Trading Quotes

  • By Luke Andresen

  • June 15, 2015
  • 11:07 am BST

Trading Quotes from the worlds best traders

You can be free. You can live and work anywhere in the world. You can be independent from routine and not answer to anybody. This is the life of a successful trader. Many aspire to this but few succeed. An amateur looks at a quote screen and sees millions of dollars sparkle in front of his face. He reaches for the money – and loses. He reaches again – and loses more. Traders lose because the game is hard, or out of ignorance, or lack of discipline or because of both. – ALEXANDER ELDER

Every winner needs to master three essential components of trading; a sound individual psychology, a logical trading system and good money management. These essentials are like 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 trades 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. – ALEXANDER ELDER

My ability to do what is uncomfortable enhances the profitability as I have a willingness to buy a stock on extreme strength following a significantly bullish news item. In such situations, most investors will wait for a reaction that never comes, or at the very least will place a price limit on that buy order. I also realize that if the news is sufficiently significant, the only way to buy the stock is to buy the stock. Any more cautious approach is likely to result in missing the move. In a similar fashion, one should also be ready to immediately liquidate a holding, even on a sharp one-day decline, if a negative news item has changed the outlook for the stock. The rule is : Do what is right, not what is comfortable. – RICHARD DRIEHAUS


Markets offer unlimited opportunities for self-sabotage, as well as for self-fulfillment. Acting out your internal conflicts in the marketplace is an expensive proposition. Traders who are not at peace with themselves often try to fulfill their contradictory wishes in their market. If you do not know where you are going, you will wind up somewhere you never wanted to be. You can succeed in trading only if you can handle it as a serious intellectual pursuit. Emotional trading is lethal. To help ensure success, practice defensive money management. A good trader watches his or her capital as successfully as a professional scuba-diver watches his or her air supply. – ALEXANDER ELDER

Most often, traders have four fears. There’s the fear of being wrong, the fear of losing money, the fear of missing out and the fear of leaving money on the table. I found that basically, those four fears accounted for probably 90% to 95% of the trading errors that we make. Let’s put it this way: If you can recognize opportunity, what’s going to prevent you from executing your trades properly? Your fear. Your fears immobilize you. Your fears distort your perception of market information in ways that don’t allow you to utilize what you know. – MARK DOUGLAS

We know that the random element in the market represents at least 40 to 60 percent activity. Therefore, it’s not logical to look at every tick or to think that every tick or every chart formation has meaning. They don’t. There are too many traders trying to look at the markets from too stringent an analytical viewpoint. Most of what happens in the markets is meaningless. Why try to interpret every little movement, every little reversal, every little tick? In trying to do too much, they’re actually paying too much attention to the market. You have to keep a distance from the market. Only then will you have the psychological resources to let your profits ride. You won’t be looking at every tick and interpreting it in a fearful way. – JAKE BERNSTEIN

Most aspiring traders underestimate the time, work, and money required to become successful. To succeed as a trader, one needs complete commitment. Just as in any entrepreneurial venture, you must have a solid business plan, adequate financing, and a willingness to work long hours. Those seeking shortcuts are doomed to failure. And even if you do everything right, you should still expect to, lose money during the first five years – losses that I view as tuition payments to be made to the school of trading. These are cold, hard facts that many would-be traders prefer not to hear or believe, but ignoring them doesn’t change the reality. – MARK D COOK

I believe that to be a good trader it’s very important to be rational and have your emotions under control. I’ve been trying for years to get rid of anger completely when I completely lose money, and I’ve come to the conclusion that it is impossible. I can work towards that goal, but until the day I die, I don’t think I’m ever going to be able to look a big loss in the face and not get angry. – MONROE TROUT

Managing risks is in many ways the foundation of the entire process. Managing risk comes down to two things. First is how you are going to place your stops. That goes back to cutting your losses short. Consider trading as a business venture. Managing risk means recognizing what the costs of trading are. Make a comprehensive plan. Winning traders always treat their trading like a game, but they also look at the whole thing as a money-making business. – GLEN RING

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

A major misconception people have about stock market is that they tend to confuse short-term volatility with long-term risk. The longer the time period, the lower the risk of holding equities. People focus too much on the short-term day-to-day, – week-to-week and month-to-month price changes – and they don’t pay enough attention to the long-term potential. They look at all movement as negative, whereas I look at movement as a constructive element. For many investors, the lack of sufficient exposure to high-returning, more volatile assets is their greatest risk. In my opinion, investment vehicles that provide the least short-term volatility often embody the greatest long-term risk. Without significant price movement, you cannot achieve superior gains. – RICHARD DRIEUHAS

My basic philosophy is that price follows growth and that the key to superb performance in the stock market is picking the companies with the best potential earnings growth. Everything else is secondary. Interestingly, the high growth stocks that meet my criteria often sell at extremely high P/E ratios. The so-called prudent approach of buying only stocks with average to below-average P/Es will automatically eliminate many of the best performers. The stocks that I tend to buy are also often companies that are not followed by, or only lightly followed by industry analysts, a characteristic that I believe lead to greater inefficiencies and hence greater opportunities. – RICHARD DRIEUHAS

To be a successful trader, you have to be able to admit mistakes. People who are very bright don’t make very many mistakes. In a sense, they generally are correct. In trading, however, the person who can easily admit to being wrong is the one who walks away a winner. Besides trading, there is probably no other profession where you have to admit you’re wrong. In trading, you can’t hide your failures. Your equity provides a daily reflection of your performance. The trader who tries to blame his losses on external events will never learn from his mistakes. For a trader, rationalization is a guaranteed road to ultimate failure. –VICTOR SPERANDEO

I think paper trading is the worst thing you can do. If you are a beginner, trade with an amount of money that is small enough so that you can afford to lose it, but large enough so that you will feel the pain if you do. Otherwise, you are fooling yourself. If you go from paper trading to real trading, you’re going to make totally different decisions because you’re not used to being subjected to the emotional pressure. Nothing is the same. It’s like shadowboxing and then getting in the ring with a professional boxer. What do you think is going to happen? You’re going to crawl up into a turtle position and get the crap beat out of you because you’re not used to really getting hit. The most important thing to becoming a good trader is to trade.

Most of traders lose because they don’t have a winning strategy. Apart from this even among those traders who do, many don’t follow their strategy. Trading puts pressure on weaker human traits and seems to seek out each individual’s Achilles’ heel. – GILL BLAKE

One common adage about trading is that is completely wrongheaded is : You can’t go broke trading profits. That’s precisely how many traders do go broke. While amateurs go broke by taking large losses, professionals go broke by taking small profits. The problem in a nutshell is that human nature does not operate to maximize gain but rather to maximize the chances of gain. The desire to maximize the number of winning trades( or minimize the number of losing trades) works against the trader. The success rate of trades is the least important performance statistic and may even be inversely related to performance. – WILLIAM ECKHARDT

The ability to change one’s mind is probably a key characteristic of successful traders. Dogmatic and rigid personalities rarely succeed in markets. The markets are a dynamic process and sustained trading success requires the ability to modify and even change strategies as markets evolve. Successful traders have the ability to adapt to the changing dynamics of the market and in the process maintain their consistency of performance. – GILL BLAKE

Since most small to moderate profits tend to vanish, the market teaches you to cash them in before they get away. Since the market spends more time in consolidations than in trends, it teaches you to buy dips and sell rallies. Since the market trades through the same prices again and again and seems, if only you wait long enough to return to prices it has visited before, it teaches you to hold on to bad trades. The market likes to lull you into false security of high success rate techniques, which often lose disastrously in the long run. The general idea is that what works most of the time is nearly the opposite of what works in the long run. –WILLIAM ECKHARDT

The most important advice is to never let a loser get out of hand. You want to be sure that you can be wrong twenty or thirty times in a row and still have money in your account. When I trade, I’ll risk perhaps 5 to 10 percent of the money in my account. If I lose on that trade, no matter how strongly I feel, on my next trade I’ll risk no more than about 4 percent of my account. If I lose again, I’ll drop the trading size down to about 2 percent. I’ll keep on reducing my trading size as long as I’m losing. I’ve gone from trading as many as three thousand contracts per trade to as few as ten. – RANDY McKAY

It takes only 1 or 2 good trades to make up for 10 small losing trades, and so if you are in a good trend, stay with it. Have a trailing stop or retracement level you are willing to let a profit retreat to, and if it doesn’t hit it and you see no other reason to exit, hold on for the ride. –MARCEL LINK

One way to get more realistic about trading is to consider it a serious full-fledged business. To succeed, one should be no less serious than any other individual who starts and owns a business. When starting a business one should always make sure to have enough capital to see it through properly. No one expects a new venture to turn a profit right away.- MARCEL LINK

You shouldn’t expect to be a success overnight, and you need to be realistic about how long that will take. I’d say that it takes 2 to 5 years before you have paid all of your tuition and dues as a trader. During the first couple of years the overall goal of a trader should not be to make X amount of dollars; it should be to still have enough capital to be trading with after that time is over with; making money will come on its own. – MARCEL LINK

Each trading failure is a sign that you are doing something wrong; it is not necessarily a good predictor of ultimate potential failure or success.
To survive you have to learn to limit your losses. If you don’t survive then you have no chance to learn any more. – John Piper

Next comes discipline, a key factor in trading markets. You have to learn about your own emotions and control them. This takes discipline. You need to develop a methodology that gives you an edge, and if you are going to use that you will need the discipline to do so. –John Piper
The trick is not being contrarian but being contrarian at the right time.

When you’re trading at your biggest, you should be making money instantaneously.

Don’t get caught in a situation in which you can lose a great deal of money for reasons you don’t understand.


Do your own thing (independence) and do the right thing (discipline)

All traders make mistakes, great traders, however, limit the damage.

Don’t worry about what the markets are going to do, worry about what you are going to do in response to the markets.

Life isn’t worth living unless you’re willing to take some big chances and go for broke.– Eliot Wiggington

Do independent research before buying a stock. People do more research when buying a Television then they do before buying a stock

Successful speculation implies taking risks when the odds are in your favour

Don’t force trades. Do not attempt to create an opportunity where one does not exist. Be patient.

The fruits of your trading or investment success will be in direct ratio to the honesty and sincerity of your own effort in keeping your own records, doing your own thinking, and reaching your own conclusions. You cannot wisely read a book on ‘ how to keep fit’ and leave the physical exercise to another. – Jesse Livermore

Never let your market decisions be restricted or influenced by concern over what others might think. Don’t worry about looking stupid.
I believe that systems tend to be more useful or successful for the originator than for someone else. It’s more important that an approach be personalized: otherwise, you won’t have the confidence to follow it. It’s unlikely that someone else’s approach will be consistent with your own personality. It’s also possible that individuals who become successful traders are not the type to use someone else’s approach and that successful traders don’t sell their systems – GILL BLAKE

Make sure that you have the edge. Know what your edge is and employ rigid risk control rules. Basically, when you get down to it, to make money, you need to have an edge and employ good money management. Good money management alone isn’t going to increase your edge at all. If your system isn’t any good, you’re still going to lose money, no matter how effective your money management rules are. But if you have an approach that makes money, then money management can make the difference between success and failure –MONROE TROUT

My trading style blends both the risk-oriented and conservative personality of my personality. I take the risk-oriented part of my personality and put it where it belongs to : trading. And, I take the conservative part of my personality and put it where it belongs to money management. My money management techniques are extremely conservative. I never risk anything approaching the total amount of money in my account, let alone my total funds. –RANDY McKAY

Traders should avoid putting stops in the obvious places. For example, rather than placing a stop 1 tick above yesterday’s high, put it either 10 ticks below the high so you’re out before all that action happens, or 10 ticks above the high because may be the stops won’t bring the market up that fair. If you’re going to use stops, it’s probably best not to put them at the typical spots. Nothing is going to be 100 percent foolproof, but that’s a generally wise concept. – MONROE TROUT

Amateurs do not approach the task in a systematic or businesslike way. Entries are spasmodic rather than systematic, losses aren’t stopped and winners are cut short. The whole focus of amateurs is on entries. The amateur will remain a spectator until it seems safe to enter the market and then hold the position rigidly irrespective of the information the market tells them about how their position is faring. In a sense their strategy is to enter a ‘trade’ and hope for the best, rather than manage it. In chapter 1 we called this gambling. – Chris Shea

To expand your mind to the possibilities available in the stock market, I would suggest reading about successful traders or even better meeting them if you can. Find out what makes them successful and what they have achieved because it can alter your beliefs and change the possibilities in your inner world. If your belief system is that every time you enter a trade you lose money, then the chances are very good that this will occur. You will seek out opportunities that are in alignment with your beliefs. – Jeff Cartridge

“Don’t bottom fish” – Peter Lynch.

“Don’t try to buy at the bottom or sell at the top” – Bernard Baruch

“Maybe the trend is your friend for a few minutes in Chicago, but for the most part it is rarely a way to get rich” – Jim Rogers.
“I believe the very best money is made at the market turns. Everyone says you get killed trying to pick tops and bottoms and you make all your money by playing the trend in the middle. Well for twelve years I have been missing the meat in the middle but I have made a lot of money at tops and bottoms.” – Paul Tudor Jones.
“My basic advise is don’t lose money” – Jim Rogers.

“I’m more concerned about controlling the downside. Learn to take the losses. The most important thing about making money is not to let your losses get out of hand.” – Marty Schwartz.
“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.
“Rule number one of investing is never lose money. Rule number two is never forget rule number 1” – Warren Buffet.

“If you have an approach that makes money, then money management can make the difference between success and failure… … I try to be conservative in my risk management. I want to make sure I’ll be around to play tomorrow. Risk control is essential.” – Monroe Trout

“If you personalize losses, you can’t trade.” – Bruce Kovner

“The best traders have no ego. You have to swallow your pride and get out of the losses.” –Tom Baldwin

“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.

My weakness has always been being a bit premature on entering positions. I’ve learned to think to myself, “ Patience, patience , patience.” I try to wait until things set up just right before I take a trade. Then, when I am ready to take the trade, I slowly count to ten before I pick up the phone. It’s better to have the wrong idea and good timing than the right idea and bad timing. – LINDA BRADFORD RASCHKE

We use technical analysis not because we think it means something, but because other people think it means something. We are always looking for market participants to take us out of a trade, and in that sense, knowing the technical points at which people are likely to be buying or selling is helpful. – MICHAEL MASTERS

A great company could be a terrible investment if its price has already more than discounted the bullish fundamentals. Conversely, a company that has been experiencing problems and is the subject of negative news could be a great investment if its price decline has more than discounted the bearish information. Fundamentals are not bullish or bearish in a vacuum, they are bullish or bearish only relative to price. – JACK SCHWAGER

I started tasting success when I developed my own successful methodology and this was a slow gradual process that took years of research and trading experience. I also read just about every book I could find on the markets and successful individuals. Out of the hundreds of books that I read, there were probably no more than ten that had a major influence on me. However, I don’t think there is no such thing as a bad book, it’s still worthwhile. Sometimes, one sentence can even change your life. – MARK MINNERVINI

To succeed as a trader, it is absolutely necessary to have an edge. You can’t win without an edge, even with the world’s greatest discipline and money management skills. If you don’t have an edge, all that money management and discipline will do for you is to guarantee that you will gradually bleed to death. Incidentally, if you don’t know what your edge is, you don’t have one. – JACK SCHWAGER

I am a firm believer in predicting price direction, but not magnitude. I don’t set price targets. I get out when the market action tells me it’s the time to get out, rather than based on any consideration of how far the price has gone. You have to be willing to take what the market gives you. If it doesn’t give you very much, you can’t hesitate to get out with a small profit. –LINDA BRADFORD RASCHKE

My advice to new entrants to stock market is to approach it only with the help of professional advisors. Otherwise stay out of the business and stay completely away from the market. For novices to come in and try to generate profit in this incredibly complex industry is like me trying to do brain surgery on the weekends to pick up a little extra cash. – MARK RITCHIE

I put a great deal of effort into getting the best entry price possible. I feel this is probably one of my strongest skills. In day trading, a good entry price is critical because it buys you time to see how the market will react. If you buy because you think the market should bounce, but it only goes sideways, you’d better get out. Part of the trading process is a matter of testing the water. If your entry timing is good enough, you won’t lose much even when you’re wrong. –LINDA BRADFORD RASCHKE

The essential element is that the markets are ultimately based on human psychology, and by charting the markets you’re merely converting human psychology into graphic representations. I believe that the human mind is more powerful than any computer in analyzing the implications of this graph. – AL WEISS

People underestimate the time it takes to succeed as a trader. Some people come here and think they can sit with me for a week and become great traders. How many people when they went to college would’ve thought to walk up to the professor and say, “ I know the course is for a semester, but I think a week should be enough for me to get it.” Gaining proficiency is the same in trading as in any other profession – it requires experience, and experience takes time. – MARK D COOK

Being right is more important than being a genius. I think one reason why so many people try to pick tops and bottoms is that they want to prove to the world how smart they are. Think about winning rather than being a hero. Forget trying to judge trading success by how close you can come to picking major tops and bottoms, but rather by how well you can pick individual trades with merit based on favourable risk / return situations and a good percentage of winners. Go for consistency on a trade-to-trade basis, not perfect trades. – JACK SCHWAGER