“I don’t think you can consistently be a winning trader if you’re banking on being right more than 50 percent of the time. You have to figure out how to make money being right only 20 to 30 percent of the time.” -Bill Lipschutz
“Here’s what I believe: The markets are not random. I don’t care if the number of academicians who have argued the efficient market hypothesis would stretch to the moon and back if laid end to end; they are simply wrong. The markets are not random, because they are based on human behavior, and human behavior, especially mass behavior, is not random. It never has been, and it probably never will be. There is no holy grail or grand secret to the markets, but there are many patterns that can lead to profits. There are a million ways to make money in markets. The irony is that they are all very difficult to find. The markets are always changing, and they are always the same. The secret to success in the markets lies not in discovering some incredible indicator or elaborate theory; rather, it lies within each individual. To excel in trading requires a combination of talent and extremely hard work—(surprise!) the same combination required for excellence in any field. Those seeking success by buying the latest $300 or even $3,000 system, or by following the latest hot tip, will never find the answer because they haven’t yet understood the question. Success in trading is a worthy goal, but it will be worthless if it is not accompanied by success in your life (and I use the word success here without monetary connotation)” -New Stock Market Wizards
“I basically learned that you must get out of your losses immediately. It’s not merely a matter of how much you can afford to risk on a given trade, but you also have to consider how many potential future winners you might miss because of the effect of the larger loss on your mental attitude and trading size.” -New Market Wizards
“Two of the cardinal sins of trading—giving losses too much rope and taking profits prematurely—are both attempts to make current positions more likely to succeed, to the severe detriment of long-term performance.” -William Eckhardt
“You have to learn how to lose; it is more important than learning how to win.” -Mark Weinstein
“Whenever I enter a position, I have a predetermined stop. That is the only way I can sleep. I know where I’m getting out before I get in. The position size on a trade is determined by the stop, and the stop is determined on a technical basis. For example, if the market is in the midst of a trading range, it makes no sense to put your stop within that range, since you are likely to be taken out. I always place my stop beyond some technical barrier.” -Bruce Kovner
“When the news is wonderful and a market can’t go up, then you want to be sure to be short.” -Market Wizards
“I have noticed that everyone who has ever told me that the markets are efficient is poor.” -Larry Hite
“The best trades are the ones in which you have all three things going for you: fundamentals, technicals, and market tone. First, the fundamentals should suggest that there is an imbalance of supply and demand, which could result in a major move. Second, the chart must show that the market is moving in the direction that the fundamentals suggest. Third, when news comes out, the market should act in a way that reflects the right psychological tone. For example, a bull market should shrug off bearish news and respond vigorously to bullish news. If you can restrict your activity to only those types of trades, you have to make money, in any market, under any circumstances.” -Michael Marcus
“Moral: If you can’t take a small loss, sooner or later you will take the mother of all losses.” -Jack Schwager