It seems like only yesterday we were concerned about Y2k and had so-called pundits predicting a catastrophe with the world's computers going into a new millennium. I recall like it was yesterday the day madmen ran planes into the WTC. I recall Spring of 2000 out in AZ at the EL Tovar Hotel with a friend watching on her laptop as the tech market began to crash. I got hammered that Spring (and it made me more gun shy ever since); but I had a great view of the Grand Canyon, and food was great.
Here it is 6 years later. We are still surviving- and in fact the USA and world economies apparently are doing AOK. Even Chicago and Boston have World Series championships.
Thus I believe next year will be a positive one- and great trading opportunities will be prevalent. Of course this year did not start that way. In fact we all recall threads on ET.com proclaiming "Is trading Dead" (to paraphrase) and others bemoaning the end of viable trading markets. Perhaps many of us were spoiled by the markets of the 80s and 90s.
Anyway -- like many traders-- I like aphorisms... so here are some to ponder over the long Holiday weekend -- and as we move into a new trading year ----- 2006. There are many others of course, so if anyone wishes to post some that have particular appeal to them - please do so.
What is more mortifying than to feel you've missed the plum for want of courage to shake the tree?
Confidence comes from not always being right-- but from not fearing to be wrong.
To be absolutely certain about something, one must know everything or nothing about it
Making Mistakes is part of Business
[Michael Marcus - another top trader] taught me one other thing that is absolutely critical: You have to be willing to make mistakes regularly; there is nothing wrong with it. Michael taught me about making your best judgement, being wrong, making your next best judgement, being wrong, making your third best judgement, and then doubling your money... Bruce Kovner
Trading Paradox
I know it may sound strange to many readers, but there is an inverse relationship between analysis and trading results. More analysis or being able to make distinctions in the market's behavior will not produce better trading results. There are many traders who find themselves caught in this exasperating loop, thinking that more or better analysis is going to give them the confidence they need to do what needs to be done to achieve success. It's what I call a trading paradox that most traders find difficult, if not impossible to reconcile, until they realize you can't use analysis to overcome fear of being wrong or losing money. It just doesn't work!... Mark Douglas
Samurai Truth
Every trader knows that market truth and practice are visceral, not cerebral. Market wisdom, like Samurai truth, is practical truth that can only be utilized and realized in action. It can never reside on the level of mere theory... Robert Koppel, Tao of Trading
It Takes Courage To Be A Pig
The way to build superior long-term returns is through preservation of capital and home runs...When you have tremendous conviction on a trade, you have to go for the jugular. It takes courage to be a pig... Stanley Druckenmiller
Deal With Randomness
As humans we do not come equipped to deal with the variety of randomness that is around us every day. Many professions deal with making processes and things work reliably. We are taught to strive for perfection, for high scores in school and in sports. This can be a handicap to traders. There is no perfection in trading. Instead traders must put probability in their favor... Larry Sanders
Aim for Big Gains
One common adage...that is completely wrongheaded is: You can't go broke taking profits. That's precisely how many traders do go broke. While amateurs go broke by taking large losses, professionals go broke by taking small profits... William Eckhardt
Emotional Discipline
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... Victor Sperandeo
Learn to Take Losses
The most important thing in making money is not letting your losses get out of hand... Marty Schwartz
Be Defensive
Don't focus on making money; focus on protecting what you have... 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... Paul Tudor Jones
