Trading Wisdom

  • Buy low, sell high.
  • Buy high, sell higher.
  • Don’t fight the Fed.
  • Don’t fight the tape.
  • Pigs get fat, hogs get slaughtered. Or: Pigs get FED, hogs get slaughtered.
  • Bulls make money. Bears make money. Pigs get slaughtered.
  • Trade in the direction of the trend.
  • The trend is your friend.
  • The trend is not your friend when it ends.
  • The crowd is right during the trends but wrong at both ends. (Humphrey B. Neill)
  • Buy the dips, sell the rallies.
  • Buy the rumor, sell the fact.
  • Buy into bad news and sell into good news.
  • Buy the panic, sell the greed.
  • Buy strength, sell weakness.
  • Never short a dull market.
  • Cut losses short, let profits run.
  • When in doubt, stay out.
  • It’s easier to stay out than to get out.
  • Get out when you can, not when you have to.
  • Minimize losses.
  • Never let a winner turn into a loser.
  • Never let a small loss turn into a big loss.
  • Lose your opinion, not your money.
  • Trade what you see, not what you think.
  • When in doubt, sell. You will usually get another chance in something else.
  • Quickly exit losing trades and move on to the next opportunity.
  • Date them, don’t marry them.
  • You can’t go broke taking profits.
  • A profitable trade is a good trade.
  • Take profits relentlessly.
  • Profits aren’t as important as preserving your capital.
  • Manage the risk and the profits will take care of themselves.
  • It’s better to own too few shares than too many.
  • Average up, not down. Add to winners, not losers.
  • There are more fools among buyers than among sellers.
  • The open belongs to the amateurs and the close belongs to the professionals.
  • Plan your trades. Trade your plan.
  • Always sell what shows you a loss and keep what shows you a profit. (Reminiscences of a Stock Operator)
  • There are few if any chronic bears, as pessimists have a hard time making a living in America. (John Rothchild)
  • There’s nothing wrong with cash. It gives you time to think. (Robert Pretcher, Jr.)
  • Predetermine the exit strategy for all trades. Always have a plan for selling, as well as for buying.
  • Know the fundamentals. Trade the technicals.
  • Volume precedes price.
  • Price has memory.
  • Bottoms take longer to form than tops.
  • Buy at support, sell at resistance.
  • Sell on the stall before the fall.
  • Buy ‘em when they’re sleepin’, hold ‘em when they’re creepin’, sell ‘em when they’re leapin’.
  • The best time to buy is when blood is running in the streets. (Nathan M. Rothschild)
  • Buy when most people are selling, and sell when most people are buying.
  • Buy from the scared, sell to the greedy.
  • Buy their pain, not their gain.
  • Beat the crowd in and out the door. You have to take their money before they take yours, period.
  • Successful traders are quick to change their minds and have little pride of opinion. (Don Worden)
  • The most profitable traders spend 80 percent of their time finding a fast-moving market, and 20 percent of their time trading it. (David Bowden)
  • There’s only one indicator that counts: The Check-Book Indicator. (David Bowden)
  • Risk varies inversely with knowledge. (Irving Fisher)
  • I made my money because I always got out too soon. (Bernard Baruch)
  • Don’t try to buy at the bottom and sell at the top. It can’t be done except by liars. (Bernard Baruch)
  • Even being right three or four times out of 10 should yield a person a fortune if they have the sense to cut losses quickly. (Bernard Baruch)
  • Throughout all my years of investing I’ve found that the big money was never made in the buying or the selling. The big money was made in the waiting. (Jesse Livermore)
  • The faster a stock has climbed, the quicker it will fall. (Menschel)
  • The easier information arrives, the less valuable it is. (Menschel)
  • The more certain the crowd is, the surer it is to be wrong. (Menschel)
  • 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)
  • My approach works not by making valid predictions but by allowing me to correct false ones. (George Soros)
Warren Buffet

  • Occasionally, successful investing requires inactivity.
  • In this game, the market has to keep pitching, but you don’t have to swing. You can stand there with the bat on your shoulder until you get a fat pitch.
  • I will tell you the secret of getting rich on Wall Street. You try to be greedy when others are fearful, and you try to be very fearful when others are greedy.
  • I’d be a bum on the street with a tin cup if the markets were always efficient.
  • I don’t try to jump over 7-foot bars, I look around for 1-foot bars that I can step over.
  • For investors as a whole, returns decrease as motion increases.
  • The market, like the Lord, helps those who help themselves. But unlike the Lord, the market does not forgive those who know not what they do.
  • Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.
  • Risk comes from not knowing what you’re doing.
  • It’s only when the tide goes out that you know who’s been swimming naked.
  • Buy at the point of maximum pessimism and sell at the point of maximum optimism. (Sir John Templeton, founder of Templeton Funds)
  • Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. (Sir John Templeton)
  • We’re all just one trade away from humility. (WallStreet, the movie)
  • As the notorious stock manipulator Daniel Drew allegedly said, “To speckilate as an outsider is like trying to drive black pigs in the dark.”
  • If you don’t like the odds, don’t bet. (Jesse Livermore)
  • Price is king, but volume is the power behind the price. (Don Warden)
  • The market can remain irrational longer than you can remain solvent. (Keynes)
  • Bear markets begin in good times. Bull markets begin in bad times.
  • Never confuse genius with a bull market.
  • Just because the price goes up doesn’t mean you’re right; just because the price goes down doesn’t mean you’re wrong. (Peter Lynch)
  • Money goes where it is wanted and stays where it is well treated. (Walter Wriston)
  • Rallies in bear markets die on low volume. (Art Cashin on CNBC)
  • Volume is validity. If enough people believe in something, it moves. (Art Cashin on CNBC)
  • Trading isn’t a game of luck. It’s a game of probability.
  • Prosperity ends in a crisis. The error of optimism dies in the crisis, but in dying it gives birth to an error of pessimism. This new error is born, not an infant, but a giant. (Arthur Cecil Pigou)
  • Capitalism without failure is like religion without sin.  (Economist and Carnegie Mellon professor Allan Meltzer)
  • Money: Power at its most liquid. -Mason Cooley
  • The bigger the top, the bigger the drop.

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