Great People, Famous Quotes – Read, Learn & Remember to Trade Better!
“Rule number one of investing is never lose money. Rule number two is never forget rule number 1“ – Warren Buffet (net worth in 2013: $53.5 Billion).
You guessed it, I know: this article is focused on famous quotes, little nuggets of wisdom given to us by the ones who really made it in this business, the ones who are living the dream. And how much blunter can it get than the above quote. Ah, but if we could only follow rule number 1… things would be much easier for us. Unfortunately, saying it is easier than doing it… after all, not losing money is a tricky endeavor if you are trading on a regular basis, but Mr. Buffet is probably talking about not losing money in the long run, not about individual trades, because everybody loses a few trades here and there, even the best traders. And this reminds me of another famous trader who said:
“In this business if you’re good, you’re right six times out of ten. You’re never going to be right nine times out of ten.” – Peter Lynch (net worth in 2006: $352 Million). This statement backs up the idea that a Holy Grail of trading does not exist and no matter how much we search for it, we will never find it. Instead, traders must find inner balance and acceptance of losses but at the same time, they must be able to make the difference between the long run and the short run: it is perfectly normal to lose in the short run but to be successful in the long run. Stop looking for the Holy Grail and learn the regular, basic, down-to-earth stuff like RSI – Old School is Good School! or learn something about Japanese Candlesticks.
I find this next quote on the same note with what I just said: “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.” – George Soros (net worth in 2012: $20 Billion). In other words, he agrees with the idea of losing trades, but if we read through the lines we will see that he is emphasizing the importance of Money Management. This is not meant to be an educational article so I am not going into deeper detail about Money and Risk management, but if you notice Mr. Soros’ net worth, I am sure you agree with me that he must be doing something right so his advice is worth taking. So, you might want to take a look at our Binary Options Trading School section dedicated to risk management because if you are not educated, you might as well Donate your Money to Charity than trade Binary Options.
And I just mentioned School… yes I did, because you cannot expect to make a living out of trading if you don’t educate yourself or if you are lazy. Just how Alexander Elder said, “Traders lose because the game is hard, or out of ignorance, or lack of discipline or because of both.” Indeed, the game is hard and I don’t think someone can hit it big in this business without mastering the three major components of trading: “Every winner needs to master three essential components of trading; a sound individual psychology, a logical trading system and good money management. These essentials are like three legs of a stool – remove one and the stool will fall, together with the person who sits on it.”This metaphor belongs to Alexander Elder as well and I must admit it’s one of my favorites because it sums up excellently everything what trading is all about. Just like you cannot sit on a stool with one or two legs, you cannot trade successfully without paying attention to all aspects involved: the trading system is not all you need; it has to be backed up by a proper mindset and… money management… yes, another famous trader talking about the importance of money management. They must be on to something. Wanna be part of the elite? Read The Secret Behind Binary Options Psychology and How to Avoid 5 Binary Options Mistakes.
Mistakes, Mistakes, Mistakes. We all make them, but as Otto von Bismarck (the 1st Chancellor of Germany) said: “Only a fool learns from his own mistakes. The wise man learns from the mistakes of others”. So if you want to learn from our mistakes, instead of making your own, I recommend reading My Biggest Binary Options Mistakes and 6 (Too) Common Mistake Binary options Traders Love Doing. You won’t become and instant market wizard after reading those articles but at least you’ll know what to avoid and how to do it.
“The game taught me the game. And it didn’t spare me rod while teaching.” – Jesse Livermore. I like a good underdog story and maybe the biggest underdog of all traders was Jesse Livermore. He was a farm boy who managed to make several millions during the early 1900s and his strong belief was that how much you make depends directly on how much you are willing to work and study the market. He made and lost fortunes several times in the market before committing suicide in late 1940 but he left traders with important lessons to be learned.
“You don’t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ.” – Warren Buffet. According to Forbes, Buffet is ranked the thirteenth most powerful man in the world so probably we should listen to what he’s saying. He may be right and you don’t need to be a genius to make some money in the market. Now that I think of it, we actually have an article on that subject. Make sure you don’t miss it: I’m Not Smart – How Can I Profit From Binary Options Trading?
To finish this article on a cheerful note, I will quote Jesse Livermore: “There is only one side of the market and it is not the bull side or the bear side, but the right side.” After all, if I must make a prediction about where the market is going, I can safely say it will go to the right side and I will always be right 100%. In fact, the day when my chart goes to the left (on its own) will probably be the day when I stop trading and pick up… knitting or something similar. Do I sound irrational? Then just remember this:
“Markets can remain irrational longer than you can remain solvent.” – John Maynard Keynes