Mind: The key to winning is inside the Mind. As Master of your mind, you have to manage and understand your emotions very well. It is extremely important to understand not just the individual’s psychology, but also the crowd psychology of the markets. To become a successful trader, you must have sheer perseverance and discipline.

Method: There is no Holy Grail in the search for the perfect method to trade. Follow the wisdom of ‘Plan your Trade and Trade your Plan’. A good trading plan should cover your entry, exit and position sizing requirements. My method consists of discretionary trading techniques that combine both fundamental and technical analysis, in addition to my own proprietary automated trading system. Coming up with a good trading plan requires lots of market experience, as you modify, conquer and solidify your trading techniques. Don’t be duped by charming salesmen selling get-rich-quick-without-effort secret recipes. 

Money: Overall profit/loss depends on money management. The first goal of money management is capital preservation. If you lose 10% of your capital, you have to make 11% just to break even. If you lose 40%, you need to make 67%, and if you lose 50%, guess what? You have to make 100% just to recover! So before you think about making big money, first you got to think about not risking your capital unnecessarily. Money management is too important to be overlooked.

Manage risk in the markets and in life.

No question that there is volatility in the markets right now. Too much volatility can lead to an increase in stress, especially if your trading involves holding positions longer than 5 minutes. Stress is part of the business so we have to adapt to it, both physically and mentally, or fade away. For some it is easier than others to find an activity to unwind and release some stress. Hitting the batting cages, taking in a movie, attending a sporting event, going for a jog or simply reading a good book are some examples.

I’d argue that those who have a difficult time taking a break from the trading world and thus the accompanying stress are also poor managers of risk. Having risk in the market is a given. Not having discipline to manage that risk is where they fail. We’ve all had that gut feeling that X is going to happen and a loss will occur, it’s part of the business. Those that take that loss, learn from it and move on are those that are able to escape the markets when needed.

Those that choose to not manage risk in the market fail to manage risk in life. Instead of taking the edge off at the local watering hole they stay there ’til last call, neglecting other duties in life. Instead of spending the weekends with family and friends to recharge they pore over charts, financial statements and twitter looking for the next holy grail. Always chasing, never catching.

Wisdom Quotes adapted to Trading



Here are some famous quotes adapted to trading.

A man should look for what is, and not for what he thinks should be.
Albert Einstein

A trader should look at a chart for what it is, and not for what he want it
to be.

A person who never made a mistake never tried anything new.
Albert Einstein

A trader who has never lost, is not a trader yet.

All men by nature desire knowledge.

All traders by nature desire profitable trades.

Bring your desires down to your present means. Increase them only when your increased means permit.

Trade within your ability and risk tolerance. Increase size and frequency when ability and tolerance permits it.

Being ignorant is not so much a shame, as being unwilling to learn.
Benjamin Franklin

Losing because of a new situation is fine, losing again is the beginning of the end.

By failing to prepare, you are preparing to fail.
Benjamin Franklin

The easiest thing to do is prepare. If you don’t, on behalf of the other market participants, we thank you.

Creditors have better memories than debtors.
Benjamin Franklin

You will always remember the trades that could have been and forget about the risks that were involved.

Applause is a receipt, not a bill.
Dale Carnegie

Your trading statement is the receipt, not your spreadsheet.

First ask yourself: What is the worst that can happen? Then prepare to accept it. Then proceed to improve on the worst.
Dale Carnegie

The more you mentally prepare and except loss the less chance it occurs.

A pair of powerful spectacles has sometimes sufficed to cure a person in love.
Friedrich Nietzsche

A trade is a not the girl you want to take home to mother, act accordingly.

After coming into contact with a religious man I always feel I must wash my hands.
Friedrich Nietzsche

After talking to a guru or anyone with the holy grail, I always take a hot shower, burn the clothes I was wearing, and drink them out of my mind.

Ah, women. They make the highs higher and the lows more frequent.
Friedrich Nietzsche

Focusing on the result (making money), makes winning more fun but less frequent.

Always do whatever’s next.
George Carlin

Move on, understand what happened in the past but do not have an emotional attachment to it.

Fighting for peace is like screwing for virginity.
George Carlin

Fighting yourself is like robbing your own bank.

A good plan violently executed now is better than a perfect plan executed next week.
George S. Patton

A trading plan is just words until you act on it.

Always do everything you ask of those you command.
George S. Patton

Educators talk in best practices, if you teach it, do it.

I don’t measure a man’s success by how high he climbs but how high he bounces when he hits bottom.
George S. Patton

The easiest thing to handle is winning, but trading doesn’t start until you lose.

If everyone is thinking alike, then somebody isn’t thinking.
George S. Patton

If every trader is the long there is no money in being long unless you were first.

Be courteous to all, but intimate with few, and let those few be well tried before you give them your confidence.
George Washington

Don’t marry a trade but if you must make sure you have a prenup.

Experience teaches us that it is much easier to prevent an enemy from posting themselves than it is to dislodge them after they have got possession.
George Washington

Your habits are easily formed but be aware they are hard to pay for.

A man is rich in proportion to the number of things he can afford to let alone.
Henry David Thoreau

Just because the market is open does not mean you have to trade. Cash is a position too.

All men are children, and of one family. The same tale sends them all to bed, and wakes them in the morning.
Henry David Thoreau

Your worth as a trader is today’s trading statement, it is re-calculated daily.

All this worldly wisdom was once the unamiable heresy of some wise man.
Henry David Thoreau

The trading genius was previously an idiot or is closer to being one tomorrow.

A bore is a person who opens his mouth and puts his feats in it.
Henry Ford

All trading results are insignificant unless it is your last.

Coming together is a beginning; keeping together is progress; working together is success.
Henry Ford

Having trading discipline is the beginning; keeping discipline is the progress; staying discipline is the success.

Be candid with everyone.
Jack Welch

Be honest with yourself, if or when you fail the change of direction will not kill you.

Change before you have to.
Jack Welch

The market will force you to change if you don’t and it is painful and disheartening.

Control your own destiny or someone else will.
Jack Welch

Put yourself in the best position or you will not have a position come tomorrow.

Face reality as it is, not as it was or as you wish it to be.
Jack Welch

Bend your view to the charts, not the charts to your view.

Even Castles made of sand, fall into the sea, eventually.
Jimi Hendrix

If the base of your trading was built on weak grounds, it is not a matter of if you fail but when you fail.

I try to use my music to move these people to act.
Jimi Hendrix

I place my entries and exits where I am assured people will have to act.

I used to live in a room full of mirrors; all I could see was me.
Jimi Hendrix

You are not the market, but some days you are a part of it.

Abuse of words has been the great instrument of sophistry and chicanery, of party, faction, and division of society.
John Adams

Trading can be simple if you let it. The stakeholders want to convince you otherwise, making their accomplishment and pocketbooks larger.

In politics the middle way is none at all.
John Adams

Indecision will lead to failure even if it does not result in losing money.

Efforts and courage are not enough without purpose and direction.
John F. Kennedy

Any trader can take risk a smart trader can use it to their advantage.

Forgive your enemies, but never forget their names.
John F. Kennedy

Move past your losing trades don’t erase them.

I don’t think the intelligence reports are all that hot. Some days I get more out of the New York Times.
John F. Kennedy

Understand from whom and why you are getting “hot” tips.

Adversity is the state in which man mostly easily becomes acquainted with himself, being especially free of admirers then.
John Wooden

Losing is lonely, but it can be the easiest way to get to know yourself.

Don’t measure yourself by what you have accomplished, but by what you should have accomplished with your ability.
John Wooden

If you make money by making a mistake, it is loan with a very high interest rate.

Failure is not fatal, but failure to change might be.
John Wooden

Losing only matters if you lost because of a lesson you were already taught.

If you don’t have time to do it right, when will you have time to do it over?
John Wooden

Develop a plan before you trade or do it later with less cash and more frustration.

History repeats itself, first as tragedy, second as farce.
Karl Marx

A result is rarely an aberration, never treat it as one.

Be content to seem what you really are.
Marcus Aurelius

Find yourself and trade that way.

Because a thing seems difficult for you, do not think it impossible for anyone to accomplish.
Marcus Aurelius

Because trading seems difficult today, it was not for someone else. Stick with it the roles may reverse tomorrow.

Confine yourself to the present.
Marcus Aurelius

A trade is not connected to another, unless you let.

A man is never more truthful than when he acknowledges himself a liar.
Mark Twain

Not accepting a failure is to not learn from it.

A man’s character may be learned from the adjectives which he habitually uses in conversation.
Mark Twain

If you lose you are not necessarily a loser, if you call yourself a loser no one will be able to change your mind.

Against the assault of laughter nothing can stand.
Mark Twain

Don’t risk more than you cannot look at positively later.

A lie cannot live.
Martin Luther King, Jr.

Eventually you will run out of money if you run from your losses.

Everything that we see is a shadow cast by that which we do not see.
Martin Luther King, Jr.

You may not understand it fully right now but the market is always right.

He who hesitates is poor.
Mel Brooks

If you are thinking about getting out, your competition is already flat.

Always turn a negative situation into a positive situation.
Michael Jordan

A loss is only a loss if you lose the lesson.

I’ve failed over and over and over again in my life and that is why I succeed.
Michael Jordan

The view of trading changes after a loss it is your job to get it back to where it was.

The game is my wife. It demands loyalty and responsibility, and it gives me back fulfillment and peace.
Michael Jordan

If you do not respect the market it will not respect you.

I have found the paradox, that if you love until it hurts, there can be no more hurt, only more love.
Mother Teresa

If you understand and accept risk, you will never risk too much again.

If you can’t feed a hundred people, then feed just one.
Mother Teresa

It does not matter how successful you were today, it just matters that you were successful.

I realize that some of my anecdotes may appear conflicting but they are not to me. It is not up to me to convince you of their truths. It is your job to figure out how they apply to you.

Being confident

Being confident is the ultimate prize for any trader; some call it being in the “zone”, some others talk about finding the “Holy Grail”. What it really means is that, as for any performance based endeavours, trading will satisfy you only once you reached the state where “you know what you do”. Trading is not different from any other demanding undertaking, it requires mastering the different stages of the learning curve and the quality of this learning process depends on how focused and disciplined the trader is in honing his acquired skills. Once the trader has identified, through practice, what markets, methodology and timeframe he is comfortable with, he will slowly gain confidence in himself by systematically repeating all of the steps that constitute his trading plan until it becomes part of his personality. Just as for a tennis or a golf player, being confident makes the difference between winning and losing, so it is for the trader. And, just like the tennis or golf player, the trader can only gain this confidence through a well worked out set of skills, a battle plan and the continuous practice at a performance level. Losing focus or relaxing the discipline will very rapidly threaten the trader’s confidence. Hence, it is of the utmost importance to understand that this virtuous circle has to be maintained during every trade. And here we touch the challenge for any trader: only the repetitive and focused practice of his plan will ensure that he will stay confident in his trading. This can only be achieved through a balanced and healthy way of living and a sound detachment of the day to day results.

Trading Mistakes

Letting small losses turn into large losses.
— Refusing to take a loss at all.
— Overbetting.
— Bottom fishing/Catching falling knives.
— Averaging down.
— Shorting bulls and buying bears.
— Confusing the company with its stock.
— Falling in love with a “story.”
— Following the leader.
— Buying IPOs.
— Finding the Holy Grail.
— Overtrading.
— Excessive tape watching.
— Being undercapitalized.
— Letting the tax tail wag the stock dog.
— Relying on Blue Channels and Website Analysts
— Thinking this market stuff is easy.
— Thinking rather than looking.


Trading is not about perfection. It is about probability and progress. All charts, analyses (fundamental and technical) and trading plans are built on probabilities.

Why then, do so many traders strive for perfection? Why do so many traders miss trades, waiting for exactly the right entry and then beat up on themselves when it doesn’t come and the position runs away while they sit there scratching their heads and condemning themselves?

Why are so many traders trying to turn a game of probability into one of 100% certainty?

The answer lies in one of the cardinal sins of trading which is PERFECTIONISM.

Perfectionism can be a great help to people in many professions, but can be fatal to a trader. Perfectionists, always trying to find the Holy Grail of trading go from one service to another, from one system to another, looking for a way that they can be right all the time. YES! Now, I found it. It’s this trading room, or this service, or this indicator! Wait… something is wrong here. Not all of these trades are working and I have draw downs! How can it be that this particular method failed and I actually had to take a loss? Must be something wrong. I will try harder and look for an even better system, a more expensive service, a new and improved guru, some absolutely no-fail software so that I can have ONLY WINNING TRADES. (more…)

Trading is simple. The trader is complicated

Here is a very short list of comments from very reliable sources—successful professional traders.

From my collection of Books

 John F. Carter: “It is important to remember that there is no need to spend wasted years looking for complicated setups or the next Holy Grail.  There are very simple setups out there to use.  Some of the best traders I know have been trading the same setup, on the same time frame, on the same market for 20 years. They don’t care about anything else, and they don’t want to learn about anything else.  This works for them, and they are the masters of this setup.  They have nothing else coming in to interfere with their focus” (p. 31, Mastering the Trade: Proven Techniques for Profiting from Intraday and Swing Trading Setups).

Clifford Bennett: “While there have been some spectacular front-cover traders, the ones who amass fortunes year after year tend to stay in the background. At the very least, they display a simple and down-to-earth approach to markets if they are ever interviewed” (p. 117, Warrior Trading: Inside the Mind of an Elite Currency Trader).

Mark Douglas: “What you want to do is become an expert at just one particular type of behavior pattern that repeats itself with some degree of frequency. To become an expert, choose one simple trading system that identifies a pattern, preferably one that is mechanical, instead of mathematical, so that you will be working with a visual representation of market behavior. Your objective is to understand completely every aspect of the system-all the relationships between the components-and its potential to produce profitable trades.  In the meantime, it is important to avoid all other possibilities and information” (pp. 208-09, The Disciplined Trader: Developing Winning Attitudes).

Marcel Link: “Systems should be kept as simple as possible. Overdoing things doesn’t make a system better; on the contrary, it can take away from a good system.  Trying to make a system too complicated with too many indicators and variables is a common mistake with some traders: some of the best systems are the simplest. As a rule of thumb, a system should fit on the back of an envelope and be easily explained so that someone can understand what every indicator does and every rule does.  Otherwise it’s too complicated.  Always remember the old adage ‘Keep it simple, stupid’ and you’ll be okay” (p 249, High Probability Trading).

George Angell: “One observation I’ve made over the years, which is especially notable on the trading floor, is that everyone who truly succeeds is a specialist. Unlike the novice trader, who may dabble in as many as a dozen different futures contracts, the professional floor trader is identified with just one kind of futures and one specific type of trading…moreover, the professional is identified by his specialty-scalper, short-term trader, spread trader, or whatever.  He does the same thing every day (pp. 10-11, Sniper Trading).

John Murphy: “My work has gotten better due to simplifying my approach.” (KEY TO SUCCESS)

Dennis Gartman:Keep your technical systems simple. Complicated systems breed confusion; simplicity breeds elegance.” (From Dennis Gartman’s Trading Rules List, Rule #12).

Trading Quotes that Will Change Your Trading

“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…)

Trading Rules

*The big money is made from position sizing. You really must stop chasing a holy Grail and spend time on different position sizing rules. This is the one “secret” that separates a professional from the man in the street.

*Question everything and everyone. Even me. Never blindly believe anything you read or hear about. Be careful about what you read and even more careful about what you believe in. after all an opinion is only some-ones belief.

*If you have to ask you shouldn’t be in. I can’t believe people actually ask other people whether they should hold or sell a stock position they are in. Surely before you enter you have your exits all in place. I’ll guarantee if you are asking this question you are not making money.

My Goal

Technical analysis is often misunderstood as being the holy grail to making profits. What is often overlooked is its ability to warn you of impending price moves and its ability to help avoid huge losses. Applying technical analysis and using stop losses are the only way to protect your financial and mental capital. If you want to play the markets you need to stay in the game. My goal as a trader is still the same:

  • To continue to learn about the markets and price movements
  • To learn from my mistakes in order to avoid repeating them
  • To continually increase discipline
  • To be emotionally detached.
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