On Setting Stop Losses and Preserving Capital

"7% to 8% below your purchase price is the absolute limit. Once you get to that point, you can no longer hesitate. You can't think about it or wait a few more days to see what might happen. It now becomes automatic - no more vacillating - sell, and sell immediately at the market. The fact that you are down 7% or 8% below your cost is the reason you are selling. You don't need other reason."

William J. O'Neil

"My philosophy is that all stocks are bad. There are no good stocks unless they go up in price. If they go down instead, you have to cut your losses fast. Letting losses run is the most serious mistake made by most investors."

William J. O'Neil

"The way to build long-term returns is through preservation of capital and home runs".

George Soros

On Outcome of Trades

"The best traders have evolved to the point where they believe, without a shred of doubt or internal conflict, that "anything can happen".

Mark Douglas

"My approach works not by making valid predictions but by allowing me to correct false ones."

George Soros

On Technical Analysis

"If you asked me to distill trading down to its simplest form, I would say that it is a pattern recognition numbers game. We use market analysis to identify the pattern, define the risk, and determine when to take profit."

Mark Douglas

"Remember, technical analysis is the art of identifying trend reversals based on the weight of evidence."

Martin J. Pring
Technical Analysis Explained

"Don't let technical advocates mislead you. Technical analysis tracks the past; it does not foretell the future. Technicians rely on history repeating itself. There is one thing TA does very well, and that is quantify market sentiment. It provides an excellent technique for counting all the votes of every trading."

Thomas McCafferty
All about Options

On Trader's Mindset, Belief System and Investment Psychology

"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."

Tom Basso

"In actual practice, an investor has to guard against many things, but most of all against himself."

Jesse Livermore

"We typically trade our beliefs about the market and once we've made up our minds about those beliefs, we're not likely to change them. And when we play the markets, we assume that we are considering all of the available information. Instead, our beliefs, through selective perception, may have eliminated the most useful information."

Van K. Tharp

"Trading is about making a profit, in the best case by applying a disciplined method and an organized set of strategies over time. The markets in which we traders may deal are irrelevant to the activity of trading, except regarding the relative level of advantage we may obtain by dealing in one market and shunning another. I'd be perfectly happy to trade tiger shrimp, tiger lilies, Bengal tigers, or Kellogg's Frosted Flakes if I thought I understood how to profit by doing so."

S A Johnston

On Contrary Trading

"A Contrary Opinion situation is said to exist when most of the traders are of one mind, either bearish or bullish. For example, a Bullish Consensus for gold of 83 percen would indicate such a situation. ... Such a situation offers the potential for making extremely large profits. So many traders are bullish, or in a reverse case bearish, that there are not enough traders left to drive prices any further."

R. Earl Hadady

"A good contrarian investor must be good at understanding value - i.e. he either purchase something on cents to a dollar or he foresees that the growth potential of the asset that he purchased will bring him the reward he desire. A contrarian enters a position when others are still leaving or when there were lack of interests.  And he quietly leaves the room when the crowd starts to fill it."

option-income.com

Trading Quotable Quotes Main Page - On Risk and Risk Management

TQQ Part 2 - On Being Patient / Mr Market and Respecting the Market / Market Timing / Trading the News

TQQ Part 3 - On Stock Selection / Success Rate of Trades vs Making Money / Entries & Exits

TQQ Part 4 - On Setting Stop Losses and Preserving Capital / Outcome of Trades / Technical Analysis / Trader's Mindset, Belief System & Investment Psychology / Contrary Trading

TQQ Part 5 - On Trend Following / Going With The Flow / Letting Winners Run / Averaging Up / Discipline / Recovery

TQQ Part 6 - General Topics related to Trading

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