Keep a Cash Reserve & Be Patient

There are times when playing the stock mar­ket that your money should be inactive - waiting on the sidelines in cash - waiting to come into play.

In the stockmarket - time is not money - time is time ­and money is money.
Often money that is just sitting can later be moved into the right situation at the right time and make a vast fortune – patience – patience.

Patience is the key to success not speed.
Time is a cunning speculator's best friend if he uses it right.

Remember the clever speculator is always patient and has a reserve of cash.

Jesse Livermore

Good Trading Quotes from “Techniques of Tape Reading”

This (Trading) is not a job where you get paid by the hour.
You get paid for doing the right thing.

Forget that your money is at stake. Money in trading account is just a tool for making money. Preserve your tool. You need it to make money.

Don’t let the outcome of one trade alter your trading discipline. One trade doesn’t make a system…

Trading is a game of probabilities. You don’t have to be right every time. You just have to follow your rules.

You decide your fate; the market doesn’t.

Pure followers of stock pickers will never be around… Learn or you are bankrupt.

Be aggressive in trending market and conservative in choppy market.

Take home runs when you can, but don’t beat yourself up about missing a few.
One trade should never make or break your account.

Vadym Graifer & Christopher Schumacher, Techniques of Tape Reading

Source: http://simplyoptionstrading.blogspot.com/2007/09/quotable-quotes.html

Warren Buffett’s Investment Wisdom

You want to be greedy when others are fearful,
and you want to be fearful when others are greedy.

Billionaire Warren Buffett

Money Management & Positive Expectancy

A good trading system gives you an edge in the market.
To use a technical term, it provides a positive expectancy over a long series of trials.
A good system ensures that winning is more likely than losing over a long series of trades.
If your system can do that, you need money management.
But if you have no positive expectancy, no amount of money management will save you from losing.

Dr Alexander Elder, Come Into My Trading Room

Risk / Money Management Strategy

Never risk more than 1% of your total equity in any one trade.
By risking 1%, I am indifferent to any individual trade.
Keeping your risk small and constant is absolutely critical.

Larry Hite

Get Out When You’re Wrong

Successful traders know that discipline is what allows them to enter their trades when the odds are in their favor and, more importantly, to get out when they’re wrong.
Being right is not the problem. What you do when you’re wrong is the crucial issue.

There are a lot of traders who buy then pray while the market goes against them, because they think that it will eventually go their way.
Most traders average down and wait for the market to turn their way.
Trading my way, I always have defined amount of money that I am willing to lose.
I let the market decide how much money I’m going to make.

Casey (In "“The Logical Trader” by Mark B. Fisher)

Source: Options Trading Beginner

Have A Plan

In trading, as in life, you need a plan. This plan includes not only the micro – a strategy for each and every trade you make – but also the macro – meaning why you trade, how you intend to reach that goal (your means to the desired end), and what you’ll do as an alternative if that doesn’t work out.

Know what you want to accomplish, how you intend to get there, and what you will do if it does – or does not – work out. Have a plan and stick with it. That works in trading, as well as in life.

Mark B. Fisher, The Logical Trader

Source: Options Trading Beginner

The Importance of Trading Records / Diary

Records are more important to your success than any indicator, system, or technical tools.
Even the best system is bound to have some holes, but good records will allow you to find them and plug them up.
A person who keeps detailed records makes a huge leap in his development as a trader.

Show me a trader with good records, and I’ll show you a good trader.

Dr Alexander Elder, Come Into My Trading Room

Stop A Losing Streak

The best way to stop a losing streak is to STOP!….
Stopping lets your emotions calm down and lets you reestablish your momentum with your intellect.

Marty Schwartz

Risk Management & No Overtrading

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.

Bruce Kovner

Money Management – Manage Your Downside

Being wrong is acceptable, but staying wrong is totally unacceptable.
Being wrong isn’t a choice, but staying wrong is.

To play any game successfully, you have to have some skill, an edge.
But beyond that, it is money management.
Good traders manage the downside;
they don’t worry the upside.

Mark Minnervini

Most Important Qualifications for a Successful Trader

I believe that one of the most important qualifications for a successful trader is “POISE”, which to me is defined as stability, a well balanced person with dignity of manner – as it relates to the stock market.
A poised person is a person who can handle their hopes and their fears in a calm manner.

The other qualification is “PATIENCE” to wait for the opportune time, when as many factors as possible are positioned in the traders favor.
Poise and patience are the close friends of successful traders.

The final qualification is “SILENT”. Keep your own silent counsel – keep your victories and your failures to yourself – learn from them both.

Poise, patience and silence are attributes that must be cultivated.
These virtues do not come automatically to the stock market trader.

Jesse Livermore, How To Trade In Stocks

No 1 Trading Survival Tips: Capital Preservation

Survive first and make money afterwards.

George Soros

If you don’t bet, you can’t win. If you lose all your chips, you can’t bet.

Larry Hite

Source: otakalawoo

Turtle Trading Principle

Trade with an edge, manage risk, be consistent, and keep it simple.

The entire Turtle training, and indeed the basis of all successful trading, can be summed up in these four core principles.

Curtis Faith, Way Of Turtle

Three Essential Components Of Trading

Every winner needs three essential components of trading: a sound individual psychology, a logical trading system and a good money management.

These essentials are three legs of a stool – remove one and the stool will fall together with the person who sits on it.

Losers try to build a stool with only one leg, or two at the most. They usually focus exclusively on trading systems.

Your trade must be based on clearly defined rules.
You have to analyze your feelings as you trade, to make sure that your decisions are intellectually sound.
You have to structure your money management so that no string of losses can kick you out of the game.

Dr Alexander Elder, Trading For A Living

Source: Options Trading Beginner

Emotion Is More Important Than Intelligence In Trading

There is nothing new on Wall Street or in stock speculation.
What has happened in the past will happen again, and again, and again.
This is because human nature does not change, and it is human emotion, solidly built into human nature, that always gets in the way of human intelligence.
Of this I am sure.

Jesse Livermore

Warren Buffet’s Rules of Investing

Rule number one of investing is never lose money.
Rule number two is never forget rule number 1.

Warren Buffet

Knowledge And Patience

The essential to success in the stock market is knowledge and patience.
So few people succeed in the market because they have no patience and are generally ignorant of the market and finally they want to get rich quickly.

Anyone who figures that his success in dependent upon chance may as well stay out of the market.
His attitude is wrong from the very start.
The great trouble with the average person who buys securities is that they think the market is a gambling proposition.

Jesse Livermore, How To Trade In Stocks

Stick To Your Trading Rules

Successful trading is about finding the rules that work and then sticking to those rules.

William J. O’neil

Why Chart Patterns Repeat Themselves

All through time, people have basically acted and re-acted the same way in the market as a result of: greed, fear, ignorance, and hope.
That is why the numerical formations and patterns recur on a constant basis.

Jesse Livermore, How To Trade In Stocks