Marcus's collected quotes

marcus · #21 6th September 2007, 01:28 AM

Today's quote comes from William O'Neil of CANSLIM fame the man who turned $5,000 into $200,000 in 1962 with just 3 consecutive trades

Quote:

Letting losses run is the most serious mistake made by most investors. With an individual stock, you absolutely have to have a stop-loss point, because you never know how far down the stock is going. I remember selling a $100 stock one time and it eventually went to $1. I didn't have any idea it was going down that far, but what would have happened if I had held on to it? One mistake like that and you can't come back. The majority of unskilled investors stubbornly hold onto their losses when the losses are small and reasonable. They could get out cheaply, but being emotionally involved and human, they keep waiting and hoping until their loss gets much bigger and costs them dearly. ... Some investors have trouble making decisions to buy or sell. In other words, they vacillate and can't make up their minds. They are unsure because they really don't know what they are doing. They do not have a plan, a set of principles, or rules to guide them and, therefore, are uncertain of what they should be doing.

Further reading
http://en.wikipedia.org/wiki/William_O'Neil

Interview
http://archive.newsmax.com/archives/...7/164856.shtml

marcus · #22 14th September 2007, 03:12 AM

Today's quote is from David Ryan who Won Stanford University's Investing Championships and earned 1,400% return over 3 years

Quote:

The more disciplined you can get, the better you are going to do in the market. The more you listen to tips and rumors, the more money you're likely to lose. My percentage of winners is only about 50/50, because I cut my losers very quickly. The maximum loss I allow is 7 percent, and usually I am out of a losing stock a lot quicker. I make my money on the few stocks a year that double and triple in price. The profits in those trades easily makes up for all the small losers. If you really think the stock is going to make a big move - and that should be the only reason you are buying the stock to begin with - then there is no reason to haggle over an eighth of a point. Just buy the stock. The same thing applies to the downside; if you think the stock is going to drop, just sell it. The single most important advice I can give anybody is: Learn from your mistakes. That is the only way to become a successful trader.

MoneyMagnet · #23 24th October 2007, 06:38 PM

Hello

I quote this as I have seen a coment about the role of intellegence in one of early posts in this thread.

“Persistence. Nothing in the world can take the place of persistence.
Talent will not; nothing is more common than unsuccessful men with
talent. Genius will not; unrewarded genius is almost a proverb.
Education will not; the world is full of educated derelicts. Persistence
and determination alone are omnipotent. The slogan, 'Press on,' has
solved and always will solve the problems of the human race."

Calvin Coolidge (President USA)

Let's make money!
MoneyMagnet

"Money is only an idea. If you want more money, simply
change your thinking."
Robert Kiyosaki

marcus · #24 14th November 2007, 02:20 AM

Today's quote is from Mark Weinstein, actually I'm looking for more info about him for quite some time specifically whether he has written any articles, research papers or books.

Anyway I read in some forum someone saying he went a record 300 trades without a loss at some point, can't really verify the info though.

Wonder if its an alternate name for the great Stan Weinstein? Does Anyone know? CV perhaps?

Quote:

The biggest mistake I made was having a specific target of what I wanted out of the trade. I think there are a lot of people in this business who just enjoy watching others lose money. I don't believe anyone ever gets wiped out in the market because of bad luck; there is always some other reason for it. Either you were off when you did the trade, or you didn't have the experience. There is always a mistake involved. I have found that the greatest traders are the ones who are most afraid of the markets. Don't get too complacent once you have made profits. The toughest thing in the world is holding on to profits. You have to learn how to lose; it is more important than learning how to win. Limit losses quickly. Most traders hold on to their losses too long because they hope the loss will not get larger. They take profits too soon, because they fear the profit will diminish. Instead, traders should fear a larger loss and hope for a larger profit.

marcus · #25 14th November 2007, 03:07 AM

This is a real gem - the difference between winning and loosing traders

Quote:

Aiming for the Right Target in Trading By Walter T. Downs

When trading goes right, it can be a great feeling. When trading goes wrong it can be a nightmare. Fortunes are made in a matter of weeks and lost in a matter of minutes. This pattern repeats itself as each new generation of traders hit the market. They hurl themselves out of the night like insane insects against some sort of karmic bug-light; all thought and all existence extinguished in one final cosmic "zzzzzzt". Obviously, for a trader to be successful he must acknowledge this pattern and then break it. This can be accomplished by asking the right questions and finding the correct answers by rational observation and logical conclusion.
This article will attempt to address one question:
"What is the difference between a winning trader and a losing trader?"

What follows are eleven observations and conclusions that I use in my own trading to help keep me on the right track. You can put these ideas into table form, and use them as a template to determine the probability of a trader being successful.

OBSERVATION # 1

The greatest number of losing traders is found in the short-term and intraday ranks. This has less to do with the time frame and more to do with the fact that many of these traders lack proper preparation and a well thought-out game plan. By trading in the time frame most unforgiving of even minute error and most vulnerable to floor manipulation and general costs of trading, losses due to lack of knowledge and lack of preparedness are exponential. These traders are often undercapitalized as well. Winning traders often trade in mid-term to long-term time frames. Often they carry greater initial levels of equity as well.

CONCLUSION:

Trading in mid-term and long-term time frames offers greater probability of success from a statistical point of view. The same can be said for level of capitalization. The greater the initial equity, the greater the probability of survival.

OBSERVATION # 2

Losing traders often use complex systems or methodologies or rely entirely on outside recommendations from gurus or black boxes. Winning traders often use very simple techniques. Invariably they use either a highly modified version of an existing technique or else they have invented their own.

CONCLUSION:

This seems to fit in with the mistaken belief that "complex" is synonymous with "better". Such is not necessarily the case. Logically one could argue that simplistic market approaches tend to be more practical and less prone to false interpretation. In truth, even the terms "simple" or "complex" have no relevance. All that really matters is what makes money and what doesn't. From the observations, we might also conclude that maintaining a major stake in the trading process via our own thoughts and analyses is important to being successful as a trader. This may also explain why a trader who possesses no other qualities than patience and persistence often outperforms those with advanced education, superior intellect or even true genius.

OBSERVATION # 3

Losing traders often rely heavily on computer-generated systems and indicators. They do not take the time to study the mathematical construction of such tools nor do they consider variable usage other than the most popular interpretation. Winning traders often take advantage of the use of computers because of their speed in analyzing large amounts of data and many markets. However, they also tend to be accomplished chartists who are quite happy to sit down with a paper chart, a pencil, protractor and calculator. Very often you will find that they have taken the time to learn the actual mathematical construction of averages and oscillators and can construct them manually if need be. They have taken the time to understand the mechanics of market machinery right down to the last nut and bolt.

CONCLUSION:

If you want to be successful at anything, you need to have a strong understanding of the tools involved. Using a hammer to drive a nut in to a threaded hole might work, but it isn't pretty or practical.

OBSERVATION # 4

Losing traders spend a great deal of time forecasting where the market will be tomorrow. Winning traders spend most of their time thinking about how traders will react to what the market is doing now, and they plan their strategy accordingly.

CONCLUSION:

Success of a trade is much more likely to occur if a trader can predict what type of crowd reaction a particular market event will incur. Being able to respond to irrational buying or selling with a rational and well thought out plan of attack will always increase your probability of success. It can also be concluded that being a successful trader is easier than being a successful analyst since analysts must in effect forecast ultimate outcome and project ultimate profit. If one were to ask a successful trader where he thought a particular market was going to be tomorrow, the most likely response would be a shrug of the shoulders and a simple comment that he would follow the market wherever it wanted to go. By the time we have reached the end of our observations and conclusions, what may have seemed like a rather inane response may be reconsidered as a very prescient view of the market.

OBSERVATION # 5

Losing traders focus on winning trades and high percentages of winners. Winning traders focus on losing trades, solid returns and good risk to reward ratios.

CONCLUSION:

The observation implies that it is much more important to focus on overall risk versus overall profit, rather than "wins" or "losses". The successful trader focuses on possible money gained versus possible money lost, and cares little about the mental highs and lows associated with being "right" or "wrong".

OBSERVATION # 6

Losing traders often fail to acknowledge and control their emotive processes during a trade. Winning traders acknowledge their emotions and then examine the market. If the state of the market has not changed, the emotion is ignored. If the state of the market has changed, the emotion has relevance and the trade is exited.

CONCLUSION:

If a trader enters or exits a trade based purely on emotion then his market approach is neither practical nor rational. Strangely, much damage can also be done if the trader ignores his emotions. In extreme cases this can cause physical illness due to psychological stress. In addition, valuable subconscious trading skills that the trader possesses but has no conscious awareness of may be lost. It is best to acknowledge each emotion as it is experienced and to view the market at these points to see if the original reasons we took the trade are still present. Further proof that this conclusion may have validity can be seen in even highly systematic traders exiting a trade for no apparent reason, and pegging a profitable move almost to the tick. Commonly, this is referred to as being "lucky" or being "in the zone".

OBSERVATION # 7

Losing traders care a great deal about being right. They love the adrenaline and endorphin rushes that trading can produce. They must be in touch with the markets almost twenty-four hours a day. A friend of mine once joked that a new trader won't enter a room unless there is a quote machine in it. Winning traders recognize the emotions but do not let it become a governing factor in the trading process. They may go days without looking at a quote screen. To them, trading is a business. They don't care about being right. They focus on what makes money and what doesn't. They enjoy the intellectual challenge of finding the best odds in the game. If those odds aren't present they don't play.

CONCLUSION:

It is important to stay in synch with the markets, but it is also important to have a life outside of trading. It is a rare individual who can do anything to excess without suffering some form of psychological or physical degradation. Successful traders keep active enough to stay sharp but also realize that it is a business not an addiction.

OBSERVATION # 8

When a losing trader has a bad trade he goes out and buys a new book or system, and then he starts over again from scratch. When winning traders have a bad trade they spend time figuring out what happened and then they adjust their current methodology to account for this possibility next time. They do not switch to new systems or methodologies lightly, and only do so when the market has made it very clear that the old approach is no longer valid. In fact, the best traders often use methodologies that are endemic to basic market structure and will therefore always be a part of the markets they trade. Thus the possibility of the market changing form to the extent that the approach becomes useless, is very small.

CONCLUSION:

The most successful traders have a methodology or system that they use in a very consistent manner. Often, this revolves around one or two techniques and market approaches that have proven profitable for them in the past. Even a bad plan that is used consistently will fair better than jumping from system to system. This observation implies that stylistic foundations of a trader's market approach must be in place before consistent profitability can occur.

OBSERVATION # 9

Losing traders focus on "big-name" traders who made a killing, and they try to emulate the trader's technique. Winning traders monitor new techniques that come on the trading scene, but remain unaffected unless some part of that technique is valuable to them within the framework of their current market approach. They often spend much more time looking at how the market seeks and destroys other traders or how traders destroy themselves. They then trade with the market or against other traders as these situations arise.

CONCLUSION:

Once again, we can note that the individuality of a trader and his comfort level and knowledge regarding his system are far more important than the latest doodad or Market guru.

OBSERVATION #10

Losing traders often fail to include many factors in the overall trading process that affects the probabilities of overall profit. Winning traders understand that winning in the markets means "cash flow". More cash must come in than goes out, and anything that effects this should be considered. Thus a winning trader is just as thrilled with a new way to reduce his data-feed costs or commissions as he is with a new trading system.

CONCLUSION:

ANYTHING that affects bottom line profitability should be considered as a viable area of study to improve performance.

OBSERVATION #11

Losing traders often take themselves quite seriously and seldom find humor in market analysis or the trading environment. Successful traders are often the funniest and most imaginative people you will ever meet. They take joy in trading and are the first to laugh or relate a funny story. They take trading seriously, but they are always the first to laugh at themselves.

CONCLUSION:

Its no wonder that one of the first things psychiatrists test for when treating a patient is whether or not the patient has any sense of humor about his affliction. The more serious the tone of the individual, the more likely that insanity has set in.

SUMMARY OF CONCLUSIONS AND OBSERVATIONS

Both winning and losing traders consider trading a game. However, winning traders take the game not as a diversion but as a vocation which they practice with an intensity and dedication that rivals the work ethic of a professional athlete. Since the athletic metaphor seems appropriate, I will sum up on that note.

If trading were a game like basketball perhaps novice traders would realize more readily that what appears as effortless ease of the professional trader in sinking three-point shots is in fact the product of endless hours spent shooting hoops in deserted back yards and empty playgrounds. As in sports, the governing factors are internal and external. We deal with the market and ourselves. Both are like weapons and they can be used proactively or destructively. Each and every trade should be taken with professional care and planning In order to bring these observations home in an even more compelling form, lets add an element of ultimate risk to life and limb and say that our "sport" is more like target practice with a handgun. While it is certainly important to hit the target, it is more important to make sure the gun isn't pointed directly at ourselves when we pull the trigger.
Minute differences in how we take aim in the markets can have amazing impact on the final outcome. The difference is clear: One method is accurate target practice. The other is Russian Roulette.

CreditViolet · #26 15th November 2007, 07:50 AM

Quote:

Originally Posted by marcus

Today's quote is from Mark Weinstein, actually I'm looking for more info about him for quite some time specifically whether he has written any articles, research papers or books.

Anyway I read in some forum someone saying he went a record 300 trades without a loss at some point, can't really verify the info though.

Wonder if its an alternate name for the great Stan Weinstein? Does Anyone know? CV perhaps?

I dont thinks its the same guy.The 300 trade streak is verified and is genuine I believe. Also marcus, it gives more credibility that Mark Weinstein has remained anonymous instead of going into publishing and vending.

beginner_av · #27 16th November 2007, 05:11 PM

Quote:

Originally Posted by marcus

This is a real gem - the difference between winning and loosing traders

Winning traders do not believe in truisms offered by other authors. they rely on expertise and experience and find their own edge.

marcus · #28 16th November 2007, 06:27 PM

Quote:

Originally Posted by CreditViolet

I dont thinks its the same guy.The 300 trade streak is verified and is genuine I believe. Also marcus, it gives more credibility that Mark Weinstein has remained anonymous instead of going into publishing and vending.

well thanks for the input CV, 300 winners in a row, really amazing

marcus · #29 16th November 2007, 06:42 PM

Today's quote is from Marty Schwartz, a legendary trader an author of the best selling book "Pit Bull". Has scored enormous percentage gains in every year since he turned full time trader in 1979, but he has done so without ever losing more than 3 percent of his equity on a month-end to month-end basis. In the US Investing Championships held by Stanford University Professor Norm Zadeh his performance was nothing short of astounding. In nine of the ten four-month trading championships he entered, he made more money than all the other traders combined. His average return in these nine contests was 210 percent - non annualized! In his single entry in a one-year contest, he scored a 781 percent return.

He has been an inspiration to many of today's most successful traders

Quote:

The marketplace is an arena and other traders are the adversaries.

I turned from a loser to a winner when I was able to separate my ego needs from making money. When I was able to accept being wrong. Before that, admitting I was wrong was more upsetting than losing the money.

When I became a winner I went from 'I figured it out, therefore it can't be wrong' to 'I figured it out, but if I'm wrong, I'm getting the hell out, because I want to save my money and go on to the next trade.'

By living the philosophy that my winners are always in front of me, it is not so painful to take a loss. If I make a mistake, so what!

My attitude is: Never risk your family's security.

Whenever you get hit, you are very upset emotionally. Most traders try to make it back immediately; they try to play bigger. Whenever you try to get all your losses back at once, you are most often doomed to fail.

After a devastating loss, I always play very small and try to get black ink, black ink. It's not how much money I make, but just getting my rhythm and confidence back.

Before taking a position always know the amount you are willing to lose.

The most important thing is money management, money management, money management. Anybody who is successful will tell you the same thing.

I always take my losses quickly. That is probably the key to my success.

The best advice I can give to the ordinary guy trying to become a better trader is Learn to take losses. The most important thing in making money is not letting your losses get out of hand.

Brief biogarphy http://en.wikipedia.org/wiki/Martin_S._Schwartz

uasish · #30 17th November 2007, 12:12 AM

A good collection ,somehow missed it earlier thks Marcus.

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