A Quote by Jesse Lauriston Livermore
Money is made by sitting, not trading.
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Don’t ever average losers. Decrease your trading volume when you are trading poorly; increase your volume when you are trading well. Never trade in situations where you don’t have control. For example, I don’t risk significant amounts of money in front of key reports, since that is gambling, not trading.
I have this memory of being 15 years old, sitting with a friend on the steps of a little bookstore on Bloor Street in Toronto and saying, 'I'll never take money for my writing!' I had such idealism about this idea of trading your soul for money.
It never was my thinking that made the big money for me. It was always my sitting. Got that? My sitting tight!
Successful trading depends on the 3M`s - Mind, Method and Money. Beginners focus on analysis, but professionals operate in a three dimensional space. They are aware of trading psychology their own feelings and the mass psychology of the markets. Each trader needs to have a method for choosing specific stocks, options or futures as well as firm rules for pulling the trigger - deciding when to buy and sell. Money refers to how you manage your trading capital.
The key to trading success is emotional discipline. If intelligence were the key, there would be a lot more people making money trading… I know this will sound like a cliché, but the single most important reason that people lose money in the financial markets is that they don't cut their losses short.
Trading has taught me not to take the conventional wisdom for granted. What money I made in trading is testimony to the fact that the majority is wrong a lot of the time. The vast majority is wrong even more of the time. I've learned that markets, which are often just mad crowds, are often irrational; when emotionally overwrought, they're almost always wrong.
The key to trading success is emotional discipline. If intelligence were the key, there would be a lot more people making money trading.
One day I visited a guy who had made a fortune as a broker. He was sitting in his office with his computer. I hire people from here and make deals from this room, he told me. Then he took me to the trading room. Nobody was talking to anybody else, the place was silent as a tomb, they were all sitting there watching their terminals - a great word, terminal. I tell you, it scares the crap out of me.
Traditionally, companies have made major announcements before or after the close of trading so that all interested investors and analysts are apprised of the news before trading resumes in their stocks.
After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight!
You know how on the evening news they always tell you that the stock market is up in active trading, or off in moderate trading, or trading in mixed activity, or whatever. Well, who gives a
It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I've known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine--that is, they made no real money out of it. Men who can both be right and sit tight are uncommon.
The moral is that in trading it's important to examine the situation from as many angles as possible, because your initial impulses are probably going to be wrong. There is never any money to be made in the obvious conclusions.
Life can be lived at a remove. You trade in futures, and then you trade in derivatives of futures. Banks make more money trading derivatives than they do trading actual commodities.
It never was my thinking that made the big money for me. It always was my sitting.
Every winner needs to master three essential components of trading; a sound individual psychology, a logical trading system and good money management. These essentials are like three legs of a stool – remove one and the stool will fall, together with the person who sits on it.
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