Best Trading Quotes From The Greatest Traders On The Planet
From forex traders, to hedge fund managers, let's look at the best trading quotes to improve your trading and trading psychology.
Best trading quotes. Like any field, the key to trading success is observing more experienced traders who’ve been in the trading game for decades.
No need to reinvent the wheel, these traders have been there and done that.
We can learn from their famous best trading quotes, a collection of which could be regarded as a ‘trading bible.‘
Let’s look at the best words of wisdom uttered by the market wizards across many generations, from Jesse Livermore to Linda Raschke.
Table of Contents
Jesse Livermore Trading Quotes
While Jesse Livermore (1877-1940) lived in a bygone era of financial markets, many still regard him as the greatest who ever lived.
He was even considered among the wealthiest people during his lifetime, known for having a wild lifestyle.
Sadly, this is what led him to commit suicide and pass on with more liabilities than assets.
Despite his legend, Livermore is a cautionary tale for most investors to not over-leverage and trade recklessly. See lessons from Jesse Livermore.
Still, Livermore is a pioneer of day trading, technical analysis, trading psychology, and many other concepts successful traders tend to use even today.
The American stock trader experienced massive trading success across multiple financial crisis events like the 1906 San Francisco earthquake, the Panic of 1907, and the 1929 Wall Street Crash.
Let’s look at his most popular words, some of which include rather funny trading quotes.
On the art of doing nothing:
– “There is time to go long, time to go short, and time to go fishing.”
-“Money is made by sitting, not trading.”
-“It never was my thinking that made the big money for me. It always was my sitting.”
On history repeating itself: “There is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again.”
On not being overly busy in the markets:
– “There are times when you should be completely out of the market for emotional as well as economic reasons.”
-“Every once in a while, you must go to cash, take a break, take a vacation. Don’t try to play the market all the time. It can’t be done, too tough on the emotions.”
-“There is the plain fool who does the wrong thing at all times anywhere, but there is the Wall Street fool who thinks he must trade all the time.”
On emotional discipline: “I never argue with the tape. To be angry at the market because it unexpectedly or even illogically goes against you is like getting mad at your lungs because you have pneumonia.”
On dealing with losing trades and being consistently profitable: “Instead of hoping he must fear and instead of fearing he must hope. He must fear that his loss may develop into a much bigger loss and hope that his profit may become a big profit.”
Paul Tudor Jones Trading Quotes
Paul Tudor Jones is among the most storied traders across all financial markets.
Before becoming a billionaire hedge fund manager, Jones started in the mid-70s as a commodities trader specializing in cotton.
Yet, after founding his own investment firm in the early 80s, the hedge fund manager branched into other commodities, stock indices, and an early type of forex trading through currency futures.
Among Jones’ best trades was predicting the infamous Black Monday of 1987 through large short positions.
It’s reported the billionaire tripled his money to an estimated $100 million.
Let’s look at his best trading quotes:
On being a humble trader: “Don’t be a hero. Don’t have an ego. Always question yourself and your ability. Don’t ever feel that you are very good. The second you do, you are dead.”
On risk management: “If I have positions going against me, I get right out; if they are going for me, I keep them. Risk control is the most important thing in trading.”
On being aggressive and over-trading: “First of all, never play macho man with the market. Second, never overtrade.”
On the key to trading success: “The secret to being successful from a trading perspective is to have an indefatigable and an undying and unquenchable thirst for information and knowledge.”
On learning when you lose money: “You learn more from your losses than from your gains.”
Bruce Kovner Trading Quotes
Bruce Kovner is another American billionaire hedge fund manager.
Interestingly, he was inducted into the Institutional Investor’s Alpha’s Hedge Fund Manager Hall of Fame in 2008, along with Paul Tudor Jones and others.
Like most traders during his era, Kovner first discovered making money by trading through commodities.
It’s been said his first position came in 1977, borrowing $3,000 in trading capital using his MasterCard to trade soybean futures.
This profitable trade eventually grew to $40,000, but not without several never-racking selling experiences that taught Kovner the importance of risk management.
The best highlights of his trading career came when he worked for the Commodities Corporation hedge fund (now a subsidiary of Goldman Sachs) under Michael Marcus.
This is where Kovner made millions before establishing his own hedge fund in 1983 named Caxton Associates, which still operates today with $22.2 billion in assets under management as of October 2023.
So, clearly, Kovner knows a thing or two about success and making the best trades. So, let’s look at his best quotes.
On the dangers of trading too big: “My experience with novice traders is that they trade three to five times too big. They are taking 5 to 10 percent risks on a trade when they should be taking 1 to 2 percent risks. The emotional burden of trading is substantial; on any given day, I could lose millions of dollars. If you personalise these losses, you can’t trade.”
On the importance of using a stop loss: “Whenever I enter a position, I have a predetermined stop. That is the only way I can sleep. I know where I’m getting out before I get in. The position size on a trade is determined by the stop, and the stop is determined on a technical basis.”
On being a technical trader: “Fundamentalists who say they are not going to pay any attention to the charts are like a doctor who says he’s not going to take a patient’s temperature.”
On risk management, under-trading, and position sizing: “Risk management is the most important thing to be well understood. Undertrade, undertrade, undertrade is my second piece of advice. Whatever you think your position ought to be, cut it at least in half.”
Mark Douglas Trading Quotes
Most of us think of Mark Douglas (1948-2015) when it comes to trading psychology thanks to ‘Trading in the Zone: Master the Market with Confidence, Discipline, and a Winning Attitude,’ a book with biblical status.
Before becoming a successful trading psychology coach and author with multiple best-sellers, Douglas was already a professional trader in the stock market, working with hedge funds and money managers since the 70s.
‘Trading in The Zone,’ released in 2000, still holds many applicable lessons of good trading behaviour even today.
It revolves around how a professional trader deals with randomness and probabilities, among many other factors.
So, his insightful trading quotes will come mostly from ‘Trading in The Zone.’
On letting your edge play out over time: “Why do casinos make consistent money on an event that has a random outcome? Because they know that over a series of events, the odds are in their favour. They also know that to realize the benefits of the favourable odds, they have to participate in every event.”
On losing money: “Rarely will the typical trader stay with his system beyond two or three losses in a row, and taking two or three losses in a row is a very common occurrence for most trading systems.”
On dealing with uncertainty in trade setups: “When you achieve complete acceptance of the uncertainty of each edge and the uniqueness of each moment, your frustration with trading will end.”
On the Five Fundamental Truths:
1. Anything can happen.
2. You don’t need to know what is going to happen next in order to make money.
3. There is a random distribution between wins and losses for any given set of variables that define an edge.
4. An edge is nothing more than an indication of a higher probability of one thing happening over another.
5. Every moment in the market is unique.
Bill Lipschutz Trading Quotes
Bill Lipschutz is another legendary forex trader who has lost and made tons of money trading.
The 68-year-old works with his own asset management fund, Hathersage, specializing in G10 forex market sectors.
Reportedly, the fund has returned 19% yearly on a consistent basis.
Unlike most traders, Lipschutz began studying Fine Arts at Cornell University, eventually getting a bachelor’s degree. He then earned an MBA in Finance from the same institution in 1982.
It was the unfortunate passing of his grandma that kickstarted his journey to be a successful trader. Lipschutz inherited $12,000 worth of stock, where he studied every nook and cranny of equities.
The popular story goes that his winning trades turned this amount into about $ 250,000 over several years.
However, he lost it all due to poor risk management.
Luckily, he had joined Salomon Brothers from the early 80s until 1990.
The company had recently created among the first forex trading departments.
It’s said that Lipschutz allegedly earned about $300 million in 1984 alone.
His story shows the power of resilience once a trader has corrected their trading mistakes. Thanks to Lipschutz’s perseverance, we have even more famous trading quotes.
On being right two or three times out of ten: “I don’t think you can consistently be a winning trader if you’re banking on being right more than 50 percent of the time. You have to figure out how to make money being right only 20 to 30 percent of the time.”
On focusing more on the art of trading than the money. “If a trader is motivated by the money, then it is the wrong reason. A truly successful trader has got to be involved, and into the trading, the money is the side issue… The principal motivation is not the trappings of success. It’s usually the by-product – simply stated ‘the game’s the thing.”
On dealing with a streak of losing trades: “When you’re in a losing streak, your ability to properly assimilate and analyse information starts to become distorted because of the impairment of the confidence factor, which is a by-product of a losing streak. You have to work very hard to restore that confidence, and cutting back trading size helps achieve that goal.”
On the mindset of successful traders: “It’s very difficult to be different from the rest of the crowd the majority of the time, which by definition is what you’re doing if you’re a successful trader.”
Ed Seykota Trading Quotes
Ed Seykota is a 77-year-old author and trader who made his name as a commodities specialist.
Before he even knew what a trading strategy or trading desk was, the American had always been fascinated with technology, messing with equipment from old radios to oscilloscopes as a kid.
Seykota was already comfortable with the complexity of trading strategies in commodities after studying electrical engineering in the late 60s.
One of Seykota’s biggest accomplishments was creating a computerized trading system with Michael Marcus in 1970 for a futures brokerage house.
This made him unique compared to most traders, as he knew the external part of trading via charts and the inner technological side.
He later ventured on his own and managed funds for other people, turning $5,000 into $15 million over 12 years for one client.
Let’s look at his most insightful trading quotes here.
On dealing with a losing position:
– “If you can’t take a small loss, sooner or later, you will take the mother of all losses.”
–” Win or lose, everybody gets what they want out of the market. Some people seem to like to lose, so they win by losing money.”
-“The elements of good trading are (1) cutting losses, (2) cutting losses, and (3) cutting losses. If you can follow these three rules, you may have a chance.”
On having a trading plan: “A trading system is an agreement you make between yourself and the markets.”
On the parallels between surfing and trading:
-“Traders and surfers both have to deal with feelings of missing out on the small ones until the big one comes along. They also have to deal with feelings of staying with the big one.”
“Charting is a little like surfing. You don’t have to know a lot about the physics of tides, resonance, and fluid dynamics in order to catch a good wave. You just have to be able to sense when it’s happening and then have the drive to act at the right time.”
On being totally committed: “In your recipe for success, don’t forget commitment – and a deep belief in the inevitability of your success.”
Linda Raschke Trading Quotes
Linda Raschke is a standout female trader and author in the financial markets, where many traders are male.
Raschke is an American financier who made vast amounts of money trading commodities and futures. Her career began on the Pacific Coast Stock Exchange in 1981 as a market maker before moving to the Philadelphia Stock Exchange.
Raschke was among the traders featured in Jack Schwager’s celebrated 1989 ‘Market Wizards’ book, which contained many famous trading quotes.
She became a licensed commodity trading advisor in 1992, becoming the principal trader for several hedge funds and starting her own in 2002.
While she is now retired, she deserves her rightful place in the ‘Trading Hall of Fame.’
Given that women often have better trading characteristics than their male counterparts… it makes sense to learn from Linda Raschke how to be a peak-performance trader…
On not needing formal education to trade successfully: “You don’t have to be a rocket scientist to be a trader. In fact, some of the best traders whom I knew down on the floor were surf bums. Formal education didn’t really seem to have much to do with a person’s skill as a trader.”
On trusting your trading strategy over another’s:
-“If you ever have to ask someone else’s opinion on a trade, you shouldn’t be in it.”
-“If you ever find yourself tempted to seek out someone else’s opinion on a trade, that’s usually a sure sign that you should get out of your position.”
On how it takes years to be successful in trading: “Understand that learning the market can take years. Immerse yourself in the world of trading and give up everything else. Get as close to other successful traders as you can. Consider working for one for free.”
On journaling: “Writing down your trades is the best exercise in the world.”
Conclusion
A key takeaway from these quotes is that the ingredients to be a successful trader haven’t changed much from decades ago until now.
Also, with a few simple words, you can learn so much about trading psychology, making money, emotional discipline, risk management, and more without textbooks or other long-form content.
Hopefully, many of these quotes resonate with you and inspire you to make significant improvements on your way to trading success.
What next?
If you’re focused on your trading psychology then this trading discipline webinar called “Overcoming the Threat of Overtrading” will help.
Looking for new strategy ideas?
Then trading strategies page is the place to start. With VWAP plays, gap trades, and scalping strategies
Good trading!