**GREAT QUOTES FROM GREAT BOOKS**
Try to find the 10 stocks with the most action for that day. If you sit long enough in front of the screen and you're on top of the 10 stocks with the most action, whether
they're going up or down, you're going to make money in the long run after you learn how to trade them.
--Trader Brad Frerick's, from Marc Friedfertig and George West's Electronic Day Traders' Secrets (1999, McGraw-Hill, New York.)
New Highs/New Lows--I love long setups at or near new highs and short setups at or near new lows.
--Jeff Cooper, from Hit and Run Trading II (1998, M. Gordon Publishing Group, Malibu, Calif.)
Price--At least $30 per share, and the higher, the better. As I stated in Hit and Run Trading I, it is easier for a $60 stock to rise 2 points than it is for a
$20 stock (common sense).
--Jeff Cooper, from Hit and Run Trading II (1998, M. Gordon Publishing Group, Malibu, Calif.)
Never allow a profit of at least 3/4 of a point to turn into a loss! Remember, day trading and short-term trading is a game of eighths, and profits must be
protected.
--Jeff Cooper, from Hit and Run Trading II (1998, M. Gordon Publishing Group, Malibu, Calif.)
Be Cautious, but Confident
Trade only when you feel confident and optimistic?Think of trading as a cold ocean. Test the water before plunging in.
--Jack Schwager, from Schwager on Futures: Technical Analysis (1996, John Wiley & Sons, New York).
Wait for a Trade with an Edge
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.
--James B. Rodgers Jr., from Market Wizards, by Jack D. Schwager (1990, HarperPerennial, New York).
Expect the Unexpected
The unexpected and impossible happen every now and then.
--Richard Dennis, co-founder of the Turtles, from Market Wizards, by Jack D. Schwager (1990, HarperPerennial, New York).
Game Theory and the Markets
When you take a position in the market, you are really playing a game against the market. Profitability doesn't lie in your actions alone, it lies in the
interaction between your position and the market's price fluctuations?The goal of the individual is obvious. It is to make money. But what is the goal of
the market? Simply put, the market wants you to lose money. This may be a provocative thought, but it is quite reasonable in the context of game
theory.
--from Gaming the Market, by Ronald B. Shelton (1997, John Wiley & Sons, New York).
Take big profits when they come
If the market offers you a windfall profit on a trade, lock it in! (Windfall means a much bigger profit than anticipated.) Take profits on half or all the
position. Trail an extremely tight stop on any balance!
--from Street Smarts, by Larry Connors and Linda Bradford Raschke (1995, M. Gordon Publishing Group, Malibu, Calif.)
Focus
All you need is one pattern to make a living! Learn first to specialize in doing one thing well.
--from Street Smarts, by Larry Connors and Linda Bradford Raschke (1995, M. Gordon Publishing Group, Malibu, Calif.)
Eliminate any Personal Bias
Your biggest enemy in trading is going to be a directional bias, an opinion about market direction?whether yours, a broker's or a friend's. Shut it out!
Learn to concentrate on the "right-hand side" of the chart--in other words, on the pattern at hand.
--from Street Smarts, by Larry Connors and Linda Bradford Raschke (1995, M. Gordon Publishing Group, Malibu, Calif.)
Gauge Sentiment Correctly
Moderate sentiment in a market that is strongly trending may be a more reliable indicator of a probable continuation of the price move than a high/low
sentiment reading is of a reversal. In other words, extreme sentiment readings can often occur in the absence of major tops and bottoms, but major tops
and bottoms rarely occur in the absence of extreme sentiment readings (current or recent).
--Jack Schwager, from Schwager on Futures: Technical Analysis (1996, John Wiley & Sons, New York). |
