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insightWe all need a little inspiration and guidance from time to time, and as traders, who better to get it from than some of the biggest trading legends of our time? After all, learning from those who have already achieved what you are trying to achieve is the best way to learn anything.

This article is a resource for all traders to refer to regularly on their trading journey when they need a ‘pep talk’ or to simply be reminded of the proper way to think about and trade the markets. You will notice that I have grouped together various quotes that relate to the same trading topic so that you can quickly reference inspiration and insight on the topics you are most in need of help with. The traders quoted in this article are seasoned professionals with the quotes first appearing in our article on How to Trade Like the Market Wizards, based on the Market Wizards books by Jack D. Schwager. I truly hope you utilize this lesson as an on-going learning and inspiration resource….

Thoughts on technical analysis vs. fundamental analysis

The debate between technical analysts and fundamental analysts over which form of market analysis is ‘better’ has been going on for centuries most likely. To read my very firm view of which form of market analysis I prefer, check out my article on news trading.

Let’s check out some famous quotes on this topic from some legendary traders…

Fundamentals that you read about are typically useless as the market has already discounted the price, and I call them “funny-mentals”.

I am primarily a trend trader with touches of hunches based on about twenty years of experience. In order of importance to me are: (1) the long-term trend, (2) the current chart pattern, and (3) picking a good spot to buy or sell. Those are the three primary component of my trading. Way down in a very distant fourth place are my fundamental ideas and, quite likely, on balance, they have cost me money. – Ed Seykota

I always laugh at people who say, “I’ve never met a rich technician.” I love that! It’s such an arrogant, nonsensical response. I used fundamentals for nine years and got rich as a technician. – Marty Schwartz

Thoughts on trading robots / mechanical systems

If you’ve followed my blog for any length of time you probably already know how I feel about mechanical trading systems, expert advisors and robot trading software. If you don’t know, check out this recent article I wrote on the truth about automated forex trading systems or robots.

Let’s check out some famous quotes on this topic from some legendary traders…

The problem with developing expert systems for trading is that the “rules” of the trading and investment game keep changing. I have spent some time working with expert system developers, and we concluded that trading was a poor candidate for this approach, because trading decisions encompass too many types of knowledge, and the rules for interpreting the information keep changing. – Bruce Kovner

It is experience and gut feel. I use all forms of technical analysis, but interpret them through gut feel. I do not believe in mathematical systems that always approach the markets in the same way. Using myself as the “system,” I constantly change the input to achieve the same output – profit! – Mark Weinstein

Don’t be fooled by the modern day snake oil salesman approach to trading the Forex market; there’s no easy way to make money as a trader, and indeed I might be one of the few trading educators who will tell you that, but it’s the truth. The ‘easiest’ way to make money is by learning a sound and logical trading method that is either purely or mostly dependent on reading the price action in the market, proper trading psychology and proper money management practices. – Nial Fuller

Thoughts on trading behavior / psychology

I’ve written many articles dealing with trading psychology and behavior and how significant attaining and maintaining the right trading mindset is. Check out my article on the psychology of forex trading, to learn more.

Let’s check out some famous quotes on this topic from some legendary traders…

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. I do nothing in the meantime. Even people who lose money in the market say, “I just lost my money, now I have to do something to make it back.” No, you don’t. You should sit there until you find something. – Jim Rogers

I haven’t seen much correlation between good trading and intelligence. Some outstanding traders are quite intelligent, but a few aren’t. Many outstandingly intelligent people are horrible traders. Average intelligence is enough. Beyond that, emotional makeup is more important. – William Eckhardt (co-founder of Turtle Traders)

A lot of people seem to be unaware of the fact that they are trading with a mindset that is inhibiting them from making money in the markets. Instead, they think that if they just find the right indicator or system they will magically start printing money from their computer. Trading success is the end result of developing the proper trading habits, and habits are the end result of having the proper trading psychology. – Nial Fuller

Thoughts on stop losses

Stop loss placement is a critical piece of the trading puzzle. If you do not know how to properly place stop losses your entire trading approach and money management plan will be spoiled. Check out the stop loss placement tutorial I wrote for more info on this.

Let’s check out some famous quotes on this topic from some legendary traders…

Whenever I enter a position, I have a predetermined stop. That is the only way I can sleep. I know where I’m getting out before I get in. The position size on a trade is determined by the stop, and the stop is determined on a technical basis. – Bruce Kovner

Thoughts on capital preservation, risk management and position sizing

Money management is the key. I know it may sound cliché to you at this point, but it’s only cliché because it’s true and you’ve probably heard it a thousand times from various trading education sources. Check out my article on capital preservation to get an understanding of what it is and why it’s critical to trading success. Check out my article on risk reward and position sizing to learn why those topics are so critically important.

Let’s check out some famous quotes on these topics from some legendary traders…

The most important rule of trading is to play great defense, not great offense. Every day I assume every position I have is wrong. I know where my stop risk points are going to be. I do that so I can define my maximum possible draw-down. Hopefully, I spend the rest of the day enjoying positions that are going my direction. If they are going against me, then I have a game plan for getting out.

Don’t be a hero. Don’t have an ego. Always question yourself and your ability. Don’t ever feel that you are very good. The second you do, you are dead. My biggest hits have always come after I have had a great period and I started to think that I knew something. – Paul Tudor Jones

The key to long-term survival and prosperity has a lot to do with the money management techniques incorporated into the technical system. There are old traders and there are bold traders, but there are very few old, bold traders. – Ed Seykota

I prefer not to dwell on past situations. I tend to cut bad trades as soon as possible, forget them, and then move on to new opportunities. – Ed Seykota

Either a trade is good enough to take, in which case it should be implemented at full size, or it’s not worth bothering with at all. – William Eckhardt

Learn to take losses. The most important thing in making money is not letting your losses get out of hand. Also, don’t increase your position size until you have doubled or tripled your capital. Most people make the mistake of increasing their bets as soon as they start making money. That is a quick way to get wiped out. – Marty Schwartz

I’ve learned many things from him [George Soros], but perhaps the most significant is that it’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong. – Stanley Druckenmiller

Thoughts on the random distribution of winners and losers in trading

One of the most difficult things for many traders to grasp is that there’s a random distribution of winners and losers for any given series of trades. Meaning, you can’t ever assume you know that THIS trade will be a winner, because any one trade has essentially a random chance of winning or losing. A high-probability trading edge is only realized over a large SERIES of trades, this is an important thing to remember. To learn more about this, read my article on the key to lasting trading success.

Let’s check out some famous quotes on this topic from some legendary traders…

The key is consistency and discipline. Almost anybody can make up a list of rules that are 80 percent as good as what we taught our people. What they couldn’t do is give them the confidence to stick to those rules even when things are going bad.

On any individual trade it is almost all luck. It is just a matter of statistics. If you take something that has a 53 percent chance of working each time, over the long run there is a 100 percent chance of it working. If I review the results of two different traders, looking at anything less than one year doesn’t make any sense. It might be a couple of years before you can determine if one is better than the other. – Richard Dennis (co-founder of Turtle Traders)

Once you begin to realize that any given trade has an equal chance of being a winner or loser, you will stop giving too much emotional and financial importance to any one trade. Once you do this, it opens up the pathway to carefree trading and allows you to truly induce the proper trading mindset. – Nial Fuller

Thoughts on end-of-day trading vs. day-trading

For many very, very good reasons, I focus almost entirely on daily charts and end-of-day price data when I analyze and trade the markets. To learn more about why I do this, check out my article on the best chart time frames to trade.

Having a quote machine is like having a slot machine on your desk – you end up feeding it all day long. I get my price data after the close each day. – Ed Seykota

One of the best rules anybody can learn about investing is to do nothing, absolutely nothing, unless there is something to do. Most people – not that I’m better than most people – always have to be playing; they always have to be doing something. They make a big play and say, “Boy, am I smart, I just tripled my money.” Then they rush out and have to do something else with that money. They can’t just sit there and wait for something new to develop. – Jim Rogers

Conclusion

There is much wisdom to be absorbed from trading legends such as those quoted above. The fastest way to get your trading career off to a successful start is simply by learning from those who have come before you. Don’t try to reinvent the wheel with trading, stick to what works and learn as much as you can from experienced, professional traders like myself and the other traders discussed in this lesson.

I truly hope you’ve found this article useful and that you will refer back to it for insight and inspiration when you need it. My trading course contains my personal views on each topic discussed today in this lesson and gives you a ‘blueprint’ of how I do things in the market, my trading beliefs and personal mantras. To learn more, click here.

REMINDER: Until September 30th - Get 35% Off Life-Time Access To Nial Fuller's Professional Trading Courses & Daily Trade Setups Newsletter, Ends Sep 30th -  Click Here For More Info.
nialfuller

About Nial Fuller

is a Professional Trader & Author who is considered ‘The Authority’ on Price Action Trading. He has a monthly readership of 250,000+ traders and has taught 15,000+ students since 2008.
Checkout Nial’s Professional Forex Course here.

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17 Comments

  1. olatunde says:

    Always straight to the point and simple. Thank you.

  2. Anne says:

    Very good advice

  3. Gustav says:

    After following and reading every piece of article you’ve published I don’t know why I’m not a successful trader.

    Great article Nial, absolutely on point.
    Thank you

  4. Sharon says:

    Very inspirational, thanks!

  5. Idris says:

    Trully inpiring article, thanks Nial!!

  6. KRISTOFA OKENTA says:

    Well inspiring. Thanks.

  7. valdez says:

    M inspired!Whaowww

  8. Adeniji Mustapha Opeyemi says:

    Well written article

    1. steven says:

      good to see a fellow nigerian like me learns about the market from nialfuller would be great to meet u

  9. Janet says:

    Very good article

  10. Youness Fakir says:

    Thoughts on picking tops and bottoms:

    ” I believe the very best money is made at the market turns. Everyone says you get killed trying to pick tops and bottoms and you make all your money by playing the trend in the middle. Well for twelve years I have been missing the meat in the middle but I have made a lot of money at tops and bottoms.” – Paul Tudor Jones

    Many trend traders don’t like this quote just because it goes against their belief.

    1. Simon says:

      But not everyone understands what is to pick correct bottom or top and simply try to pick when it seems too high or too low. Instead of waiting for proper level rejection with good pa signal. Right?

  11. Keith Clifford sproson says:

    Think i had this one b4 but a memory jog sometimes creates an A HA moment

  12. akhtar mahmood says:

    Good , useful and much articulated, thanks

  13. Margaret Tonkin says:

    Good article – many thanks – good re inforcement of principles

  14. Mike says:

    Over Trading is a big reason people fail, I like to say I get paid to do nothing, but I’m still learning that myself.
    Thanks for the quotes.

  15. Sthembiso says:

    Your articles are always having their seat in my mind.

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