Quotes About Trading

The idea that trading success is tied to finding some specific ideal approach is misguided. There is no single correct methodology.

relationships. For example, if the S&P was moving in an inverse lockstep to the bonds, and bonds were down for the day, but the S&P was not responding on the upside, it would tell me I should sell the S&P.

Now it's no longer sufficient to assume that because you trade with the trend, you'll make money. Of course, you still need to be with the trend, because it puts the percentages in your favor, but you also have to pay a lot more attention to where you're getting in and out.

If trading (or any other job or endeavor) is a source of anxiety, fear, frustration, depression, or anger, something is wrong—even if you are successful in a conventional sense

internal trend lines are far more useful than conventional trend lines in defining potential support and resistance areas.

The perspective I have on it now is that when I was trading my own account, it was like trading monopoly money. My trading capital was just something I kept score with. I detached myself emotionally from it.

The worst thing that can happen to you in the markets is being right and still losing money. That's the danger in buying on rallies and selling on breaks these days.

In trading, 80 percent of your profits come from 20 percent of your ideas.

The first rule of trading—there are probably many first rules—is don't get caught in a situation in which you can lose a great deal of money for reasons you don't understand.

Whenever I enter a position, I have a predetermined stop.

The next thing I would advise is to always use stops.

Perhaps the most important rule is to hold on to your winners and cut your losers. Both are equally important. If you don't stay with your winners, you are not going to be able to pay for the losers.

Place your stops at a point that, if reached, will reasonably indicate that the trade is wrong, not at a point determined primarily by the maximum dollar amount you are willing to lose per contract.

Undertrade, undertrade, undertrade is my second piece of advice. Whatever you think your position ought to be, cut it at least in half. My experience with novice traders is that they trade three to five times too big.

Place your stops at a point that, if reached, will reasonably indicate that the trade is wrong, not at a point determined primarily by the maximum dollar amount you are willing to lose per contract. If the meaningful stop point implies an uncomfortably large loss per contract, trade a smaller number of contracts.

there is probably no class of trades with a higher failure rate than impulsive (not to be confused with intuitive) trades.

People who applaud traders for providing liquidity to markets are often saying little more than that trading facilitates trading

This map by cartographer Herman Moll was commissioned by the South Sea Company. The entire region displayed, with the exception of Brazil, was claimed as the company's trading territory. Disregarded was the fact that Spain claimed the same territory.

In fact, the Federal Reserve was helpless only because it wanted to be. Had it been determined to do something, it could for example have asked Congress for authority to halt trading on margin by granting the Board the power to set margin requirements. Margins were not low in 1929; a residue of caution had caused most brokers to require customers to put up in cash 45 to 50 per cent of the value of the stocks they were buying. However, this was all the cash numerous of their customers had.

I'm having yet another dinner, but this time with more of the working-level capital markets origination bankers. These guys are considerably more risk averse; they don't have the stomach for sales and trading and lack the smarts for M&A.

Mexico spent $180 million to fight the disease, but suffered $9 billion in economic losses because of the irrational response from trading partners—not exactly positive reinforcement if the goal is to encourage candor the next time.

Transaction costs can arise before any business is done. Locating potential trading partners may be costly and time-consuming. Comparing alternative sellers and choosing among them takes effort by the buyer. The quality of the goods for sale is often not immediately apparent, and the buyer may have to go to some trouble to evaluate it. If it cannot be reliably checked, the buyer might be reluctant to purchase.

The markets are unforgiving, and emotional trading always results in losses.

Many traders ride an emotional roller coaster and miss the essential element of winning: the management of their emotions.