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Compelling words of wisdom from some of the most brilliant minds to ever work the markets
A well-crafted phrase encouraging us to persevere or a helpful tip that gives us an alternative perspective can push us to great heights of achievement. The right words have immense power to guide us and can often highlight a possible path to such success through their empowering viewpoint.
When it comes to trading, a lot of these words of wisdom deal in common sense rather than the specifics and nuances of trading. After all, a lot of what we do in the market comes down to common sense and pure logic, rather than complicated formulations and analyses.
For most of us who don’t have direct access to the best minds in the trading world, taking their wisdom from quotes and teachings can be almost as valuable as firsthand learning. So, here are 13 of the most powerful quotes to elevate you to the next level of your trading career:
“I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.” – Warren Buffett
Starting off this list from wise words from one of the market masters. Buffett implores us to buck trends and not to be afraid to invest in a down market, and vice versa, to have no fear of getting out of a booming market.
“The stock market is filled with individuals who know the price of everything, but the value of nothing.” – Phillip Fisher
Rather than joining the bandwagon and blindly following the movements of others, do your own research and strive to educate yourself to the highest level. Your own individual insight gleaned from learning and experience will be more valuable in the long run than just listening to pundits or other supposed experts.
“You get recessions, you have stock market declines. If you don’t understand that’s going to happen, then you’re not ready, you won’t do well in the markets.” – Peter Lynch
Here at The 5%ers, we’ve repeatedly stressed the importance of accepting downturns as part of the trading experience. But rather than become a helpless victim to them, it’s important to study history and understand the cyclical nature of the market. If you’re hit with a downturn, dust yourself off and make sure you’re part of the recovery.
“If you can learn to create a state of mind that is not affected by the market’s behavior, the struggle will cease to exist.” – Mark Douglas
The mental or psychological aspect of trading is incredibly important. Traders who build up their mental fortitude have a big edge in navigating the ups and downs of the market and their own emotional trips. It is important to trade from a neutral mindset and not let emotions like anger, sadness, or even happiness and euphoria get in the way.
“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
If the previous quote regarding the importance of trading psychology wasn’t explicit enough, take this quote to really hammer down the idea of mental preparations.
“Throughout my financial career, I have continually witnessed examples of other people that I have known being ruined by a failure to respect risk. If you don’t take a hard look at risk, it will take you.” – Larry Hite
Repeat after us – successful trading boils down to the ability to properly manage risk. No matter how good you are, you will lose trades. Long term sustainable, profitable trading means a reduction of your risk.
“The goal of a successful trader is to make the best trades. Money is secondary.” – Alexander Elder
If you get into trading just because you just want to make money, you will lose. You might not lose right away but you will eventually lose. Trading is an art form where much of the success is determined in between the margins. Losing a trade can be deemed a success if it means you stuck to your trading plan and are looking for a long term, not just for a short term profit.
It’s not what we do once in a while that shapes our lives. It’s what we do consistently.” – Anthony Robbins
Sticking with the idea of viewing the market and success as a long term, not a short term goal, this quote boils it down to two simple sentences.
“The four most dangerous words in investing are: ‘this time it’s different.'” – Sir John Templeton
While we gave you a quote from Warren Buffett earlier encouraging you to buck trends, this doesn’t mean you should disregard historical data and market trends. We encourage you to work with those signifiers and not to speculate that despite all the data to the contrary, that this next time will be different.
“Invest in yourself. Your career is the engine of your wealth.” – Paul Clitheroe
Earlier in this list, we touched on the importance of education in order to form your own opinions and strategy. This is an area where you should never cut corners or spend thriftly. Invest as much money as you need in courses and mentors. Find your strengths and weakness and works to enhance and eliminate them, respectively.
Because after all…,
“An investment in knowledge pays the best interest.” – Benjamin Franklin
Fortify yourself with the best tools available and you will be properly prepared to master the market and make your living as a professional trader.
Photo by Jason Rosewell
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