Thought For The Day

flea

Active member
160 22
"The market can stay irrational longer than you can stay solvent."

- John Maynard Keynes
 

flea

Active member
160 22
"The typical trader will do most anything to avoid creating definition and rules because he does not want to take responsibility for the results of his trading. If he knows exactly what he is going to do and under what conditions, then he would have something by which to measure his performance, thus making himself accountable to himself. This is exactly what most traders don't want to do, preferring instead to keep their relationship with the market somewhat mysterious.

"This creates a real psychological paradox for traders, because the only way to learn how to trade effectively is to make oneself accountable by creating structure: but, with accountability comes responsibility."

Mark Douglas, trader and author: The Disciplined Trader: Developing Winning Attitudes
 

flea

Active member
160 22
"Never, ever, follow conventional wisdom in the market. You have to learn to go counter to the markets. You have to learn how to think for yourself; to be able to see that the emperor has no clothes."

James B. Rogers, Jr., as quoted in Market Wizards, by Jack Schwager
 

flea

Active member
160 22
"To a very large extent people fail because they want to fail. They want to punish themselves for one reason or another. Subconsciously, there are people who do not want to win."

Alpesh B. Patel, Financial Times columnist and author, The Mind of a Trader
 

Jinx

Newbie
1 0
The man who makes no mistakes does not usually make anything.


Bishop W. C. Magee
 

flea

Active member
160 22
"First, I would say that risk management is the most important thing to be well understood. 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 3 to 5 times too big. They are taking 5 to 10 percent risks on a trade when they should be taking 1 to 2 percent risks."

- John Percival, trader and author: The Way of the Dollar
 

flea

Active member
160 22
"Each individual trader creates his own experience of the markets based on this picking and choosing process and the decisions that result. If you accept this concept as valid, then the implications are that you will never have a valid reason to blame the markets for your unsatisfying results. The markets don't owe you anything (regardless of how hard you work to be successful) because every other trader participating is doing so to take your money away. You and you alone are completely responsible for whatever you end up with. The sooner you accept that responsibility (if you haven't already), the easier it will be to identify what skills you need to learn to interact with the markets more successfully. Even if you can't identify the mental components responsible for what you ended up with, at least by assuming that you are responsible, you will be opening yourself up to find out."

- Mark Douglas, trader and author: The Disciplined Trader: Developing Winning Attitudes
 

flea

Active member
160 22
"Do you want to know why we make so much money? It's because we're smarter."

Greg Hawkins, of Long Term Capital Management (before its demise!)
 

flea

Active member
160 22
"By the time the market 'confirms' what you suspected, it is TOO LATE. By the time the market passes or fails a 'test', it is too late. To be paid, you must act upon your suspicions before they are manifested.
- Donald Worden, author: Trader's Manifesto
 

ibet

Newbie
3 0
I feel there is a great deal of wisdom in many of these posts and surprisingly little encouragement for the traders who swear by TA and those who carefully follow charts. Some of it seems to suggest acting on impulse and trusting to luck. Looking back, my biggest gains have come from taking a risk and being lucky rather than clever. Patience and time can bring unexpected rewards as well.
 

flea

Active member
160 22
"So many people want the positive rewards of being a successful trader without being willing to go through the commitment and pain. And there's a lot of pain."

Bill Lipschutz, as quoted in The New Market Wizards, by Jack Schwager
 

flea

Active member
160 22
"It's quite tempting to bend your rules to make your current trades work, ... Two of the cardinal sins of trading - giving losses too much rope and taking profits prematurely - are both attempts to make current positions more likely to succeed..."

William Eckhardt, as quoted in The New Market Wizards, by Jack Schwager
 

flea

Active member
160 22
"The belief in miracles that all men cherish is born of immoderate indulgence in hope. There are people who go on hope sprees periodically and we all know the chronic hope drunkard that is held up before us as an exemplary optimist. Tip-takers are all they really are."

Edwin Lefevre, author: Reminiscences of a Stock Operator
 

flea

Active member
160 22
"The average man doesn't wish to be told that it is a bull or a bear market. What he desires is to be told that specifically which particular stock to buy or sell. He wants to get something for nothing. He does not wish to work. He doesn't even wish to have to think."


Edwin Lefevre, author: Reminiscences of a Stock Operator
 

flea

Active member
160 22
" ...maybe a better question about confidence - financial and otherwise - is not why people are overconfident to begin with, but why they stay overconfident. You see, the problem with overconfidence is not the innate bias toward optimism that most people seem to possess. That's a good thing, it keeps the world moving forward. The problem is the inability to temper optimism as a result of prior experience. Frankly, we don't learn well enough from our mistakes. Consider: If overconfidence is as big a problem as we say it is, it should be a short-term problem at worst. The learning process would ideally go something like this: We think highly of ourselves, the world and events show us who is the boss, and we become less confident and more realistic about our knowledge and skills. Yet in the main, this does not happen."

Belsky & Gilovich, authors: Why Smart People Make Big Money Mistakes
 
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