The most popular words used in Ernest Hemingway’s The Old Man and the Sea are “old,” “man,” and “fish.” In Jane Austen’s Pride and Prejudice, it’s “Mr.,” “Elizabeth,” and “all.” What would be the most popular words in a trading book? Profit, loss, and strategy? Bull, bear, and volatility? Well, no one has counted them yet.
But this short article has something more interesting—some of the most quoted phrases in trading history.
1. “I believe in analysis and not forecasting.”
Nicolas Darvas believed that precise forecasting is impossible and that only technical analysis can help make a sound trading decision.
2. “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”
Warren Buffet recommends staying one step ahead of the crowd. More specifically, he recommends acting opposite to the crowd.
3. “I could trade without knowing the name of the market.”
While not everyone agrees, Richard Dennis is saying that patterns in different markets are very similar.
4. “The hard work in trading comes in the preparation. The actual process of trading, however, should be effortless.”
Jack Schwager believes that the best way to approach the act of trading is to separate it from the homework.
5. “The way I prepare myself is by doing my work each night.”
Marty Schwartz’s recipe for success is putting in more time and effort than others every day.
6. “The market can stay irrational longer than you can stay solvent.”
According to John Maynard Keynes, you shouldn’t rationalize the market’s behavior or think the market is “supposed to” do something.
7. “A truly successful trader has got to be involved and into the trading, the money is the side issue.”
Bill Lipschutz warns that if money is your only driving force, it’s possible that you’ll quit trading at the first sign of difficulty.
8. “Confidence is not “I will profit on this trade.” Confidence is “I will be fine if I don’t profit from this trade.”
Yvan Byeajee doesn’t need to get every single trade right. His risk management strategy ensures that he can take a loss.
9. “Losses are necessary.”
This is not the end of the quote, though. David Sikhosana adds that losses can only be beneficial if you learn from them.
10. “When in doubt, get out and get a good night’s sleep.”
Michael Marcus believes sleeping to be the greatest “reset” button. When you wake up, you’ll be ready for a fresh start.
11. “Focus on protecting what you have.”
Paul Tudor Jones admits that losing money is fairly easy, but it’s twice as hard to make it back. So, his preferred strategy is the preservation of capital.
You don’t get to where Warren Buffett or Nicolas Darvas are without having a ton of knowledge to share. Translate them into a meaningful context for you and consider applying these concepts in your trading.