Your judgment will become poorer from the very time when you decide that you know more about the market than the market is telling you. From that moment your results will be unsatisfactory, for in this trading business the tape is the boss. You must learn to obey its orders, doing exactly what it tells you. When you can accomplish this, you are on the high road to success in your stock trading.
– Richard Wyckoff, Stock Market Technique No. 1
The more sophisticated you become as a trader, the more you will realize that trading is completely mental. It isn’t you against the markets, it’s just you. All the other traders participating to make the market provide you with an opportunity to make money from their divergent beliefs about the future. If people didn’t disagree about the future value of any particular commodity or stock, then there would be nothing to compel them to either bid a price higher or offer it lower, and the opportunity to profit from these changes would cease to exist. So the markets just offer the individual trader opportunity.
– Mark Douglas, The Disciplined Trader
It is my conclusion that playing the market is partly an art form, it is not just pure reason. If it were pure reason, then somebody would have figured it out long ago. That is why I believe every speculator must analyze his own emotions to find out just what stress level he can endure. Every speculator is different, every human psyche is unique, every personality exclusive to that person. Learn your own emotional limits before attempting to speculate-that is my advice to any one who has ever asked me what makes a successful speculator. If you can’t sleep at night because of your stock market position then you have gone too far; if this is the case, then sell your position down to the sleeping level.
– Jesse Livermore, Reminiscences of a Stock Operator
There is no rule that says you always have to have action; yet that is perhaps the most disastrous of all the common errors we noticed. Rather than continually confronting the market on its own often inscrutable terms, stop and ask yourself what you know, whether what you know is enough to act upon, and how you are relating to it.
Maybe it is a period when the market’s personality conflicts with yours, or something in your extra-market life is hampering your ability to view stock action objectively, or, simply, perhaps it’s a time when the markets course isn’t clear to anyone. Then it is best to step aside. You owe it to yourself to find out exactly how ready and able you are to play, because it’s yourself you end up playing against.
– Justin Mamis, When to Sell
Study and practice are the two things farthest removed from the minds of the majority. Everyone knows that people who engage in speculation for the first time do not want to bother with such details. The average man who comes to Wall Street comes to speculate, although he may pay in full for his purchases. All he asks is to be told “something good.” That is not speculation, it is gambling; for speculation, to quote Thomas F. Woodlock, “involves the use of intelligent foresight.” Most people use neither foresight nor intelligence.
– Richard Wyckoff, How I Trade and Invest in Stocks and Bonds
Recognize our single purpose when the market opens each morning. We are there to take other people’s money before they take ours.
– Alan Farley, The Master Swing Trader
There are numerous similarities between the serious trader and the serious gambler. In the casino, the difference between the winner and the loser is that the former leaves the table when he has reached his goal for the session, and the latter leaves when he has lost his stake. Most gamblers, like many traders, don’t realize that the only way they can stop gambling is by losing.
– Franklin Chu, The Mind of the Markets
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