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Kindle Notes & Highlights
If my gut feel of market conditions is not right, I don’t trade.
a market that is fundamentally and technically poised to move higher is not going to reverse direction because of a news item—even a dramatic one.
The best traders are the most humble.
The mistake most people make is they keep the same strategy all the time.
“If you are a broker, you are not a trader; if you are a trader, you are not a broker.”
just be myself. Let him make whatever he can, and I’ll make whatever I can.
Most traders don’t listen to your opinion; they only want to tell you their opinion.
when you don’t care, you do well, and when you try too hard, you don’t do well.
When you start being afraid to lose, you’re finished.
Never add to a loser.
you have to have a total disregard for money. You can’t trade for money.
You tend to go from one lot to five lots to ten lots to twenty lots to fifty lots.
If you had a really good trading system, you could make millions. Why would you sell it for $29.95?
When you are in a boat that springs a leak, you don’t drill another hole to let the water out.
Clear thinking, ability to stay focused, and extreme discipline. Discipline is number one:
You have to be able to say, “My method worked for this type of market, but we are not in that type of market anymore.”
It is important to realize that many of the great traders interviewed in this book were not immediately successful.
losing traders tend to be disorganized and impatient. They want action now.
An easy method that people can adopt right away is simply to control posture, breathing, and muscle tension. If you change those factors, you will probably find that you change your emotional state.
Most people approach trading to make a lot of money, and that is one of the primary reasons they lose. Because money is so important, they have trouble taking losses and letting profits run.
I’m too impatient with the markets. I get angry at the markets. I’m afraid at the wrong time. I’m too optimistic about what will happen.
how one can use body posture, breathing, and muscle control to manipulate one’s mental state.
Winners know they are responsible for their results; losers think they are not.
a losing trade can still reflect a correct trading decision. A losing trade that adheres to a profitable strategy is still a good trade because if repeated many times it will win on balance. There is no way a trader can know a priori which individual trade is likely to be a winner. Traders need to accept that a certain percentage of good trades will lose money. As long as a profitable strategy is implemented according to plan, a trade loss does not imply a trading mistake.
On the flip side, a winning trade can still be a poor trading decision.
Trading is a matter of probabilities.
Traders often confuse the concepts of winning and losing trades with good and bad trades. A good trade can lose money, and a bad trade can make money.
A bad trade follows a process that will lose money if repeated multiple times, but may make money on any individual trade.
how a trade is implemented is even more important than the trade idea itself. He seeks to implement a trade in the way that provides the best return-to-risk ratio and limits losses in the event the trade is wrong.
you have to make sure that you make money when you are right.
it is important not to be involved in the market when the opportunities are not there.
accepting the fact that you will sometimes end up liquidating losing positions right before they reverse dramatically.
Trading size needs to kept small enough so that fear does not become the prevailing instinct guiding your judgment.
When you restart trading, trade smaller until you have regained confidence.
If you find that your intuition is more right than wrong, trust it.
An annual return expectation will lead a trader to trade too small when opportunities are exceptionally favorable and too large when opportunities are absent. Caution against trading out of a desire to make money.
You cannot succeed in the markets by copying someone else’s approach, because the odds are remote that their method will fit your personality.
