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Trends & Analysis
News

Crude oil declines on profit taking

News

Delta Air Lines shares crash despite earnings beat

News

GBP spikes ahead of major economic data

News

Gold hits another record high on bank demand

News

Will Meta Platforms’ magnificent run continue

News

US dollar gains following NFP report

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Words of Wisdom Shared by Leading Traders to Help You Stay in the Game

Trading is the art of making timely decisions, without letting emotions get in the way. Pick the brains of the pros to improve your strategy.

Disclaimer: This article is an educational guide to CFD trading and the financial markets and should not be considered as advice. Trading CFDs is high risk. Always ensure you understand the potential risks and rewards associated with trading before you trade.

 

 

There are many self-proclaimed experts in the field of trading, then there are some whose results speak louder than words. When those traders and investors do speak up, it pays to, well, pay attention. Here are some gems from the world’s leading traders to help you in your trading journey.

1. “Pride of opinion has been responsible for the downfall of more men on Wall Street than any other factor.”

– Charles Dow

The famous quote by the pioneer of indices, after whom the Dow Jones Industrial Average is named, emphasises the importance of not letting a few wins get to your head. Traders must never stop asking questions and learning from the markets. The ability to remember that price movements are only a confirmation that your speculation was correct, rather than markets moving according to what you predicted, is imported for staying grounded as a trader.

 

2. “I still think buying a home is the best investment any individual can make.”

– John Paulson

Paulson explains the importance of putting money into a trade only after one has their expenses sorted. Trading is risky and no trader should risk more capital than they can afford to lose. Trading is an opportunity to grow your capital, but the cost should not be your peace of mind or meeting your daily expenses.

Did You Know?

Livermore correctly predicted the crashes of 1907 and 1929. He shorted the entire stock market before the Great Depression, booking profits that would be valued at $1.4 billion today.

 

3. “My peculiarity is that I don’t have a particular style of investing or, more exactly, I try to change my style to fit the conditions.”

– George Soros

The man who broke the Bank of England attributes his success as a trader to his habit of constant vigilance and improvisation in the trading strategy within his trading plan. He brings to the fore that the only constant in the financial markets is change and to accommodate that, traders must be ready to adjust their trading goals, plan, risk tolerance, capital involved, and trading timings with the changing market conditions.

 

4. “I could either watch it happen or be a part of it.”

– Elon Musk

The ambitious businessman and founder of Tesla said this after he purchased Bitcoin for the first time. He wanted people to realise that it is important to dive into the financial markets and take risks if the goal is to be a trader. You cannot learn to swim without getting wet, and losses are a part of the learning process, whether assets are digital or traditional.

 

5. “I still think buying a home is the best investment any individual can make.”

– John Paulson

Paulson explains the importance of putting money into a trade only after one has their expenses sorted. Trading is risky and no trader should risk more capital than they can afford to lose. Trading is an opportunity to grow your capital, but the cost should not be your peace of mind or meeting your daily expenses.

Did You Know?

Paulson was among the few who got the timing right after realising that the real estate bubble was nearing a burst. He heavily shorted credit default obligations (CDOs) after pursuing the banks to issue credit default swaps (CDSs). And he made millions of dollars!

 

6. “The goal of a successful trader is to make the best trades. Money is secondary.”

– Alexander Elder

The famous psychiatrist and trader used his knowledge of psychology to master the art of reading market sentiment to make trading decisions. He emphasises the need to keep your focus on making each trade successful, without stressing about making money, as that may cloud judgment and force irrational decisions.

 

7. “All the math you need in the stock market you get in the fourth grade.”

– Peter Lynch

The American investor emphasises the need to keep your trading strategy simple and manageable. Using too many indicators and complex data analytics only increases the time taken to make decisions. And, in the financial markets, agility is important. Also, the more factors you add into your trading strategy, the more things there are to possibly go wrong.

 

8. “Time is more important than price. When time is up price will reverse.”

– William Delbert Gann

Timing is essential to make the right entry and exit decisions. The trader and technical analysis guru stressed the need to study the markets and understand time cycles. It helps traders understand why markets top or bottom out at certain points. He reiterated that the most volatile periods occur right around the end of a cycle and are the ones that yield the best returns.

 

9. “I just wait until there is money lying in the corner, and all I have to do is go over there and pick it up. I do nothing in the meantime.”

– Jim Rogers

Overtrading comes with an opportunity cost, says the US investor and financial commentator. Patience is key to identifying and entering only the trades that help you meet your financial goals. A trader who waits for the most favourable trade setups is already set to take advantage of the inefficiencies in the market.

Did You Know?

Following the long bearish run of the commodities market in the 1990s, Rogers anticipated that paper assets would lose their worth, but commodities would ultimately trend upward. He still stands by his opinion!

 

10. “Writing down your trades is the best exercise in the world.”

– Linda Bradford Raschke

Whether a success or failure, it has lessons for you. Traders must track the performance of their strategies and identify what works for them. It helps them recognise their shortcomings and improvise accordingly. According to the famous commodities and futures trader, performance, longevity, and consistency are the essential qualities of a successful trader.

Key Takeaways

  • Never assume you will always be right.
  • Avoid waiting for a favourable market. Instead, find favourable entry points wherever the market is going.
  • Never risk more than you can afford to lose.
  • Focus on trading well, rather than on getting rich.
  • Keep your trading strategy simple.
  • Learning market behaviours to time the trades right is the key to success as a trader.
  • Never risk huge capital for mediocre trading opportunities, wait for the great ones.
  • Analyse your performance to continue improving.

 

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Investing in CFDs involves a high degree of risk that you will lose your money due to the use of leverage, particularly in fast moving markets, where a relatively small movement in the price can lead to a proportionately larger movement in the value of your investment. This can result in loses that exceed the funds in your account. You should consider whether you understand how CFDs work and you should seek independent advice if necessary.

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ADSS is an execution only service provider and does not provide advice. ADSS may publish general market commentary from time to time. Where it does, the material published does not constitute advice, or a solicitation, or a recommendation to a transaction in any financial instrument. ADSS accepts no responsibility for any use of the content presented and any consequences of that use. No representation or warranty is given as to the completeness of this information. Anyone acting on the information provided does so at their own risk.