I go first...
These quotes really changed my perspective of trading when I was beginning to trade.
Quote #1: “In trading/investing, it’s not about how much you make but rather how much you don’t lose.” - Bernard Baruch
Not losing money is the most important rule of trading. Although almost everyone loses money in the beginning, it’s important to learn how to improve and become profitable as soon as possible.
Some of the most basic ways to instantly stop losing money are the following:
1. Stay humble and keep learning. Most traders get hurt because of their ego, especially after a winning streak. Understand probability and Optimism bias. Keep in mind, anyone could get unlucky, even you!
2. Understand margin, margin calls, and the risk associated with leverage. That could bite you!
3. Never bet against the trend. “Don’t catch a falling knife” and don’t try to find the top or bottom of stocks. Best traders wait for confirmations, not top or bottom.
4. Trade like a robot. Remove your emotions entirely and know your plan before entering a trade. That means, set your exit strategy BEFORE placing your order. When are you taking profit, or should you cut your loss?
5. After placing your order, the only thing you are allowed to change is your stop-loss and only when the stock is moving in your favor. Stop convincing yourself to break this rule. That brings us to the second quote.
Quote #2: "Trading stocks without a stop loss is like driving a car without brakes." - Mark Minervini
Everyone must have a stop-loss, period! History is filled with examples of those who lost a fortune just because they were too confident to have a stop-loss. Plain and simple! Do it.
Quote #3: “In investing, what is comfortable is rarely profitable.” - Robert Arnott
This is common sense but also complex. When a trade is uncomfortable, it’s the risk that makes it feel that way. But trading is risky by nature, because it is based on the uncertainty of the future. Therefore, learning how to manage your risk is a crucial aspect of trading. For example, try answering these questions: How do you decide to take one risk over the other? Which one is a calculated risk, and what’s its difference from gambling? How do you define your risk management strategy?
Quote #4: "Buying cheap stocks is an expensive mistake." - Unknown
This quote is one of the basics of trading. Good quality stocks are usually performing close to their all-time highs. Going with cheap stocks is not safe.
Quote #5: “The goal of a successful trader is to make the best trades. Money is secondary.” - Alexander Elder
Last, but not least, quote is emphasizing on the importance of good trades. But I want to keep this one open for discussion. What do you think Mr. Elder was talking about here? If people trade to make money, then how come money is less important than a good trade? And what is a “good trade”?
Bless us with your favorite quotes and discuss how they changed your perspective on trading!
These quotes really changed my perspective of trading when I was beginning to trade.
Quote #1: “In trading/investing, it’s not about how much you make but rather how much you don’t lose.” - Bernard Baruch
Not losing money is the most important rule of trading. Although almost everyone loses money in the beginning, it’s important to learn how to improve and become profitable as soon as possible.
Some of the most basic ways to instantly stop losing money are the following:
1. Stay humble and keep learning. Most traders get hurt because of their ego, especially after a winning streak. Understand probability and Optimism bias. Keep in mind, anyone could get unlucky, even you!
2. Understand margin, margin calls, and the risk associated with leverage. That could bite you!
3. Never bet against the trend. “Don’t catch a falling knife” and don’t try to find the top or bottom of stocks. Best traders wait for confirmations, not top or bottom.
4. Trade like a robot. Remove your emotions entirely and know your plan before entering a trade. That means, set your exit strategy BEFORE placing your order. When are you taking profit, or should you cut your loss?
5. After placing your order, the only thing you are allowed to change is your stop-loss and only when the stock is moving in your favor. Stop convincing yourself to break this rule. That brings us to the second quote.
Quote #2: "Trading stocks without a stop loss is like driving a car without brakes." - Mark Minervini
Everyone must have a stop-loss, period! History is filled with examples of those who lost a fortune just because they were too confident to have a stop-loss. Plain and simple! Do it.
Quote #3: “In investing, what is comfortable is rarely profitable.” - Robert Arnott
This is common sense but also complex. When a trade is uncomfortable, it’s the risk that makes it feel that way. But trading is risky by nature, because it is based on the uncertainty of the future. Therefore, learning how to manage your risk is a crucial aspect of trading. For example, try answering these questions: How do you decide to take one risk over the other? Which one is a calculated risk, and what’s its difference from gambling? How do you define your risk management strategy?
Quote #4: "Buying cheap stocks is an expensive mistake." - Unknown
This quote is one of the basics of trading. Good quality stocks are usually performing close to their all-time highs. Going with cheap stocks is not safe.
Quote #5: “The goal of a successful trader is to make the best trades. Money is secondary.” - Alexander Elder
Last, but not least, quote is emphasizing on the importance of good trades. But I want to keep this one open for discussion. What do you think Mr. Elder was talking about here? If people trade to make money, then how come money is less important than a good trade? And what is a “good trade”?
Bless us with your favorite quotes and discuss how they changed your perspective on trading!