Aphorisms and quotes

In the last post of this journey into psychology in trading, some aphorisms and quotes from the trading world, and beyond. I have not included the ones I have already mentioned in the various posts

The only truth is the current price. (Brokers’ wisdom)

A handful of patience is worth a bushel of brains. (Dutch proverb)

Vision without action is a daydream. Action without vision is a nightmare. (Japanese proverb)

Buy on rumour, sell on news. (Wall Street proverb)

Lose your opinion, not your money. (Wall Street proverb)

If stock market experts were so expert, they would be buying stock, not selling advice. (Norman Ralph Augustine)

I think investment psychology is by far the more important element, followed by risk control, with the least important consideration being the question of where you buy and sell. (Tom Basso)

You have to be okay with wins and losses. You can't just be looking for the wins and, when the losses happen, you can't buy more and more because you're sure it's going to bounce. We call that revenge trading. (Josh Brolin)

Money doesn't always bring happiness. People with ten million dollars are no happier than people with nine million dollars. (Hobart Brown)

It takes 20 years to build a reputation and 5 minutes to ruin it. If you think about that, you’ll do things differently. (Warren Buffett)

It is not necessary to do extraordinary things to get extraordinary results. (Warren Buffett)

The dumbest reason in the world to buy a stock is because it’s going up. (Warren Buffett)

You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ. (Warren Buffett)

No matter how great the talent or efforts, some things just take time. You can’t produce a baby in one month by getting nine women pregnant. (Warren Buffett)

I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful. (Warren Buffett)

Anything can happen in stock markets and you ought to conduct your affairs so that if the most extraordinary events happen, that you’re still around to play the next day. (Warren Buffett)

The business schools reward complex behaviour more than simple behaviour, but simple behaviour is more effective. (Warren Buffett)

In the business world, the rear-view mirror is always clearer than the windshield. (Warren Buffett)

You can't reach success in investment if you don't think independently. (Warren Buffett)

They told me to buy this stock for my old age. It worked wonderfully. Within a week I was an old man! (Eddie Cantor)

Nobody outside of you is worthy of managing your money because only you know the effort you went through to get it. (David Carli)

Trading is like tennis: you don’t have to win every point; you have to win the game. (David Carli)

You don’t become a trader overnight. If you want to be an engineer, you have to study and work hard for several years. Why should trading be any different? (David Carli)

Always do whatever’s next. (George Carlin)

First ask yourself: what is the worst that can happen? Then prepare to accept it. Then proceed to improve on the worst. (Dale Carnegie)

The best trading method is to take advantage of the crowd’s greed and fear. (Jimmy Chow)

Success consists of going from failure to failure without loss of enthusiasm. (Winston Churchill)

Have no fear of perfection, you'll never reach it. (Salvador Dalì)

It is not enough to have a good mind. The main thing is to use it well. (René Descartes)

A man should look for what is, and not for what he thinks should be. (Albert Einstein)

The goal of a successful trader is to make the best trades. Money is secondary. (Alexander Elder)

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. (Alexander Elder)

The markets are unforgiving, and emotional trading always results in losses. (Alexander Elder)

To be a good trader, you need to trade with your eyes open, recognize real trends and turns, and not waste time or energy on regrets and wishful thinking. (Alexander Elder)

You have to identify your weaknesses and work to change. Keep a trading diary - write down your reasons for entering and exiting every trade. Look for repetitive patterns of success and failure. (Alexander Elder)

You can be free. You can live and work anywhere in the world. You can be independent of routine and not answer to anybody. (Alexander Elder)

One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute. (William Feather)

Being ignorant is not so much a shame, as being unwilling to learn. (Benjamin Franklin)

By failing to prepare, you are preparing to fail. (Benjamin Franklin)

A successful trader studies human nature and does the opposite of what the general public does. (William Delbert Gann)

Frankly, I do not see markets; I see risks, rewards, and money. (Larry Hite)

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. (Larry Hite)

The secret to being successful from a trading perspective is to have an indefatigable and an undying and unquenchable thirst for information and knowledge. (Paul Tudor Jones)

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)

I’m always thinking about losing money as opposed to making money. Don’t focus on making money, focus on protecting what you have. (Paul Tudor Jones)

Successful investing is anticipating the anticipations of others. (John Maynard Keynes)

Markets can remain irrational longer than you can remain solvent. (John Maynard Keynes)

Investing is an activity of forecasting the yield over the life of the asset; speculation is the activity of forecasting the psychology of the market. (John Maynard Keynes)

It is better to be roughly right than precisely wrong. (John Maynard Keynes)

In the long run, we are all dead! (John Maynard Keynes)

If you don’t feel right, you won’t trade right, and that is the time to remain on the side-lines. (George Kleinman)

If you are a novice, it makes sense to “paper trade” before you trade for real. If you are trading currently, you should keep a logbook. Log your triumphs and your failures (George Kleinman)

Looking back only brings regrets, so you need to face the future with optimism, knowledge, patience, and guts. (George Kleinman)

Patience is the most important of the essential qualities for trading success. A good trader possesses the patience to wait for the right opportunity. (George Kleinman)

You need a well-thought-out and thoroughly researched trading plan before you begin, and you need to do your homework. Your plan should always have a mechanism to cut the losses on the bad trades and to maximize profits aggressively on the good ones. You must be organized and remain focused at all times. If your plan is a good one, you need the consistency to stick with it during down periods. (George Kleinman)

Whenever I enter a position, I have a predetermined stop. That is the only way I can sleep. I know where I'm getting out before I get in. The position size on a trade is determined by the stop, and the stop is determined on a technical basis. I never think about other people who may be using the same stop, because the market shouldn't go there if I am right. (Bruce Kovner)

If you personalize losses, you can’t trade. (Bruce Kovner)

Fundamentalists who say they are not going to pay any attention to the charts are like a doctor who says he’s not going to take a patient’s temperature. (Bruce Kovner)

The game taught me the game. And it didn’t spare me rod while teaching. (Jesse Livermore)

It isn't as important to buy as cheap as possible as it is to buy at the right time. (Jesse Livermore)

The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance, or the get-rich-quick adventurer. They will die poor. (Jesse Livermore)

After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: it never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! (Jesse Livermore)

The desire for constant action irrespective of underlying conditions is responsible for many losses in Wall Street even among the professionals, who feel that they must take home some money every day, as though they were working for regular wages. (Jesse Livermore)

Emotional control is the most essential factor in playing the market. Never lose control of your emotions when the market moves against you. Don't get too confident over your wins or too despondent over your losses. (Jesse Livermore)

There is only one side to the stock market, and it is not the bull side or the bear side, but the right side. (Jesse Livermore)

A loss never bothers me after I take it. I forget it overnight. But being wrong, not taking the loss, that is what does damage to the pocketbook and the soul. (Jesse Livermore)

I learned early that 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 today has happened before and will happen again. I have never forgotten that. (Jesse Livermore)

There is nothing like losing all you have in the world for teaching you what not to do. And when you know what not to do in order not to lose money, you begin to learn what to do in order to win. (Jesse Livermore)

All through time, people have basically acted and reacted 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)

It is foolhardy to make a second trade if your first trade shows you a loss. Never average losses. Let this thought be written indelibly upon your mind. (Jesse Livermore)

No diagnosis, no prognosis. No prognosis, no profit. (Jesse Livermore)

A prudent speculator never argues with the tape. Markets are never wrong, opinions often are. (Jesse Livermore)

To anticipate the market is to gamble. To be patient and react only when the market gives the signal is to speculate. (Jesse Livermore)

The most important single factor in shaping security markets is public psychology. (Gerald M. Loeb)

Every trader has strengths and weakness. Some are good holders of winners but may hold their losers a little too long. Others may cut their winners a little short but are quick to take their losses. As long as you stick to your own style, you get the good and bad in your own approach. (Michael Marcus)

When I get hurt in the market, I get the hell out. It doesn’t matter at all where the market is trading. I just get out, because I believe that once you’re hurt in the market, your decisions are going to be far less objective than they are when you’re doing well… If you stick around when the market is severely against you, sooner or later they are going to carry you out. (Randy McKay)

Diversification is your buddy. (Merton Miller)

A good plan violently executed now is better than a perfect plan executed next week. (George S. Patton)

I do not measure a man’s success by how high he climbs but how high he bounces when he hits bottom. (George S. Patton)

If enough people suddenly wake up believing in a stock, it will, for that reason alone, go up in price and justify their beliefs. (John Allen Paulos)

People tend to avoid risk when seeking gains, but choose risk when trying to avoid losses. (John Allen Paulos)

There is safety in numbers. (Euripides c. 480 – c. 406 BC, a tragedian of classical Athens)

Anyone who thinks there's safety in numbers hasn't looked at the stock market pages. (Irene Peter)

No profession requires more hard work, intelligence, patience, and mental discipline than successful speculation. (Robert Rhea)

I know at last what distinguishes man from animals; financial worries. (Romain Rolland)

If your self-esteem rises and falls with your trading results, you and your trading are in trouble. (Ruth Barrons Roosevelt)

We need to check our egos at the door when we start to trade. Uncertainty is central to trading. If we add the uncertainty of our own self-image into the mix of the unknowable endemic to trading, we’re in for certain trouble sooner or later. (Ruth Barrons Roosevelt)

Buy when there's blood in the streets, even if the blood is your own and sell when also the taxi drivers told you what to buy. (Lionel Walter Rothschild)

The ability to foresee that some things cannot be foreseen is a very important quality. (Jean Jacques Rousseau)

I always define my risk, and I do not have to worry about it. (Tony Saliba)

A great trader is like a great athlete. You have to have natural skills, but you have to train yourself on how to use them. (Marty Schwartz)

When I became a winner, I said, “I figured it out, but if I am wrong, I am getting the hell out, because I want to save my money and go on to the next trade.” (Marty Schwartz)

Learn to take losses. The most important thing in making money is not letting your losses get out of hand. (Marty Schwartz)

A lot of people get so enmeshed in the markets that they lose their perspective. Working longer does not necessarily equate with working smarter. In fact, sometimes is the other way around. (Marty Schwartz)

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. (Ed Seykota)

Win or lose, everybody gets what they want out of the market. Some people seem to like to lose, so they win by losing money. (Ed Seykota)

The markets are the same now as they were five or ten years ago because they keep changing-just as they did then. (Ed Seykota)

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. (George Soros)

Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected. (George Soros)

Volatility is greatest at turning points, diminishing as a new trend becomes established. (George Soros)

The key to trading success is emotional discipline. If intelligence were the key, there would be a lot more people making money trading… I know this will sound like a cliché, but the single most important reason that people lose money in the financial markets is that they don’t cut their losses short. (Victor Sperandeo)

Making money has nothing to do with intelligence. To be a successful investor, you have to be able to admit mistakes. I trained a guy to trade who had a 188 IQ. He was on “Jeopardy” once and answered every question correctly. That same person never made a dime in trading for 5 years! (Victor Sperandeo)

Investing in the market without knowing what stage it is in is like selling life insurance to 20-year-olds and 80-year-olds at the same premium. (Victor Sperandeo)

Most people lose money because of the lack of emotional discipline -the ability to keep their emotions removed from investment decisions. Dieting provides an apt analogy. Most people have the necessary knowledge to lose weight-that is they know that in order to lose weight you have to exercise and cut your intake of fats. However, despite this widespread knowledge, the vast majority of people who attempt to lose weight are unsuccessful. Why? Because they lack emotional discipline. (Victor Sperandeo)

An investor who has all the answers doesn't even understand all the questions. (Sir John Templeton)

Bull markets are born on pessimism, grow on scepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell. If you want to have a better performance than the crowd, you must do things differently from the crowd. (Sir John Templeton)

The four most dangerous words in investing are: this time it's different. (Sir John Templeton)

A peak performance trader is totally committed to being the best and doing whatever it takes to be the best. He feels totally responsible for whatever happens and thus can learn from mistakes. These people typically have a working business plan for trading because they treat trading as a business. (Van K. Tharp)

October: this is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February. (Mark Twain)

Do not argue with the market, because it's like time: although it is not always good, it is always right. (Kenneth Walden)

Control your own destiny or someone else will. (Jack Welch)

Face reality as it is, not as it was or as you wish it to be. (Jack Welch)

Don't blame the Stock Exchange for your own mistakes. (Frank Williams)

Don’t measure yourself by what you have accomplished, but by what you should have accomplished with your ability. (John Wooden)

Failure is not fatal, but failure to change might be. (John Wooden)