Trading Maxims/Quotes

It seemed strange to me that a member of the prestigious Chicago Board of Trade could be a smashing success one year and begging for work the next.

Mark Ritchie
God in the Pits: Confessions of a Commodities Trader, 1990, p. 151
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The stock market is like sex. It feels the best just before it ends.

Harvey Eisen
Dow and Jones: The Wizards of Wall Street
"Biography: A & E Television Network"
March 5, 1997
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I'm not a seat-of-the-pants person, and options trading is a seat-of-the-pants business.

Elizabeth Mackay
Women of the Street
Sue Herera
1997, p. 75
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Read every book by traders to study where they lost money. You will learn nothing relevant from their profits (the markets adjust). You will learn from their losses.

Nassim Taleb
Derivatives Strategy, April, 1997, p. 25
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People always get excited when they hear about this strategy called ‘covered call writing.' They like the idea of picking up income - who doesn't - but rarely grasp the significance of the fact when the train leaves the station heading north, they won't be on it.

Don Chance
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It might sound like a whole new ballgame, but once you cut through the language, you were generally back to basics. Buy and sell, sell and buy, differences of opinion as to the worth and prospects of pieces of paper, that's what it came down to.

Hanover Place
Michael M. Thomas, 1990, p. 540
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In your grandfather's day, it was all buy and sell, sell and buy. No god but the tape, and speculators and traders were its prophets.

Hanover Place
Michael M. Thomas, 1990, p. 229
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To some extent -but only some - Wall Street resembled a dogfight. The business demanded open eyes, wits about you, and the assumption that even the silkiest cloud contained enemy fighters waiting to pounce. But there any real similarity ended. People on the street liked to employ the language of combat, but money was one thing; bullets quite another. The amount of coolness and nerve required to stand firm in a market panic was a pale fraction of what it took to get through a minute of combat in the trenches or in the air.

Hanover Place
Michael M. Thomas, 1990, p. 37
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Trading is like sex. You don't have to be good at it to enjoy it.

Larry Williams
Quoted in Futures magazine, June, 1998, p. 18
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When I put my PC out on the trading floor in 1985, a senior manager asked "What are you doing? This is a trading floor. You're not allowed to have a PC.

Jeffrey Larsen
Quoted in Derivatives Strategies magazine, May, 1998, p. 39
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There are few things more frightening in the financial markets than senior executives suffering from the Tinkerbelle disease ('I believe, I believe') - the main symptom of which is an uqualified acceptance of the high profits reported by traders using 'superior' proprietary models.

Lee Wakeman
Quoted in Risk magazine, September, 1998, p. 31
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Trading is like no other profession I can think of other than dragon slaying. Facing that hot breath and those toothy jaws fearlessly, armed only with belief in oneself, on a daily basis.

Mara Koppel
Women of the Pits
1998, p. xii
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Josh
 
If I had any learning
Of a highway wide and fit,
Would I lose it at each turning ?
Yet look at people spurning
Natural use of it !
See how fine the palaces
And see how poor the farms,
How bare the pesants' granaries
While gentry wear embroideries
Hiding sharpened arms,
And the more they have the more they seize,
How can there be such men as these
Who never hunger, never thirst,
Yet eat and drink until they burst !
There are other brigands, but these are the worst
Of all the highway's harms.

..........Lao Tzu.........604 BC
 
- Try very hard to get aboard those big days.

- Don't wait around for a lot of confirming action. The train leaves promptly.

- Jump the gun. Have a tight stop and stop looking for a sure thing.

- It is difficult to be too quick or too decisive.
 
Like ancient mariners, traders wait for some bit of news to billow their financial sails and send them breezily on to a pleasing destination.

Mara Koppel
Women of the Pits
1998, p. x

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The traders spend their day in that eerie, perfect state the rest of us achieve only sometimes when we're playing sports, having sex, gambling, or driving fast. Think of traders as doing all those things at once, minus perhaps the sex.

P. J. O'Rourke
Eat the Rich
1998, p. 21

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When I first came down here, I was Mr. Big Ego. I had a law degree and here were all these ex-cops and truck drivers and people with 200-word vocabularies trading in the pits. I figured I'd make a killing, right? With this competition, how could you lose? Then I got the shit kicked out of me. Then I got the shit kicked out of me again. You know what I've learned down here? Humility. Discipline. You come into this business with any sense of superiority, and you're dead.

Marty Dickman, corn trader
A Fool and His Money
John Rothchild, 1997, p. 184

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You hear a lot of rationalization such as 'This trade didn't work out, but if I keep doing it, it will work out.'

Marty O'Connell
Derivatives Strategy, September, 1999, p. 41.

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You still see situations in which traders commit risk violations and the manager overlooks them because the position made money. Those managers have a lot of nerve cashing their paychecks.

Marty O'Connell
Derivatives Strategy, September, 1999, p. 42.

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"It takes two things to make a good trader," Struve advises Norman. "You have to understand the mathematics, and you need street smarts. You don't want to be the guy with thick glasses who is reading the sheet just when the freight train is about to roll over you. The street-smart guy will pick up a couple of quarters and get out of the way."

The Predictors
Thomas A. Bass, 1999, pp. 126-127.

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Even if we didn't believe it for a second, there's an undeniable adrenaline jab that comes from someone telling you that you're going to make five hundred million dollars.

Doyne Farmer
Quoted in The Predictors
Thomas A. Bass, 1999, p. 119

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There weren't many traders at the sharp end over thirty. Eyes flitting between flickering lines of information on four differenct screens, one ear on the phone, the other on the cries of colleagues, twelve hours of split-second calculation, judging yourself and being judged on the score at the end of every day. These men and women lived and breathed the market.


Linda Davies
Into the Fire
1999, p. 34


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"It is like watching your favorite soap opera," Ozdek says. "You know all the characters. You know the basic plot. But you never really know how the day is going to end."


Turk Ozdek
Quoted in Futures, July, 2001
p. 86
==================


Josh
 
Blaming derivatives for financial losses is akin to blaming cars for drunk driving fatalities.

Christopher L. Culp
MediaNomics, April, 1995, p. 4

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"‘Derivatives.' That's the 11-letter four-letter word.

Richard Syron, Chairman, American Stock Exchange
Fortune, March 20, 1995, p. 50

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They're here, they're weird, and they're not going away. Yes, these beasties bite, but companies that tame them have a competitive edge.

Terente P. Paré
Fortune, July 25, 1994, p. 106

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We use a number of tools to manage our investment portfolio for the highest return, while minimizing risk. Some of these tools happen to be called ‘derivatives.'

Anonymous respondent quoted in
1996 Capital Access Corporation Survey on Derivatives

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Derivatives are like NFL quarterbacks. They get too much of the credit and too much of the blame.

Gerald Corrigan, Goldman Sachs
Speech before the State of Wisconsin Investment Board
May 5, 1994 (and repeated at other times)

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Derivatives are nothing more than a set of tools. And just as a saw can build your house, it can cut off your arm if it isn't used properly.

Walter D. Hops, Treasurer, Ciba-Geigy
Business Week, October 31, 1994, p. 98

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The beauty of derivatives is that they self-destruct every month and you get another commission.

Don Stone, NYSE specialist
Stealing the Market by Martin Mayer
1992, p. 84


=============




Josh
 
Definition of Equity: Mysterious kind of money that everybody is always claiming belongs to you even though you never actually see it.

Dave Barry
Homes and Other Black Holes, 1988

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Futures markets are designed to permit trading among strangers, as against other markets which permit only trading among friends.

Terence Martell, former Research Director, COMEX
The Wall Street Journal, March 2, 1995, p. A14

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I use derivatives - you got a problem with that?

Anonymous inscription seen on t-shirts, buttons in 1995

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You will be amazed at how much common sense you'll have to drop in order to understand this business.

Joe Ritchie
God in the Pits: Confessions of a Commodities Trader, 1990, p. 8
Mark Ritchie

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I started to look at the stock market but got really confused by 3,000 - 4,000 stocks - this was before personal computers - and I knew there was something called the futures market lurking out there, but I thought it might be illegal or immoral.

John Fritz, futures trader
Futures, November, 1995, p. 90

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Wall Street has always been a workplace with a high coincidence of occupational hazards and these days the perils range from OPEC to computer viruses to the Chicago Board of Trade.

East is East (fiction), 1991, p. 1
Emma Lathen

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We must avoid the temptation to demonize derivatives, which are a vital tool in modern financial markets. They are so useful in managing risk that if they didn't exist, we would surely have to invent them.

Arthur Levitt, SEC Chairman
Risk/Emerging Markets, April, 1996, p. 42

==========



Josh
 
Trade the market like you are surfing. Be agile and surrender to the forces. Ride the wave and know when to get out before it crests and crashes. If you miss one wave, know that there is always another one right behind it.
 
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