10 Top Lessons From the Book “Reminiscences of a Stock Operator”
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“A man must believe in himself and his judgment if he expects to make a living at this game.”
“After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight!”
“Another lesson I learned early is that there is nothing new in Wall Street. There can't be because speculation is as old as the hills. Whatever happens in the stock market to-day has happened before and will happen again.”
Speculators buy the trend; investors are in for the long haul; "they are a different breed of cats." One reason that people lose money today is that they have lost sight of this distinction; they profess to have the long term in mind & yet cannot resist following where the hot 💰
“Fear and hope remain the same; therefore the study of the psychology of speculators is as valuable as it ever was. Weapons change, but strategy remains strategy, on the New York Stock Exchange as on the battlefield.”
“My losses have taught me that I must not begin to advance until I am sure I shall not have to retreat.”
“If a man didn't make mistakes he'd own the world in a month. But if he didn't profit by his mistakes he wouldn't own a blessed thing.”
“A man cannot be convinced against his own convictions, but he can be talked into a state of uncertainty and indecision, which is even worse, for that means that he cannot trade with confidence and comfort.”
“People who look for easy money invariably pay for the privilege of proving conclusively that it cannot be found on this sordid earth.”
“A man must know himself thoroughly if he is going to make a good job out of trading in the speculative markets. To know what I was capable of in the line of folly was a long educational step.”
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Ed Seykota’s 10 Top Trading Principles that made him a fortune and a legend:
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Seykota was long through bull markets.
“If I am bullish, I neither buy on a reaction, nor wait for strength; I am already in. I turn bullish at the instant my buy stop is hit, and stay bullish until my sell stop is hit. Being bullish and not being long is illogical.”
Ed traded a system that fit his own personality.
“Systems don’t need to be changed. The trick is for a trader to develop a system with which he is compatible”
William J. O’Neil’s 10 trading principles that made him a fortune and a legend:
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He sells a stock he is holding after it has gone down 7% from his purchase price.
“I make it a rule to never lose more than 7% on any stock I buy. If a stock drops 7% below my purchase price, I will automatically sell it at the market – no second-guessing, no hesitation”
One of the major keys to his profitable trading was only having small losses when he was wrong.
“The whole secret to winning in the stock market is to lose the least amount possible when you’re not right.”
In trading less is more, less activity generally leads to more profits and smaller positions sizes leads to better odds of keeping profits over the long term. Less activity in trends allows an easier way to make money. Less position size leads to smaller losses when wrong.
It is better to specialize in trading, pick a market, pick a method and master it. It is better to be a master of one set up, pattern, stock, market, or system, than to dabble in many.