Trading Quotes To Know And Live By

“The elements of good trading are: (1) cutting losses, (2) cutting losses, and (3) cutting losses. If you can follow these three rules, you may have a chance.”

💡 The exit is decided before the entry. No stop written down, no trade.

“Every day I assume every position I have is wrong. I know where my stop risk points are going to be.”

💡 Before you enter, name the price that proves the idea wrong. That price is the stop, not a pain point in dollars.

“A loss never bothers me after I take it. I forget it overnight. But being wrong—not taking the loss—that is what does the damage to the pocketbook and to the soul.”

💡 The loss you took is finished. The loss you are still holding is the danger. Close it and the head clears.

“Profits always take care of themselves, but losses never do.”

💡 Spend your attention on the losing trade. The winning one only needs its exit rule.

“The whole secret to winning big in the stock market is not to be right all the time, but to lose the least amount possible when you’re wrong.”

💡 Keep every loss about the same small size and let the wins vary. Then being right less than half the time is fine.

“My philosophy is strong opinions, weakly held. The minute a trade reaches into my pocket, it becomes a weakly held position, and I’ll drop it like a hot potato.”

💡 Take the setup with conviction, and drop it the moment price closes against the level it depended on.

“It never was my thinking that made the big money for me. It was always my sitting. Got that? My sitting tight!”

💡 Once a trade on a trend day is working, the hard job is doing nothing until your exit rule fires.

“There is the plain fool, who does the wrong thing at all times everywhere, but there is the Wall Street fool, who thinks he must trade all the time.”

💡 Set a cap on trades for the day. A day with no setup is a valid trading day.

“Whenever I have had the patience to wait for the market to arrive at what I call a ‘Pivotal Point’ before I started to trade, I have always made money in my operations.”

💡 Let price come to the level you marked before the open. Enter at the level, not halfway to it.

“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.”

💡 A clean setup at a level you planned is the money in the corner. Everything else is waiting.

“We find doing nothing the most difficult task of all.”

💡 Sitting flat through a choppy hour is a skill. Expect it to feel bad, and do it anyway.

“I always say that you could publish trading rules in the newspaper and no one would follow them. The key is consistency and discipline.”

💡 Most traders know the rules. The edge is following them on the twentieth trade exactly as on the first.

“Anyone who is inclined to speculate should look at speculation as a business and treat it as such and not regard it as a pure gamble…”

💡 A business has hours, a budget and books. So does trading: a time window, a max daily loss, a journal.

“You better have a plan ahead of time and it better be self-executing”

💡 On a big-news morning (CPI, the Fed), the exit order is in before the number comes out, not typed after it.

“A man must believe in himself and his judgment if he expects to make a living at this game. That is why I don’t believe in tips.”

💡 A call from a chat room is not your setup. If you can’t name your own stop for it, skip it.

“The one thing you can control is yourself.”

💡 You control your size, your stop and whether you click. The next candle is not yours.

“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.”

💡 On a trend day, keep part of the position on. That runner is what pays for the small losses.

“…prices, like everything else, move along the line of least resistance.”

💡 Trade the side the trend is already taking. Don’t fight the easy direction.

“They say you never grow poor taking profits. No, you don’t. But neither do you grow rich taking a four-point profit in a bull market.”

💡 Take some profit at the first level, and leave a piece for the trend to carry.

“While amateurs go broke by taking large losses, professionals go broke by taking small profits.”

💡 If your average winner is smaller than your average loser, the fix is the exit, not more trades.

“I’m always going to be a trend trader. I’m always going to follow the momentum”

💡 When momentum and your opinion disagree, momentum gets the vote.

“Some people automatically sell the “winners” … and hold on to their “losers” … which is about as sensible as pulling out the flowers and watering the weeds.”

💡 Selling the winner early and holding the loser is backwards. Cut the loser at the stop, and let the winner’s rule decide.

“Don’t be a hero. Don’t have an ego. Always question yourself and your ability. Don’t ever feel that you are very good. The second you do, you are dead.”

💡 After a big green week, keep the size where it was.

“Markets are never wrong—opinions often are.”

💡 If price ignores your idea, the idea is what’s wrong.

“My approach works not by making valid predictions but by allowing me to correct false ones.”

💡 The morning plan is a guess with exits. The edge is how fast you correct it.

“…I’ll always make mistakes. I just try to make them less frequently, recognize them faster, and correct them immediately!”

💡 The goal is shorter mistakes, not zero mistakes.

“There is no harm in being sometimes wrong — especially if one is promptly found out.”

💡 A stop finds you out in minutes. Being wrong is cheap when it’s found fast, and expensive when you hide from it.

“Instead of hoping he must fear; instead of fearing he must hope. He must fear that his loss may develop into a much bigger loss, and hope that his profit may become a big profit.”

💡 Flip the instinct: fear the losing position, hope on the winning one.

“The consistency you seek is in your mind, not in the markets.”

💡 The market won’t get more predictable. Your execution can.

“I didn’t learn anything. I already knew that I wasn’t supposed to do that. I was just an emotional basket case and couldn’t help myself.”

💡 Knowing better doesn’t stop the chase. A hard rule written in advance does.

“A person who has not made peace with his losses is likely to accept gambles that would be unacceptable to him otherwise.”

💡 After a red morning, the long-shot contract you would never buy at the open starts to look good. That pull is the sign to stop for the day.

“Speculation is most dangerous when it looks easiest.”

💡 Three easy wins in a row is when size creeps up. Hold the size.

“Undertrade, undertrade, undertrade is my second piece of advice. Whatever you think your position ought to be, cut it at least in half.”

💡 New to options? Trade the smallest size until your journal shows twenty trades taken by the plan.

“When I am trading poorly, I keep reducing my position size. That way, I will be trading my smallest position size when my trading is worst.”

💡 Two red days in a row: half size until a green one.

“The way to build long term returns is through preservation of capital and home runs.”

💡 Small on ordinary days. Bigger only on the rare day everything lines up, and still inside your max risk.

“A long string of impressive numbers multiplied by a single zero always equals zero.”

💡 Twenty green days don’t survive one account-ending day. Size so no single day can be the zero.

“Never forget the six-foot-tall man who drowned crossing the stream that was five feet deep on average.”

💡 An average day’s range says nothing about today’s worst minute. Size for the deep spot.

“If I had to summarize money success in a single word it would be “survival.””

💡 Still trading next month is the first goal. Profit comes second.

“…it’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.”

💡 Track your average win and your average loss. The win rate alone lies.

“You don’t need to know what is going to happen next in order to make money.”

💡 You need a stop, a target and an edge, not a forecast for the close.

“An edge is nothing more than an indication of a higher probability of one thing happening over another.”

💡 A good setup tilts the odds. It doesn’t promise the trade.

“The goal of a successful trader is to make the best trades. Money is secondary.”

💡 Grade each trade on how well you followed the plan. The money follows the well-made trades.

“The correctness of a decision can’t be judged from the outcome.”

💡 Two columns in the journal: did I follow the plan, and what did it make. Read the first one first.

“If a method is truly valid, you should be able to explain it to a computer.”

💡 If you can’t write your entry rule in one sentence, you’ll trade it differently every day.

“…there is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market to-day has happened before and will happen again.”

💡 Today’s squeeze or pin looks like one you’ve seen before. Your journal is where you find it.

“We devote our intelligences to anticipating what average opinion expects the average opinion to be.”

💡 The obvious levels work partly because everyone watches them. Watch where the crowd expects the crowd to act.

“Some of the best trades come when everyone gets very panicky. The crowd can often act very stupidly in the markets.”

💡 A panic flush into a known support level, then a reversal, is where the panic trade pays.

“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”

💡 An investor’s rule, built for months, not minutes. Intraday, fear spiking into a level you planned is where a reversal can set up; fading a strong trend on a feeling is not this rule.

“If you buy the same securities everyone else is buying, you will have the same results as everyone else.”

💡 The same entry as the whole chat room gets the same slippage and the same stop-run.

“The tape tells the news minutes, hours and days before the news tickers, or newspapers, and before it can become current gossip.”

💡 A sudden burst of volume at a level is often the news before the headline.

“The chart is what will give you money or take money from you, so it is the only thing that you should ever consider when trading.”

💡 Opinions, headlines and your P&L are noise next to the bar in front of you.

“You Can’t Predict. You Can Prepare.”

💡 A daily plan is not a forecast. It is what you do at each level, in both directions.

“It isn’t the charts that give me my edge; it’s risk management. I get an edge from discipline, patience, and order execution.”

💡 Two traders, same chart. The one with the written plan and the stop usually comes out ahead.

“There are two parts to a trade: direction and timing. And, if you’re wrong about either one, you’re wrong on the trade.”

💡 With options, time is a cost. The right direction too late is still a losing contract.

“Predicting rain doesn’t count, building arks does.”

💡 Calling the CPI move doesn’t count. Having a plan for both outcomes does.

“I handle losing streaks by trimming down my activity. I just wait it out. Trying to trade during a losing streak is emotionally devastating. Trying to play ‘catch up’ is lethal.”

💡 After three stops, the day is over. No “one more to get back to green.”

“My biggest losses have always followed my largest profits.”

💡 The day after your best day gets your normal size, not a bigger one.

“…when you’re in a slump, try to be patient and wait for a trade that you feel very confident about and keep the bet size small.”

💡 In a slump, take only your cleanest setup, at your smallest size, to rebuild confidence, not the P&L.

“Don’t become discouraged, and certainly don’t try to recoup your losses by taking bigger risks.”

💡 After a loss, the next trade is the same size or smaller. Never bigger.

“Volatility is almost always a fee, not a fine.”

💡 A stop-out inside your plan is the fee. The fine is what a broken rule costs.