Tradingcitat Tradingcitat Jag har alltid gillat att läsa citat från kända traders och investerare. Tradingcitat ger mig mig nästan alltid en liten boost och inspiration till min trading och även om de inte alltid ger mig någon ny insikt så förstärker de många gånger min övertygelse och kunskap i något som jag redan vet eller tro mig förstå. Här är mina favoriter bland tradingcitat: In the short run, the market is a voting machine, but in the long run it is a weighing machine. Unless you can watch your stock decline by 50% without becoming panic stricken, you should not be in the stock market. If you are not willing to own a stock for 10 years, do not even think about owning it for 10 minutes. If you expect to purchase stocks throughout your life, you should welcome price drops as a way to add stocks more cheaply. If past history was all there was to the game, the richest people would be librarians. We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful. Rule number one of investing is never lose money. Rule number two is never forget rule number 1 – Warren Buffet There seems to be an unwritten rule on Wall Street: If you don’t understand it, then put your life savings into it. In this business if you’re good, you’re right six times out of ten. You’re never going to be right nine times out of ten. Time is your friend; impulse is your enemy. If you have trouble imaging a 20% loss in the stock market, you shouldn’t be in stocks. Maybe the trend is your friend for a few minutes in Chicago, but for the most part it is rarely a way to get rich – Jim Rogers First ask yourself: What is the worst that can happen? Then prepare to accept it. Then proceed to improve on the worst. You adapt, evolve, compete or die. Intellectual capital will always trump financial capital. Im always thinking about losing as opposed to making money. Dont focus on making money, focus on protecting what you got If you don’t bet, you can’t win. If you lose all your chips, you can’t bet. Never risk more than 1% of your total equity in any one trade. By risking 1%, I am indifferent to any individual trade. Rules of Trading: 1) Cut losses, 2) Cut losses and 3) Cut losses. If you can follow these 3 rules, you may have a chance. Investing should be more like watching paint dry or watching grass grow. You want excitement, take $800 and go to Vegas Markets are never wrong – opinions often are. There is only one side to the stock market. And it’s not the bull side or the bear side, but the right side. At long as a stock is acting right, and the market is right, don’t be in a hurry to take profits. The people I go after are the false experts, those who do not accept the limits of their knowledge. Never think that lack of variability is stability. Don’t confuse lack of volatility with stability, ever. If you are in banking and lending, surprise outcomes are likely to be negative for you. The four most dangerous words in investing are: ’this time it’s different. In investing, what is comfortable is rarely profitable. An investment in knowledge pays the best interest. Markets can remain irrational longer than you can remain solvent. If it’s obvious, it’s obviously wrong. Being wrong is acceptable, but staying wrong is totally unacceptable. Trade the ticker, not the company. The realization that you are responsible for your results is the key to successful investing. Most people approach trading to make a lot of money, and that is one of the primary reasons they lose. Whenever you find the key to the market, they change the locks! – Gerald Loeb Investing is not a game where the guy with the 160 IQ beats the guy with the 130 IQ. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble I want you to back yourself into a corner. Give yourself no choice but to succeed. Let the consequences of failure become so dire and so unthinkable that you’ll have no choice but to do whatever it takes to succeed I’d be a bum on the street with a tin cup if the efficient markets hypothesis was true. I believe in total immersion, if you want to be rich, you have to program your mind to be rich. You have to unlearn all the thoughts that were making you poor and replace them with new thoughts, rich thoughts. If you want to be rich, never give up. People tend to give up. If you have persistence, you will come out ahead of most people. More importantly, you will learn. When you do something, you might fail. But that’s not because you’re a failure. It’s because you have not learnt enough. Do it differently each time. One day, you will do it right. Failure is your friend. Successful people are 100% convinced that they are masters of their own destiny , they’re not creatures of circumstance, they create circumstance, if the circumstances around them suck they change them. In trading you have to be defensiveand aggressive at the same time. If you are not aggressive, you are not going to make any money, and if you are not defensive, you are not going to keep it. You can’t make a baby in a month if you get nine women pregnant. It’s easier to stay out of trouble than it is to get out of trouble. We’d rather be on the outside wishing we were in, than on the inside wishing we were out. If most traders would learn to sit on their hands 50% of the time, they would make a lot more money. Never underestimate the power of stupid people in large groups. There are as many as 10 components to a professional trading system and the entry signal is probably the least important. Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. We are in the business of making mistakes. The only difference between the winners and the losers is that the winners make small mistakes, while the losers make big mistakes. The market tells us that flexibility of opinion is crucial for consistent success – Brian Shannon The answer to successful trading cannot be found in any coach, book, or system. Success is something that is cultivated over time, with directed effort. The crowd is bargain hunting in what was; the knowing are buying what will be. A trader should have no opinion. The stronger your opinion, harder it is to get out of a losing position. The real opponent of a trader is himself. Not the markets and not other traders down the street. My opponent in the market is me. So much of the driver of any asset class’s returns is based on how events actually transpire relative to expectations. So there’s a certain discounted growth rate in equities Winning traders think like a casino, losing traders think like gamblers. Success is a lousy teacher. It seduces smart people into thinking they can’t lose. Anyone with an average intelligence can learn how to trade. This is not rocket science. However, it’s much easier to learn what you should do in trading than do it. You may think you are in the business of trading. But in reality, you are in the business of decision making. And the better you can make these decisions ahead of time, the better your results will be. Every day I assume every position I have is wrong. Go to bed smarter than when you woke up. In investing, what is comfortable is rarely profitable. Trade with an edge, manage risk, be consistent, and keep it simple. This is the basis for all successful trading. Never overpay for a stock. More money is lost than in any other way by projecting above-average growth and paying an extra multiple for it. There can be a huge gap between what you understand about the markets and your ability to transform that knowledge into consistent profits. A bubble is a bull market in which you don’t have a position. It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent. There must be some wisdom in the folk saying: ’It’s the strong swimmers who drown. If you want to have better performance than the crowd, then you must do things differently from the crowd. Losing a position is aggravating, whereas losing your nerve is devastating. 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. I don’t think traders can follow rules for very long unless they reflect their own trading style. Eventually, a breaking point is reached and the trader has to quit or change, or find a new set of rules he can follow. This seems to be part of the process of evolution and growth of a trader. Systems don’t need to be changed. The trick is for a trader to develop a system with which he is compatible. It can be very expensive to try to convince the markets you are right. The biggest secret about success is that there isn’t any secret about it, or if there is, then it’s a secret to me, too. The idea of searching for some secret for trading success misses the point. Weak currency is evidence of a weak economy, which is evidence of a weak government. Its okay to be wrong; it is not okay to stay wrong – Old Traders Expression More than anything else, what differentiates people who live up to their potential from those who don’t is a willingness to look at themselves and others objectively. Traders would rather lose money than admit they’re wrong. I became a winning trader when I was able tosay, ’To hell with my ego, making money is more important. Nothing ruins my day more than losses. I believe in the discipline of mastering the best that other people have ever figured out. I don’t believe in just sitting there and trying to dream it up all yourself. Nobody’s that smart. The markets are noisy, messy places. The mathematical tools that work best in this environment are simple and robust. You do not need fancy, higher math for most trading applications; you need simple, basic math, but you must understand your tools completely. There’s a clarity that comes with great ideas: You can explain why something’s a great business, how and why it’s cheap, why it’s cheap for temporary reasons and how, on a normal basis, it should be trading at a much higher level. You’re never sitting there on the 40th page of your spreadsheet, as Buffett would say, agonizing over whether you should buy or not. Stress is literally kryptonite to traders. Stress disrupts their equilibrium and affects their decision-making. Anything we can do to minimize the “yips” will flow directly to the bottom-line. Have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary. Cash may be the ultimate in capital preservation but it earns you nothing. In a zero return environment, notwithstanding all the financial, economic and geopolitical uncertainties, cash is not king. What is king, however, is cash flow. Getting excited by gains in a trade is the first step toward getting panicky when those gains are threatened. Traders often repeat the same mistakes over and over, acting on triggers that have served them poorly time and time again even as they continue to expect a tidy profit as a reward. The time to buy is when there’s blood in the streets. When everybody goes to the same side of the boat, it’s logical to take the opposite side of the trade. Based on my own personal experience, both as an investor in recent years and an expert witness in years past, rarely do more than three or four variables really count. Everything else is noise. Trading successfully, unfortunately, is not a skill you can acquire by being a passive learner. The question isn’t “Is the market efficient?” but rather “How inefficient is the market?” and “How can we exploit this? – Edward Thor Mr. Market has a great knack for turning even the most polished of veteran chartists into incorrect fools. Never risk more than 1% of your total equity in any one trade. By risking 1%, I am indifferent to any individual trade. Keeping your risk small and constant is absolutely critical. We use technical analysis not because we think it means something, but because other people think it means something. We are always looking for market participants to take us out of a trade, and in that sense, knowing the technical points at which people are likely to be buying or selling is helpful. A great company could be a terrible investment if its price has already more than discounted the bullish fundamentals. Conversely, a company that has been experiencing problems and is the subject of negative news could be a great investment if its price decline has more than discounted the bearish information. Fundamentals are not bullish or bearish in a vacuum, they are bullish or bearish only relative to price. To succeed as a trader, it is absolutely necessary to have an edge. You can’t win without an edge, even with the world’s greatest discipline and money management skills. If you don’t have an edge, all that money management and discipline will do for you is to guarantee that you will gradually bleed to death. Incidentally, if you don’t know what your edge is, you don’t have one. I started tasting success when I developed my own successful methodology and this was a slow gradual process that took years of research and trading experience. I also read just about every book I could find on the markets and successful individuals. Out of the hundreds of books that I read, there were probably no more than ten that had a major influence on me. However, I don’t think there is no such thing as a bad book, it’s still worthwhile. Sometimes, one sentence can even change your life. Most often, traders have four fears. There’s the fear of being wrong, the fear of losing money, the fear of missing out and the fear of leaving money on the table I found that basically, those four fears accounted for probably 90% to 95% of the trading errors that we make. Let’s put it this way: If you can recognize opportunity, what’s going to prevent you from executing your trades properly? Your fear. Your fears immobilize you. Your fears distort your perception of market information in ways that don’t allow you to utilize what you know. We know that the random element in the market represents at least 40 to 60 percent activity. Therefore, it’s not logical to look at every tick or to think that every tick or every chart formation has meaning. They don’t. There are too many traders trying to look at the markets from too stringent an analytical viewpoint. Most of what happens in the markets is meaningless. Why try to interpret every little movement, every little reversal, every little tick? In trying to do too much, they’re actually paying too much attention to the market. You have to keep a distance from the market. Only then will you have the psychological resources to let your profits ride. You won’t be looking at every tick and interpreting it in a fearful way. We don’t look at data neutrally, that is, when the human eye scans a chart, it doesn’t give all the data points equal weight. Instead, it will focus on certain outstanding cases. It’s human nature to pick out the stunning successes of a method and to overlook the day-in, day-out losses that grind you to the bone. Thus, even a fairly careful perusal of the charts is prone to leave the researcher with the idea that the system is a lot better than it really is. We typically trade our beliefs about the market and once we’ve made up our minds about those beliefs, we’re not likely to change them. And when we play the markets, we assume that we are considering all of the available information. Instead, our beliefs, through selective perception, may have eliminated the most useful information. Is not some magical source that is the key to the markets, as most people believe. The metaphor of the “Holy Grail” ………….is all about finding yourself. More importantly, if you cannot accept that losses will occur, then you cannot accept a good trading system that will make a lot of money in the long run but might lose money 60 percent of the time. Most of traders lose because they don’t have a winning strategy. Apart from this even among those traders who do, many don’t follow their strategy. Trading puts pressure on weaker human traits and seems to seek out each individual’s Achilles’ heel. To be a successful trader, you have to be able to admit mistakes. People who are very bright don’t make very many mistakes. In a sense, they generally are correct. In trading, however, the person who can easily admit to being wrong is the one who walks away a winner. Besides trading, there is probably no other profession where you have to admit you’re wrong. In trading, you can’t hide your failures. Your equity provides a daily reflection of your performance. The trader who tries to blame his losses on external events will never learn from his mistakes. For a trader, rationalization is a guaranteed road to ultimate failure. You get recession, you get stock market declines. If you don’t understand that’s going to happen, then you are not ready and you will not do well in the markets. I think you have to learn that there’s a company behind every stock and there’s only one real reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies. Everyone has the power to follow the stock market. If you made it through fifth grade math, you can do it. If you make a bad trade and you have money management you are really not in much trouble. However, if you miss a good trade there is nowhere to turn. If you miss good trades with any regularity you’re finished. Most private traders on a losing streak keep trying to trade their way out of a hole. A loser thinks a successful trade is just around the corner, and that his luck is about to turn. He keeps putting on more trades and increases his size, all the while digging himself a deeper hole in the ice. The sensible thing to do would be to reduce your trading size and then stop and review your system. A beginner never writes down a plan because he has nothing to write. He is having too much fun chasing hot tips and trying to make a quick killing. Even if he wanted to write, he wouldn’t know where to begin. A serious amateur or a semi‐pro who writes down a plan, including money management rules, is on his way towards the expert level. I have stated before that whenever your worst fears are not realized about a trade and the market is letting you out better than you expected, it is not just luck. Rather your position is most likely correct and should not only be held but perhaps added to. Trading is a psychological game. Most people think that they’re playing against the market, but the market doesn’t care. You’re really playing against yourself. Maximize the good, minimize the bad, and continually forgive yourself. Losing money is the least of my troubles. A loss never bothers me after I take it. I forget it overnight. But being wrong, not taking the loss, that is what does the damage to the pocketbook and to the soul. I think investment psychology is by far the more important element, followed by risk control, with the least important consideration being the question of where you buy and sell. The key to trading success is emotional discipline. If intelligence were the key, there would be a lot more people making money trading… I know this will sound like a cliche, but the single most important reason that people lose money in the financial markets is that they don’t cut their losses short. Throughout all my years of investing I’ve found that the big money was never made in the buying or the selling. The big money was made in the waiting. Throughout my financial career, I have continually witnessed examples of other people that I have known being ruined by a failure to respect risk. If you don’t take a hard look at risk, it will take you. If I have positions going against me, I get right out; if they are going for me, I keep them… Risk control is the most important thing in trading. If you have a losing position that is making you uncomfortable, the solution is very simple: Get out, because you can always get back in. Don’t focus on making money; focus on protecting what you have. Most traders take a good system and destroy it by trying to make it into a perfect system. How did Berkshire’s track record happen? If you were an observer, you’d see that Warren did most of it sitting on his ass and reading. If you want to be an outlier in achievement, just sit on your ass and read most of your life. But they fire you for that! Experienced traders control risk, inexperienced traders chase gains. Don’t overestimate the skill and wisdom of professionals. Show me a good loser and I’ll show you a loser. Great traders do their best work when they are not trading; unsuccessful traders do not work when they are not trading. I haven’t seen much correlation between good trading and intelligence. Some outstanding traders are quite intelligent, but a few aren’t. Many outstanding intelligent people are horrible traders. Average intelligence is enough. To whatever degree you haven’t accepted the risk, is the same degree to which you will avoid the risk. Trying to avoid something that is unavoidable will have disastrous effects on your ability to trade successfully. A theme I have found in my research is that persistent uptrends rarely end abruptly. If you’re the smartest person in the room, you’re in the wrong room. Success is, like so many things in life, contagious. Discipline comes from confidence, confidence comes from methodologies that work. Investing is the intersection of economics and psychology. . . . The economics – the valuation of the business, is not that hard. The psychology — how much do you buy, do you buy it at this price, do you wait for a lower price, what do you do when it looks like the world might end, those things are harder. Knowing whether you stand there, buy more, or something legitimately has gone wrong and you need to sell, those are harder things. That you learn with experience.