If you are unsure about position, just get out.
I have to believe a trade has at least a 75 per cent chance of being right or else I won't put it on.
You need to select a market that fits your personality because a market is a reflection of the people who trade it.
It is not return that matters but rather return relative to risk.
We can't control when acceptable opportunities appear, but we can certainly try to preserve our capital until those opportunities arrive.
Different market participants will do research of varying quality. The market price will reflect the average assessment of all investors. If you can do research that most other people do not, you might be able to discover something that most of the rest of the market doesn't know and benefit from that knowledge. There are a lot of things that I know about my companies that most other investors don't. Therefore, my evaluation of these companies is not going to be the same as theirs. Why then should a stock always trade at the right price level?
You have to be very decisive, extremely disciplined, relatively smart, and above all, totally independent.
One characteristic that I have repeatedly noticed in winning traders - and that is probably true of winners in any field - is that they are extremely confident.
If his system tells him to liquidate, he's out - no questions, no second-guessing, no qualifications.
The essence of discipline is that there are no exceptions.
The more variables you have, the greater the number of statistical artifacts that you're likely to find, and the more difficult it will generally be to tell whether a pattern you uncover actually has any predictive value.
Promising the result commits you to doing it and leaves you no alternative but to do it if you are going to live by your word. Letting others know that you have set a goal and are committed to achieving it makes it more likely you will acieve that goal, whether it is in the realm of athletics, trading, or something else.
From: Stock Market Wizards by Jack D. Schwager
