When you do what your emotions tell you to – on the spur of the moment – you are doing exactly what the “masses” are doing, and this is not generally profitable.
– Claude Rosenberg Jr, The Investor’s Anthology by Charles Ellis
On June 22, 2010, In Thought of the Day, by ElfLord
On June 21, 2010, In Thought of the Day, by ElfLord
What is the ultimate rationalization of a trader in a losing position? “I’ll get out when I’m even.” Why is getting out even so important? Because it protects the ego. I became a winning trader when I was able to say, “To hell with my ego, making money is more important.”
– Martin Schwartz , Market Wizards by Jack Schwager
On June 20, 2010, In Thought of the Day, by ElfLord
Before I began my trading career, I played a lot of poker. I read every book I could find on the subject and learned that poker isn’t a game of luck, but one of both risk and odds management. Leaving bluffs aside, if you bet or call only when the odds are in your favor and plan your bets so that you stay at the table, you will make money over time. That doesn’t mean you’ll win every hand, far from it. But if you always keep the odds in your favor and scale your bets accordingly, you will come out a winner in the long run.
– Victor Sperandeo, Trader Vic II: Principles of Professional Speculation
On June 19, 2010, In Thought of the Day, by ElfLord
It is stupidity which makes people “rush in where angels fear to tread.” And there is something about the Wall Street atmosphere which makes people think that whatever is to be done must be done at once, otherwise the opportunity will get away from them. I find that opportunities are coming along all the time, and that the majority are not as good as they look. So the best ones are worth waiting for.
– Richard Wyckoff, How I Trade and Invest in Stocks and Bonds
On June 18, 2010, In Thought of the Day, by ElfLord
The speculator is not an investor. His object is not to secure a steady return on his money at a good rate of interest, but to profit by either a rise or a fall in the price of whatever he may be speculating in. Therefore the thing to determine is the speculative line of least resistance at the moment of trading; and what he should wait for is the moment when that line defines itself, because that is the signal to get busy.
– Jesse Livermore, Reminiscences of a Stock Operator
On June 17, 2010, In Thought of the Day, by ElfLord
People become primitive and action-oriented when they join crowds. Crowds feel simple but strong emotions such as terror, elation, alarm, and joy. Crowds swing from fear to glee, from panic to mirth. A scientist can be cool an rational in his lab but make harebrained trades after being swept up in the mass hysteria of the market. A group can suck you in, whether you trade from a crowded brokerage office or from a remote mountaintop. When you let others influence your trading decisions, you lose your chance of success.
– Alexander Elder, Trading for a Living
On June 16, 2010, In Thought of the Day, by ElfLord
If there is one generalization about the whole subject of stock charts which we may suggest at the very introduction of our study, it is the definite caution that the reader be skeptical of any apparently sure thing.
– Richard Schabacker, Technical Analysis and Stock Market Profits