The 10 Best Things Ever Said About Trading
And how to use them to secure your financial freedom
Amber's the co-editor of successful advisory newsletter. Each day the market is open, Amber provides her subscribers with trade recommendations based upon the best investment ideas
coming out of her entire analyst department at her office. To date, 97% of these recommendations have been winners, for an average annualized return of 19.5%. Sure, it's wonderful to get top-notch trade recommendations but it's even better to learn how to become a great trader. Below Amber shares a compilation of these must-read lessons.
By Amber Lee Mason
1. "I just wait until there is money lying in the corner, and all I have to do is go over there and pick it up. I do nothing in the meantime." – Jim Rogers
Of all the brilliant things Jim Rogers has ever said, I believe this one is head-and-shoulders above the rest.
Rogers is one of the most successful money managers in history. He made so much money investing and trading during the 1970s, he left the conventional side of work to travel and run his own money. You can read more about him in the greatest trading book ever, Market Wizards.
In that short quote above, Rogers nails one of the most important factors to trading and investment success: Don't spend your time and energy chasing mediocre trades and investment opportunities. Only move when the odds are overwhelmingly in your favor.
If you follow his lead, you'll probably end up a very successful trader. If you don't, you'll contribute to the bank accounts of those who do follow his lead.
You see, the average market participant always feels like he has to be "doing something." He chases all kinds of ideas... takes lots of "fliers"... acts on all kinds of magazine articles, CNBC shows, and hot tips from buddies. He's always on his phone or computer checking quotes. He usually has a bunch of stocks in his portfolio that are down big... but are sure to "come back." Not Jim Rogers.
In all his books, interviews, and articles, Rogers makes it clear he spends long stretches of time without having significant money at work in the market. He waits for extraordinary opportunities, where the odds are so far in his favor, the position is like picking up free money. When he doesn't see any sure things, he simply sits in cash and does nothing.
Now, don't get me wrong. There are few 100% can't-lose trades and investments in this world. I'm not encouraging you to find trades that carry no risk of loss. I'm encouraging you to find trades where the odds are heavily stacked in your favor.
Find "extreme" opportunities... where the sentiment toward an asset is shifted to one side... where the valuation is ridiculously expensive or ridiculously cheap... and where the market is moving in the right direction and confirming your thesis. These are the opportunities where you can risk $1 and make $5 or $10. Only then should you commit a large chunk of capital to an idea.
If you're not seeing any extremes, it's best to fight the natural urge to stay busy and make "this might-could-kinda-work" trades. These trades will just distract you, cause stress, and run up your commission bill.
Most older, rich investors and traders will tell you they made most of their money on five or 10 positions they had tremendous conviction in... where it felt like they were simply picking up free money. They'll tell you the other positions weren't worth the time it took to put them on.
This is not to say there aren't a lot of great traders out there who make quick, frequent trades. But folks who can do that are few and far between. Most regular traders don't have the time or the temperament for it.
So be lazy in the market. Don't worry about sitting on a big pile of cash, waiting for low-risk, high-reward trades. It's the idea behind "free money" trading. It's the thinking that built and maintained Jim Rogers' wealth. It can do the same for you.
2. "Wall Street's graveyards are filled with men who were right too soon."
– William Hamilton
I know... this quote sounds bizarre. But hear me out: It contains an incredible seed of trading knowledge.
Hamilton was one of the first editors of the Wall Street Journal... He was one of the country's most respected market analysts 80 years ago. And the legendary market advisor Richard Russell still recommends reading Hamilton's book The Stock Market Barometer, once a year. So what does Hamilton mean by "right too soon"?
Well, many traders and investors have a strong "hero streak" in them. They have a lot of confidence in their ability to value assets and gauge investor sentiment. They love to "see what others don't," step into a runaway market, and bet on prices moving the other way.
It's an exciting way to trade. It's like being the only guy standing on the beach while a hurricane approaches. Problem is, the hurricane will usually blow you into the next state.
That hurricane hit a lot of traders in late 1999... Tech stocks had absolutely soared for five years, many companies were trading for 100 or 200 times earnings, and sentiment was overwhelmingly shifted to one side. It was an extreme situation – the kind you should always be hunting for.
Any experienced trader was looking to bet the other way. But any trader who actually made the bet was "right too soon." Take a look...
Even though the Nasdaq was overvalued at the time... even though the rally was long in the tooth... it was a bad move to short with the Nasdaq at 3,500 (circled in red). It was too early. The crazed public drove the index 30% higher over the coming months.
Now, have a look at the blue circle. What's so special about this area? This was the point at which the market started moving in the "direction of sanity." This was the point the bubble popped. This was the market getting started in the direction the bears believed it would. Traders call this "price confirmation."
Smart traders always wait for a bit of "price confirmation" before they back a trading thesis with big money.
They know the market can run far away from rational fundamental values. They know how easy it is to be "right too soon." So they wait for the price to move in their direction for five or 10 trading sessions... or they wait for the price to break through a moving average.
The point is, they let the market exhaust itself before they step in. So it's as easy as pushing over an exhausted runner (on the bear side)... or climbing aboard a gently moving freight train (on the bull side).
Wall Street's graveyards are filled with guys who got killed because they tried to step in front of runaway markets. So keep Hamilton's words in mind anytime you're considering being a "hero." Find market extremes... then wait to be right.
3. "It never was my thinking that made big money for me. It was always my sitting. Got that? My sitting
tight!" – Jesse Livermore
Jesse Livermore was one of the most respected traders of the 1920s. He built one of America's largest fortunes at the time with his skills in the stock and commodity markets. The classic book Reminiscences of a Stock Operator contains his story.
"Sitting tight" was Livermore's term for not selling when he was up 20%... 50%... or 100% on a position. Sitting tight is the art of not taking quick profits.
You see, most traders and investors get tempted to sell their winners after they see a modest profit... like, say, 33%. They get fidgety. They tell themselves that, "You can't go broke taking a profit." They always feel like they should be doing something, so they take action and jump out of the winning trade. This strategy will kill your long-term trading performance.
For instance... I have a friend who bought shares of Brazilian oil company Petrobras in 2003 for around $5 per share. He doubled his money in just over a year... and then sold. Nothing negative happened with the position – he just got fidgety and figured a double was good enough.
It's a shame my friend didn't "sit tight," because Petrobras eventually climbed to $70 per share. He missed the chance to make 14 times his money instead of one times his money. He missed the chance to ride a huge, multi-year trend in oil stocks to its fullest extent.
That's it. When you are right on a trade – whether it's tech stocks, biotech stocks, oil, or gold – ride it for all it's worth. Don't cut your profits short. Don't sell until you see a legitimate reason for concern... like a decline of more than 15%... or an asset's refusal to rise on bullish news. One of the best ways to get rich in the stock market is to get in early on a big trend and ride it for years... You can't ride a trend if you don't sit tight.
And although we're concerned with trading here, it's worth pointing out a key fact about the world's greatest investor, Warren Buffett... Buffett's partner, Charlie Munger, claims Buffett's edge over other investors is that he "sits on his ass and reads a lot." Buffett spends most of his time sitting. And don't forget Jim Rogers' "I just wait until there is money lying in the corner" philosophy.
You see, you can go broke taking profits... if you allow losers to pile up and if you cut profits short. Learning how to sit tight will make sure you let winners pile up instead.
4. "Never confuse brains with a bull market."
– Humphrey Neill
Congratulations. You found an asset that was extremely cheap... extremely hated... and just starting an uptrend. You took an intelligent position size that limited risk. You did a great job of sitting tight... of being patient and letting the bull market fully express itself. You are up 500%. Now... for God's sake... Don't confuse brains with a bull market.
This classic quote is attributed to Humphrey Neill. Neill was a stock market expert who literally wrote the book on contrarian investment thinking. It's called The Art of Contrary Thinking. Neill's advice will save you a ton of money as a trader.
You see, the natural human tendency after hitting it big in the market is to "puff up" a bit... to brag to friends and family about how you "nailed it."
Maybe you did some great analysis on the oil market and rode a big move for hundreds of thousands of dollars. Or maybe you found a promising microcap company that turned into a 1,000% winner.
The natural human tendency after doing something great is hubris. And in the stock market, hubris is more dangerous than ignorance.
In 1999, I thought of myself as a great stock trader. I was 22 years old... and I was sitting on huge gains in tech stocks like JDS Uniphase, Ariba, and Microsoft. I would buy 'em, and they'd go up hundreds of percent. I made more money trading stocks that year than I did from my job.
I figured I would be retired and living on a private island by my late 20s. That's how good I was!
Now mind you, this was during the greatest tech stock bull market in history. The benchmark Nasdaq stock index gained 86% that year. I wasn't some incredible trader. I simply happened to be buying while the market was soaring. I had confused brains with a bull market.
You can guess what happened next. When the market collapsed, so did my huge tech stock bets. I didn't use stop losses. I didn't practice smart position sizing. I lost everything I had gained and then some.
It was expensive market tuition... but it taught me a tremendously valuable lesson.
Rich traders reach a happy medium between confidence and overconfidence. The right balance means having conviction in your beliefs and the courage to act on them... but always treating the market as a dangerous place that can bankrupt you if you don't use intelligent positions sizes and stop losses.
The wrong balance is being overconfident, taking a huge leveraged position, and refusing to say "uncle" if the market doesn't move in your direction.
If you've made a bundle on a big market move, go ahead and celebrate a little. Brag to your buddies. Go on a nice vacation.
But take Humphrey Neill's advice... Remember the lesson of the Internet bubble. Don't believe that just because you were right before, you don't have to limit risk. Confusing brains with a bull market will result in bankruptcy.
5. "When you have tremendous conviction on a trade, you have to go for the jugular. It takes courage to be a pig." – Stanley Druckenmiller
This quote is the financial equivalent of nuclear energy: a source of tremendous power that can be used to drive progress... or to cause complete destruction. It's so dangerous, I debated not including this piece.
You see, this idea is one of the keys to making a fortune in the stock market... the idea of being a "pig."
Stanley Druckenmiller is one of the most successful money managers of all time. He earned an estimated $150 million in 2008. He learned much of what he knows from legendary speculator George Soros. That's where he learned to be a pig.
There's an old Wall Street adage that says, "Bears make money, bulls make money, but pigs get slaughtered." The idea is that you can make money when stocks go down (the bear side) or when they go up (the bull side)... but anyone who behaves like a pig – who gets too greedy – is destined to lose.
Soros and Druckenmiller don't agree with this line of thinking. They know that to make tremendous returns, you have to back your best ideas with large positions. You have to get greedy when you find an amazing risk-reward situation. Hitting a big trade with a tiny position size just doesn't generate big returns. You have to be a pig. But here's where this idea gets dangerous...
The No. 1 cause of catastrophic losses – the kind of financial blow that will bankrupt someone – is losing a big percentage of a big position. So why would I encourage you to learn about this weapon of mass financial destruction?
Because used correctly, a large position size in a great idea can make you rich. Because being a pig can make your year, doubling or tripling your account. It can be the difference between making $20,000 or $200,000 on a big trend, like the monster 500% move many gold stocks enjoyed from 2003 to 2008.
Normally, a trader should avoid putting more than 5% of his money into one idea. If you use a stop loss of 20% on a 5% position, you will only lose 1% of your total portfolio if you are wrong.
But occasionally, when trade is close to "slam dunk" territory – when the reward-to-risk ratio is 6, 8, or 10 to 1 – a large position size of 10% or 20% of your portfolio allows you to make huge gains. The way to build superior long-term returns is through your "home run" trades... which must be backed by real money... not a 3% position.
Someone who isn't comfortable taking losses and minding their sell discipline should never take large positions sizes. If you can't cut losers short, you're playing Russian roulette when you take big positions. It's only a matter of time before you're toast. And if you're not good at recognizing great high-reward/low-risk trades, then please keep your position sizes small.
Only after years of successful trading and mastering stop losses should you evenconsider a position size greater than 5%.
But if you have extensive experience under your belt, you need to brush off the old Wall Street wisdom and pay attention to filthy rich traders like George Soros and Stanley Druckenmiller. You must make big money on your best high-reward/low-risk trades. You must be a pig.
6. "The market can stay irrational longer than you can stay solvent."
– John Maynard Keynes
At some point in his career, every trader will confront the ghost of John Maynard Keynes. The decision he makes then will either ruin him or save him a fortune.
John Maynard Keynes was the most influential economist of the 20th century. His ideas shaped the way the Western world ran its finances after World War II. Keynes was also a brilliant speculator who pulled millions of dollars out of the market.
While I believe some of Keynes' economic ideas were batty (a subject for another time), his quote above is one of the most important things ever said about trading. It's how Keynes' ghost will forever live in the minds of traders.
You see, Keynes brilliantly cautions traders against shorting a stock or a market that "shouldn't" be rising... and cautions against buying a stock or a market that "shouldn't" be falling.
Great traders are always on the lookout for extremes: extremes in sentiment, extremes in valuation, and extremes in momentum. It's by finding extremes and then betting against the crowd that you set yourself up for big gains in a short time. But watch out for the problem Keynes warns about: The crowd often gets irrationaland stays that way for a long time.
For example, a lot of money managers believed the enormous rise in oil prices starting in early 2007 was an irrational move. When crude oil had risen from $50 to $90 a barrel in early 2008, they knew speculators with lots of borrowed money were behind the move. And they knew oil was selling for at least 50% more than its real-world value. So they bet on falling prices.
When oil climbed to $100 a barrel, these money managers knew it was even more irrationally overvalued. Same with $115... and $125... and $135... and you get the idea.
Any trader who stubbornly held on to his short position because he just knew $90 was an "irrational" price suffered the longest summer of his life. He watched that irrational price tick higher and higher like Chinese water torture... and his losses were huge.
Any trader who was short at $90 and hung on was carried out a broken man... He forgot the market can stay irrational longer than any one single person can heavily bet against it and stay solvent.
The market is full of stories like this... Think of the traders who went bankrupt shorting super expensive Nasdaq stocks in 1999... or the famous blow-up of Long Term Capital Management in 1998. Both groups took big positions against markets they felt were behaving irrationally... but those markets just kept on behaving irrationally for a long time.
A corollary to Keynes' quote is the Jim Rogers line, "Markets often rise higher than you think is possible, and fall deeper than we can imagine."
You can put the warning from Keynes and Rogers to real-world use by always minding your stop losses. Go ahead and take a contrarian position at the extremes. But always have an "uncle" point to limit losses in case the crowd keeps pushing prices in a crazy direction.
It's tough to watch a stock you know inside and out move in a direction that isn't rooted in reality. But remember... if a stock can trade for an irrational 50 times earnings, it can trade for an irrational 75 times earnings... or 100 times earnings... or as we saw in the Nasdaq bubble days, 200 times earnings.
It's tough to say uncle on a trade you know has terrific potential. But when you start thinking, "This is an irrational move... I'll just keep betting against it," remember Keynes and Rogers. Know that markets can go farther in either direction than you can imagine... and they can keep going longer than you can stay solvent.
7. "The elements of good trading are: (1) cutting losses, (2) cutting losses, and (3) cutting losses. If you follow these three rules, you may have a chance." – Ed Seykota
Imagine someone rounded up the greatest golfers of all time, sat them down, and asked them how to become a great golfer.
Now imagine that all of them – Arnold Palmer, Ben Hogan, Jack Nicklaus, Tiger Woods, and so on – recommended using the same technique to achieve incredible success. Maybe they tell you to keep your head down or to keep your arm straight. If you wanted to become a great golfer, you'd probably make this technique your main focus.
This sort of thing has been done in the business of trading. You'll find it in the greatest trading book of all time, Market Wizards. This book is a series of interviews with some of the richest, most successful traders to ever live. It's also a series of stories about one trading technique, which Ed Seykota captured in the quote above.
The technique is cutting your losses. Of selling a position if it's not moving in your favor. It's the key to turning your trading into a lifetime builder of wealth.
Seykota is a legendary "trend following" trader who made himself and his clients millions and millions of dollars. His quote is a lot like the real estate cliché, "location, location, location." The idea of cutting losses is so much more important than everything else, it needs to be repeated three times.
Other legendary traders say the same thing... William O'Neil, the great stock trader and founder of the newspaper Investor's Business Daily puts it like this: "Letting losses run is the most serious mistake made by most investors." The great short-term trader Marty Schwartz puts it like this: "Learn to take losses. The most important thing in making money is not letting your losses get out of hand."
Now... it's easy to read all of this great "cut your losers short and let your winners ride" stuff. It's easy to repeat it to yourself while you're driving or lying in bed. But for many traders, the execution of this idea is difficult. Many traders just can't say, "Well, I'm wrong on this one... Time to admit it, protect my capital, and move on." If you're one of these traders, here's a technique that could mean a lifetime of profitable trading...
Let's say you're trading a $50,000 account and having trouble cutting losses. When you look at your account statement at the end of the year, you see a series of large losses overwhelming your small winners.
Take a small portion of your total account – maybe $3,000 or $5,000 – and start trading a volatile sector of the market. Small-cap Chinese stocks, biotech stocks, or mining stocks work beautifully here.
Instead of placing your normal-sized position in these stocks, place just $300 or $500 into each trade. Use a stop loss of 10% or 25% on each trade. Make a lot of trades with this small "training account." When one of these trades goes against you, cut your loss and move on. You'll lose maybe $50 or $125 per trade.
Make as many of these micro trades as it takes in order to turn loss-cutting into an automatic reaction... just like throwing your arms out for balance when you slip on ice. Practice loss cutting just like you would practice the piano and you'll get great at it. You'll know what the Market Wizards know... and you'll start acting like them. Wealth will follow.
8. "Buy when there is blood in the streets."
– Nathan Rothschild
Back in his day, Nathan Rothschild was like Warren Buffett and Alan Greenspan rolled into one.
Nathan was one of the founding members of the greatest banking dynasty in history. He and his family bankrolled wars, giant gold purchases, governments, and anything else that could pay them interest. Even kings couldn't match Nathan's power and influence. He's considered the man who financed Napoleon's final defeat at Waterloo in 1815.
Today, many estimate the Rothschild fortune totals billions or even trillions of dollars. (The family has always managed their accounts the right way: so nobody knows how large they are.)
Despite the enormous wealth he accumulated, Nathan is best known by the classic contrarian investment quote above, which is No. 8 in our series of all-time great trading quotes.
"Blood in the streets" has become a cliché, but for good reason: To make extraordinary gains, you must buy an asset near the point of maximum pessimism.
In Nathan's day, in 19th century Europe, folks had plenty of chances to buy when blood literally soaked city streets and battlefields. The developing nations fought hideous wars at least once a generation. In today's age of relative peace, however, it's tougher to follow Nathan's lead.
I can't tell you to hop on a plane and scout rental properties or stock investments in a war zone. So here's the main thing to take away from "blood in the streets"... Great investors and traders are like birddogs for news of disaster and despondency. They don't wince at headlines like "Gambling industry bankrupt," or "Indian stock market crashes for seventh day in a row." They get excited.
They know desperate situations create incredible values and incredible extremes in sentiment. They are always on the hunt for places where "things can't get any worse"... When things "can't get any worse," they can only get better.
It's only when things can't get any worse that you can buy world-class businesses for just four or five times annual profits... or safe bonds yielding 18%... or trophy properties for 80% below their highs. And despite what your emotions tell you, dark and gloomy situations have a way of working themselves out.
Note that in March 2009, most folks believed the Great Depression II was in the cards. There was plenty of blood on the balance sheets of bankrupt businesses and homeowners. The average stock climbed 60% in six months after the pessimism blew over. Many stocks climbed 200% and 300%.
So turn your completely normal, knee-jerk reaction to good news on its head. Don't rush out to buy a stock, a piece of land, or a commodity based on some bullish headline like "Analysts all agree... crude oil is going higher." Instead, hunt for headlines like, "Uranium prices sink to historic low... industry desperate for money," or "Argentina suffers currency crisis." Both of these headlines preceded huge gains in the past decade.
Like many great trading ideas, Nathan's quote has been "repeated" by other skilled investors: Warren Buffett tells us, "Be greedy when others are fearful and fearful when others are greedy." Steve Sjuggerud says, "You make triple-digit gains not when things go from bad to good, but when things go from bad to less bad." Peter Steidlmayer reminded us that these trades can be hard to make because of fear... but, "The hard trade is the right trade."
However it's phrased, the idea behind "blood in the streets" is the same: Be on the lookout for desperate, blown-out sectors, commodities, and countries. This is where you'll find extraordinary deals. It's been the surest way to triple-digit profits for hundreds of years. It will be the surest way for hundreds more.
9. "The most important rule of trading is to play great defense, not great offense. Every day I assume every position I have is wrong." – Paul Tudor Jones
Tucked near the middle of the greatest book on trading ever produced are 23 pages of pure paranoia.
These 23 pages center on a guy who sees trouble around every corner... a guy obsessed with risk... a guy probably worth over $3 billion... a guy who correctly called the 1987 stock market crash, made over $80 million in the process, and will go down as one of the greatest trading minds of all time.
Pages 117 through 139 of Market Wizards contain an interview with legendary trader Paul Tudor Jones.
For many years, Jones was the picture of the Wall Street big shot. He owned an enormous Chesapeake Bay mansion. He took skiing trips to Switzerland. He married a fashion model. To this day, Jones controls one of the largest hedge funds in the world.
He became so successful because of the idea behind the quote above – the idea that playing great defense is the key to succeeding in the markets. He became so successful by focusing on not losing money... His billions came as a result.
Reading Jones' interview will take you less than 10 minutes... and it might be the greatest "time put in versus value received" proposition an investor or trader will ever get. You'll find that for a guy associated with "winning" so much money, Jones constantly talks about losing... he constantly talks about playing great defense. There's a comment on defense on nearly every page. In addition to his quote above, he says:
• Don't focus on making money. Focus on protecting what you have.
• I know that to be successful [in trading], I have to be frightened.
• I am always thinking about losing money as opposed to making money.
• Risk control is the most important thing in trading.
• Never play macho man with the market.
Like all great traders, Jones sees his No. 1 job as cutting risk to the bone. You can cut your own risk by always using protective stop losses and intelligent position sizing.
Bottom line: Keep your losses small and your winners large. And never put more than 1% or 2% of your account at risk on a given trade. An amateur trader will often risk 5% to 10% of his account on a trade, which eventually leads to disaster.
Most people lose in the stock market. It's an incredibly hostile place, where you're going toe-to-toe with the world's smartest people.
So I encourage you to buy Market Wizards and read Jones' interview many times. Repeating his "defense" lines over and over is about the best "daily affirmation" a trader or investor will find.
Playing great defense. Winning by not losing. It's the system Paul Tudor Jones used to become a billionaire... and it's the second most important factor in your trading success.
10. "The realization that you are responsible for your results is the key to successful investing. Winners know they are responsible for their results; losers think they are not." – Dr. Van K. Tharp
I saved this quote for the final essay in our series of all-time great trading quotes. It's the "broccoli" of trading. It's the one few people want to read. And that's a shame, because the idea contained in this quote is far and away the No. 1 factor in your success as a trader or investor.
Most folks who make it through the next 400 words will decide this essay simply doesn't apply to them. Those people will always lose in the market. They will always lose in life. And worst of all, they'll believe those losses are not their fault.
Dr. Van K. Tharp is an investor, trader, and famed trading psychologist. For decades, Tharp has worked with traders to develop winning trading systems and mindsets. His work landed him in the trading classic, Market Wizards. Of all the fancy trading systems and stock strategies Tharp could present as the "Holy Grail" for traders, this is what he chose. Personal responsibility is the Holy Grail.
For most people, the natural tendency is to find someone – anyone – to blame for their failures. It's too painful for most people to just come out and admit they screwed up. Since money is such an emotionally charged topic, the "blame game" is especially common in trading.
Folks blame their broker for bad advice. They blame an advisory writer for a stock tip that doesn't pan out. They blame Wall Street for its rigged game. They blame the government, Jim Cramer, God, conspiracy theories, and anything else you can think of. They point their finger at everyone except the person in the mirror.
The "finger pointing" mindset is the loser's mindset, whether you're talking about sports, work, relationships, or trading. Unfortunately, most people have it. Most people simply will not accept full responsibility for their actions... and it suffocates their progress.
When you always accept responsibility for your actions, you set yourself up for a lifetime of progress and betterment. When you acknowledge your errors and discover why you made them, you can take steps to correct them. Blaming someone else for your trading failures is like ignoring an awful sound from your car's engine. If you ignore the sound, you'll eventually find yourself in the middle of nowhere with a car that won't move.
How does this apply to trading? Let's say you've been taking big losses on your stocks. When you accept that you should have minded your stop losses – but didn't – then you can make it a point to fix the problem. Or let's say the stock-picking method you're using isn't working. When you accept that it's your responsibility to decide what's best for your money – and not the responsibility of a guy on television or a stock broker – you can start looking around for a method that works.
You – and you alone – are responsible for the gains and losses in your trading account. You must take all of the wisdom and strategies accumulated by legends like Paul Tudor Jones and Stanley Druckenmiller and put them to use.
Van Tharp has spent most of his adult life – decades – working with winning traders and losing traders. This is what he found separates the two. Many of life's dilemmas are not "black or white" choices. Many of them are different shades of grey. This one is not. You either accept responsibility for your results and learn how to win... or you do not accept responsibility for your results and always lose.
If you're looking for the Holy Grail of trading, it's not in a book, stock picking system, Fibonacci series, or a currency advisor. It's embedded in Tharp's quote. It looks you in the eye every time you look at a mirror.
P.S. I consider Van's book Trade Your Way to Financial Freedom the second-best book on trading ever written (second to the trading Bible Market Wizards). You can buy it used on Amazon for about $20. Used properly, the return on investment will be in the thousands and millions of percent.
Bonus... "Number 11"
While putting this collection together, one incredible quote kept turning up over and over.
I kept meaning to write up a commentary on the quote, only to realize that if I did, it would make the rest of my list a little redundant. It also has so much meaning packed into it, that it would take 20 pages of analysis to do it justice.
If you took all of the previous quotes and threw them into a stew, this is what the lot would taste like.
The quote is from a man most traders consider to be the greatest speculator in history... and if you're looking for that one magic quote to tape near your computer, this is it. I recently prepared a short, three-minute video that fully explains this idea. You can view it now right here.