trading: A monkey was carrying two handfuls of peas. One little pea dropped out. He tried to pick it up and spilt twenty. He tried to pick up the twenty and spilt them all. Then he lost his temper, scattered the peas in all directions and ran away.