Harmony With Market

Your last trade obviously has nothing to do with the potential that exists in the market at any given moment. When you feel compelled to get back, it puts you in an adversary relationship with the market. The market becomes your opponent, it is you against it, instead of being in harmony with it.----The Disciplined Trader,Mark Douglas

Right Time

People don't seem to grasp easily the fundamentals of stock trading. I have often said that to buy on a rising market is the most comfortable way of buying stocks. Now, the point is not so much to buy as cheap as possible or go short at top prices, but to buy or sell at the right time. When I am bearish and I sell a stock, each sale must be at a lower level than the previous sale. When I am buying, the reverse is true. I must buy on a rising scale. I don't buy long stock on a scale down, I buy on a scale up.----REMINISCENCES OF A STOCK OPERATOR by Edwin LeFevre

Trend

I never hesitate to tell a man that I am bullish or bearish. But I do not tell people to buy or sell any particular stock. In a bear market all stocks go down and in a bull market they go up. I don't mean of course that in a bear market caused by a war, ammunition shares do not go up. I speak in a general sense. But the average man doesn't wish to be told that it is a bull or a bear market. What he desires is to be told specifically which particular stock to buy or sell. He wants to get something for nothing. He does not wish to work. He doesn't even wish to have to think. It is too much bother to have to count the money that he picks up from the ground. ----REMINISCENCES OF A STOCK OPERATOR by Edwin LeFevre

Never Revenge On The Market

There is a direct correlation between your ability to let the market tell you what it is likely to do next and the degree to which you have released yourself from the negative effects of any beliefs about losing, being wrong, and revenge on the markets. Not being aware of this relationship, most traders will continue to observe the market from a contaminated perspective.----The Disciplined Trader,Mark Douglas

Psychological

I sincerely feel that success in trading is 80 percent psychological and 20 percent one's methodology, be it fundamental or technical. For example, you can have a mediocre knowledge of fundamental and technical information, and if you are in psychological control, you can make money. ----The Disciplined Trader,Mark Douglas

Making Money

The market is never wrong in what it does; it just is. Therefore, you as an individual trader interacting with the market—first as an observer to perceive opportunity, then as a participant executing a trade, contributing to the overall market behavior—have to confront an environment where only you can be wrong, and it's never the other way around. As a trader, you have to decide what is more important—being right or making money—because the two are not always compatible or consistent with one another...----The Disciplined Trader,Mark Douglas

Self Control

If, in fact, you can't control or manipulate the markets and the markets have absolutely no power or control over you, then the responsibility for what you perceive and for your resulting behavior resides only in you. The one thing you can control is yourself. As a trader, you have the power either to give yourself money or to give your money to other traders.----The Disciplined Trader,Mark Douglas

You Can't Beat The Market

A man may beat a stock or a group at a certain time, but no man living can beat the stock market! A man may make money out of individual deals in cotton or grain, but no man can beat the cotton market or the grain market. It's like the track. A man may beat a horse race, but he cannot beat horse racing. -----REMINISCENCES OF A STOCK OPERATOR by Edwin LeFevre

Human Nature

“There is nothing new on Wall Street or in stock speculation. What has happened in the past will happen again, and again, and again. This is because human nature does not change, and it is human emotion that always gets in the way of human intelligence.
Of this I am sure.”—Jesse Livermore

Clear Thinking

But my greatest discovery was that a man must study general conditions, to size them so as to be able to anticipate probabilities. In short, I had learned that I had to work for my money. I was no longer betting blindly or concerned with mastering the technic of the game, but with earning my successes by hard study and clear thinking.----REMINISCENCES OF A STOCK OPERATOR by Edwin LeFevre

Begin To Learn

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. Did you get that? You begin to learn!--REMINISCENCES OF A STOCK OPERATOR by Edwin LeFevre

Diagnosis

If a stock doesn't act right don't touch it; because, being unable to tell precisely what is wrong, you cannot tell which way it is going. No diagnosis, no prognosis. No prognosis, no profit.----REMINISCENCES OF A STOCK OPERATOR by Edwin LeFevre

Plan

The Perfect speculator must know when to get in; more important he must know when to stay out: and most important he must know when to get out once he is in.---- Trend Following Michael W. Covel.

Guess

If the unusual never happened there would be no difference in people and then there wouldn't be any fun in life. The game would become merely a matter of addition and subtraction. It would make of us a race of bookkeepers with plodding minds. It's the guessing that develops a man's brain power. Just consider what you have to do to guess right. --REMINISCENCES OF A STOCK OPERATOR by Edwin LeFevre

Attitude

It was the change in my own attitude toward the game that was of supreme importance to me. It taught me, little by little, the essential difference between betting on fluctuations and anticipating inevitable advances and declines, between gambling and speculating.----REMINISCENCES OF A STOCK OPERATOR by Edwin LeFevre

Patient

The reason is that a man may see straight and clearly and yet become impatient or doubtful when the market takes its time about doing as he figured it must do. That is why so many men in Wall Street, who are not at all in the sucker class, not even in the third grade, nevertheless lose money. The market does not beat them. They beat themselves, because though they have brains they cannot sit tight.----REMINISCENCES OF A STOCK OPERATOR by Edwin LeFevre

Speculation

Speculation is dealing with the uncertain conditions of the unknown future. Every human action is a speculation in that it is embedded in the flux of time. --Ludwig von Mises

30 Percent Rule

Sell stocks whenever the market is 30% higher over a year ago.— Eugene D. Brody (Oppenheimer Capital)

Anticipate

I can't tell you how it came to take me so many years to learn that instead of placing piking bets on what the next few quotations were going to be, my game was to anticipate what was going to happen in a big way.--REMINISCENCES OF A STOCK OPERATOR by Edwin LeFevre

30 Week Moving Avearge

Pullbacks near the 30-week moving average are often good times to take action. — Michael Burke (Investors Intelligence)

Too Soon

Wall Street’s graveyards are filled with men who were right too soon. — William Hamilton

Central Banks

The job of central banks: To take away the punch bowl just as the party is getting going.— William McChesney Martin(Federal Reserve Chairman 1951-1970, 1906-1998)

Don't Fight The Fed

Stocks are super-attractive when the Fed is loosening and interest rates are falling.In sum: Don’t fight the Fed!— Martin Zweig

Speculation

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

Cash

There’s nothing wrong with cash. It gives you time to think.— Robert Prechter, Jr. (Elliott Wave Theorist)

Ignorance

Ignorance is not knowing something; stupidity is not admitting your ignorance.— Daniel Turov (Turov on Timing)

Bottom

If buying equities seems, the most hazardous and foolish thing you could possibly do, then you are near the bottom that will end the bear market.— Joseph E. Granville

Ten Percent Rule

Only buy stocks when the market declines 10% from that date a year ago, which happens once or twice a decade.— Eugene D. Brody (Oppenheimer Capital)

Falling

You know a country is falling apart when even the government will not accept its own currency.— Jim Rogers (Financier, Adventure Capitalist, b. 1942)

Humble

Become more humble as the market goes your way.— Bernard Baruch

Success

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

Mistake

The worst mistake investors make is taking their profits too soon, and their losses too long.— Michael Price (Mutual Shares Fund)

Success

Success is going from failure to failure without loss of enthusiasm.— Winston Churchill (British statesman, 1874-1965)

Return

In investing, the return you want should depend on whether you want to eat well or sleep well. — J. Kenfield Morley

Earning

When a company reports higher earnings for its first quarter (over its previous year’s first quarter), chances are almost five to one it will also have increased earnings in its second quarter. — Niederhoffer, Cross & Zeckhauser

Emotions

Your emotions are often a reverse indicator of what you ought to be doing. — John F. Hindelong (Dillon, Reed)

Truth

Every truth passes through three stages before it is recognized. In the first it is ridiculed; in the second it is opposed; in the third it is regarded as self evident. — Arthur Schopenhauer (German philosopher, 1788-1860)

Expert

An expert is a person who avoids small error as he sweeps on to the grand fallacy.----- Benjamin Stolberg

Habit

The difference between great people and others is largely a habit — a controlled habit of doing every task better, faster and more efficiently.— William Danforth (Ralston Purina founder)

Habit

The difference between great people and others is largely a habit— a controlled habit of doing every task better, faster and more efficiently.— William Danforth (Ralston Purina founder)

Energy

We are like tenant farmers chopping down the fence around our house for fuel when we should be using Nature’s inexhaustible sources of energy — sun, wind and tide. I’d put my money on the sun and solar energy. What a source of power! I hope we don’t have to wait until oil and coal run out before we tackle that.— Thomas Alva Edison (1847-1931)

Right

You know you’re right when the other side starts to shout.— I. A. O’Shaughnessy

Timing

When the strike of a hawk breaks the body of its prey, it is because of timing.---- Sun Tzu

Market Price

The generally accepted view is that markets are always right — that is, market prices tend to discount future developments accurately even when it is unclear what those developments are. I start with the opposite point of view. I believe that market prices are always wrong in the sense that they present a biased view of the future.— George Soros (1987, Financier, philanthropist, political activist, author and philosopher, b. 1930)

Gaps

Gaps are closed within two days in 90% of all occasions. If they are not closed it indicates that the market will continue strongly in that direction. -- Borsellino.

Least Resistance

A man ought not to be led into trading by tokens. He should wait until the tape tells him that the time is ripe. As a matter of fact, millions upon millions of dollars have been lost by men who bought stocks because they looked cheap or sold them because they looked dear. 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 his signal to get busy. -------REMINISCENCES OF A STOCK OPERATOR by Edwin LeFevre

Moving Average

It’s a buy when the 10-week moving average crosses the 30-week moving average and the slope of both averages is up.— Victor Sperandeo (Trader Vic—Methods of a Wall Street Master)

Bottom

I keep hearing “Should I buy? Should I buy?”When I start hearing “Should I sell?” that’s the bottom.— Nick Moore (Portfolio manager,Jurika & Voyles, TheStreet.com Mar. 12, 2001)

Volatility

Short-term volatility is greatest at turning points and diminishes as a trend becomes established. — George Soros (Financier, philanthropist, political activist, author and philosopher, b. 1930)

Self-Examination

I believe that most people are not inclined to look inward, but prefer to live in the land of denial and rationalization. And I take the position that learning the fundamentals of trading success requires much more self-examination. I believe that the more consciousness you bring to this process, the more successful you will be.----Trading to Win, Ari Kiev

Interpretation

To keep experiencing the novelty and freshness of the market, and to keep from being trapped by your preconceptions, it's important to keep distinguishing between the tape and your interpretations of the tape. View as neutral both the events and your inclination to impose your interpretations on them. You enter the market without expectations, surrendering to it rather than struggling with it for personal gain.Ultimately, you are able to fine-tune your responses.----Trading to Win, Ari Kiev

Contrary

The master trader trades from a perspective of rationality, knowledge, and skill— not from an emotional or defensive perspective, not in order to feel "complete" or "excited." To succeed at trading you have to be willing to do things contrary to human nature. You need to hold on to or get bigger in winning trades and get out of losing trades faster.----Trading to Win, Ari Kiev

Think

You have to think for yourself.It always amazes me how high-IQ people mindlessly imitate.I never get good ideas talking to other people.----Warren Buffett

Pray

The worst trades are generally when people freeze and start to pray and hope rather than take some action.— Robert Mnuchin (Goldman, Sachs)

Believe

In the end, I always believe my eyes rather than anythings else .----Warren Buffett

Predictable

The fact that people will be full of greed,fear, or folly is predictable.The sequence is not predictable.---- Warren Buffett.

Doubt

In case of doubt, decide in favour of what is correct -- Karl Kraus

Bets

There are just four kinds of bets. There are good bets, bad bets, bets that you win, and bets that you lose. Winning a bad bet can be the most dangerous outcome of all, because a success of that kind can encourage you to take more bad bets in the future, when the odds will be running against you. You can also lose a good bet, no matter how sound the underlying proposition, but if you keep placing good bets, over time, the law of averages will be working for you.----Larry Hite

Volume

Small volume is usually accompanied by a fall in price; large volume by a rise in price.— Charles C. Ying (Computer Study)

Indicator

Your emotions are often a reverse indicator of what you ought to be doing.— John F. Hindelong (Dillon, Reed)

Blood

The time to buy is when blood is running in the streets.— Baron Nathan Rothschild (London financier, 1777-1836)

History

In the stock market those who expect history to repeat itself exactly are doomed to failure.— Yale Hirsch

Hates

The fewer analysts who follow a situation, the more pregnant its possibilities…if Wall Street hates a stock, buy it. — Martin T. Sosnoff

General Conditions

Disregarding the big swing and trying to jump in and out was fatal to me. Nobody can catch all the fluctuations. In a bull market your game is to buy and hold until you believe that the bull market is near its end. To do this you must study general conditions and not tips or special factors affecting individual stocks. Then get out of all your stocks; get out for keeps! Wait until you see—or if you prefer, until you think you see—the turn of the market; the beginning of a reversal of general conditions. You have to use your brains and your vision to do this; otherwise my advice would be as idiotic as to tell you to buy cheap and sell dear. One of the most helpful things that anybody can learn is to give up trying to catch the last eighth—or the first. These two are the most expensive eighths in the world. They have cost stock traders, in the aggregate, enough millions of dollars to build a concrete highway across the continent.----.----REMINISCENCES OF A STOCK OPERATOR by Edwin LeFevre

Time To Sell

Every time everyone’s talking about something, that’s the time to sell. — George Lindemann(Billionaire, Forbes)

Thinks

The dissenter (or “contrary investor”) is every human at those moments of his life when he resigns momentarily from the herd and thinks for himself. — Archibald MacLeish (American poet, writer and political activist, 1892-1982)

Luck

I’m a great believer in luck, and I find the harder I work the more I have of it. — Thomas Jefferson

Edge

Investors operate with limited funds and limited intelligence, they don’t need to know everything. As long as they understand something better than others, they have an edge. — George Soros (Financier, philanthropist, political activist, author and philosopher, b. 1930)

Greed-Fear

Securities pricing is, in every sense, a psychological phenomenon that arises from the interaction of human beings with fear. Why not greed and fear as the equation is usually stated? Because greed is simply fear of not having enough.— John Bollinger (Bollinger Capital Management, created Bollinger Bands, Capital Growth Letter, Bollinger on Bollinger Bands)

Fearful-Greedy

You try to be greedy when others are fearful, and fearful when others are greedy. --Warren Buffett

Bends

Observe that the blade of glass that resists the lawn mower gets cut down, while the blade that bends remains uncut -- Paul Todor Jones

Trend

In an uptrend, if a higher high is made but fails to carry through, and prices dip below the previous high, the trend is apt to reverse. The converse is true for downtrends.— Victor Sperandeo(Trader Vic — Methods of a Wall Street Master)

Hoping

Turning a losing trade into an “investment” is a common disease among small private traders, but some institutional traders also suffer from it. Disasters at banks and major financial firms occur when poorly supervised traders lose money in short-term trades and stick them into long-term accounts, hoping that time will bail them out.----Dr. Alexander Elder

Against The General Trend

It was simple enough. In a bull market the trend of prices, of course, is decidedly and definitely upward. Therefore whenever a stock goes against the general trend you are justified in assuming that there is something wrong with that particular stock. It is enough for the experienced trader to perceive that something is wrong. He must not expect the tape to become a lecturer. His job is to listen for it to say "Get out!" and not wait for it to submit a legal brief for approval. -----REMINISCENCES OF A STOCK OPERATOR by Edwin LeFevre

Success

Success actually can stimulate fears about failing and about the impossibility of success. These increased anxiety levels may result in selfdestructive behavior and a succession of losing trades that bring the trader back to the starting point.----Trading to Win, Ari Kiev

Cool

Nothing gives one person so much advantage over another as to remain always cool and unruffled under all circumstances.— Thomas Jefferson

Accept

To be a successful trader, you must accept total responsibility for your decisions and actions.----Dr. Alexander Elder

Taking The Loss

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 to the soul.— Jesse Livermore

Screaming Buy

When a falling stock becomes a screaming buy because it cannot conceivably drop further, try to buy it 30 percent lower.
— Al Rizzo (1986)

Insider Purchase

Almost any insider purchase is worth investigating for a possible lead to a superior speculation. But very few insider sales justify concern.— William Chidester

Averaging Down

Averaging down in a bear market is tantamount to taking a seat on the down escalator at Macy’s.
— Richard Russell (Dow Theory Letters, 1984)

Chart

Charts not only tell what was, they tell what is; and a trend from was to is (projected linearly into the will be) contains better percentages than clumsy guessing.
— R. A. Levy

Bail & PAY

A bull market tends to bail you out of all your mistakes. Conversely, bear markets make you PAY for your mistakes.— Richard Russell (Dow Theory Letters)

Fact

If the models are telling you to sell, sell, sell, but only buyers are out there, don’t be a jerk. Buy!
— William Silber, Ph.D. (N.Y.U., Newsweek, 1986)

Knowledge and Discipline

A successful trader must hop over several high hurdles— and keep hopping. Being better than average is not good enough—you have to be head and shoulders above the crowd. You can win only if you have both knowledge and discipline.----Dr. Alexander Elder