When I feel fidgety while waiting for a trade to pan out, I read trading quotes. Trading quotes are short, so I can read them quickly without affecting my trading. They are also relevant and help me to keep the right trading perspective.
Here, I’ve picked 19 trading quotes from 19 traders/investors. To present a wide range of ideas, I kept to one rule when building this list of quotes – one quote from one trader.
If you want to have a better performance than the crowd, you must do things differently from the crowd.
Sir John Templeton
This trading quote applies not just to your trading method, but your attitude towards trading.
Most people are looking for ways to get rich quick and do not want to put in real effort to learn. Be different.
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.
Jack Schwager, Author of Market Wizards
Traders who ask think that there’s one answer. Traders who think know that they must find their own answers.
The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective.
Quantitative finance? Trading algorithms? Dozens of indicators? Or just plain old price action.
Time is your friend; impulse is your enemy.
Jack Bogle is talking about time in the context of a passive portfolio. But this trading quote applies to traders of all time frames. Always allow enough time for your trading position to prove itself.
One characteristic I’ve found among successful traders is that they function effectively when they’re not trading. When markets become very quiet and range bound, they occupy themselves with a variety of activities, from sharing ideas with peers to conducting research. Traders who do not tolerate inactivity well inevitably feel the need to trade, often when there is no objective edge present. For them, losing money is less onerous than experiencing boredom.
Dr. Brett Steenbarger, TraderFeed
In a nutshell, good traders don’t feel that they need to trade.
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.
Raise your threshold for taking a trade. Don’t take a trade until you “see money lying in the corner”.
Hardwork and Effort
No profession requires more hard work, intelligence, patience, and mental discipline than successful speculation.
As I’ve written at length in this article, most people have easier ways to make money.
A trading philosophy is something that cannot just be transferred from one person to another; it’s something that you have to acquire yourself through time and effort.
In my trading course, I’ve wrote that if you achieve trading success, you have no one to thank but yourself.
If you succeed as a trader, it’s because you’ve developed your own trading philosophy. And not because you’ve adopted mine.
The market does not know if you are long or short and could not care less. You are the only one emotionally involved with your position. The market is just reacting to supply and demand and if you are cheering it one way, there is always somebody else cheering it just as hard that it will go the other way.
Marty Schwartz, Pit Bull
Losing money is the least of my troubles. A loss never troubles me after I take it. I forget it overnight. But being wrong – not taking the loss – that is what does the damage to the pocket book and to the soul.
Jesse Livermore, Reminiscences Of A Stock Operator
Letting a loss drag on is really damaging to your mind. It shatters your confidence and makes you want to slap yourself. Take the loss and save your soul.
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.
Beginners tend to pay lip service to the importance of emotions. Only seasoned traders appreciate its importance. It usually takes time in the market and a lot of losses for this message to sink in.
Don’t worry about what the markets are going to do, worry about what you are going to do in response to the markets.
Control the only thing you can, and that’s you. Instead of guessing the unknown, plan your response.
Volatility is greatest at turning points, diminishing as a new trend becomes established.
This trading quote is a great piece of insight for designing a price based trading strategy.
The markets are the same now as they were five or ten years ago because they keep changing-just like they did then.
This is why price action analysis lives on, in evolving forms.
Risk Control and Losses
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.
Once you have a trading edge, the most important thing to do is to control your risk until your profits arrive.
If I have positions going against me, I get right out; if they are going for me, I keep them… Risk control is the most important thing in trading. If you have a losing position that is making you uncomfortable, the solution is very simple: Get out, because you can always get back in.
Paul Tudor Jones
You are just one commission away from getting back into the market. Don’t hesitate to get out.
Limit your size in any position so that fear does not become the prevailing instinct guiding your judgment.
Position sizing is important. Never trade larger than what you are capable of, both mentally and financially. If you do so, there is no way you can trade well.
We want to perceive ourselves as winners, but successful traders are always focusing on their losses
Getting our ego out of the way is important. Trading is a tricky profession.
Common sense tells you that traders must trade and should think about how to make money.
Experience will tell you that traders must not trade unless “there’s money lying in the corner”. And they should think about how not to lose money.
On Trading Quotes
Trading isn’t simple enough to be boiled down to a punchy quote.
Well, never forget the contrarian.
Share your favourite trading quote with us in the comments below!