You are probably no stranger to inspirational quotes.
Some of them make you want to act:
…while others offer insight and share the nuggets of wisdom.
As with any other activity, it’s difficult to know how to stay on the right path when you’re trading.
Luckily, there are meaningful quotes about trading that might help you out.
The sheer number of these quotes may seem a bit intimidating, but don’t worry – we’ve got your back.
In this list of quotes, I’ve created four major subgroups including:
- trading psychology
- risk management
- trade management
- common trading wisdom.
Check them out, but remember:
…simply reading quotes won’t make you a successful trader…
…nothing beats proper education.
Top trading psychology quotes
For trading beginners, it’s easy to overlook the importance of applying trading psychology lessons.
Successful hedge fund manager Tom Basso, might help you reconsider.
“I think investment psychology is by far the more important element, followed by risk control, with the least important consideration being the question of where you buy and sell.”
When talking about about trading psychology, many experts refer to the patience, mindset, discipline and planning as equals.
But Warren Buffett seems to underscore the importance of planning, saying:
“Someone’s sitting in the shade today, because someone planted a tree a long time ago.”
Another vital part of trading psychology, is knowing your limits and weaknesses.
“You have to identify your weaknesses and work to change. Keep a trading diary – write down your reasons for entering and exiting every trade. Look for repetitive patterns of success and failure.” Alexander Elder
Of course, cultivating a balanced mindset is not automatic:
…a trader’s natural tendency is to expect the market to prove our analysis right…
…but we should always focus on what the market is actually showing us.
In other words, trade what you see and not what you think.
Nenad Kerkez sums up this philosophy by saying that as a trader, you should always “react and not predict” but that “as an analyst and trader, you do both”.
Nenad points out that our own preconceptions stand in the way of our trading performance and even long-term success, which Buffet mirrors.
“Look at market fluctuations as your friend rather than your enemy,” says Warren Buffett. “Profit from folly, rather than participate in it.”
Our perception of ourselves is a vital component of our trading performance too.
As Peter Borish says, “we want to perceive ourselves as winners, but successful traders are always focusing on their losses”.
And the best traders are continually practicing too – something you can do risk-free and in real time, anytime.
Yet it’s easy to think that good traders are society’s top intellects:
…but being a successful trader goes much deeper than that.
“The key to trading success, is emotional discipline. If intelligence were the key, there would be a lot more people making money trading.” Victor Sperandeo
Last but not least, keep in mind that a trader should focus on the how and not the what.
“The goal of a successful trader is to make the best trades. Money is secondary.” Alexander Elder
You can learn more about being in tune with your psychology, in the following video.
Top risk management quotes
As a trader, you always want to have trading capital reserves to continue trading with – even when you experience a streak of loses.
You accomplish this, by following sound risk management principles.
So let’s check-out my favourite quotes on this subject.
“Frankly, I don’t see markets: I see risks, rewards and money.” Larry Hite
Tony Saliba believes that defining the importance of risk is equally important, saying “I always define my risk”.
Trading beginners may find risk management a bit difficult at first, but Bruce Kovner believes it’s easily remedied.
“Novice Traders trade 5 to 10 times too big. They are taking 5 to 10 percent risk, on a trade they should be taking 1 to 2 percent risk on.”
Of course, you will inevitably experience losing trades during your career.
As such, it is important to understand what losing actually is and what you can learn from it.
“In trading/investing, it’s not about how much you make but rather how much you don’t lose.” Bernard Baruch
“I’m always thinking about losing money as opposed to making money. Don’t focus on making money, focus on protecting what you have.” Paul Tudor Jones
Top trade management quotes
No trading quote collection would be complete without this section.
American investor John Bogle believes there are two opposite forces that influence your judgement, when you manage your trades.
“Time is your friend; impulse is your enemy.”
I could not agree more and often advise traders to:
- give a newly open trade a chance at the start, without hanging on to the trade forever
- be careful not to suffocate the trade too quickly, but eventually do lock in profits.
Most other trade management quotes refer to the importance of cutting losses and nobody exemplifies this more than Ed Seykota.
“The elements of good trading are: (1) cutting losses, (2) cutting losses and (3) cutting losses. If you can follow these three rules, you may have a chance.”
It bears repeating that you need to accept losses as a natural part of your trading.
Losses are not a hurdle, but an opportunity to educate yourself.
“Learn to take losses. The most important thing in making money, is not letting your losses get out of hand.” Marty Schwartz
“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.” Victor Sperandeo
With that said, cutting losses is just one side of the coin:
…the ability to take profits is another thing that sets good traders apart.
Top trading wisdom quotes
So far we’ve looked at quotes offering categorised trading wisdom.
But some of the best trading advice is fairly generic, not necessarily attributable and can be summed up in just a few words.
- Plan the trade, trade the plan… think before trading, but act during trading.
- Better money missed than money lost… don’t think about missed opportunities too much; rather focus on new ones.
- The market will always be there… don’t worry about missed opportunities.
- All we can control is risk… don’t expect to control price.
- Price is the ultimate indicator… realise that price is king and it will go where it wants to.
- Let it center, before you enter… allow the market to make a pullback before entering.
Well, I’ve given you a lot of quotes, but I may have missed some really good ones.
So feel free to help me out, by writing down your favourite quotes below.
Meantime, I’ll leave you with a last nugget of wisdom from Benjamin Franklin who said that “an investment in knowledge, pays the best interest”.
Cheers and safe trading,