The 20 Trading Lessons from Top Traders

26 set

I have read a lot of trading books since the time I started trading my own account and the one book that really helps me out and “I wish I’ve read this one first” – is Market Wizards Interview with Top Traders by Jack D. Schwager.

Here’s the list that struck me most that I’d like to share:

1. “Early trading failure is a sign that you are doing something wrong; it is not necessarily a good predictor of ultimate potential failure or success.” – Michael Marcus
   
2. “If you don’t stay with your winners, you are not going to be able to pay for the losers.” – Michael Marcus
   
3. “Liquidating positions is the way to achieve mental clarity when one is losing money and confused regarding market decisions.” – Michael Marcus
   
4. “Being a successful trader also takes courage: the courage to try, the courage to fail, the courage to succeed, and the courage to keep going when the going keeps tough.” – Michael Marcus
   
5. “Place your stops at a point that, if reached, will reasonably indicate that the trade is wrong, not at a point determined primarily by the maximum dollar amount you are willing to lose per contract. If the meaningful stop point implies an uncomfortably large loss per contract, trade a smaller number of contracts.” – Bruce Kovner
   
6. “The times when you least want to think about trading – the losing periods – are precisely the times when you need to focus most on trading.” – Richard Dennis
   
7. “Everybody gets what they want out of the market.” – Ed Seykota
   
8. “It is a happy circumstance that when nature gives us true burning desires, it also gives us the means to satisfy them.” – Ed Seykota
   
9. “Frankly, I don’t see markets; I see risks, rewards and money.” – Larry HIte
   
10. “ I have two basic rules about winning in trading as well as in life: 1. If you don’t bet, you can’t win. 2. If you lose all your chips, you can’t bet” – Larry Hite
    
11. “In my judgment, all traders are seekers of truth.” – Michael Steinhardt
    
12. “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.” – David Ryan
    
13. “When the market gets good news and goes down, it means the market is very weak; when it gets bad news and goes up, it means the market is healthy.” – Marty Schwartz
    
14. “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
    
15. “The best traders are the most humble.” – Mark Weinstein
    
16. “You have to learn how to lose; it is more important than learning how to win.” – Mark Weinstein
    
17. “Most traders who fail have large egos and can’t admit that they are wrong. Even those who are willing to admit that they are wrong early in their career can’t admit it later on. Also, some traders fail because they are too worried about losing.” – Brian Gelber
    
18. “You are never really confident in this business, because you can always be wiped out pretty quickly. The way I trade is: Live by the sword, die by the sword. There is always the potential that I could get caught with the big position in a fluke move with the market going the limit against me. On the other hand, there is no doubt in my mind that I could walk into any market in the world and make money.” – Tom Baldwin
    
19. “Clear thinking, ability to stay focused, and extreme discipline. Discipline is number one: Take a theory and stick with it. But you have to be open-minded enough to switch tracks if you feel that your theory has been proven wrong. You have to be able to say, my method worked for this type of market, but we are not in that type of market anymore.” – Tony Saliba
    
20. “ How do you judge success? I don’t know. All I know is that all the money in the world isn’t the answer.” Tony Saliba
    

There’s still a lot of golden information that I want to write in here – for ourselves and for everyday reading so as to keep us aligned with our trading goal, but I prefer to encourage you to read the book.