Author Topic: Trading quotes and wisdoms  (Read 58 times)

Kaitsu

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Trading quotes and wisdoms
« on: November 19, 2022, 01:26:50 PM »
There are lots of famous quotes, sayings and wisdoms related to trading to be found in all kinds of books and all over the internet. I often find these to be useful, enlightening and even formative. I especially like those which are brief and pithy and with a practical message. So I thought it would be useful to collect some of these here for all to share.

This first one is not very glamorous but it gets to the heart of what trading is all about and is something that has certainy become deeply ingrained in my trading at all times:

"Trading effectively is about assessing probabilities"

There it is. Simple but profound. Whatever market we trade. We can read and talk and analyse til the cows come home, but when it comes to the actual trade, well, it is never a certainty. Therefore, the heart of the decision is always based on its probability.

And once we accept that then we also accept that losses are also going to happen and are a logical and inevitable integral part of the trading process. And once we grasp and accept that then the inevitable consequence is to recognise the crucial role of risk/money management in whether our trading is successful and consistent or patchy, inconclusive and failing.

Feel free to add any "wisdoms" or comments of your own....
Ships are safe in harbour - but that is not what ships are for....

Kaitsu

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Re: Trading quotes and wisdoms
« Reply #1 on: November 20, 2022, 06:35:08 AM »
I saw this one this morning whilst browsing. I am not sure how much, or little, I agree with it but its an aggressive challenge to what, I am sure, many (if not most) traders are seeking!!!

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 havenít even gotten as far as asking the right question, let alone getting the right answer. - Jack Schwager
Ships are safe in harbour - but that is not what ships are for....

Caesar

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Re: Trading quotes and wisdoms
« Reply #2 on: November 20, 2022, 03:42:06 PM »
Here's a couple that I've taken note of;

ďIn trading/investing, itís not about how much you make but rather how much you donít lose.Ē -Bernard Baruch

and in a similar vein;

Itís not whether youíre right or wrong thatís important, itís how much money you make when youíre right and how much you lose when youíre wrongĒ. -George Soros
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Kaitsu

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Re: Trading quotes and wisdoms
« Reply #3 on: November 20, 2022, 05:31:16 PM »
Two very good observations, @Caesar

There is clearly a widely-held belief amongst new traders that there is a fortune to be made from trading in a very quick time and even with a minimal account balance. This tends to concentrate attention on trying to make abnormally big profits from each trade rather than managing a steady growth of one's equity.

Because of this, I suspect many traders focus too much on each individual trade and not on their account balance. And when it is so easy to make many trades with modern systems and low time frames, there is a great tendency to overtrade with the end result that the account balance is depleted.

It is always worth remembering that risk exposure offering abnormally high rewards is usually matched with a similar risk of abnormally high losses...

One should look in a mirror and ask oneself, "Am I a trader or just a gambler"  ;)
Ships are safe in harbour - but that is not what ships are for....

Kaitsu

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Re: Trading quotes and wisdoms
« Reply #4 on: November 20, 2022, 08:03:09 PM »
It is claimed that Lenin once said:

"There are decades where nothing happens, and there are weeks where decades happen"

On a different timescale this is a great description of our markets and what we should keep in mind!
Ships are safe in harbour - but that is not what ships are for....

Kaitsu

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Re: Trading quotes and wisdoms
« Reply #5 on: November 22, 2022, 07:42:03 PM »
This is one attributed to Alexander Elder

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

Whatever method or approach we use to decide our trades there are always bad, mediocre, and good set-ups.

It is not always easy to focus on only taking the top-grade set-ups, but it is the lower quality ones that generally end with the exasperating response: "Why did I do that???"

Here again, we are talking about the fine line that divides trading from gambling.

If one cannot differentiate between taking a punt and a decision based on a high probability of success then one is unlikely to optimise one's long-term profitability.

A good success rate increases confidence which, in turn, leads to a gradual and controlled increase in position size, which leads to one's desired level of income on a consistent basis.
Ships are safe in harbour - but that is not what ships are for....