Thought of the Day (May 11, 2010)

If eight or ten people place their hands on your head and push you down, your knees will buckle, no matter how strong your are. The crowd may be stupid, but it is stronger than you. Crowds have the power to create trends. Never buck a trend. If the trend is up, you should only buy or stand aside. Never sell short because “the prices are too high” — never argue with the crowd. You do not have to run with the crowd — but you should never run against it.

Respect the strength of the crowd — but do not fear it. Crowds are powerful, but primitive, their behavior simple and repetitive. A trader who thinks for himself can take money from crowd members.

– Alexander Elder, Trading for a Living

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Thought of the Day (May 10, 2010)

It is critical to choose a method that is consistent with your own personality and comfort level. If you can’t stand to give back significant profits, then a long-term trend-following approach– even a very good one– will be a disaster, because you will never be able to follow it. If you don’t want to watch the quote screen all day (or can’t), don’t try a day-trading method. If you can’t stand the emotional strain of making trading decisions, then try to develop a mechanical system for trading the markets. The approach you use must be right for you; it must feel comfortable.

– Jack Schwager, The New Market Wizards

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Thought of the Day (May 9, 2010)

But we must remember that there are times when the market, or life itself, is incoherent, unclear, and/or conflicting; times when it isn’t us, it’s it.

– Justin Mamis, The Nature of Risk

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Thought of the Day (May 8, 2010)

Most things done well are also done simply. Because the market operates on common sense [!!?], the best approaches to it are basically very simple. If an analyst must resort to complex computer programming and model building, the chances are that he or she has not mastered the basic techniques and therefore requires an analytical crutch.

– Martin Pring, Technical Analysis Explained

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Thought of the Day (May 7, 2010)

Certainly one could argue that some traders lose because they don’t understand enough about the markets and therefore they usually pick the wrong trades. As reasonable as this may sound, it has been my experience that traders with losing attitudes pick the wrong trades regardless of how much they know about the markets. In any case, the result is the same– they lose. On the other hand, traders with winning attitudes who know virtually nothing about the markets can pick winners; and if they know a lot about the markets, they can pick even more winners.

– Mark Douglas, Trading in the Zone

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Thought of the Day (May 6, 2010)

When you are doing nothing, those speculators who feel they must trade day in and day out, are laying the foundation for your next venture. You will reap benefits from their mistakes.

– Jesse Livermore, Reminiscences of a Stock Operator

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Thought of the Day (May 5, 2010)

Patient traders obtain better prices than impatient traders do because they are willing to search longer and harder to arrange their trades at favorable terms. Impatient traders pay for the privilege of trading when they want to trade.

– Larry Harris, Trading & Exchanges

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