10 lessons from my book “New Trader, Rich Trader.”
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“You need to focus on a sound strategy, system, and trading plan and not profits. Good trading will create your profits, but focusing on your profits will usually lead to bad trading.”
“Before you place the trade, you need to have an exit strategy of how, when, and why you will take profits and what your stop loss will be. You have to plan to sell your stock at a specific percentage loss, price support breach, or trend change.”
“If you experience high levels of stress during trading, either your position size is too large or you don’t have enough confidence in your system. To reduce stress, lower your positions or do more testing on your system.”
“New Traders are impatient and look for constant action; Rich Traders are patient and wait for entry and exit signals.”
“I would suggest that you trade only to make money, not for entertainment or to prove something to yourself. Profitable trading is often boring. If you already know what you’re going to do before you trade, it takes a lot of the excitement out of it.”
If you have a trading plan & a system, there are no spontaneous trades. You’ll spend your time waiting for entry signals & exit signals. You’ll learn that your system makes you money in the long-term, but your ego loses you money in the short term. Trade your system, not opinions
“Your first job as a trader is to focus on the correct trading process, not profits.”
“Good trades are generally ones which show a profit from the beginning.”
“Don’t trade based on your opinions or feelings, only trade your system.”
“Trade only in the direction of the market trend. Let your system make all the decisions, not opinions & feelings. Buy only at the sweet spot on a chart. Become an expert in 1 method & the stocks on your watchlist. Trade where the volume is, not in illiquid stocks or markets.”
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Ten lessons from the book “Trend Following” by @Covel
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“There are 4 kinds of bets. There are good bets, bad bets, bets that you win, & 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 are against you.”
“We’re trying to exploit people’s reaction, which is embedded in prices and leads to trends.”
10 lessons from the book “Market Wizards” by Jack Schwager
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“ A way to determine the direction of the general market is to focus on how the leading stocks are performing. If the stocks that have been leading the bull market start breaking down, that is a major sign the market has topped.”
“Another important factor to watch is the Federal Reserve discount rate. Usually, after the Fed raises the rate two or three times, the market runs into trouble.”
What is surprising is not the magnitude of our forecast errors,but our absence of awareness of it. This is all the more worrisome when we engage in deadly conflicts: wars are fundamentally unpredictable. Owing to this misunderstanding of the causal chains between policy & action
“It is impossible for our brain to see anything in raw form without some interpretation. We may not even always be conscious of it.”
Top lessons from “How to Make Money in Stocks: A Winning System in Good Times or Bad:
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“Be completely objective and recognize what the marketplace is telling you, rather than trying to prove that what you said or did yesterday or six weeks ago was right. The fastest way to take a bath in the stock market is to try to prove that you are right & the market is wrong.”
“The whole secret to winning big in the stock market is not to be right all the time, but to lose the least amount possible when you’re wrong.”
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!”