300+ Quotes Trading.Mindset.

tm
[email protected]
On Trading

Trading

● I want to be one of the best ● Professionals don’t count

trader in the world. I will do their money while they are
everything it will take. working they focus on
execution.
● If there is a sudden range
expansion in a market that
has been trading narrowly, ● A surgeon doesn’t look at
human nature is to try and the clock for how much
fade that price move. When money they have made,
you get range expansion, they focus on the surgery,
the market is sending you a patient, and process.
very loud, clear signal that
the market is getting ready
● Professional athletes keep
to move in the direction of
that expansion. – Paul their eye on the ball and
Tudor Jones not the scoreboard when
they are on the field of
● Avoid trading when the play.
market is far away from
the moving average ● “The key to long-term
survival and prosperity
● Support & resistance has a lot to do with the
helps you identify areas of money management
value to trade from techniques incorporated
into the technical
● Trading at support & system.” -Ed Seykota
resistance gives you
favorable risk to reward

Trading.Mindset.Tm
 ● The longer it range the ● A 10% loss requires an
harder it trends 11% return to get back to
even.A loss of 20% of
● Narrow range candles your capital requires a
usually lead to explosive 25% return to get back to
moves even.A 50% loss of
capital needs a 100%
● Wide range candles serve return just to get back to
as “hidden” support & where you started.
resistance
● Risking 1% of your
● False breakout provides capital per trade puts you
one of the best entry to down 10% after 10 trades
profit from “trapped”
traders ● Risking 5% per trade
puts you down 50% after
● Trading with the trend 10 trades.
gives you greater profit
potential ● No matter how good you
are, you can’t trade so
● Continuation patterns large that a single losing
work best in trending streak is your last. If you
markets risk too much of your
trading capital, even a
● A break of structure, trend few losses in a 50%
line, and moving average winning streak will
usually indicates the trend destroy your capital.
is coming to an endh the You’re not going to be
minor market swings that perfect as a trader, and
they miss the major price you have to play the
moves. – Jack Schwager defense needed to
protect your trading
● Trading with the trend account from losing
gives you greater profit streaks. You will have
potential streaks of 50% win rates
and losing streaks. The
● Continuation patterns question is, will you
work best in trending survive them with your

Trading.Mindset.Tm
 markets current risk exposure.

● A mistake made by many ● You have lost money

traders is that they trading because you
become so involved in exposed your capital to
trying to catch the minor too much risk in a single
market swings that they trade. You haven’t been
miss the major price profitable because your
moves. – Jack Schwager losses have destroyed
your capital. You have to
● The market can begin a structure your position
trend up or down on the sizing so your losses
next bar. Be open to all don’t destroy your
possibilities and when the capital after every losing
surprise happens, don't streak.
question or deny it. Just
read it and trade it. ● “This idea that in order
to make a decision you
● Everything that you see is need to focus on the
in a gray fog. Nothing is consequences (which you
perfectly clear. Close is can know) rather than
close enough. the probability (which
you can’t know) is the
● Everything makes sense. If central idea of
you know how to read price uncertainty."
action, nothing will surprise ●
you because you will
understand what the ● Professional traders are
market is doing. Beginners no different, they must
can see it on a printout at focus on executing their
the end of the day. The goal
system not on the money
is to learn how to read fast
enough so that you can they are making or losing
understand what is on any one trade or one
happening real time. day.

● Simply understanding price ● To make money a trader

action is not enough to must first have a
make you profitable. You

Trading.Mindset.Tm
 must learn how to take the strategy with and edge,
best trades and follow your then they must practice
rules. executing it consistently
with discipline.
● Everything that you see is
in a gray fog. Nothing is ● When a trade goes
perfectly clear. Close is against them instead of
close enough. taking their stop loss
they want to wait for the
● Work on increasing your trade to get back to even.
position size rather than on They hate taking the loss
the number of trades or the due to an ego problem of
variety of setups that you always wanting to be
use. You only need to make right.
one point in the Eminis a ● After a losing trade they
day to do well (100 then try to take a trade
contracts at 1 point a day is with the position size
seven figures a year). needed to recover the
loss quickly and hope
● The second-most-important that it will get the money
trait of great traders is the back they lost in the last
ability to do nothing for trade. This can be
hours at a time. Don't revenge trading the same
succumb to boredom and chart or another one
let it convince you that it's thinking they must trade
been too long since the last harder because they need
trade. to immediately recover
the last loss, they hate
● Discipline is the single even a small drawdown
most important in trading capital.
characteristic of winning ● They don’t take profits
traders. Trading is easy to while they are there and
understand but difficult to after a reversal hold on
do. It is very difficult to stubbornly not wanting
follow simple rules, and to exit a big winning
even occasional trade with much less
self-indulgencescan be the profits that were once
difference between success available. They feel like a
and failure. Everyone can loser so they want the

Trading.Mindset.Tm
 be as mentally tough as trade to get back to the
Tiger Woods for one shot, old price to show they are
but few can be that tough a winner.
for an entire round, and ● Trying to make some
then be that way for a profits by overtrading
round every day of their when their are no signals
lives. Everyone knows what or set ups to trade
mental toughness and because the trader feels
discipline are, and like they always need to
everyone is mentally tough be doing something.
and disciplined in some They feel the need to
activities every day, but few make money like it was a
truly appreciate just how job that paid by the hour.
extreme and unrelenting ● Measuring success in
you have to be to be a great terms of the profit and
trader. Develop the loss and not in terms of
discipline to take only the following a system with
best trades. an edge.
● Understand that all
● Beginners should only take trading systems have ups
the best trades and either and downs on their
scalp or swing. It is difficult equity curves. No one
to watch a screen for two or wins every time, losing
three hours at a time and traders are a part of
not place a trade, but this is doing business.
the best way for beginners Obsessing over a perfect
to make money. If your winning percentage is
overriding goal is to make the path to failure taken
money, this is what you by the ego.
must do. If you do not, then ● Understand your trading
you have other goals that system win rate
are interfering with what expectancy so losing
should really be your only trades, losing streaks,
goal. and drawdowns will not
come as a surprise but be
● You will not make money expected on the way to
long term until you know long term profits.
enough about your ● A trader must have faith
personality to find a trading in their strategy and

Trading.Mindset.Tm
 style that is compatible. confidence in their
You need to be able to ability to execute it so it
follow your rules is not an emotional or
comfortably, allowing you ego problem when the
to enter and exit trades with losses do occur. Each
minimal or no uncertainty trade should be just one
or anxiety. Once you have of the next 100 and have
mastered a method of a low emotional impact.
trading, if you feel stress ● Don’t measure your self
while trading, then either worth by the fluctuations
you haven't yet found your of your P&L. Your
style or yourself. confidence must come
from your own
● Those who talk don't know knowledge, experience,
and those who know don't backtesting, chart
talk. Don't watch TV or read studies, and past
any news. The traders who successes.
are making the most money ● Only look at your P&L as
trading are too busy to be needed, when it’s either
on TV. Ask yourself, if you time to update weekly or
are netting even just two monthly returns or it is a
points in the Emini a day on positive experience to
large positions, do you help build confidence to
really want to bother with carry you through the
going on TV? So why are next losing streak.
you listening for trading
ideas from someone who ● Traders don’t survive
can't even make a couple without perseverance. If
points a day? Trading is a one thing is the “The
business, not a religion, so holy grail” of trading it’s
don't look for a trading perseverance. All
savior. legendary traders
decided they were going
● When you are about to take to be traders. They did
any trade, always ask what they had to do to be
yourself if the setup is one successful in the
of the best of the day. Is business. They put in the
this the one that the time & paid the price.
institutions have been

Trading.Mindset.Tm
 waiting for all day? If the ● Build Unbreakable Self
answer is "no" and you are Discipline With These 5
not a consistently Rules
profitable trader, then you Rule #1: Set SMART goals
should not take the trade for yourself
either. If you have two Specific, Measurable,
consecutive losers within Achievable, Relevant,
15-minutes or so, ask and Time-bound
yourself if those were (SMART)
trades that the institutions Rule #2: Make a plan and
have been waiting hours to stick to it
take. If the answer is no, Rule #3: Get rid of
you are overtrading, and distractions
you need to become more Rule #4: Be accountable
patient. to someone
Rule #5: Reward yourself
● The easiest time to make for sticking to your goals
money is in the first 90
minutes, and some of the ● A trader must keep their
easiest trades to spot are eyes on their trading
failed breakouts and signals and the charts
breakout pullbacks of not their P&L if they
patterns from the prior day. want to be a
Beginners should avoid professional.
trading in the middle of the
day and in the middle of the
day's range. ● Trade the market, not the
money. – Richard
● Good fill, bad trade. Always Weissman.
be suspicious if the market
lets you in or out at a price
● Get in the habit of
that is better than you
anticipated, but if the setup focusing on your trading
is good, take it. The system and following the
corollary of bad fill, good process for entries, exits,
trade is not as reliable. and position size, rather
than the money you are
● Beginners should consider
making or losing at any
swing trading stocks

Trading.Mindset.Tm
 instead of scalping or particular moment.
swinging Eminis because
stock charts are usually ● When there’s nothing to
easier to read and often do, do nothing. – Richard
trend well.
Weissman
● If you can't juggle one ball,
don't try to juggle two or ● The ability to do nothing
three. If you are not yet unless there is a signal is
making money, start with a powerful and profitable
one chart, one market, one habit to develop.
time frame (the 5-minute), Self-control, patience, and
and one concept (price
impulse control will save
action and not indicators).
you a lot of time, money,
● Decide if this is a hobby or and sanity.
a job. If it is a hobby, find
another one because this ● Trade what's
one will be too expensive happening...not what you
and it is dangerously think is gonna happen. –
addictive. All great traders
Doug Gregory
are likely trading addicts,
but most trading addicts
are or will likely end up ● Get in the habit of going
broke. with the flow, and avoid
trying to predict where the
● Simple is better. You don't flow is going.
need indicators, and you
should only look at one ● Get in the habit of
chart. If you can't make
remembering the
money off a single chart
with no indicators, adding maximum drawdown in
more things to analyze will trading capital that you
only make it more difficult. can mentally and
Also, only trade the very emotionally endure, and
best setups until you are design your trading
consistently profitable.
system with position
● Many beginners want sizing and risk exposure

Trading.Mindset.Tm
 excitement and tend to in a way that you never
overtrade. Many great reach your breaking point.
traders find trading to be
lonely and boring, but very ● Remain flexible and go
profitable.
with the flow of the market
● All patterns fail, and the price action.
failures often fail, but a Stubbornness, egos, and
failed failure is a second emotions are the worst
entry in the original indicators for entries and
direction and has a high exits.
probability of success.
● A trader can only be
● Trading is a job, and if you
expect to make serious successful after they have
money, you need a faith in themselves as a
business plan, just as you trader, their trading
would have with any other system as a winner, and
business, and you must know that they will remain
follow your plan. The plan
disciplined.
can be simple, such as only
taking two or three types of
setups off a single 5-minute ● One thing I have learned
chart, scalping half and over the years trading is
swinging the other half with that crisis = opportunity. –
a breakeven stop. However, Dean Karrys
you must follow your plan.
The profit margin is tiny in
● Manage losses and
this business so even a
couple lapses in discipline maximize gains
a day can keep you in the
red. ● Get in the habit of
knowing where your stop
● No Trader got rich quick by loss will be before you
just one trade. You need to enter a trade. Small losses
think long term. Think in
is one of the primary ways
large sample. Ask yourself
" If continue to trade this to experience profitable
way on my next 1000 trading.

Trading.Mindset.Tm
 trades, will I come out
profitable " ?.- Trading ● The key to long-term
Mindset survival and prosperity
has a lot to do with the
● A winning trading system
money management
must either be designed to
have a large winning techniques incorporated
percentage, or big wins and into the technical system.
small losses. – Ed Seykota

● In athletics, business, and ● Be disciplined in risk

entertainment, the top management and flexible
performers are those that
in perceiving market
carefully consider every
action they take. The elite behavior. – Richard
have trained themselves to Weissman
be nimble; habitually doing
the right thing, at the right ● Develop the habit of not
moment. Their years of arguing, bargaining, or
study and practice have hoping once your stop
taught their mind and body
loss is triggered. Get out
to react without hesitation,
lregardless of pressure or of the trade, because your
uncertainty. long term profitability
depends on it. Once you
● When first studying a have set a quality stop
winning technique, the loss with a low probability
process is mechanical and
of being reached, you
thoughtful. “Do A, then B,
and you will likely arrive at must take it.
C”. Speed in action comes
from knowing exactly what ● Position sizing can be
to do on a deeper, correlated to the quality of
subconscious level. Once a trade setup.
you know the right move to
make, the final step is to ● Regardless of setup, it is
commit to a regimen of
important to have different
dedicated practice. Only
then will you be able to position size parameters

Trading.Mindset.Tm
 outperform your based on the quality of
opponents. your entry and the
risk/reward parameters. It
● Always focus on being
is a better strategy to risk
better today than you were
yesterday. your maximum position
size on your best setups,
● Another way to gain an and your smallest position
advantage over your size on your less likely
opponents is to trade with trades.
discipline. Most traders are
trading based on their own
● Get in the habit of making
predictions, opinions, and
emotions. These are the your best trades be your
worst trading signals. biggest trades, and your
Instead, develop trading losing trades the smallest.
rules that will guide you. Mastering this strategy
Replace your opinions with will dramatically improve
trade signals, your ego with
your performance.
position sizing, and your
emotions with a trading
plan. ● Never lose more than 1%
of your total trading
● When you have the right capital on any one trade.
set of rules and follow them
long enough, they will ● First find the right stop
slowly become part of your loss level that will show
trading personality and
you that you’re wrong
style and you will follow
them on a subconscious about a trade, then set
level. You will know that your positions size based
you have reached trading on that price level.
maturity, when it becomes
uncomfortable to break ● Never lose more than 3%
your trading rules. This of your total trading
signifies that they have
capital on your worst day.
become second-nature to
you, and they’re more
powerful than your ● When I am trading poorly, I

Trading.Mindset.Tm
 emotionally driven keep reducing my position
impulses. size. That way, I will be
trading my smallest
position size when my
● Develop and practicing
powerful trading habits. trading is worst. – Paul
Tudor Jones
● In trading, the first step is
to learn what you need to ● Losers average losers.
do in order to be profitable.
Education should be your ● Get in the habit of never
first priority. Nurturing your adding to a losing trade,
comprehension of trading
learning from the
vocabulary is critical to
your success. Trading experience, and moving
methods, trading systems, on to the next trade.
trading plans, risk/reward
ratios, and win rates can ● Never allow a statistically
sound mysterious to significant unrealized gain
newcomers. Find good to turn into a statistically
sources of trading
significant realized loss. –
information and learn as
much as you can. Richard Weissman
● The old Wall Street saying
● Continued learning through “You can’t go broke taking
chart studies, backtesting a profit” is not true. If you
price patterns, interacting take only small profits it
with experienced traders, only takes a few big
and reading great trading losses to break you.
material is are the best
habits a new trader can ● The bigger your wins, the
develop. fewer you need to be
profitable. The more
● Look for low risk, high accurate your entries and
reward, and high exits, the less losses you
probability setups. – will endure. You can be
Richard Weissman. profitable with fewer wins
as long as losses are kept
● Start with the weekly price small. Large losses are the

Trading.Mindset.Tm
 chart to establish the long fastest path to being
term trend, and then work unprofitable, regardless of
down through the daily and circumstances.
hourly charts to trade in the
direction of that trend. The ● To be profitable in a low
odds are better if you’re win rate system, you don’t
trading in the direction of have to be right every
the long term trend. time, you just have to right
big and wrong small.
● The more times a support
or resistance level is ● If you’re right, you stay
tested, the greater the odds right for as long as
that it will be broken. Old possible, but if you’re
resistance can become the wrong, you get out with a
new support, and the old small loss and wait for the
support may become the next opportunity. Cutting
new resistance. winners short at the
beginning of a trend and
● Bull markets have no long letting a loser run on the
term resistance, and bear wrong side of a trend, are
markets have no long term the two biggest causes of
support. unprofitability.

● It is much easier to watch a ● Your trading system must

few than many. – Jesse be built on quantifiable
Livermore facts and not
opinions.Trading without
● Trends never turn on a quantifiable signals means
dime. Reversals build you’re trading randomly.
slowly. The first sharp dip Quantified entries and
always finds buyers and exits in a tested trading
the first sharp rise always system is the path to
finds sellers. – Alan Farley profitability.

● Successful trading is about ● Filter out the noise The

consistently doing the signal is the truth. The
difficult thing so often that noise is what distracts us
it becomes second nature. from the truth. - Nate
– Richard Weissman Silver.

Trading.Mindset.Tm
 ● The best trades work ● As a trader, you are
almost right away. dealing with two types of
information, signals and
● Hope is a dangerous noise. Signals are
emotion in the stock meaningful pieces of
market. Hope for a big information that cause
winning trade causes traders to take action
people to take position when the odds are in their
sizes that are too large, and favor. Signals are things
opens them up to even that traders look for;
bigger losses. technical buy signals, sell
signals, or psychological
● Wishful thinking must be signals like the market
banished. – Jesse going up on bad news or
Livermore down on good news, for
example.
● A losing trade costs you
money, but letting a losing ● The noise is all the price
trade get too far out of action, news, predictions,
hand can cause you to lose opinions, projections, and
your nerve. Cut losses for forecasts that add no
the sake of your nerves and value to your trading. Your
your capital. ability to filter out the
unnecessary and focus on
● Never trade position sizes the important things is
so large that your emotions what will keep you calm
take over your trading plan. while other traders are
suffering a psychological
downtrend.
● You have to trade with a
position size that you can
handle, both mentally and
emotionally.
● You have to trade with a ● The more you can focus
position size that keeps on what matters and avoid
your emotions and ego in noise, confusion, and
check. stress, the better your
odds of staying calm and

Trading.Mindset.Tm
 ● Understand the nature of becoming a profitable
instability and adjust your trader.
position size for the
increased risk due to ● Your time, money, and
volatility spikes. energy are your most
important assets, spend
● Place your stop losses them wisely.
outside the range of noise
so you’re only stopped out ● Diversify your life-:
when you’re wrong. Trading can be your
passion and a way to
● Get in the habit of finding create wealth, but it’s not
low probability stop losses the meaning of life. Your
as much as high probability highest goal should be
setups. happiness, and trading
should just be a stepping
● Find the price level for your stone on the path to get
stop loss that has a high you there. – Steve Burns
probability of never being
hit, so you have the time to ● It’s not healthy to work on
exit your trade profitably. your trading so much that
it hurts your health,
● Many traders choose to mindset, marriage, or
look for the highest friendships. While getting
probability setups to take over the learning curve
entries, but if your stop will require a lot of reading
loss is a low probability and research, even this
exit, you have a potentially difficult part of your
great trade because your journey must be balanced
stop loss won’t be hit, and with the other areas of
you can let a winner run. your life.

● If instead of saying, “I’m ● Revenge trading is a

going to do this trade,” you desperate attempt to force
say, “I’m going to watch the market to give back
myself do this trade,” all of money that was previously
a sudden you find that the lost. Anger is one of the
process is a lot easier. – worst trading signals to
Jack D. Schwager. use, and a trading plan

Trading.Mindset.Tm
 can be the best protection
● Trend following is a form of against making angry
technical analysis. trades. Trade the plan and
However, it’s not predictive not the anger.
technical analysis, but
rather it’s reactive technical ● Developing a relationship
analysis. This is key to with your ego,
understand. – Michael acknowledging when
Covel. things are getting out of
hand, and being able to
● A trader has to focus on refocus on your trading
what’s happening, not what plan, risk management,
they want to happen or and robust trading system
hope will happen next. The will give you a trading
past is over and the future edge.
doesn’t exist yet. All we can
do is focus on the present ● -Don’t fight a trend. -Honor
moment. your first stop loss. -Limit
your total risk exposure.
● The art of self-control-: It’s -Don’t hold and hope, cut
hard enough to know what and run. -Trade in your
the market is going to do; if comfort zone.
you don't know what you
are going to do, the game is ● -Trade smaller during
lost. – Alexander Elder, The losing streaks. -Listen to
New Trading for a Living. your trading plan.

● The ability to control your ● -Don’t trade markets you

impulse to get rich quick, don’t understand.
gives you the discipline
and focus to study the ● If I have positions going
markets when you would against me, I get right out;
rather be doing something if they are going for me, I
else. keep them… If you have a
losing position that is
making you
● Affirmations are powerful. uncomfortable, the
The truth of the matter is solution is very simple:
that you are what you Get out, because you can

Trading.Mindset.Tm
 believe. Consistently always get back in. – Paul
reinforcing positive Tudor Jones.
thoughts about yourself
will change how you view ● Happy trader, rich trader-:
yourself. It may take some I feel my success comes
time for your personal from my love of the
perceptions to change, so markets. I am not a casual
find a few minutes every trader. It’s my life. I have a
morning to give yourself a passion for trading. It’s
pep-talk. The right positive not merely a hobby or
inner dialogue doesn’t even a career choice for
guarantee your success as me. There is no question
a trader, but a negative that this is what I am
inner dialogue can almost supposed to do with my
guarantee your failure. life. – Ed Seykota
-“If he can do it, I can do it.”
-“I am willing to do what it
takes to be a successful
trader.”
-“I know if I grow and learn,
trading success will come.”
● 10 things that a trader has
● Exercise: to overcome to stay calm
Trading is hard, but it’s and be profitable.
important to take time to Impulsiveness-Replace
impulsiveness with proven
live a good life. Here are
rules that filter emotions
areas that will create into the correct actions.
mental balance and Impatience-Replace
encourage a happy, healthy market noise and
trading lifestyle. emotions with quantified
● -Maintain healthy eating entries and exits based on
signals. Anger-Replace
habits and exercise
animosity towards the
regularly. -Have a weekly market with respect for
date night with your price action and
significant other. -Spend emotionless trading.
quality time with your Uncertainty-Accept the
randomness of short term

Trading.Mindset.Tm
 children every day. results and embrace the
long term edge.
● -Visit extended family on Laziness-Reduce stress
holidays. -Maintain a by doing homework when
healthy spiritual life the market is closed so
through prayer or you can be ready when the
meditation. -Enjoy a hobby market is open.
that you love or find a new Greed-Replace the need
one. -Relax and read a for immediate wins with a
great book -Volunteer or process for consistently
find a way to give back to growing capital.
your community Fear-Replace your fear of
failure with confidence in
● Remember why you started your system and your
trading to begin with. You ability to follow it
started trading to have a successfully. Ego-Replace
better life, not a worse one. your need to be right
When it’s time to work then about specific trades with
do your work, but when it’s the desire to make money.
time to relax, then do that. Hope-Replace the hope
A happy trader is more that a losing trade will
likely to be successful in all recover with a
areas of life. well-planned stop loss.
Stress-Reduce stress by
● Managing choosing to have small
uncertainty-Speculation is losses fast instead of big,
dealing with the uncertain slow losses.
conditions of the unknown
future. Every human action ● “Look for low risk, high
is a speculation in that it’s reward, high probability
embedded in the flux of setups.” –Richard
time. — Ludwig von Mises. Weissman

● Great traders are profitable ● “Decide where you will get

because they have become out before you get in.”
masters at managing –Jack Schwager
uncertainty. They don’t win
because they can see the ● If you’re wrong: When you
future, they win because enter a trade you must

Trading.Mindset.Tm
 they are certain of what also identify the price level
they will do, in the present that invalidates your entry.
moment, when faced with Your stop loss level has to
uncertainty. be set outside the range of
ordinary price noise that
● Remember that if you trade occurs in your own time
your plan, you will be fine frame. If you’re right: If the
every time, no matter what trade trends in your favor,
happens. When you deviate you need a plan for
from your plan, you will put locking in profits. A
stress on yourself because trailing stop is used by
you know you are putting raising your initial stop
yourself at risk, and if an loss, as the asset trends in
unforeseen catastrophic your favor. Trailing stops
event occurs, you will likely can be moved to a
suffer mentally and previous day’s low-of-day,
financially. or a short term moving
average.

● Make a list of everything ● “Traders focus almost

that you feel you have done entirely on where to enter
wrong in the past year. You a trade. In reality, entry
can add things that size is ofter more
happened in the distant important than entry price
past, but you may want to - Jack Schwager.
start with one year to make
sure you remember it well ● Your ability to correctly
enough, and the feelings and consistently
are still fresh. You can also implement your entry
include personal things if signals, exit strategy, and
they affected your trading, position sizing will
or your trading affected determine your success
your personal life in some as a trader.
way.
● “The essential element is
● I forgive myself I’m still that the markets are
growing as a trader I’ll do ultimately based on
better the next time I’m human psychology, and
sorry. by charting the markets

Trading.Mindset.Tm
 you’re merely converting
● It seems like a small thing, human psychology into
but the power of graphic representations. I
self-forgiveness is believe that the human
powerful. If you embrace mind is more powerful
this exercise, you will than any computer in
overcome some mental analyzing the implications
blockages that may be of these price graphs.”–Al
holding you back, and you Weiss
will undoubtedly feel better
about yourself and your ● Technical analysis is a
future. skill that improves with
experience and study.
● While diversification is Always be a student and
referred to as ‘the only free keep learning.- John
lunch’ in the investment Murphy.
world, traders often quote ● Don’t spend all your time
the effect of compounding admiring the fancy tools in
as being the eighth wonder the magazines. First learn
of the world. how to use the basic ones
well. It’s not the size of
● You should trade small your tools that counts but
enough you won’t go broke how well you use them.
but large enough to make it
worthwhile. ● Keep it simple. Simple
time-tested methods that
● A trader can be their own are well executed will beat
worst enemy when their fancy complicated
entry and exit signals are methods every time.
based on how they feel,
rather than quantifiable ● There are two quick ways
data. to ruin an account: not
use stops and put on
trades that are
● Taking a stop loss when it too large for that
is first hit can be painful account’s size.
and difficult. Taking a huge
loss later can be much ● Type of emotion
more painful and even

Trading.Mindset.Tm
 more difficult. ● Fear
● Greed
● Discipline gives birth to ● Hope
confidence, which breeds ● Excitement/Anxious
success. ● Boredom
● Trade size “Risk no more ● Frustration
than you can afford to lose
and also risk enough so ● Volatility based stop loss
that a win is meaningful.” orders of the turtle
–Ed Seykota traders.
● Stop loss:- Volatility based
● Understand that even the stop loss and entry based
best traders only win about stop loss.
50-60% of the time. No one ● Position Sizing - : Quality
is perfect. based position Sizing.

● “It’s not whether you’re ● "The stock market is a

right or wrong that’s device for transferring
important, but how much money from the impatient
money you make when to the patient."–Warren
you’re right and how much Buffett.
you lose when you’re
wrong.” – George Soros ● "The markets generally
are unpredictable, so that
● The bigger your winning one has to have different
trades, the lower your win scenarios. The idea that
rate must be to become you can actually predict
profitable. You don’t have what's going to happen
to be right all of the time, contradicts my way of
you just have to be right looking at the market."–
big, and wrong small. George Soros.

● It is not the winning ● "The main purpose of the

percentage of a trader that stock market is to make
determines their fools of as many men as
profitability but the size of possible."-Bernard
all their winning trades Baruch.
versus the size of all their
losing trades. ● "All the math you need in

Trading.Mindset.Tm
 the stock market you get
● “By risking 1%, I am in the fourth grade."-Peter
indifferent to any individual Lynch
trade. Keeping your risk
small and constant is ● "Stocks are bought not in
absolutely critical.” –Larry fear but in hope. They are
Hite typically sold out of
fear."–Justin Mamis.
● The 1% rule is one of the
most misunderstood rules ● "The stock market is filled
in trading, and leads to with individuals who know
confusion for many new the price of everything,
traders. To the uninitiated, but the value of
this rule may seem too nothing."-Philip Arthur
conservative. However, by Fisher.
limiting your losses to only
1% on any one trade, you ● "We are in the business of
preserve your trading making mistakes. Winners
capital, and even after a make small mistakes;
losing streak, you will live losers make big
to trade again. mistakes."

● A new trader has to decide ● "Cut your losses. Cut

what time frame they will your losses. Cut your
trade before building their losses. Then maybe you
trading plan and have a chance."-Ed
developing their system. Seykota.
Each time frame has a
unique use of charts, ● "We want to perceive
entries and exits, as well as ourselves as winners, but
support, resistance levels, successful traders are
and breakouts. As a new always focusing on their
trader, your goal should be losses."-Peter Borish.
to understand and apply
winning principles for your
chosen time frame. ● "My favorite things in life
don't cost any money. It's
● Key price levels and really clear that the most
indicators for day traders precious resource we all

Trading.Mindset.Tm
 ● -Opening price -First hour have is time."-Steve Jobs.
break outs of the daily
range -Daily high and low ● "The big money is not in
price -Setups from the daily the buying or the selling,
chart -Price reaction to but in the waiting."-Charlie
news events. Munger.

● The same principles apply ● "Don't be a hero. Don't

to all trading time frames, have an ego. Always
and money can be made on question yourself and
any time frame by following your ability. Don't ever feel
a winning trading system, that you are very good.
with discipline, while The second you do, you
managing risk. You should are dead."-Paul Tudor
choose which time frame Jones.
best fits your lifestyle and
personality. ● "I will keep cutting my
position size down as I
● The following are John's have losing trades. When I
ten most important rules of am trading poorly, I keep
technical trading: reducing my position size.
That way, I will be trading
1. Map the Trends my smallest position size
2. Spot the Trend and Go when my trading is
With It worst."-Paul Tudor Jones.
3. Find the Low and High
of It ● "If I have positions going
4. Know How Far to against me, I get right out;
Backtrack if they are going for me, I
5. Draw the Line keep them."
6. Follow That Average
7. Learn the Turns ● "Trading is very
8. Know the Warning competitive, and you have
Signs to be able to handle
9. Trend or Not a Trend? getting your butt
10. Know the kicked."-Paul Tudor Jones.
Confirming Signs
● "Don't focus on making
● Never trade with a profit money; focus on

Trading.Mindset.Tm
 target in mind. Trade protecting what you
because a trade is the right have."-Paul Tudor Jones.
thing to do at that point in
time ● "The secret to being
successful from a trading
● Capital preservation is the perspective is to have an
only job you have as a indefatigable and an
trader. You need to undying and
preserve your capital for unquenchable thirst for
great trades with a high information and
probability of high profit. If knowledge."-Paul Tudor
you lose money on poor Jones.
trades, you will not have
any money to take the great ● "Don't ever average
ones losers. Decrease your
trading volume when you
● Remember, there is always are trading poorly;
the next trade. Don’t take increase your volume
stupid risks in the current when you are trading well.
one. Never trade in situations
where you don't have
● It is okay to miss an control."
opportunity. It is not okay
to lose money because of ● "I am always thinking
impatience. about losing money as
opposed to making
● Not having a position is a money."-Paul Tudor
position. Some of the best Jones.
trades in life are the ones
you do not take. ● Forget your pride and ego;
the market doesn't know
● Most of the times the best or care what you think. No
strategy is to sit and watch matter how smart you
on the sidelines. think you are, the market
is always smarter. A high
● There is a life outside of IQ and a master's degree
trading. It is easy to lose are not guarantees of
sight of that and get market success. Your ego
addicted to gambling. could cost you a lot of

Trading.Mindset.Tm
 money. Don't argue with
● "Never, ever argue with the market, and never try
your trading system." to prove you're right and
the market is wrong.
● "Amateurs think about how
much money they can
make. Professionals think
about how much money
they could lose."–Jack
Schwager.

● "99%+ of traders don't care

about Ferraris and yachts.
They just want to pay their
bills, save a little extra ● Buy that which is showing
money, and sleep well at strength - sell that which
night. The only way to do is showing weakness. The
that is to bat 70% or more. public continues to buy
Anything less, and these when prices have fallen.
goals are nothing more The professional buys
than fantasy." because prices have
rallied. This difference
● "Are you willing to lose may not sound logical, but
money on a trade? If not, buying strength works.
then don't take it. You can The rule of survival is not
only win if you're not afraid to “buy low, sell high”, but
to lose. And you can only to “buy higher and sell
do that if you truly accept higher”. Furthermore,
the risks in front of you." when comparing various
stocks within a group, buy
● "We don't care about 'why'. only the strongest and sell
Real traders only have the the weakest.
time and interest to care
about 'what' and 'when' and ● Be patient. The old adage
'if' and 'then'. 'Why' is for that “you never go broke
pretenders."-JC Parets. taking a profit” is maybe
the most worthless piece
● "Trading is not for the of advice ever given.
dabblers, the dreamers, or Taking small profits is the

Trading.Mindset.Tm
 the desperate. It requires, surest way to ultimate loss
above all, one steadfast I can think of, for small
trait of dedication. So if you profits are never allowed
are going to trade, trade to develop into enormous
like you mean it" profits. The real money in
trading is made from the
● "In trading, you have to be one, two or three large
defensive and aggressive trades that develop each
at the same time. If you are year. You must develop
not aggressive, you are not the ability to patiently stay
going to make money, and with winning trades to
if you are not defensive, allow them to develop into
you are not going to keep that sort of trade.
the money."
● When putting on a trade,
● "The biggest risk is not enter it as if it has the
taking a risk. In a world potential to be the biggest
that's changing really trade of the year. Don't
quickly, the only strategy enter a trade until it has
that is guaranteed to fail is been well thought out, a
not taking risks." campaign has been
devised for adding to the
● "I have two basic rules trade, and contingency
about winning in trading as plans set for exiting the
well as in life: 1. If you don't trade.
bet, you can't win. 2. If you
lose all your chips, you ● Be patient. If a trade is
can't bet."-Larry Hite. missed, wait for a
correction to occur before
putting the trade on.
● "I just wait until there is
money lying in the corner, ● Be patient. Once a trade is
and all I have to do is go put on, allow it time to
over there and pick it up. I develop and give it time to
do nothing in the create the profits you
meantime." -Jim Rogers. expected.

● "I believe in analysis and ● Be patient. Once a trade is

not forecasting."-Nicolas put on, give it time to

Trading.Mindset.Tm
 Darvas work; give it time to
insulate itself from
● "The purpose of trading is random noise; give it time
not being right, the purpose for others to see the merit
is to make money, and I of what you saw earlier
think that's my number-one than they.
rule. Don't get hung up on
your current ● Be impatient. As always,
positions."-Dana Allen. small loses and quick
losses are the best losses.
It is not the loss of money
that is important. Rather, it
● "Learn to take losses. The is the mental capital that is
most important thing in used up when you sit with
making money is not letting a losing trade that is
your losses get out of important.
hand."-Marty Schwartz.
● Never, ever under any
● "Whatever method you use condition, add to a losing
to enter trades, the most trade, or “average” into a
critical thing is that if there position. If you are buying,
is a major trend, your then each new buy price
approach should assure must be higher than the
that you get in that previous buy price. If you
trend."-Richard Dennis. are selling, then each new
selling price must be
● "The goal of a successful lower. This rule is to be
trader is to make the best adhered to without
trades. Money is question.
secondary."-Alexander
Elder. ● Do more of what is
working for you, and less
● "Time is your friend; of what's not. Each day,
impulse is your look at the various
money."-John Bogle. positions you are holding,
and try to add to the trade
● "There is a time to go long, that has the most profit
a time to go short, and a while subtracting from
time to go fishing."-Jesse that trade that is either

Trading.Mindset.Tm
 Livermore. unprofitable or is showing
the smallest profit. This is
● "Spend each day trying to the basis of the old adage,
be a little wiser than you “let your profits run.”
were when you woke
up."–Charlie Munger. ● When sharp losses in
equity are experienced,
● "Compound interest is the take time off. Close all
eighth wonder of the world. trades and stop trading for
He who understands it several days. The mind
earns it. He who doesn't can play games with itself
pay it."– Albert Einstein. following sharp, quick
losses. The urge “to get
● "The rich invest in time, the the money back” is
poor invest in extreme, and should not
money."-Warren Buffet. be given in to.

● "If most traders would learn ● When adding to a trade,

to sit on their hands 50 add only 1/4 to 1/2 as
percent of the time, they much as currently held.
would make a lot more That is, if you are holding
money."–Bill Lipschutz. 400 shares of a stock, at
the next point at which to
● "Throughout my financial add, add no more than 100
career, I have continually or 200 shares. That moves
witnessed examples of the average price of your
other people that I have holdings less than half of
known being ruined by a the distance moved, thus
failure to respect risk. If allowing you to sit through
you don't take a hard look 50% corrections without
at risk, it will take touching your average
you."–Larry Hite. price.

● Think like a guerrilla

● "Do not anticipate and warrior. We wish to fight
move without market on the side of the market
confirmation—being a little that is winning, not
late in your trade is your wasting our time and
insurance that you are right capital on futile efforts to

Trading.Mindset.Tm
 or wrong."-Jesse gain fame by buying the
Livermore. lows or selling the highs
of some market
● "Remember that stocks are movement. Our duty is to
never too high for you to earn profits by fighting
begin buying or too low to alongside the winning
begin selling."-Jesse forces. If neither side is
Livermore. winning, then we don't
need to fight at all.
● "Stock price movements
actually begin to reflect ● Trading Systems don’t
new developments before it eliminate whipsaws. They
is generally recognized that just include them as part
they have taken of the process.
place."–Arthur Zeikel.
● The trading rules I live by
● "You never know what kind are: (1) Cut losses. (2)
of setup market will present Ride winners. (3) Keep
to you; your objective bets small. (4) Follow the
should be to find an rules without question. (5)
opportunity where Know when to break the
risk-reward ratio is rules.
best."–Jaymin Shah.
● The elements of good
● "Trading doesn't just reveal trading are: (1) cutting
your character, it also losses, (2) cutting losses,
builds it if you stay in the and (3) cutting losses. If
game long enough."-Yvan you can follow these three
Byeajee. rules, you may have a
chance.
● "A handful of men have
become very rich by paying ● If you can’t take a small
attention to details that loss, sooner or later you
most others will take the mother of all
ignored."-Henry Ford. losses.

● "If stock market experts ● One alternative is to keep

were so expert, they would bets small and then to
be buying stocks, not systematically keep

Trading.Mindset.Tm
 selling advice."-Norman R. reducing risk during
Augustine. equity draw downs. That
way you have a gentle
● They say you never go financial and emotional
broke taking profits. No, touchdown.
you don’t. But neither do
you grow rich taking a ● Systems don’t need to be
four-point profit in a bull changed. The trick is for a
market. trader to develop a system
with which he is
● Successful trading is compatible.
always an emotional battle
for the speculator, not an ● I don’t think traders can
intelligent battle. follow rules for very long
unless they reflect their
● Remember that stocks are own trading style.
never too high for you to Eventually, a breaking
begin buying or too low to point is reached and the
begin selling. trader has to quit or
change, or find a new set
● Losing money is the least of rules he can follow. This
of my troubles. A loss seems to be part of the
never troubles me after I process of evolution and
take it. I forget it overnight. growth of a trader.
But being wrong – not
taking the loss – that is
what does the damage to
the pocket book and to the
soul. ● Before I enter a trade, I set
stops at a point at which
● The game of speculation is the chart sours.
the most uniformly
fascinating game in the ● The markets are the same
world. But it is not a game now as they were five to
for the stupid, the mentally ten years ago because
lazy, the person of inferior they keep changing – just
emotional balance, or the like they did then.
get rich-quick adventurer.
They will die poor. ● Risk is the uncertain

Trading.Mindset.Tm
 possibility of loss. If you
● Successful traders always could quantify risk exactly,
follow the line of least it would no longer be risk.
resistance. Follow the
trend. The trend is your ● Never play macho with the
friend. market and don’t over
trade. If I have positions
● Don’t worry about catching going against me, I get
tops or bottoms, that’s out; if they are going for
fools play. Keep the me, I keep them.PAUL
number of stocks you own TUDOR JONES
to a controllable number.
It’s hard to herd cats, and ● Decrease your trading
it’s hard to track a lot of volume when you are
securities. trading poorly; increase
your volume when you are
● I believe that having the trading well.
discipline to follow your
rules is essential. Without ● Never trade in situations
specific, clear, and tested you don’t have control. I
rules, speculators do not don’t risk significant
have any real chance of amounts of money in front
success. of key reports, since that
is gambling, not trading.
● I absolutely believe that
price movement patterns ● If you have a losing
are being repeated. They position that is making
are recurring patterns that you uncomfortable, get
appear over and over, with out. Because you can
slight variations. This is always get back in.
because markets are driven
by humans — and human ● Don’t be too concerned
nature never changes. about where you got into a
position. The only relevant
question is whether you
● Markets are never wrong, are bullish or bearish on
but opinions often are. the position that day.
Remember, the market is
designed to fool most of ● The most important rule of

Trading.Mindset.Tm
 the people most of the time. trading is to play great
defense, not offense.
● After spending many years
in Wall Street and after ● Don’t be a hero. Don’t
making and losing millions have an ego. Always
of dollars I want to tell you question yourself and
this: It never was my your ability. Don’t ever feel
thinking that made the big that you are very good.
money for me. It always The second you do, you
was my sitting. are dead.

● There are many times when ● Everything gets destroyed

I have been completely in a hundred times faster
cash, especially when I was than it is built up. It takes
unsure of the direction of one day to tear down
the market and waiting for a something that might have
confirmation of the next taken ten years to build.
move.
● You always want to be
● It is foolhardy to make a with whatever the
second trade, if your first predominant trend is.
trade shows you a loss.
Never average losses. Let ● At the end of the day, your
this thought be written job is to buy what goes up
indelibly upon your mind. and to sell what goes
down so really who gives
● Don’t take action with a a damn about PE’s?
trade until the market, ● “The game taught me the
itself, confirms your game. And it didn’t spare
opinion. Being a little late in me the rod while
a trade is insurance that teaching.”
your opinion is correct. In ● – Jesse Livermore
other words, don’t be an ● The best way to learn
impatient trader. about the trading game is
to play it. You can read
● When you make a trade, bazillions of books, sign
“you should have a clear up for classes, and talk to
target where to sell if the a mentor for hours and
market moves against you. hours and you still won’t

Trading.Mindset.Tm
 And you must obey your be as skilled as someone
rules! Never sustain a loss who went ahead and made
of more than 10% of your his first trade.
capital. Losses are twice as ● You have to jump in the
expensive to make up. I pool and make your own
always established a stop mistakes if you want to
before making a trade. learn about the market
that you’re trading.
● There will be an amazing ● Your experiences will not
opportunity, or two, or only ensure that you don’t
three, every single day. repeat your mistakes, but
it will also make you trust
● Being a reviewer of your your own judgment over
own life is a hard work. the others.
● “The biggest risk is not
● It doesn’t matter if the trend taking a risk. In a world
is up or down, bear market that’s changing really
or bull market. There’s a quickly, the only strategy
50/50 chance that the that is guaranteed to fail is
market will close up or not taking risks.”– Mark
down today and it doesn’t Zuckerberg
matter.
● “Luck is preparation
● Once you have that visual meeting opportunity.”
cue, you can actually – Oprah
remember trades that took
place months and months ● “Risk comes from not
ago. knowing what you’re
doing.”
● Most people are fearful – Warren Buffett
when they should be
hopeful. Most people are ● “Yesterday’s home runs
hopeful when they should don’t win today’s
be fearful games.”– Babe Ruth

● You are not a losing trader ● “The goal of a successful

because you don’t know trader is to make the best
enough about technical trades. Money is
analysis. You’re a losing secondary.”

Trading.Mindset.Tm
 trader because you don’t – Alexander Elder
understand the mind when
you’re under pressure. ● “It is not the strongest or
the most intelligent who
● If a trader is motivated by will survive but those who
the money, then it is the can best manage change.”
wrong reason. A truly – Charles Darwin
successful trader has got
to be involved and into the ● “Every battle is won or
trading, the money is the lost before it’s ever
side issue… The principal fought”– Sun Tzu
motivation is not the ● "Invest in yourself as
trappings of success. It’s much as you can; you are
usually the by-product – your own biggest asset by
simply stated, “the game’s far."
the thing”.-Bill Lipschutz ●
● Successful investing takes
● If most traders would learn time, discipline and
to sit on their hands 50 patience.”
percent of the time, they ● “You need to know very
would make a lot more well when to move away,
money.Bill Lipschutz or give up the loss, and
not allow the anxiety to
● Don’t worry about what the trick you into trying
markets are going to do, again.” – Warren Buffett
worry about what you are ● “The market is a device for
going to do in response to transferring money from
the markets.Michael Carr the impatient to the
patient.” – warren buffet
● It’s not whether you’re right ●
or wrong that’s important, ● “Trade What’s
it’s how much money you Happening… Not What
make when you’re right and You Think Is Gonna
how much you lose when Happen.” – Doug Gregory
you’re wrong.George Soros ● The game of speculation
is the most uniformly
● Being a (successful) trader fascinating game in the
isn’t about putting on world. But it is not a game
trades, it’s about not for the stupid, the mentally

Trading.Mindset.Tm
 trading at all. It’s about lazy, the person of inferior
protecting the capital in emotional balance, or the
your account and waiting get-rich-quick adventurer.
days or sometimes weeks They will die poor.” –
for the perfect moment to Jesse Livermore
strike.
● “When I get hurt in the
● When in doubt, get out and market, I get the hell out. It
get a good night’s sleep. doesn’t matter at all where
I’ve done that lots of times the market is trading. I just
and the next day everything get out, because I believe
was clear… While you are that once you’re hurt in
in , you can’t think. When the market, your decisions
you get out, then you can are going to be far less
think clearly again.Michael objective than they are
Marcus when you’re doing well…
If you stick around when
● There is the plain fool, who the market is severely
does the wrong thing at all against you, sooner or
times everywhere, but there later they are going to
is the Wall Street fool, who carry you out.” – Randy
thinks he must trade all the McKay
time.Jesse Livermore
● You never know what kind
● I often preach about the of setup market will
importance of having present to you, your
saint-like patience as a objective should be to find
trader. an opportunity where
risk-reward ratio is best.”
● I know where I’m getting – Jaymin Shah
out before I get in.Bruce
Kovner ● Investing in yourself is the
best thing you can do, and
● One way is to know where as a part of investing in
you’re getting out before yourself; you should learn
you get in. Said differently, more about money
know the exact level at management." – Warren
which you intend to close Buffett
your position should the

Trading.Mindset.Tm
 market move against you, ● “5/1 risk/reward ratio
but do so beforehand. allows you to have a hit
rate of 20%. I can actually
● Don’t focus on making be a complete imbecile. I
money, focus on protecting can be wrong 80% of the
what you have.Paul Tudor time and still not lose.” –
Jones Paul Tudor Jones
● Trading first and learning
how to trade later is a ● "Don't test the depth of
formula for losing money. the river with both your
Traders who don’t spend feet while taking the risk"
time educating themselves – Warren Buffett
before trading will learn the
hard way, and give their ● The question should not
trading capital to other be how much I will profit
traders as tuition. on this trade! The true
● If a trader doesn’t diversify question is; will I be fine if
their life with strong I don't profit from this
relationships, fun, inner trade." – Yvan Byeajee
peace, and health, their
trading results become too ● “The trend is your friend
entangled with their self until the end when it
worth. This can lead to bends.” – Ed Seykota
mental and emotional ruin.
● If you can’t take a small
● Cut your losses short.When loss, sooner or later you
you see your position not will take the mother of all
performing as expected, it’s losses.” – Ed Seykota
always better to cut the
losses and move on than to ● The key to trading
hold on and hope for a success is emotional
miracle. 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

Trading.Mindset.Tm
 financial markets is that
they don’t cut their losses
short.” – Victor Sperandeo

● Amateurs think about how

much money they can
make. Professionals think
about how much money
● Keep a trading they could lose.” – Jack
journal.Journaling is a Schwager
great way to track your
progress and identify your
mistakes. As you reflect on
the details of your trades
and your feelings during
each one, you’ll start to see
patterns of behavior that
will help you make better
decisions next time.
●

Trading.Mindset.Tm