Famous expectancy quotes or proverbs?

loyek590 said:
if you are a trend trader, you know going in that most of the time the market chops. A wise King counts the cost before going to war. If you count the cost of the chop accurately you will eventually be sitting on the right side of a trend, and that is where all the money is made.

Just another way of saying, "Cut your losses short and your profits will take care of themselves."

These are just proverbs, it can take a lifetime learning how to trade them. But if you want a winning strategy that will keep you alive much longer than the gullible trader who thinks he has some secret for guessing the high and the low, it is a good foundation. Observe the losing trader who takes many small profits and always thinks his losers will chop back to breakeven, until he gets on the wrong side of a big trend and gets wiped out. Then just do the opposite.

You can't have it both ways. Traders use stops because they assume the market will just keep running against them. Then they take a small profit because they assume the market will chop back against them. Make up you mind. If it's always going to chop, why use a stop? If you think it will just keep going why take a small profit?

oh yeah, and the other trading proverb, "Don't cast your pearls before swine." Oh well, I now have a 50% hit rate.
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" Don't cast your pearls before swine" seems to be the philosphy of most people who post on here.lol
Your first paragraph just about covers it.
Cheers John
 
Visaria said:
Does running big profits on a few trades necessarily cover the small losses of numerous trades?
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not necessarily, but it's a real bitch trying to wrack up enough small profits to cover that one large loss which trended harder and stronger than anybody in their right mind ever thought it could

"A few trades"? I should be so lucky, You mean more like "One Trade."

You can feel good most of the time or only once in a great while, the choice is entirely yours

I've made mine, you gotta make yours

small losses? Yes, that's all I ever do is take small losses. They become very pesky, it seems like there is no end to them. On a bad night I hang my head in shame and think, "There is no way I can make up all these small loses, it will take some kind of giant move just to get me whole again."
 
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Interesting book I read a few years ago:



I am going to greatly gloss over and simplify what's in the book--please forgive that, but do consider reading it if you have an interest. The book is about directional trading. You may think you do not know direction. But his premise is: yes, you do. You know that, over time, the US stock market goes up. That's your edge. The strategy he describes is: select some long term trades (for example, long IWM) and then leverage them using options or futures, putting the same trades on over and over, through thick and thin. He spends a lot of time discussing margin and how not to blow up--sizing is much more important than the actual underlying you pick.

It's not too hard to imagine that you can improve on this simple method by staggering your trades in terms of time and using some very simple technical analysis to choose optimum underlyings for market conditions.
 
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