Online trading is not an easy endeavour. If you wish to be a successful trader you have to master the trading techniques. Following the newsfeed on your favourite online broker, mine being cmc markets, is not always enough to give you a clear market analysis.
Developing a network of fellow traders and exchanging experience is a good way to know more about online trading. Famous traders post their ideas on blogs and forums, and some of what they say is so expressive that it becomes frequently quoted. Below are twenty insightful quotes about trading. A short explanation of each quote is provided afterwards.
#1: “In investment, what is usually comfortable is rarely profitable.” – Robert Arnott
This is especially true of amateur traders. Experts say that if you are comfortable in a trade, then you are not doing the right thing. Professional traders often take advantage of the amateur lack of knowledge and invest in price action opportunities.
#2: If you do personalize losses, you can’t trade.” – Bruce Kovner
Any trading position in Forex has equal chances of wins and losses. If you lose, don’t take personally. It is not a personal failure. Emotional trading will cause you all your equity.
#3: “If you are good in this business, you’re right only 6 times out of ten. You will never be right 9 times out of ten.” -Peter Lynch
This quote should give new traders a lot of self-confidence. When you know that even professional traders have a 60% win rate, you can believe in your potential and perform better next time.
#4: The price pattern is a reminder that every movement of importance is merely a recurrence of similar price movements, and that the moment you are able to familiarise yourself with past actions, you will then be able to anticipate as well as act in a correct ad profitable manner upon forthcoming movements. – Jesse Livermore
This quotation by the famous trader Livermore sums up the key factor to be a successful trader. Understanding the price action of the market over the past allows you to trade correctly.
#5: . “I have learned over the years that after a successful run of profits in the markets, it is usually crucial to take some days off as a reward. There is a natural tendency to keep pushing till the streak ends. However, I have learned from experience that a rest in the middle of the streak will often extend it.”- Marty Schwartz
One common mistake among traders is that they get glued to their computers following the market movement. They think that by doing this, they will be better traders. Reality is different. Experts recommend that we take a day or two off after each win or loss, so as not to become emotional traders. A win might push you to venture more and end up losing everything, and a loss can destroy your self esteem and ruin your career.
#6: What appears too high and risky in the eyes of many generally goes higher and likewise, what appears low and cheap will generally goes lower.” -William O’Neil
It is important to be able to read the price-action on a chart. It helps you to understand the trend of the market and diagnose the strengths and weaknesses of the market, to be able to trade.
#7: It normally takes up to twenty years to build a reputation but the same can be ruined in only 5 minutes. If you think about that, you’ll do things differently.” – Warren Buffett
This is a warning against risking too much at a time. You may lose everything and start all over again. One single trade can destroy years of success and progress.
#8: I’m always thinking of losing money as opposed to making money. Don’t focus on making-money, focus rather on protecting what you have” – Paul Tudor Jones.
A shrewd trader is one who preserves his capital. Don’t focus on making a lot of money. Find ways to keep what you have.
#9: Markets will constantly remain in a state of uncertainty and flux and real money-making consists in discounting the obvious but betting on the uncertain. – George Soros
When you have a sound understanding of the price action, you risk to go against the trend and make a lot of profits.
#10: “Emotional discipline is the key to successful trading. If the key were intelligent, then there would be a lot of people making money trading… This may sound like a cliché, but the one most important reason why people make losses in the financial markets is due to the fact they fail to cut their losses short.” Victor Sperandeo
You only need emotional intelligence and a bit of self control to be successful at trading. Your IQ level is of no importance.
#11: The prime goal of a successful trader consists in making the best trades. Money is secondary.” – Alexander Elder
To succeed, learn the secrets of trading. After this, money will come naturally. It is like a student who focuses on success and not learning. If you learn, success will follow. The opposite is not true.
#12: “When I’m bearish and I sell a stock, each sale must be at a lower level than the previous sale. When I buy, the reverse becomes true. I should buy on a rising scale. I don’t buy long-stock on a scale down but on a scale up.” Jesse Livermore
If you have a market prediction in mind and then suddenly your trading position starts to lose, don’t wait for the market to change to prove your assumption. Sell it out! Preserving your capital is more essential than proving your theory.
#13: “It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.” George Soros
Close your losing positions and increase your winning ones. Limit your losses to preserve your capital.
#14: “When you merge ignorance with leverage, you achieve some pretty fascinating results.” Warren Buffett
You should know how to raise and lower your leverage to avoid massive losses.
#15: Wide diversification is merely needed when investors happen not to understand whatever they are doing.” Warren Buffett
When you open position, try your trading strategy to only a few currency pairs and see how it goes. If it proves to be successful you can widen it and apply it to more currency pairs.
#16: “There is only one side of the market and it is not the bull side or the bear side, but the right side. Jesse Livermore
If you wish to make money, follow the trend and don’t swim against the tide.
#17: “If past history was everything there was to this game, the wealthiest people would all be librarians.” Warren Buffett
Relying too much on the past is not always helpful. While it is important to look at the past to understand price action, it is not always possible to use the past to predict the future of the market.
#18: “An investor without investment objectives is like a traveler without a destination.” – Ralph Seger
There must be a trading strategy and trading goal every time you open a position. Develop your trading theory , set your goals and keep checking it all the way through. If it goes contrary to plan sell it out to minimize your losses. Remember, the ultimate goal is to preserve your capital.
#19: “If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring.” – George Soros
When you are comfortable in your trade, then you are not doing the right thing. Good investing involves a lot of research to discover the market trend and invest accordingly. It is by no means fun.
#20: “Experienced traders control the risks, inexperienced traders chase gains.”- Alan Farley
Minimizing your risks of loss is far more important than focusing on gains. Good trading is when you come to understand the game and start acting accordingly. Preserving what you have is vital to survive in Forex.