"The best traders are the ones who recognize mistakes, dispassionately cut their losses, and move on, preserving capital for the next opportunity."
"No one will ever be so good that he or she will never take a loss. Being wrong is unavoidable, but staying wrong is a choice"
"Making you feel stupid is the market’s way of pressuring you to act foolish. Don’t succumb. Remain disciplined and cut your losses. The alternative to managing risk is not managing risk, and that never turns out well."
"To have lasting success in the stock market, you must decide once and for all that it’s more important to make money than to be right. Your ego must take a backseat."
"Losses are a part of trading and investing; if you are not prepared to deal with them, then prepare to eventually lose a lot of money"
"Individual stocks are not like mutual funds, they don’t have a manager and they don’t manage themselves; you’re the manager."
"Good trading is boring; bad trading is exciting and makes the hair on the back of your neck stand up. You can be a bored rich trader or a thrill-seeking gambler. It’s entirely your choice."
"Your goal is not risk avoidance but risk management: to mitigate risk and have
a significant degree of control over the possibility and amount of loss."
"Amateurs are scared of positions that stop them out once or twice or just weary of the struggle; professionals are objective and dispassionate."
"The importance contingency planning plays is that it enables you to make good decisions when you’re under fire, when you need it the most."
"You have no control over how much a stock goes up, but you can, however, control the amount you lose on each trade. You should base that amount of loss on the average mortality of your gains"
"Imagine: being wrong just as often as being right allowed me to amass a fortune. This is because I follow a very important rule: always keep your risk at a level that
is less than that of your average gain."
"Avoid the trader’s cardinal sin. Never let a loss grow larger than your average gain."
"The problem with relying on a high percentage of profitable trades is that no adjustment can be made; you can’t control the number of wins and losses. What you can control is your stop loss; you can tighten it up as your gains get squeezed during difficult periods."
"Not defining and committing to a prede-termined level of risk cost traders and investors more money than any other mistake"
"My trading results went from mediocre to outstanding once I finally made the decision to draw a line in the sand and vowed never again to let a loss get out of control. I suggest that you make that same commitment right now."
"There is no shame in losing money on a stock trade, but to hold on to a loss and let it get bigger and bigger or, even worse, to buy more is amateurish and self destructive"
"My goal is to trade effortlessly. If your trading is causing you difficulty or stress, something is wrong with your criteria or timing or you’re trading too large"
"By pyramiding up when you’re trading well and tapering off when you’re trading poorly, you trade your largest when trading your best and trade your smallest when trading your worst. This is how you make big money as well as protect yourself from disaster. "
"A key difference between professionals and amateurs is that professionals
scale into positions whereas amateurs average down."
"Never trust the first price unless the position shows you a profit."