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Let the market make the decisions, not your ego

  
  Education
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The rules are not hard to understand. Recognizing a profit from a loss is simple. If the rules are easy to grasp and a profit is distinguishable from a loss, where does the problem lie? What makes it so hard to apply the rules? There is something within each of us that has a power over our minds that prevents our acting according to what we have agreed is the proper course of action. That something is present in all of us and is very powerful, more powerful than anything I know. Let’s call it ego. Until we learn to get rid of our ego, we will never make money in the market consistently. Those who haven’t identified the ego’s ways will eventually be destroyed in the market because of their ego’s tendencies. It is just that powerful. The market rewards those who have subdued their egos. Those who rid themselves of their egos are rewarded greatly. They are the superstars of their fields. In the market, rewards come in the form of profits. In the world of art, masterpieces are the results. In sports, the players are all-stars and command enormous salaries. Every pursuit has its own manifestation of victory over the ego.

Trading Quotes that Will Change Your Trading

  
  Education
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“If you lack a solid trading plan and are stressed out when you trade, you’ll naturally tend to cut your profits short and hold on to losers.” – Van K Tharp
“Without a proper mental approach to trading, someone trading a “Holy Grail” system could produce mediocre results or even large losses.” – Van K Tharp
“A peak performance trader is totally committed to being the best and doing whatever it takes to be the best. He feels totally responsible for whatever happens and thus can learn from mistakes. These people typically have a working business plan for trading because they treat trading as a business” – Van K Tharp
“Trade with an edge, manage risk, be consistent, and keep it simple. The basis of all successful trading can be summed up in these four core principles.” – Curtis Faith
“When you really believe that trading is simply a probability game, concepts like ‘right’ and ‘wrong’ or ‘win’ and ‘lose’ no longer have the same significance. As a result, your expectations will be in harmony with the possibilities.” – Mark Douglas, trader & author
“Wharton taught you that 40 percent of a stock’s price movement was due to the market, 30 percent to the sector, and only 30 percent to the stock itself, which is something that I believe is true. I don’t know if the percentages are exactly correct, but conceptually the idea makes sense.” – Steve Cohen, hedge fund manager

 

“Traders fail for the same reason that most baby turtles fail to reach maturity: Many are called and few are chosen. Society works by the attraction of the many. As they are culled out, the good ones are left, and the others are released to go try something else until they find their calling. The same is true for other fields of pursuit.” – Ed Seykota

 

“Charting is a little like surfing. You don’t have to know a lot about the physics of the tides, resonance, and fluid dynamics in order to catch a good wave. You just have to be able to sense when it’s happening and then have the drive to act at the right time.” – Ed Seykota

 

“Win or lose, everybody gets what they want out of the market. Some people seem to like to lose, so they win by losing money.” – Ed Seykota, trader

 

“The markets are the same now as they were five or ten years ago because they keep changing-just like they did then.” – Ed Seykota (more…)

The most expensive 4 words

  
  Education
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The longer a given condition or trend persist and the more comfortable we get with it, the more dramatic the correction will be when the trend fails. This does not mean that you should try to catch tops or bottoms. Only fools believe that they can be consistently lucky in fading established trends. But when a trend ends, prices often overshoot in the opposite direction.

The crowd may be stupid, but they are stronger than you. Crowds have the power to create trends. Never fade a trend. If the trend is up, you should be long or on the sidelines. Never sell short, because “prices are too high” – never argue with the crowd. You don’t have to run with it – but you should never run against it.

The most expensive 4 words in the world are “This time is different”. The underlying reasons might be different, but the psychology behind all booms and busts is always the same.

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