Insights

Notable Trading Citations

On Psychology

• No one can trade the markets but only one's beliefs about the markets. (Van K Tharp)

• The "Holy Grail" is not a magical trading system... it is a journey of self discovery. (Van K Tharp)

• There are three basic type of traders: Bulls, Bears, and Hogs... Bulls fight by striking up with his horns. A bull is a buyer, a trader who bets on rallies and profits from a rise in prices. Bears fight by striking down with his pawns. A bear is a seller, a trader who bets on a decline and profits from a fall in prices. Hogs are just greedy and fearful. They are usually late to the party and are the ones left holding the bags. Bulls make money, bears make money, but hogs get slaughtered. (Alexander Elder)

On Technical Analysis

• The goal of technical analysts is to discover the balance of power between bulls and bears and bet on the winning group. (Alexander Elder)

• Price is a momentary consensus of value of all market participants, expressed in action. Volume represents the emotions of market participants. It reflects the intensity of trader's financial and emotional commitments. (Alexander Elder)

On Risk Management

• Markets can remain irrational longer than you can stay solvent. (John Maynard Keynes)

• Never bet the farm, bet just a hog or two.

Recommended Reading

• Financial Freedom Through Electronic Daytrading*, by Van K Tharp & Brian June
• Trade Your Way to Financial Freedom, by Van K Tharp
• Trading for A Living, by Alexander Elder
• How to Make Money in Stocks, by William O'Neil
• Reminiscences of a Stock Operator, by Edwin Lefebre
• Riding The Bear, by Sy Harding
• Market Wizards & The New Market Wizards, by Jack D Schwager
• When Genius Failed (The Rise and Fall of LTCM), by Roger Lowenstein
• Understand Derivatives in a Day, by Stefan Bernstein
• Options as a Strategic Investment, by Lawrence G MacMillan
• Structured Equity Derivatives, by Harry M Kat
• Rich Dad Poor Dad, by Robert Kiyosaky
• The Cash Flow Quadrant, by Robert Kiyosaky
• Your Money or Your Life, by Joe Dominguez (†) Warning!

(†) This book contains some Marxist doctrine and is heavily biased against capitalism. I am recommending it ONLY because it also contains good advise on how to handle personal finances, how to evaluate goals, prioritize expenses and implement financial discipline.